Category: Archived Articles

Nitrogen-Infused Beers: Just the Right Amount and Voila!

Cyndi
4 men beside a nitrogen infused beers
Photo Courtesy of Chart (www.chartindustries.com)

By: Cheryl Gray

  Some aficionados of nitro-infused beers liken the sensory experience to downing a rich, creamy concoction from a dessert menu. The head of a beer created from nitrogen dosing ranks right up there with whipped cream atop a hot fudge sundae. For the consumer, the reincarnation of this draft beer experience in a single-serve can—and how that beer feels on the palate—is everything.  

  James Cain knows first-hand the difference that nitro-infused beer products can make for a craft brewery. Cain co-founded Vault Brewing Company in Yardley, Pennsylvania, in 2012. His aesthetic description of a nitro-infused beer rivals any marketing campaign. 

  “There’s nothing like watching the mesmerizing and physics-defying downward cascade of nitrogen bubbles in a properly nitrogenated and properly poured nitro beer. We are visual creatures—we drink first with our eyes—and the intrinsic beauty of nitrogen as it performs its brief dance down the sides of our glass is a special moment and sets the stage for a great tasting product to follow.”

  Experts say that smoother, palate-pleasing attribute is the result of the smaller bubbles produced when infusing beer with nitrogen rather than carbon dioxide gas, which produces larger bubbles. For the craft beer maker, liquid nitrogen (LN2) plays a host of multiple roles in the industry, not the least of which is the consistency of product that cryogenic nitrogen systems can produce. 

  In addition to attracting customers who enjoy the draft beer experience of a nitrogen-infused product, LN2 also helps to protect product shelf life. Nitrogen replaces the oxygen in the headspace of the beer container. While oxygen is important to brewing beer, it only takes a small amount inside a can or bottle to ruin the finished product, destroying taste and cutting shelf life. By contrast, nitrogen extends shelf life, leading to a potential increase in sales since breweries can widen distribution and create a larger footprint in the marketplace.

  Reduced shipping costs is another benefit to nitrogen-dosed beer. Infusing nitrogen pressurizes the can, and, as a result, it is lighter, sturdier and easier to store and ship because all of the oxygen is removed.

  Vacuum Barrier Corporation is one company helping its craft brewery clients achieve both product protection and popularity. The cryogenic engineering firm, located just outside of Boston, Massachusetts, has been in business since 1958 and has a national and global presence, providing local support for its customers worldwide. VBC supplies custom-crafted cryogenic piping and machinery for its clients using nitrogen in multiple applications, including those for craft breweries.

  VBC has partnered with both large and craft breweries for more than 30 years with the aim, it says, of improving existing beverages, while at the same time, creating new beverage products.  Dana Muse is VBC’s International Technical Sales Engineer. 

  “Currently, VBC provides Nitrodoser liquid nitrogen dosing equipment to be used for three different applications: reducing oxygen levels to preserve quality and increase shelf life; pressurizing non-carb or low-carb beverages to provide strength; and stability to the package and nitrogenating beers for a smooth, creamy head,” he says. “If using an automated filler, the Nitrodoser liquid nitrogen dosing system would be installed either before the filler or between the filler and the seamer.” For smaller craft breweries or microbreweries that need a different option, the Nitrodoser can be mounted on either a can test bench or pilot line and operated by hand.    

  In its gaseous state, nitrogen is inert, colorless, odorless, non-corrosive, non-flammable and tasteless. It can also cause suffocation. That is why monitoring oxygen levels in an environment using nitrogen is essential, especially in a confined workspace. As is the case with nearly any combination of chemicals and technology, there is inherent value in knowing what safety measures to take. Introducing a cryogenic system using nitrogen into a brewery operation is no different, says Muse. 

  “The number one concern when integrating a cryogenic system is always safety, and the first risk people tend to associate with liquid nitrogen is cold burns and frostbite. Because all of our equipment is fully vacuum insulated, the outer surfaces of VBC equipment is always at room temperature, even while the internal liquid nitrogen is at minus 320 degrees Fahrenheit. Wearing the proper protective equipment will help prevent any injuries that might be caused by direct contact with liquid nitrogen. Additional risks include over-pressurization of trapped liquid nitrogen, oxygen displacement from expanding nitrogen gas and embrittlement of non-cryogenic materials.” 

  On the West Coast is Chart Industries, located near San Francisco, California, with operations across the United States and a global presence that includes Asia, Australia, Europe and Latin America. The company, with a 150-year history, is involved in virtually every industry sector of cryogenics application.   

  Juancho Tabangay is a chemical engineer with more than 25 years of experience in his field. As Director of Sales for Chart Industries’ Global LN2 Dosing, Tabangay says that the company has been working with craft breweries wanting to tap into the nitrogen-infused beer market for the past several years. He counts some 320 of Chart Industries’ LN2 dosing systems spread across North America and beyond.

  “We’ve had conversations with our customers about the difference a dose of LN2 can make to the shelf life of their products. As an example, one of our customers shared that they get an average of a two-month shelf life but, with a dose of LN2, they see that extending to six months.  Those four months can make a difference for the craft beer producers. Of course, the results vary from application to application, but the feedback from our customers proves the investment in dosers pays off quickly.”

  The CryoDoser FleX® Craft Custom LN2 Dosing System is among the company’s products and popular within the craft beer industry. Just recently launched, Vault Brewing Company’s Cain says that the product’s versatility is designed to fit the requirements of the craft breweries.

  This doser works in the same manner as Chart’s other models. It functions by delivering a small but precise amount of liquid nitrogen into a container as part of a packaging process. The doser is connected to a liquid nitrogen tank and uses one or more sensors to detect the can, bottle, or container and dose the liquid nitrogen. It has a removable arm that allows for extensions or custom dual-heads for dual-lane canning lines. It has an introductory price but can grow with the brewery as they expand. “

  This year, Cain joined Chart Industries as a liquid nitrogen dosing specialist. From what his brewery experienced, Cain sees the use of nitrogen in craft brewing as the new lifeblood for breweries and other beverage makers eager to grow. 

  “We first explored the use of liquid nitrogen technology in 2015 with the launch of the world’s first widget-less nitro beer in a can. We worked with Chart Industries in order to develop the process and have since taken the technology worldwide. Nitro beers, nitro coffee, nitro RTDs, and other nitrogen-infused products target a specific customer who is looking for something unique and may expose your brand to new markets. If a brewery is packaging a lightly carbonated beer, seltzer, tea or other product, dosing with liquid nitrogen can add rigidity to the can wall and allow the brewery or distributor to stack the cans higher, saving floor space.

  “Breweries can experiment with creating new still products such as cocktails-in-cans, hard water, or hard teas and use liquid nitrogen dosing to leverage the same filling and packaging equipment. The LN2 will expand into gas and pressurize the container, making it possible to package an uncarbonated product,” says Cain.

  Tabangay tells Beverage Master Magazine that the success of nitrogen-infused beer comes down to the basics, which he describes as the “three P’s”— preservation, pressurization and perfect pour. 

  “Craft beer brewers like to tell a story with their beer using the taste and elaborate labeling. The behind-the-scenes story is about getting the best possible product for the lowest production cost.  Discerning consumers expect a perfect pour from cans just as they’d get from a keg at a pub. They want a nice cascade with fine bubbles.”

  When asked about whether there is a downside to using nitrogen in craft brewing, Tabangay sums it up this way. “There are only pros, no cons. Not that we’re biased, but the only way to help achieve preservation, pressurization and perfect pour is through the use of nitrogen.”

  In the end, for craft brewers, it is all about pleasing the consumer, but doing so in a way that increases sales and keeps costs down.  Craft brewers are learning how to use nitrogen in developing product lines that appeal to buyers who want that “perfect pour.”

Inaugural Craft Beer Marketing Awards Competition Underway

Cyndi
3 statues holding a beer can

By: Jim McCune

  There are dozens of competitions that award any number of beers on their flavor. There are no competitions, however, which recognize the incredible design and marketing work that breweries do for the branding of beer.

  As Jim McCune, a longtime promoter of craft beer states: “I’ve been in the beer-marketing industry for 24 years, and attended nearly a hundred beer-tasting competitions, yet I’ve never seen anything celebrating the amazing work that designers, illustrators, branders, and marketers do for beer. In many cases, this work is being handled by the brewers themselves.”

  The concept for a nationwide marketing competition was “brewed up” in November 2018 on Long Island as the brainchild of McCune and Jackie DiBella who are, respectively, the Executive Director and Account Manager of EGC Group’s Craft Beverage Division in Melville, New York. They brought this concept to EGC CEO and Founder, Ernie Canadeo, who immediately loved the idea and agreed to help both develop and finance it.

  McCune and DiBella got right to work at building out the Craft Beer Marketing Awards (CBMAs) from scratch. They cracked open a beer and started sketching a logo. From there, they carved out the categories and rules. They started inviting judges from within the brewing and creative industries. All of this work needed to be formulated into a strategic plan, with a schedule for receiving entries, judging, awarding, and celebrating.

