You started your company likely because you have a passion for what you do, for the joy it brings to your customers, or because it makes money. Finding something that brings you excitement and that you can make into a career is a really special thing. I’m going to guess that when you dove into what you love, you had at least one unexpected surprise along the way in the “business-y” part of your business.
In the decade I spent working in sales and quality within the beer industry, I realized that most brewery owners’ primary struggles stemmed from not knowing what they did not know. This isn’t some sort of inception-coded concept, just the reality that most beverage company owners don’t come from business or finance backgrounds.
With the sharp turn that the industry has taken in the past several years, the chief planning gap we are seeing is the lack of exit strategies. Many companies are running into losing revenue due to changes in drinking habits, tariff costs, or general economic slides. It’s heartbreaking for me to watch these long-standing companies run up against challenges like these with no safety net and no plan to navigate through it. Now, the challenges I just named are generally out of your control. Exit strategies are not about controlling the uncontrollable, they’re about safeguarding everything else.
Establishing and maintaining a solid exit plan that accounts for many of the possible outcomes, but most importantly the outcome you want, is as essential to your business plan as your marketing plan or cash flow management.
Many brewery exits are accidental (and painful) but with proper financial planning, they don’t have to be. Financial planning gives you leverage in your business and with your money – even if you never sell. One strategy that my clients have used is implementing tax-advantaged cash-value permanent life insurance. Sounds weird, right? It’s not! Let me explain…
Tax-Advantaged Cash
We all know that we need to plan for operations, cash flow, and retirement planning but the gap we find most often with our business-owner clients is that they have done no planning for the time between near-term and long-term. Implementing a safe place for funds that is guaranteed not to lose value and can grow tax-advantaged can mean the difference between failure and survival (or a graceful exit). By planning for what happens between now and when our retirement dollars are accessible, we close the gap. This is, of course, best discussed with your financial planner as this insurance is not available for everyone; however, based on a recent Earnst & Young study, financial plans with this type of tool outperform investment-only (and term life plus investments) strategies every time.1
Most of our clients will implement this piece of their financial plan as part of their buy-sell agreements; there are many ways to structure cash-value life insurance and depending on how many people you have at the helm of your business, these policies can be a great source of capital when times get rough.
Speaking of a buy-sell agreement – do you have one? I would venture to guess that most of you, the readers, do have something in place, but have you reviewed it with your financial planner? Many of our new clients come to us with agreements in place that lack vital components like disability overhead insurance, a current business valuation, or clear funding mechanisms because they did not have a meeting of all of the minds. So, let’s talk about it.
Disability overhead insurance protects a business’ ability to keep the lights on, the beer cool, and the employees paid even if an owner or a key person becomes disabled and can’t work. Disability can encompass a wide range of situations beyond physical injury. We’ve observed full disabilities due to mental health concerns, temporary disabilities following a cancer diagnosis, and various others arising from life events experienced by our clients. Rather than your cash flow and revenue grinding to a halt while expenses continue to pile up during a key person’s disability, this type of policy steps in to cover essential costs like rent, utilities, payroll, supplies, insurance premiums, and professional fees. With this protection, instead of shuttering the business, burning through cash reserves, taking on debt, going through panic layoffs when a key person receives a horrible diagnosis or injury, you can allow that person to focus on a full recovery and keep cash flowing as normal. This protection buys you time, stability, and options so that one person’s health crisis doesn’t turn into an existential business crisis. In terms of your buy-sell agreement and exit plan, having this protection in place can determine whether you get to choose your exit strategy or if it chooses you.
Now, I know a lot of this is incredibly morbid. It’s no fun to think about – it’s the beverage industry for cripes sake! We’re here for the party! That’s where a good financial planner can help you focus on the parts of the business you want to focus on. A good financial planner will likely be not only one of the most positive people you know, but also someone who genuinely considers you, your business, your team, and your family. Simultaneously, they are unafraid to tackle the less glamorous, non-sexy aspects of planning to ensure your financial well-being.
Business Valuations & Your Financial Plan
When planning an exit strategy, a business valuation is not just nice to have, it’s the foundation for smart decision-making. A good business valuation will tell you what your business is actually worth, not what you hope it’s worth. This matters for everything from your buy-sell agreement and succession planning to insurance coverage, financing, and potential exits. Without a credible valuation, you’re flying blind, risking disputes, and risking being underinsured. A clear defensible valuation turns guesswork into strategy and gives you a stake in the ground of reality.