  Creating this new business got extremely difficult during the development of the interactive awards website. The site needed to accept calls-to-entry registrants, paid entries, but also have a sophisticated, encrypted, yet easy-to-use judges’ platform. The judging process for the CBMAs had to be robust, credible, and have transparent digital scoring.

  Everyone involved simultaneously acquired sponsors and partnerships as they developed and produced a very unique awards trophy – something they know would look cool on a winner’s desk.

  Canadeo, McCune, and DiBella gave it their all, and in less than a year had the CBMAs live and accepting entries on October 6, 2019.

  The Craft Beer Marketing Awards became the first-ever in the USA, having been developed to recognize and award the very best marketing in the brewing industry across the nation. Breweries, their agencies, designers, and marketing partners were invited to enter their top work.

  The CBMAs were excited to get immediate coverage about the marketing competition from publications that included Forbes, New School Beer, Beverage-Master Magazine, Brewpublic, Media Post, Craft Beer Austin, Beer Connoisseur, Brewbound, Pro Brewer – and Forbes again. See all media here. https://craftbeermarketingawards.com/news/

  Design and marketing of each beer has become critical to a brewery’s popularity and success. With nearly 8,000 breweries across the country, and all of them vying for the same eyeballs – it has become increasingly more difficult to stand out from the competition in this incredibly saturated marketplace.

  In the past, small breweries could rely solely on word of mouth about their beers, but the past decade has seen something of a renaissance in craft beer marketing and branding. Beer packaging and design quickly became much more sophisticated, similar to that of the wine industry, and for good reason.

  “More than ever, breweries recognize the need to prioritize their marketing strategies,” said Prabh Hans, VP Business Development & Strategy for Hillebrand, and CBMAs Presenting Sponsor. “We’ve worked closely with brewers since 1984, and know that shelves and cities are flooded with an overwhelming amount of craft beer options. The CBMAs’ team recognized how much time and money these breweries are now investing into branding efforts and created a one-of-a-kind opportunity to celebrate them.”

  While most craft beer consumers might seek out local brews or prefer a certain style, many of today’s beer shoppers between the ages of 22 and 37 (the millennial generation) are making their final purchase decision based on “cool looking labels” – and this is why beer branding, design, and packaging has become the most effective means of influencing a purchase at the decision-making moment.

  Approximately 80 percent of consumers make their final purchase decision at the retail shelf, while 64 percent of this group admitted they would change their mind if “something better” caught their eye at that moment.

  But who do brewers owe credit to when it comes to these eye-catching, decision-driving can designs?

  Beer brand identities give breweries the opportunity to share their stories and personalities outside the brewery walls via their packaging. One of the coolest parts about beer branding is who brewers choose to collaborate with. And the choices are endless.

  These artists, designers, marketers, and branders are the ones who bring the beer to life on the shelf. Each can label, logo, and beer name ignites the brand to the consumer. It’s their job to provide packaging design with stopping power to capture the eye and compel the shopper to grab a particular beer.

  Today, brewers use strong visual identity, storytelling, word of mouth, and digital media to achieve never-before seen growth that has leveled the playing field between big and small beer companies.

  The packaging and overall branding of a beer is the most effective means of influencing purchase at that decision-making moment, and the CBMAs felt the time had come to recognize the talent behind the creatives that makes the craft beer culture so rich and unique.

  “This is a great opportunity for designers like myself to show off some awesome work I’ve done for breweries,” said Ben Owens, founder of Phine Art Designs. “I’ve never witnessed an industry with such fast growth and transformation. Craft beer is constantly evolving. So is the design, marketing, and packaging of it.”

  Each category is judged by an influential and respected panel of beer, marketing, and design experts from all across the country.

Celebrity Judges Include:

•   Zane Lamprey, comedian, actor and writer known for TV show “Three Sheets” and new Adv3nture active gear.

•   Harry Schumacher, publisher and owner of Craft Business Daily.

•   Jeff Bricker, publisher, graphic designer and owner of Beverage Master Magazine and The Grapevine Magazine.

•   Jon Contino, creative director of branding agency, Contino Studio.

•   Ralph Steadman, the infamous artist and illustrator who is most well-known for his collaborations with Hunter S. Thompson and Flying Dog Brewery.

  Check out the full panel of CBMAs’ judges here. https://craftbeermarketingawards.com/judges-panel/

  The awards accept entrants in 30 categories, ranging from “Best Logo Design,” “Best Packaging Design” and “Best Can Design” to “Best Website Design,” “Best Merchandise Design,” and “Best Use of Social Media.” Both “Best Packaging Design” and “Best Can Design” feature “People’s Choice” sub-categories that will be voted on by fans.

Some of the Award Categories are:

•    “Best Can Design”

•    “Best Tap Handle Design”

•    “Best Original Video”

•    “Best Merchandise Design”

•    “Best Use of Social Media”

•    “Best Website Design”

•    “Beer Marketing Wild Cards”

  Entry is open to anyone involved in marketing within the brewing industry. To see the full list of categories, click here. https://craftbeermarketingawards.com/categories/

  “We have numerous entries in all 30 categories,” DiBella added. “This marks the beginning of what will become a long tradition of prestigious recognition and merit for brewery marketing.”

  The CBMA “Crushie” trophies were designed and manufactured by the same NYC designer awards firm that created the prestigious Emmy Award and MTV’s “Man on the Moon” statue. The Crushie Award is sculptured to depict a heavily tattooed arm crushing a beer can to symbolically represent how breweries are “crushing it” with their unique and creative beer marketing and branding.

  The Platinum Crushie is the CBMAs’ most prestigious nomination for entries demonstrating marketing and branding excellence that exceeds the defined category objectives by using strategy, creativity, and overall innovation. Only one entry – with the highest achieved ranking from each category – will receive Platinum.

  The Gold Crushie is for entries that meet or exceed the defined category objectives by using strategy, creativity, and innovative production techniques to achieve a higher level of perceived uniqueness. The CBMAs’ will award up to five Gold Crushie Awards per category.

  The “People’s Choice” Black Crushie is the most elusive of all the awards, because the CBMAs only award up to a total of five of these. Unlike Platinum and Gold, the “People’s Choice” Crushie isn’t totally reliant on the judges’ panel. Once the judging process is complete, top-ranking entries who entered the “People’s Choice” Category have an additional showdown with a public-judging panel that uses social polling to choose the final winners.

  The Crushies’ major sponsor is Hillebrand, the Germany-based freight logistics company that has a large presence in the beer, wine and spirits business. “More than ever, breweries recognize the need to prioritize their marketing strategies,” Hans added, calling the CBMAs: “…a truly unique and important event for the craft-beer industry.”

  Critical to the continued success and growth of the CBMAs’ program is the generosity and support of their sponsors and partners. The CBMAs invites you to consider supporting these great businesses:

•   Hillebrand

•   Beveraage Master Magazine

•   EGC Group

•   Brewery Branding

•   Pro Brewer

•   Don’t Panic Projects

•   KSidrane

•   DKNG

•   Hankscraft AJS Tap Handles

•   DWS Printing

•   Society Awards

•   MMX

•   Lauterbach Craft Brew Labels

•   Red Vault Productions

•   The Beer Connoisseur

  McCune and DiBella enjoyed representing the CBMAs as podcast guests on “Beer Busters,” “Tap That AZ,” “Beer-Fit–Life,” “AG Craft Beer Cast,” “Beer N Goodz,” and “Craft Beer Storm.”

CBMAs Update:

  The last couple months have brought about changes, fear, and uncertainty – especially within our beloved craft beer industry. We understand this is no time to celebrate. The Craft Beer Marketing Awards want to make sure those in our industry most affected by the COVID-19 pandemic have the opportunity to focus on their business and the comeback from this.

  Making our peers the priority, the CBMAs have decided to extend the judging window by one month to Monday, May 11. Crushie Award winners will now officially be announced on Tuesday, June 16 through industry media and our social channels.

  We hope that the decision to delay the announcement allows us all to look forward to brighter days. We are rooting for you all and can’t wait to cheer when this is behind us.

  Individuals involved in the production and/or creation of winning works can purchase their personalized trophies in our CBMAs’ Award Shop, which will launch right after the winners are announced in June. Winners will be notified by email of their win, along with further instructions.

Stay safe, stay healthy, and stay positive.

For more information, visit craftbeermarketingawards.com or email: info@craftbeermarketingawards.com

  Jim McCune is director of the Craft Beverage Division of Melville-based EGC Group. Reach him at jimm@egcgroup.com or 516.935.4944

Canadian Brewers Struggle to Survive Amid Pandemic-Related Shutdowns

Cyndi
beverage in front of a Canadian flag

By: Briana Tomkinson

  At the close of 2019, the Canadian beer industry was riding high. The craft beer craze showed no signs of flagging, with triple the number of breweries in operation just five years before. In 2019, Canada had more brewing facilities in operation than ever before. Then, in March, the coronavirus pandemic spread to Canada.

  Taprooms, restaurants and bars are closed, and though some parts of Canada that were less severely impacted by the virus are slowly starting to allow businesses to reopen, it’s far from business as usual.

  There will be no beer gardens and merrymaking at large summer music festivals, no big wed-dings, no corporate shindigs, no Friday night pints in busy bars. Even in places that allow ser-vice businesses to reopen at a fraction of capacity with seats six feet apart, it’s likely business won’t be booming. With an estimated two million Canadian jobs lost in April alone, many Ca-nadians will be at home counting their pennies, not out on the town quaffing beers.

  According to a survey conducted in early May by Restaurants Canada, seven in 10 of those in the foodservice business fear they will run out of money in three months or less.

  Before the start of the COVID-19 pandemic, Canada’s foodservice sector was a $93 billion in-dustry, directly employing 1.2 million people serving 22 million customers every day. The in-dustry has since lost 800,000 jobs and is on track to lose as much as $17 billion in sales over the second quarter of 2020, the industry association said.

  While the situation for Canada’s breweries is not quite so dire, many smaller breweries also say they are only months away from closing their doors.

  According to Beer Canada Interim President Luke Chapman, many Canadian breweries are under a huge amount of financial stress. A recent member survey conducted by the industry organization revealed that half of the respondents said they had only enough cash flow to sur-vive for a maximum of six more months.

  In 2019, the number of brewing facilities in Canada increased by almost 13%, from 995 in 2018 to an all-time high of 1,123. Yet, although there was an unprecedented number of beers to choose from at grocery stores and dépanneurs, beer sales in Canada have been falling: do-mestic beer sales were down almost 4% in 2019.

  With fewer sales in an increasingly competitive market, Canadian breweries were already brac-ing for more challenging times ahead, yet nothing could have prepared the industry for COVID-19, Chapman said.

  While relief programs for business owners from the federal government have provided some help to keep employees on the payroll—for now—Chapman noted that with major events can-celed and many restaurants and bars closed, breweries will miss out on the expected bump in summer season revenue.

  “This is a very difficult time, and like everyone, like a lot of other businesses, brewers are just trying to learn as they go and trying to make the best of a bad situation,” Chapman said. “No one knows what the market’s going to look like next week, let alone two to three months from now. It’s a very uncertain time, for sure.”

  Canadian breweries directly employ an estimated 15,000 people; however, Conference Board of Canada figures show beer supports 149,000 Canadian jobs, with a labor income of $5.3 bil-lion. The sector contributes $13.6 billion to Canada’s GDP, thanks to the domestic nature of the industry (in 2019, 85% of the beer consumed in Canada was brewed in Canada). The vast majority of Canadian breweries are small, local operations; 94% produce less than 15,000 hec-tolitres of beer.

  Many smaller microbreweries who primarily sold beer through on-site taprooms and local res-taurants have quickly transitioned to selling packaged beer. Expanding into home delivery has also been helpful for many smaller breweries, Chapman said. Even in provincial jurisdictions that do not permit breweries to offer home delivery service, restaurant partnerships have ena-bled some breweries to have their beer delivered with dinner orders.  

  Yet Chapman said even when these transitions have been successful, for taproom-focused breweries, which can make as much as half of their revenue from tap sales, the additional costs of packaging, distribution and delivery are eating away at their profits.

  “A couple of our breweries say they are selling a similar amount of beer, but costs are up 40 to 50%. They’re just trying to keep staff employed and keep the lights on,” he said.

  In some cases, breweries have also had difficulty sourcing cans, bottles and packaging materi-als due to pandemic-related supply chain issues.

  While closing bars, restaurants and taprooms initially resulted in a slight uptick in retail beer sales, for most craft breweries, this was not nearly enough to offset the steep decline in keg sales, Chapman said. Many shuttered bars and restaurants also returned unopened kegs, forc-ing breweries to issue refunds.

  Rather than dump all this unused product down the drain, some breweries have offered this excess beer to distilleries to produce hand sanitizer.

  “Beer is really the only perishable alcoholic beverage. Both wine and spirits last essentially for-ever, and some get better with time. That’s not the case for beer,” Chapman said. “No one wants keg beer anymore, so there are a lot of brewers left with a lot of product that’s going to go bad.”

  While some breweries have been able to sell hand sanitizer on a cost-recovery basis, most breweries are treating it as a way to give back to the community.

  “I know for a fact there are some that are doing it and losing money in the process,” Chapman said.

  Hand sanitizer has been all but impossible to find on grocery store shelves in many parts of Canada since the first wave of COVID-19 cases were discovered in March. Health Canada has since moved to expedite approvals for distilleries and other companies to start producing the product. In Canada, hand sanitizer is regulated under Health Canada’s Natural Health Product Regulations, part of Canada’s Food and Drugs Act.

  In late March, Spirits Canada, Cosmetics Alliance Canada and the Canadian Consumer Spe-cialty Products Association launched the Hand Sanitizer Manufacturing Exchange in collabora-tion with Health Canada. The Exchange provides support for firms interested in contributing to the manufacture of hand sanitizer to find the materials, services or manufacturing capacity needed for production.

  “People are coming together to do what they can in this crisis, but Canadians need access to safe products. DIY hand-sanitizers, the latest trend on social media is at best ineffective against COVID-19 and at worst potentially dangerous,” said CCSPA President, Shannon Coombs.

  On top of all the other challenges facing Canadian brewers, the federal government went ahead with a planned increase in alcohol excise duties. “We as an industry were a little bit stunned that the government decided to go ahead and raise our taxes in the midst of a pan-demic that is having huge negative impact on the industry,” Chapman said.

  Although the 1.9% increase may not seem significant, he said, for a regional brewery produc-ing 70,000 to 80,000 hectolitres of beer per year, the increase translates to about $50,000 to $60,000 in lost cash flow.

  “It is a material amount of money that’s now been taken out of the hands of the breweries and put in the hands of the government,” Chapman said. “I think from our view, and I think most brewers would agree, that money is better in their hands, at least at this point in time.”

  There is one bright spot for Canadian brewers, Chapman said. Some provincial governments have temporarily lifted some restrictions on the sale and distribution of alcohol that have lim-ited how breweries can serve their customers.

  “These are things we’ve been asking for, for quite a while,” Chapman said. “We’re hoping some of these will stick around after COVID-19 is a distant memory.”

Canadian Food and Beverage Battles COVID-19

Cyndi
2 beverage bottles and glass

By: Alyssa Andres

  The COVID-19 pandemic struck the entire world swiftly and harshly. In March, Canada lost over one million jobs—800,000 of which were in the food and beverage industry. It is estimated that one in 10 Canadian restaurants have already permanently shut their doors, and those numbers will continue to climb as small businesses struggle to keep up with costs without their regular revenue streams. More than ever, business owners have to find creative and alternative ways to make a living and do so while trying to maintain a safe and secure work environment for their customers and employees. As a result, large companies have started offering their support to businesses and individuals in need, and communities have started coming together in an effort to lessen the pandemic’s impact on the hospitality community. 

  The Canadian government is doing all they can to support its citizens as they battle to flatten the curve. The Canadian Emergency Response Benefit was created in March to assist those suffering from job loss. The fund offers $2000/month to any individual who has lost work since March 15, 2020. The government has also lightened restrictions surrounding the sale of alcohol, allowing food delivery services, like UberEats, to deliver alcoholic beverages to people’s homes between 9:00 a.m. and 10:30 p.m. Restaurants can also offer beer, wine and spirits with their takeout menus.

  Breweries, wineries and restaurants that have remained open have had to rework their operations entirely. Most offer free delivery and curbside pickup options for customers to avoid any contact with staff members. Many also offer discounts on their products or other incentives to generate sales. The craft brewery, Half Hours on Earth, in Seaforth, Ontario, is planting a tree for every online order they receive. Pearl Morissette Winery in the Niagara Peninsula, which normally relies on its world-class, farm-to-table restaurant to drive its business, has transformed its operation into an online country market offering curbside pickup. Patrons can purchase ethically sourced meats, eggs and dairy from local farmers as well as pick up bottles of Pearl Morissette wine, which is highly regarded in the region and usually not available for retail purchase. 

  Other initiatives that have spawned in the wake of COVID-19 include Exchange Brewery’s Virtual Ladies Happy Hour. The Niagara-on-the-Lake, Ontario brewery offers packages for sale that include several of their beers along with a link to a happy hour zoom chat. This type of virtual event allows their loyal following to come together, taste and discuss their current beers while maintaining social distancing.

  The spirits community is also using online initiatives to bring their following together during this period of social distancing. Campari Canada teamed up with Toronto-based online community, Bartender Atlas (http://www.bartenderatlas.com), to create the #camparistircrazy campaign. The campaign brings together bartenders from across Canada to develop Campari-based cocktails using common ingredients from around the home. The competition resulted in hundreds of cocktail submissions from across the country, uniting bartenders at a time when most are struggling with job loss and self-isolation. Corby Spirit and Wine, one of Canada’s leading distributors of wine and spirits, has partnered with WSET (Wine and Spirits Education Trust) to offer the Level 1 Award in Spirits course to 1,500 Canadian bartenders. The four-week online course is an introduction into the world of spirits, providing an opportunity for novice bartenders to make good use of their time off.

  Many businesses are having to use this time to develop new sales strategies. Shawn & Ed Brewing Company and Flat Rock Cellars Winery in Niagara,   Ontario, have partnered with several other local businesses to create “Bloom Boxes” that are for sale through its online shop. The gift box sets include a bottle of beer or wine, a DIY potted plant kit and a bottle of locally sourced hand sanitizer. The initiative aims to bring the community together and support local businesses in a time when they would typically be flooded with tourism.

  Restaurants Canada is also trying to bring the country together in support of hospitality. They have created the #Takeoutday initiative, encouraging people to order takeout meals every Wednesday. This effort supports restaurants and craft breweries across the country battling to stay afloat. The initiative even includes a tandem fundraising livestream event on Facebook, Canada’s Great Kitchen Party, featuring music by famous Canadian artists including Sam Roberts and Tom Cochrane, all in support of Canadian restaurants. You can join Canada’s Great Kitchen Party at Facebook.com/greatkitchenparty.

  Many large businesses in Canada have stepped forward to offer assistance in any way they can. Restaurants that remain open are preparing meals and delivering them to first responders who are working tirelessly to care for the ill. Large hotel brands whose business numbers have declined are instead offering their rooms to frontline workers, who prefer not to commute or decide not to have contact with their family members. Large scale food suppliers like Sysco are helping to support charitable endeavors by donating their excess product to food banks and shelters. 

  Many Canadian breweries and distilleries have transformed their operations into full-time alcohol antiseptic factories. Employees of Dillon’s Distillers in Grimsby, Ontario, have been working tirelessly since March 17, 2020, to provide 40,000 bottles of antiseptic at no cost to 1,300 hospitals, shelters, elderly homes and emergency response personnel. The generosity they’ve experienced from others in support of this cause has humbled the distillery employees. Many local businesses have donated materials, money and time in the effort to help with production. Once the distillery developed a system to provide the alcohol antiseptic to frontline workers, it opened up its order forms to the public to incredible response. The distillery saw over 10,000 orders for sanitizer in a matter of days, forcing it to remove the alcohol antiseptic from its online shop so workers could process the requests already received. The 10-person staff has worked from 6:00 a.m. until midnight, trying to get the orders bottled, labeled, packaged and shipped. The overwhelming number of orders will allow Dillon’s to subsidize the cost of the endeavor and rehire staff they lost due to closures during the pandemic.

  Worldwide, craft breweries have come “all together” in an initiative sparked by Brooklyn-based brewery, Other Half Brewing Company. The All Together collaboration started as a way to support local hospitality professionals by offering an open-source recipe and public label artwork for breweries to use as a starting point to create a unique beer. The concept enables breweries to produce their All Together beer at the lowest possible cost, allowing them to band together to support the hospitality workers that, in turn, support them. Blue Label Packaging Company has volunteered to print labels for the All Together line of beers at cost, and Craftpeak Multimedia has created free social media graphics for breweries to download to promote the initiative. Since launching, 718 breweries from 51 countries around the world have signed on to create an All Together IPA. Many breweries across Canada have joined forces to support the effort. Counterpart Brewery in Niagara Falls, Ontario, is one of them. The new craft brewery has continued to operate through the pandemic, stating that business has been really good, and they’ve continued to be blown away by the support from the community.

  According to SaveHospitality.ca, a coalition of over 500 independent restauranteurs and operators, many restaurants in Canada will not be able to sustain these closures for much longer. Without the proper aid, the entire industry could collapse, taking down a whole system of suppliers, purveyors and distributors with it. Restaurants need help. The coalition has formed a detailed plan for the government of Canada about what the Canadian hospitality industry needs to sustain itself moving forward. The initiative provides information about the short-term and long-term needs of restauranteurs to maintain their businesses in the future. Waiving property taxes and deferring loans are just some of the coalition’s initiatives. The full document, which has been signed by hundreds of restaurants all over the country, is available online at savehospitality.ca. The hope is that the Canadian government will respond to this crisis and support the $90 billion foodservice industry, which accounts for 7% of the country’s workforce. 

  As of now, the future of hospitality remains unclear. What is clear is that we are all connected in this pandemic and should take this opportunity to reflect on the things that really matter. Support your local businesses. Support your neighbors. Order from your local restaurants. Buy local brews from craft producers offering curbside pickup. Let’s get through this and come out on the other side, smarter and stronger.

Local B Corp Collaboration Between Hopworks and Looptworks Turns 300+ Cases of Beer Into More Than 400 Masks for Central City Concern

Cyndi
staff carrying a tray of beer

After releasing a variety case of beer called the “Homebound Hero 24 Pack” on April 21, Hopworks Urban Brewery has raised more than $1,500 for the Looptworks Foundation. The case sold for $40 with $5 of each sale donated to the Looptworks Foundation; the donation allowed the foundation to produce over 400 face masks for Central City Concern, a non-profit organization providing housing, health care and employment services for people experiencing homelessness in Portland.

  “It was really awesome to be able to partner withLooptworks on this program,” said Christian Ettinger, founder and co-owner of Hopworks Urban Brewery. “Our whole industry, like many others, is going through a rough time right now, so being able to give back in a meaningful way to other sectors that are hurting is super important. We couldn’t have picked a better recipient with the Looptworks Foundation and Central City Concern!”

  With the collaboration concluded, the “Homebound Hero 24 Pack” has now become the “Core Four” case, complete with the same core four beers: Golden Hammer Organic Lager, Tree Frog Organic Pale Ale, Powell IPA, and Robot Panda Hazy IPA.

  Golden Hammer Organic Lager features organic Northwest and German ingredients in a new take on Germany’s most popular beer: the Munich-style Helles. Notes of honey malt aroma and flavor greet herbaceous and floral hops at the castle door. Tree Frog Organic Pale Ale is fueled by organic Fuggle, Citra, and Mosaic hops that jump from branch to branch with juicy, floral notes that deliver the perfect amount of dank hop aroma. Powell IPA is Hopworks’ flagship IPA that celebrates its Powell Blvd. brewery, brimming with melon, tropical fruit, and a perfectly balanced bitterness. Finally, Robot Panda Hazy IPA is fruity and juicy with a fluffy mouthfeel and notes of spruce, tangerine, and papaya derived from Denali, Lemondrop, and Cascade hops.

  Keep in the know by following Hopworks social channels (everything @hopworksbeer), newsletter, and HopworksBeer.com for more details.

About Hopworks Urban Brewery

  Founded in Portland, Oregon, in 2008 by Christian and Brandie Ettinger, Hopworks Urban Brewery creates sustainable beer and food with sustainable business practices that protect the environment and support our community. Family-owned and operated, Hopworks sources thoughtfully, operates efficiently and minimizes waste in an effort to protect the planet. The company’s 20-barrel brewery produces 10,000 barrels of beer a year for Hopworks’ brewpubs and distribution throughout Cascadia. Hopworks is the first Certified B Corporation brewery in the Pacific Northwest and a proud member of 1% For The Planet.

Combining the Cannabis and Cocktail Cultures

Cyndi

By: Becky Garrison

Terms like “The Wild West” and “Gold Rush 2.0” have been used to describe the rapid shift of cannabis from an underground illicit practice to a legalized market. Global brands like AB InBev and Constellation Brands have invested in cannabis-infused beverages. (For now they appear to be focusing on the Canadian market where cannabis is legalized at the national level.)

Also, after hemp became legalized at the federal level in 2018, CBD-infused drinks for the adult market (21+) began popping up at bars, restaurants, and select grocery stores. In addition, the increasing legalization of cannabis for adult use has led to the rise of non-alcoholic drinks called “mocktails” that contain THC and are available for purchase in those licensed cannabis dispensaries located in states where recreational cannabis is legal. 

As one example of the increasing normalization of cannabis, in 2019, Feast Portland, a food and drink festival celebrating the bounty of the Pacific Northwest, included in its educational offerings a panel titled “Cannabis & Cocktails: Best Buds?” During this panel, Jeremy Plumb, Director of Production Science at Prūf Cultivar, lent his 30-years of expertise in the cannabis industry to illuminate this new trend. He describes this current state of cannabis as a “frontier culture” where people are exploring a all the dimensions of over thousand compounds found in the cannabis plant.  

The two compounds in cannabis getting the most buss are  buzz is CBD (Cannabidiol) and THC (Tetrahydrocannabinol).  Both CBD and THC possess analgesic and anti-inflammatory properties that can help with a range of conditions such as relieving pain and reducing stress.

For those unfamiliar with this plant, Plumb breaks down cannabis into three types. Type 1 cannabis is high THC with almost no CBD. THC is that compound that produces a psychoactive high and is the most heavily regulated (in the U.S.). Type 2 cannabis is a 1:1 ratio of THC to CBD,  a combination that produces a balanced high. Finally, Type 3 cannabis contains less than .3% THC and is also called hemp-derived CBD. This is the form of cannabis that’s theoretically legal in all 50 states and the one being used in beers and cocktails available in bars, restaurants, and other public settings.

Rather than focus on just CBD and THC, Plumb encourages people to explore the “entourage effect” that happens when one consumes a cannabis infused product. This term describes the overall sensations a consumer experiences when consuming a particular product. In particular, Plumb homed in on terpenes, which are the organic chemicals present in food and drinks that produce certain effects. Among of the more common terpenes found in cannabis include Pinene (pine), Myrcene (musky, earthy, fruity) fruity), Limonene (citrus), Humulene (hoppy, earthy), Humulene (musky, earthy, spicy), Linalool (spicy, floral), Caryophyllene (peppery, spicy), and Terpinolene (woodsy, smoky).

While cannabis and hops belong to the same Cannabaceae family, Plumb notes that cannabis offers a broader range of flavors and aromatics than what one finds in hops. According to Plumb, cannabis is the most genetically diverse plant on the planet. “Any aroma found in nature can be found in some variety of this plant.” In his work, he explores whole-plant infusions that take advantage of all the plants properties rather than distilling a single compound and adding that to the products. 

How Cannabis  is Used in Cocktails  

Once hemp derived-CBD. became legalized at the Federal level in 2018, CBD drinks became the latest craze. Howeer, until the FDA and USDA formalize the legal guidelines for how to regulate food and beverage products made with hemp-derived CBD, these products will not be available for adult use in all 50 states. Furthermore, The Alcohol and Tobacco Tax and Trade Bureau (TTB) has not approved cannabis or CBD as approved ingredients for use by a distillery, brewery, cidery, or winery.

But while one cannot expect to see these cannabis or CBD-infused alcoholic products available in the near future, CBD drops can be added to alcoholic beverages. According to Brandon Holmes, CEO of Danodan Hempworks, the challenge in using their Hemp Flower CBD shots in a drink is the same as using any other ingredient in cocktails. “Mixologists make great drinks because they experiment with ingredient ratios that captivate the senses and amplify each ingredient’s characteristics.”

Joanna Matson,  founder and CEO of  ZVEDA Botanicals, created her CBD wellness drops using fusions of Ayurvedic herbs, cannabinoid-rich Hemp-CBD oil, and signature essential oil blends as a natural product to help promote health and wellness. Presently, she also partners with the Portland Bitters Project to produce a line of bitters infused with CBD and organic botanicals. 

For those looking for a lighter taste, East Fork Cultivar’s CBD drops are not flavored as strongly as other hemp products. Their CBD Drops are a glycerine-based tincture made from their USDA Certified Organic Oregon-grown craft hemp flower to produce an accessible, mild-tasting, broad-spectrum, water-soluble form of CBD to be added into drinks.

While CBD affects everyone at different dosage levels, one can generally expect to feel a light, pleasant feeling of relaxation after taking a 10-50 mg dose. However, some people can experience these feelings with only 2mg of CBD.

Sparkling beverages such as those produced by Ablis CBD Infusions and clēēn:craft can be used as mixers or consumed as stand-alone products for those wanting a non-alcoholic lift courtesy of the CBD present in these product but also desiring products made with organic ingredients. For those desiring products infused with THC, companies such as Magic Number and SōRSE Technology manufacture non-alcoholic THC beverages available in different strengths. These zero-proof cocktails work well for those who want a sophisticated drink in a social setting but do not wish to consume alcohol.

The Future of Cannabis-Infused Cocktails 

Lee-Ellen Reed of East Fork Cultivars, speaks to the role of CBD in the bar space. “They offer an alternative to alcohol for those who still want to “take the edge off.” Also, both cannabis and cocktails could produce some new experiences when combined together. In Plumb‘s experience, sipping on a whole plant vaporizing creates a new experience which could be incorporated into a cannabis infused cocktail. 

Also, anecdotal evidence suggests that consuming cannabis could help reduce the amount of alcohol consumed and prevent hangovers. However, further research is needed to ascertain the effects of combining alcohol and cannabis

In Plumb’s estimation, blending together cannabis and cocktails makes sense from a craft perspective. He believes cannabis should be seen in the same context of other craft food and beverages that produce nourishment and enjoyment. “There’s a whole community of passionate craftspeople who existed in this underground [cannabis] economy for a very long time, aspiring to simply be at the table with other brilliant crafts people who are producing spirits, ales, wine, and food.”

Special Considerations and Latest Innovations for Growlers & Kegs

Cyndi
beer glass with a small keg

By: Alyssa L. Ochs

Growlers and kegs have been staples in breweries for many years. With the bevy of options available to brewers today, choosing the right size, shape and material for these essentials may be an overwhelming task. To make the best choice, brewers need to consider their options as well as the new and exciting innovations in the world of portable containers.

Types of Portable Containers

  Growlers can be made with various materials, such as glass, stainless steel, ceramic and plastic. Vacuum-insulated growlers go beyond a standard glass growler’s functionality to keep beer colder and fresher for longer. Some popular models include Hydro Flask beer growlers, DrinkTanks, GrowlerWerks, 45-Degree Latitude stainless steel growlers, Yukon insulated beer growlers and two-liter Euro Growlers with metal handles.

  Meanwhile, keg types vary based on volume, capacity and weight. The most common kegs are sixth barrels, quarter barrels, slim quarter and half barrels. Consumers also have access to Cornelius kegs, mini-kegs, one-way kegs and eighth barrels.

  With headquarters in Atlanta, Georgia, Schaefer Container Systems North America manufacturers ECO KEGS that are lightweight, durable and stackable stainless-steel kegs, and 100% stainless-steel Sudex Kegs. The company also offers fully or partially encased Plus Kegs, the FreshKEG and SmartDRAFT keg with flexible small-scale dispensing systems and Party Kegs that are stylish and easy to use with a gravity-fed system. Schaefer’s specialty kegs include yeast brinks and cellar topping kegs that are adaptable by using tri-clover and tri-clamp fittings.

  “The most popular are our ECO KEGS,” said Richard Winslow, the president of Schaefer Container Systems North America. “These kegs provide immediate brand differentiation, are highly customizable, and offer significant value-added features and long terms cost advantages. Also very popular are our Party Kegs, which use a gravity-fed system with all the utility of a Firkin and none of the hassles.”

  Yet there are even more types of portable containers that are trending and particularly attractive. For consumers looking for less than the standard 64 oz fill, smaller containers, like Swig Savvy’s stainless-steel water bottles, are popular. Some breweries are now equipped to fill 32-ounce crowlers, aluminum cans filled and sealed on demand that keep the beer fresh until it’s cracked open at its destination.

Best Materials for Growlers and Kegs

  Since the advent of the modern growler, glass has been a popular material. Easy to clean, easy to fill and easy to find, glass growlers can be clear or amber color. However, the material is heavy and easily broken, among other problems.

  “Glass has a highly non-porous surface and does not absorb microorganisms which can spoil your beer, but annealing is weakened with use and when subjected to temperature changes. Thus, glass weakens over time or when subjected to an impact and will eventually break,” said John Burns, Jr. of Craft Master Growlers. “Glass is not suitable to be pressurized.”

  Based in Tacoma, Washington, Craft Master Growlers creates the next generation of growlers forged from high-quality stainless steel and designed for performance and durability.

  Stainless steel is sturdy and keeps beer cold; however, during filling, bartenders are unable to determine the fill level accurately, often leading to a loss of product. However, stainless is sustainable and durable, resists oxidation and corrosion, and is ideal for pressurization.

  Ceramic growlers have a classy look but are heavy, more difficult to clean and prone to chipping. Plastic is also used for growlers because of its low cost and low likelihood of breaking, but is less durable with multiple uses and may cause oxidation in the beer.

  For kegs, stainless steel is the most commonly used material because it is durable, sterile, long-lasting and affordable with reuse. Aluminum was once used for kegs because of its strength and low cost, but is prone to corrosion and runs the risk of being stolen for scrap metal. Plastic kegs are cheaper, lightweight and stackable, but they also create concerns about durability, oxidation and exposure to heat and sunlight.

  Emma Shepanek of G4 Kegs told Beverage Master Magazine that food-grade stainless steel is the best material for kegs. Founded in the craft beer destination of Bend, Oregon, G4 Kegs offers high-quality and durable kegs, as well as various keg services and leasing.

  “All stainless-steel kegs are the most durable, reliable and safest kegs on the market,” Shepanek said. “There have been recent innovations with plastic kegs, but they are still not as safe or sustainable as all stainless-steel kegs.”

Refill Policy Considerations

  For both growlers and kegs, there are considerations to keep in mind about refill policies. First, check local and state laws concerning portable container fills to ensure you comply. Make sure to openly and publicly share your brewery’s policy about refills with consumers to avoid confusion.

  As a general rule, never refill a container with questionable sanitation or cleanliness to avoid compromising a consumer’s health. Brewers may always want to avoid refilling containers with other breweries’ names and logos on them to avoid misconceptions about whose beer is inside. Some states have laws against filling any growler that does not feature that brewery’s logo. Again, brewers should check state and local regulations for more information.

  Many breweries have a policy of not refilling plastic containers since plastic cannot be cleaned as well as other materials and is more likely to harbor bacteria. Brewers should only use and fill containers that maintain the integrity of the beer that they’ve worked so hard to produce, such as insulated stainless-steel or colored glass.

Return Policy Considerations

  Return policies are important to have in place if the brewery is in the business of leasing kegs to consumers. Always provide written policy details to consumers and include details about how to reserve kegs, the time frame for reservations and the length of time before it must be returned.

  Other important information to provide includes how long the brewery will honor deposit refunds, the charge for unreturned kegs and the deposits amounts for barrels and hand pumps. Brewers may want to advise customers where to park while picking up their keg and how to properly exchange an empty for a full one.

New Technology for Portable Containers

  The world of portable beverage containers is continually changing due to new technology and innovations in the industry. Portable beer systems are gaining popularity by allowing consumers to pour their favorite beer anywhere. Pressurized growlers serve as mini-kegs to maintain carbonation levels for longer and even include customizable tap handles and pressure gauges. Entrepreneurs are even turning shipping containers into mobile multi-tap kegerators to help beer lovers enjoy their favorite brews outside the taproom.

  Burns of Craft Master Growlers said that new pressurized growlers substantially extend the longevity and usability of fresh craft beer for a couple of weeks or longer. This is a significant upgrade from glass growlers with virtually no shelf life.

  “Double-wall insulation lets you enjoy a cold or hot beverage for hours when outside or on the road. Oxygen is substituted for CO2, as oxygen will cause the beer to go stale. A pressurized growler goes beyond just beer, to cider, kombucha, spritzer, seltzer and more,” said Burns. “At Craft Master Growlers, we are innovating the CO2 delivery system, giving the user a way to control and monitor the pressure for the appropriate beverage, and offering ways to infuse and ferment in a small-batch container. The way we think of it is broadening the appeal and accessibility of all the great things local craft brewers and homebrewers are doing.”

  Schaefer Container Systems’ FreshKEG and SmartDRAFT technology allow brewers to pour beer without CO2 tanks or draft systems. “The CO2 and beer are contained within a single keg body, and the unit is tapped by an easy-to-use dispensing unit,” Winslow said. “It’s ‘plug and play’ for the consumer!”

  Because kegs have been designed well and there’s little need for improvement, manufacturers look to technology as the next big thing.

  “Kegs are actually quite boring and basic,” said Shepanek of G4 Kegs. “The design and engineering of the keg have already been optimized, so there’s not much to be improved with the form or function. Yet spear and keg manufacturers continue to innovate to sustain consistent quality. There are some exciting things brewing in the keg tracking and software space. Services that give breweries access to their own data about their keg fleets and that can be used for other business insights could be really beneficial.”

The Importance of Modern Portable Containers

  The demand for portable beer containers is growing, especially for small batches, and as more beer drinkers begin thinking about how their consumption impacts the environment. Beer consumers are a mobile population that’s on-the-go and looking for ways to enjoy local craft beer while traveling and enjoying the outdoors.

  Portable containers are an eco-friendly option to help consumers control their waste, while also allowing more access to rare and special-release beers. With the right marketing, portable containers encourage brand loyalty with greater exposure in the community and cost-effective refill programs.

  Burns said Craft Master Growlers’ products are ideal for anyone who likes beer, enjoys their local craft brewery scene, and also homebrewers who want to share their hard work and innovations.

“Craft Master Growler can be a delight for campers, boaters, tailgating, picnics and barbecues where a cold and fresh local craft brew is coveted,” Burns said. “Craft Master Growlers were designed for people who want a luxury, high-end product for their home, and the professional food service industry where quality and durability are so important.”

Expert Advice About Growlers and Kegs

  Industry experts who work with growlers and kegs every day have a lot of useful advice and tips about how to choose the best portable containers.

  “I think most people are aware that fads come and go, and plenty of companies jump briefly on the bandwagon,” said Burns. “So, you want to make sure you are not buying a cheap consumer product that will break or is destined for the basement, the yard sale or donation center.”   

  Winslow of Schaefer Container Systems’ said breweries should spend the money to customize their kegs for distribution. “You want to maximize your chances of getting them back!” he said.

  Shepanek advises craft breweries to invest in their own fleet of kegs. “Kegs are a great investment as they can last 30 years and pay for themselves quickly,” she said. “Leasing is a great option to keep cash flowing, but make sure it is an ownership-based program. Rental and logistics options can seem attractive and convenient, but many breweries end up locked into contracts for services they don’t need.”

Standing Out in a Crowded Room: The Beverage Distributor & Supplier in the 21st Century

Cyndi
man standing in between a line

There is a compelling evolution in the industry and from our vantage point, the industry is changing rapidly, every month – week – day!  As our country continues to change at the same rate, so must the beverage leaders to address this rapid evolution. Change, however, is difficult and having agility built into your company is critical to success. But, what is success? Many companies struggle with this notion. When asked “what is your one year and five year plan?” many just do not have an answer. This results in confusion at the top and bottom of your organization, as well as with the investment community. Planning is not rocket science but it is one of the most critical functions that leaders do for their company and intellectual property (IP). How does your craft company create, maintain and maybe even increase value?

  The number of phone calls we receive at Baker Tilly regarding mergers and acquisitions (M&A) for craft companies has increased significantly during past 18 months. This is a testament to the state of the industry. You can certainly see cognitive dissonance with the hype in relation to the number of brewers, distillers and even distributor licenses issued and in process vs. our M&A conversations.

What is not apparent, is how thin these companies are running. Many are not capitalized appropriately, have poor information systems, lack qualified management, have incomplete infrastructure, understaffed expansion markets, equipment requiring upgrades, and a limited understanding of their customers and markets. Just because sales are up (and that’s not for many brewers) doesn’t mean they are financially sound. There are many investors that haven’t seen any return on their investment and are being asked for more financial support in order for the business to become profitable.

It is not surprising that investors and over-worked managers are looking for an exit. Unfortunately, for many companies, valuations may be disappointing and in some cases, there is little to no interest from new investors in a craft company. These companies have failed to distinguish themselves in the increasing competitive and volatile marketplace. M&A is not a solution for many due to current sales trends, market share and financial performance. Waiting for a deal to break through and rescue investors is only an option for those with well-run operations.

  To overcome this situation, a solid strategic understanding of your business and a supporting plan is necessary. We are frequently asked, “How do I do this when I am so busy?” The last thing you want to say to yourself is that we completed our business plan a few years ago and everything is fine. Can your business really be fine with the amount and speed of change with consumer and retail demands? How you answer this question is how people are viewing you both internally and externally. There are very large companies with plenty of resources looking at your industry with plans and strategies to capture opportunities and improve operating performance with an appropriate funding. You must do what they are doing with a clear strategy and diligent planning processes that address the consumer, retailer and aggressively play to your strengths as a company.

  Understanding your industry, the trends within it and where you fit, is a critical first step The beer, wine, spirit and alcohol industries remain highly concentrated in the hands of the largest suppliers. There are now approximately 9,000 brewers in the United States and five of them control approximately 80% of the market share. Currently, there is a record number of distillers and distributors with licenses and many had aspirations of becoming a top-volume, successful operator in their city, state, region or even country. It was common to bootstrap the start-up phase while seeing others raise money from investors. Many began with multiple founders and received support from family members. Few were able to jump into business with all of the right funding for their business plan. No matter how it transpired, everyone is feeling the pressure of shifting demand, innovation, SKU rationale, minimum wage challenges and receding retail traction for their brands. 

  Smaller operators are trying to keep up with new entries as well as capture interest from distributors and retailers by blitzing the market with innovations or riding the wave of the latest consumer fads. Hazy IPA’s, craft spirits, cider, spiked seltzer, Kombucha and CBD-infused concoctions are all part of the buzz. Distributors want to make the most profit and retailers want to see SKUs with high rate of sale. Analytics matter and if you have not figured out how important it is to transcend beyond the ranking and distribution reports of the past, then you are missing the boat on getting your team focused on what matters most. Did you notice that the largest brewer on the planet just released a spiked seltzer of their own instead of buying one? What does this signal? Could it be they recognize small brand values are receding?

  The share of the pie continues to get smaller as more people seek licenses to brew, distill and/or distribute. What we are clearly seeing is the inability to support these numbers at the retail or distributor level. Those who signed up to own a brewer and scale it to multiple cities or states are finding it nearly impossible to make that vision come true.

  They are being transformed into bars and restaurants. Outside sales at retail are too costly to support and rate of sale with those SKUs is not keeping up with the standards set by many retailers. Small is fine and perhaps the best way to stay true to what you do best. Most off-premise retailers (grocery, convenience, packaged liquor stores) segment brands for the masses. From a supplier standpoint, it is critical that you have the relationship with your key distributors. How your brands fit into their local strategy is one of the most important aspects in your relationship. Owning your marketplace is a great way to stay small, grow organically and be ready to scale up once the business plan indicates success. As stated earlier, with 9,000 brewers in the industry, gaining higher market share than your peers should be the first priority.

  Which companies will grow and which ones won’t? Let’s go beyond the obvious characteristics like quality. If you really want success, then you must listen to the consumer and those closest to the front line. Take action and do not deny what you are seeing in the data or what distributors, retailers and consumers are telling you. There are plenty of new avenues for consumers to order, understand and even receive delivery of your product. Disruptors in the market such as Amazon Prime, Provi, goPuff and Barley Sober are changing the buying habits of consumers. Do not try to push a rope – pouring additional effort into something that is not getting traction will upset everyone in the supply chain. Create a strong plan that covers all the bases and includes funding and support from all stakeholders.

  What we are seeing is that the successful and valuable companies are those that are the most agile and adaptable. Meaning, they have identified the complexities within their operations and streamlined them with the help of business intelligence so they can spend more time focusing on growth. The traditional approach of just adding bodies to the mix is both costly and ineffective. Having a sound plan for brand growth driven by data is how you win. As we all know, the consumer is driving this complexity. Whatever generation you want to target, there is segmentation happening. How they spend their money needs to be a factor that is applied to your planning and innovation. The next factor to consider is the occasion in which the consumers are consuming. Developing your mix shift within each segment and brand is a very key factor when planning for the now and future. Addressing these consumer behaviors is critical for knowing what brands and SKUs to carry.

  Connecting the back-office fundamentals with the front line is another solid key to success. Link your back office to your front line employees. Speed and trust is critical in the beverage environment as retailers shift from on and off premise to all premise. We see great success when the plan fits the market strategy. It is a process of zooming out and then zooming back in to understand your product attributes and how they are perceived by consumers to ultimately achieve your objective and satisfy retailer needs.

  Retailers have less and less time for a sales pitch on your latest brand. Technology has made it easy for them to figure it out on their own. Your plan of attack should consider their desire to get to the point of the pitch and be right about how well it will sell. Call frequencies of your sales team should be developed with the retailer’s business needs and schedules in mind.

  Shareholder expectations and funding requirements are issues for everyone. Getting the most out of your resources and applying solid growth strategies are foundational pillars that keep the focus of your company on profitable growth.

  To lead in the 21st century, craft beverage companies have to rely on innovation and planning. The traditional route to market is not the same as yesterday. To be successful, understand your internal strengths and protect your brands and processes. These should be the cornerstones of your plan and that plan should be a working document that increases both trust and speed to market for your entire organization.

Reflections From One Year in Operation

Cyndi
2 men toasting while sitting down

By: Brian D. Kaider, Esq.

I met Christian Layke in April 2016, when he was still the head brewer at the Rockville, Maryland location of Gordon Biersch.  Like many others I had spoken to before, and since, he wanted to open his own brewery.  But, he wasn’t a homebrewer with romantic ideas of going pro with a 5 barrel system and a shoestring budget.  He had many years of education and experience in brewing (in addition to being a homebrewer) and had grandiose ideas of opening a full production brewery with a world-class taproom and launching immediately into distribution.  I was skeptical…at first.  I quickly came to realize that Christian had already developed a clear vision of what he wanted to build and had concrete plans to get there. 

  Fast forward to March 2020.  Christian and his business partner, Brett Robison, just celebrated the first anniversary of opening Silver Branch Brewing Company in Silver Spring, Maryland.  I sat down with them recently to reflect on the legal lessons they had learned in the three years leading up to their opening.

The “Harajuku Moment”

  One of the things that impressed me most about Christian was that when he first contacted me, he was already focused on obtaining federal trademark registration of the brewery name.  For many people, this thought comes much later.  But, Christian and Brett’s story highlights why this should be one of the first decisions.

  After conducting a trademark clearance search on their proposed brewery name, I had to give them the bad news that not only was it unlikely they could register the name, but that using it could expose them to legal liability based on another trademark owner’s rights.  This set off a back and forth discussion of new potential names that lasted many months.  In the meantime, they were moving forward with other phases of their brewery development; we were drafting operating agreements, deciding how to raise capital, and they were looking for commercial space.  Many months, many names, and many trademark searches later, we were still kicking around names.

  Then they met with their commercial real estate broker and had what Brett refers to as their “Harajuku moment;” an epiphany that turns a nice-to-have into a must-have.  Any landlord of the type of property in which they were interested was going to want to know what the branding of the prospective tenant was going to look like and they were going to want to negotiate with a company, not two guys with the idea of a company.  They needed a name and a branding image immediately. 

  They landed on Parallel World Brewing Company and we filed a federal trademark application on January 18, 2017.  On July 18, 2017, we received a notice of allowance from the trademark office, meaning that the mark could be registered as soon as they began using it “in commerce.”  In the meantime, they formed their LLC, opened a bank account, applied for their brewery permits, and began lease negotiations, all under the name Parallel World.

  That is when we got a cease and desist letter from another brewery with a registered trademark that they felt was too similar.  Although we believed their claim was without merit and that we would likely prevail if they followed through on their threat to file a cancellation proceeding against the Parallel World mark, it would have cost Christian and Brett money, time, and energy, all of which were precious commodities at that point.  Since they were still in the planning and building phase and had not yet opened their brewery, it made more sense to just abandon the name and try again.  As Christian put it, “if you’re not in business, you have no business being in this fight… just sigh and move on.”

  Ultimately, they feel that this process ended up benefiting them.  As they went back to the drawing board for a name, they spent significant time discussing and honing their vision of what they wanted their brewery to be.  It was an amalgamation of what they consider four key brewing cultures, Belgium, Britain and Ireland, Central Europe, and the Americas.  From this focus, they developed the imagery of their beer labels using cityscapes of those regions and they designed their taproom to have sections that pay homage to each culture.  From this concept they also found their new name, Silver Branch; a nod to their home location of Silver Spring, Maryland blended with the old world tradition of putting a branch outside your door to signify that you had beer for sale.  Additionally, in developing their new name, they also ended up with an extensive list of unused names, many of which have now become names of their beers.

  There are two overarching lessons from this experience.  First, start as early in the planning process as possible to develop a clear vision of what you want your customers’ experiences to look like.  Use this vision to guide your brand identity and the brewery name.  Second, file for trademark registration on the name as soon as possible.  Christian and Brett did everything right; they hired an attorney, researched the name, filed for registration, and got approval from the U.S. Patent and Trademark Office, and they still had to rebrand.  If they had waited until they were open for business before filing their trademark application and then had to face a cease and desist letter, it could have been devastating. 

The “Vegas Clause”

  The second thing that struck me as unusual when I first met with Christian and Brett was their focus on drafting an Operating Agreement.  Many clients will try to use a form they find online or ask if I have a “standard” operating agreement they can sign.  That is a huge mistake, because as Brett pointed out to me, “you don’t write these things for the agreement itself,” rather the value in drafting the agreement from scratch is that you get to know your partners extremely well and quickly learn whether you will be able to work together effectively.  In preparing the agreement, as Brett put it, “you put your soul to bare in front of another person and tell them everything embarrassing about yourself.” 

  In their case, one of the defining moments came when we discussed what would happen if one of them were to die unexpectedly.  It’s something most people don’t think about, but led to us drafting what they affectionately refer to as the “Vegas clause.” 

  The discussion began with two premises: 1) that if one of them died, their ownership interest would pass to their heirs, and 2) if one of them was divorced the ownership may be considered marital property, half of which would pass to the ex-spouse.  While that was fine on its face, it meant that the surviving owner could find themselves in a situation where they suddenly had a new partner who had no brewery experience, perhaps no interest, and possibly hostile intent. 

  So, we divided ownership interest in the business into two classes of LLC membership units; Class A, which were tied to managerial powers to run the business and had greater voting rights, and Class B, which had no managerial powers and lesser voting rights.  If one of the partners died, their ownership interest that was passed down to their heirs was immediately converted to Class B.  The same was true for any shares given to an ex-spouse in a divorce.  So, the heir or ex-spouse maintained the economic interest without the power to run the business. 

  The problem was that at the time we drafted the operating agreement, Christian was married, but Brett was not.  So, when the agreement was to be signed, we could have Christian’s wife sign her acknowledgement of the clause that her interest would revert to Class B shares.  But, we could not do the same for Brett.  This created a loophole where, purely hypothetically, Brett went on a bender in Las Vegas, found himself unexpectedly married (with or without Mike Tyson’s tiger in his bathroom), and quickly got a divorce or was killed and Christian would be stuck with a new partner with Class A shares, because Brett’s new wife had never signed the agreement.

  Thus, the “Vegas clause” was born.  It provided that Christian or Brett had to provide the company with a signed acknowledgement of the conversion to Class B clause from their spouse-to-be at least 5 days before entering into a new marriage.  Failure to do so would cause their Class A shares to convert to Class B.  The converted units could be reinstated to Class A upon receipt of the signed acknowledgement and upon a 2/3 vote of the Members.

  The lesson here is not in the details of this clause, but that these issues would never have come up if Christian and Brett had just pulled a “standard” agreement off the internet.  There is tremendous value in discussing these issues and ensuring that everyone is comfortable with the relationship.  Like an insurance policy, you hope that these clauses never come into play, but if something bad happens, it is a relief to know that there is a plan to allow you to move forward.

The “Curve-Ball”

  Ask anyone who has opened a brewery and they will tell you that EVERYTHING takes more time and money than you expect.  With a nod to Helmuth von Moltke, “no business plan survives first contact with the government.”  Christian and Brett learned that lesson painfully. 

  The location they found for their brewery was the bottom level of an office building in downtown Silver Spring.  It was a massive undertaking that required significant renovation, including raising the floor of one section of the building to match the rest.  After multiple rounds of discussions with architects and engineers, they were literally one signature away from getting their building permit.  Just then, the person whose signature they needed last went on vacation.  So, their application went to that person’s boss, who decided that because their proposed business required a “change of use” for the premises from office use to light industrial, they were required to bring the entire building up to specification with the new energy code. 

  What this meant was a very expensive upgrade to the building’s HVAC system and a construction delay of months.  After much blood, sweat, and tears (and money), the upgrade was completed and they celebrated in the moment captured in the photograph above; Christian and Brett toasting with a glass of scotch outside the door of what would become their brewery, the building permit in Brett’s hand.

  The specific legal lesson is that if your proposed location would require a change of use, ensure that the property is grand-fathered into the old code specifications before signing the lease.  More generally, though, think through all of the issues as thoroughly as possible before you get started, but be prepared for the fact that you will be thrown curve balls.  Budget for more than you think you will need (it won’t be) and build a team around you to help navigate the unexpected.

A Year Later

  Even with extensive experience, Christian and Brett faced a steep learning curve in building their brewery. That didn’t end when Silver Branch opened its doors.  Expanding their food service, working with artists to develop product labels, adding or changing vendors, and building their distribution network, they have encountered numerous new challenges. But, it sure is nice to meet those challenges with a glass of world-class pilsner in their bustling taproom.

  Brian Kaider is a principal of KaiderLaw, an intellectual property law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.

Lessons Learned from Opening a Taproom-Focused Brewery

Cyndi
taproom at pike place signage

By: D.C. Reeves, CEO, Perfect Plain Brewing Co., Pensacola, Florida

Blame craft spirits, seltzer or industry saturation, but the reality today is that craft beer is going to face its biggest challenges yet in the coming years. This is a turning point for the industry, and at a micro level, this challenge can present a turning point in your own market.

  Every brewery should be assessing what it does well, what it doesn’t and coming up with a plan to set itself apart. I wanted to share more of the more unique lessons we’ve learned about where we concentrate our time and resources that could help those thousands of taproom-focused breweries around the U.S. build and sustain their niche.

If you have a brewery you understand the value of top-quality product. We don’t need to cover that part. Let’s dive in on things that can separate you from your competition.

  I discuss a multitude of ways to do this in The Microbrewery Handbook. Graciously, Sam Calagione from Dogfish Head, Jeffrey Stuffings from Jester King and other experts shared their thoughts in the book about what they’ve learned along the way.

  Here are three key things that we learned and adapted as we opened and ran Perfect Plain Brewing Co. in Pensacola, Fla. starting in 2017 that helped us grow to one of the busiest taprooms in the state of Florida.

Taproom Vibe Matters (More than equipment sometimes)

  We spent a great deal of time deciding on the marriage in our budget between equipment “nice to have’s” and taproom. We ultimately decided to gear money towards the taproom and the taproom experience, and we’re thankful for that.

I visit breweries all over the nation that have sparkling new brewing systems and a neglected taproom. Imagine if a restaurant hired the most accomplished chef in New York City, built the most expensive kitchen, then left the dining room with bad lighting, plastic tables and old carpet? Would the chef and kitchen be worth the investment? Of course not.

  Don’t overlook the expenses of creating a great taproom. Having good furniture and fixtures. Good doesn’t mean expensive, it just means if you can afford a $300,000 10-barrel turnkey brewing system, you shouldn’t have your taproom look like a mismatched thrift store.

We can always grow into and upgrade equipment. It’s much, much more difficult to pick up and move a taproom or overcome a lacking first impression if your taproom isn’t up to par when you open.

  We are about to expand into a wood-aging program next door – it’s called The Well and will open this fall. This growth is attributed to us focusing on taproom first, and that success allowing us to do even more on the beer equipment side later.

Focus on Programming Your Space

  In the taproom model, the taproom is your sole business engine. We need to fuel it with events and fun to keep it busy, not just sit back and hope people come in.

  This is something we focused on from the start, but we’ve ramped up significantly in the past year or so. We wanted to be proactive about what brings people into our taproom. When we moved from one manager to two managers, we created an events position that would be charged with just one responsibility: Bring people into our taproom.

  So we’ve done all sorts of things: Drag shows, Harry Potter nights, trivia, we decorate the entire taproom for four days for Pensacon (our community’s version of ComicCon), we do pop-up theme bars in Garden & Grain, our cocktail garden behind the brewery.

  There are other things you can do: Synergize and integrate your brewing schedule and batch planning with your programming calendar from the get-go to give your patrons an immersive experience that has fun beer releases tied to it. A shared calendar with reminders set three months in advance can give you enough time to plan a special beer release, prepare a one-off pilot batch, or order seasonal ingredients for use in a beer for an approaching holiday. At Perfect Plain, we’ve found success with this simple reminder system that we check when we sit down to do our batch planning and raw material orders.

  What NOT to do is get desperate and offer deep discounts on your product as an attraction model. While you may see an increase in taproom foot traffic, you slowly devalue your product to the point that customers no longer desire to pay “full price” because they know they can get it somewhere else.

Learning to care about your employee culture, engagement and hiring well

  One distinct advantage I was fortunate enough to have when opening Perfect Plain Brewing Co. was working for Quint Studer, who pioneered customer service and organizational change in healthcare with his company, StuderGroup. They taught hospitals all over the nation about how to treat patients, treat employees and build winning cultures.

I was able to learn from Quint and adapt some of those tools to the beer business. That said, this also made me realize how much of a forgotten piece of the puzzle hiring and employee culture are in our business. We like to talk about how collaborative we are as an industry, but ask yourself, how are we when it comes to focusing on treating our own employees well?

Here are a Few of the Things We Installed at PPBC

  We have a three-interview hiring process for all positions that ultimately ends with peers making the decision on who to hire. I know, sounds like overkill. Maybe a little crazy. But it works. It allows all parts of the organization to have ownership of new hires and it gives employees the sense of ownership that their opinion on employees matters.

  We are one of the only bars or restaurants in North Florida with less than 50 employees to start offering comprehensive health benefits to our employees for 2020. It’s a significant expense, but an important one to send the message that these jobs are important, these people are important, and their work is important. I’m not saying you have to go to that extreme but think about measures you can put in place that build your employees’ sense of ownership.

  Another key piece to caring about your staff and culture – and a must for us each year – is doing an employee engagement survey. This is an assessment of how your employees feel in many different categories. The value of this is to not only know where you and your company stand with your employees, but it lets your staff know that their opinion counts and is heard. We have made some adjustments each year based on this feedback, so it has proven immensely valuable.

Questions Like:

•    Does the organization employ people whom I like to work?

•    Do my coworkers and I share a strong work ethic?

•    Are many of my coworkers performing at an acceptable level or better?

•    Do I feel connected to my coworkers?

•    Is the work I do meaningful?

  In The Microbrewery Handbook I have more details of how we conduct this survey (it’s not hard!) and the complete list of the 34 questions I ask my employees that could help you get started with your own survey.

  These tactics are especially important with a taproom focused staff. Your taproom staff is the face to your entire revenue stream. You want them happy and feeling a sense of ownership about the company.

For more information about The Microbrewery Handbook or brewery consultation email dc@perfectplain.com