A solid exit strategy is built long before an owner is ready to walk away; it can only be made by implementing a diversified and holistic financial plan that grows with you and your business so that you can guarantee control of the controllables. A strong business valuation is going to set the baseline by defining what your beloved business is worth on paper, which will inform how your financial plan will perform and subsequently how many options you have for your exit strategy. Cash-value life insurance can fund your buy-sell agreements, create liquidity for your heirs or partners, and prevent a forced sale at the most harrowing of times. Disability overhead insurance protects the business’s day-to-day viability along the way, ensuring an unexpected health event doesn’t erode value before an exit ever happens. A unified approach with all these players on your team will protect the business, protect your leverage, and foster the outcome of your dreams.
1 Earnst & Young, 2024. Benefits of integrating insurance products into a retirement plan. 2411-10068-CS_ey-benefits-of-integrating-insurance-products-into-retirement-plan_v22
As we prepare to roll out the barrel for Oktoberfest, the world’s most renowned beer festival taking place in Munich, Germany, we invite you to immerse yourself in this grand celebration of Bavarian culture. This annual two-week event showcases an abundance of beer steins, pretzels, lively dancing, traditional attire, beer tents, carnival rides, and fun. Although its name suggests it occurs in October, Oktoberfest kicks off in September. This year’s festival begins on September 20 and continues until October 5, 2025, marking an impressive 190 years of festivities! We will explore the various aspects of Oktoberfest, including its financial impact on the Munich economy and how these valuable lessons can be applied to your beer business.
Oktoberfest History
The inaugural Oktoberfest took place on October 12, 1810, as part of the wedding festivities for Crown Prince Ludwig (later King Ludwig I) of Bavaria and Princess Therese von Sachsen-Hildburghausen. Residents were invited to enjoy a five-day celebration culminating in a horse race at Theresienwiese or “Therese’s green.” The event’s popularity led to the race being held annually, eventually evolving to include food stalls and beer tents, resulting in the pop-up beer halls made of plywood, complete with interior balconies and bandstands, that visitors enjoy today. These beer halls and tents accommodate over six million guests anticipated at the 2025 Oktoberfest.
Preparations for this year’s event started June 30. Each Munich brewery constructs temporary structures with seating for around 6,000 people. The breweries also participate in parades featuring beer wagons, floats, and people dressed in folk costumes. The mayor of Munich officially opens the festival by tapping the first keg. Total beer consumption during Oktoberfest exceeds 75,800 hectoliters (approximately 2 million gallons).
Economic Impact of Munich Oktoberfest
Oktoberfest serves as a significant driver of economic growth, generating €1.25 billion and accounting for up to 2% of the city’s Gross Domestic Product (GDP). Millions of visitors from across the globe greatly contribute to hotel occupancy rates, dining, shopping, and public transportation. Despite rising beer prices and high inflation, 6.7 million guests attended Oktoberfest last year. Each year, 12,000 to 13,000 jobs are created due to the festival, resulting in an annual wage growth of 6.6%.
The creation of both temporary and permanent job opportunities benefits individuals and bolsters the city’s economy. The influx of workers leads to increased spending in Munich, positively affecting businesses beyond the festival. Local restaurants, transportation services, and accommodation providers all experience heightened activity, contributing to the city’s overall economic vitality.
The Department of Labor and Economic Opportunity reported that Oktoberfest had a significant economic impact, attracting about 7.2 million visitors who spent €442 million on the festival grounds. Total spending on food, drinks, and rides reached €1.25 billion. Visitors from outside Munich spent €505 million on accommodations, boosting the hotel sector. Beer tents generated €300 million, with setup costs between €1-2 million, and organizers earned a 7.8% profit. The festival produced 7 million liters of beer, resulting in €75.7 million in tax revenues. The hotel and hospitality sectors gained €500 million, while stalls, bars, and rides contributed €140 million to the economy. Souvenir sales, including Lederhosen and Dirndls, added €160 million to individual trade.
Long-TermEconomic Impact
Beyond immediate economic benefits, the festival also generates long-term advantages. Oktoberfest fosters strong brand recognition and nostalgia for Germany, attracting year-round visitors and tourists, leading to revenue that stretches beyond the Oktoberfest season. This allure encourages infrastructure investments and foreign businesses, directly benefiting the German economy, promoting international collaborations, and enhancing the nation’s global presence.
Willkommen (Welcome) to Oktoberfest in the U.S.
Some of the most popular Oktoberfest celebrations in the U.S. include:
1. Oktoberfest Zinzinnati (Cincinnati, OH), September 18-21, 2025, largest with 800,000 2024 attendees.
2. The Denver Oktoberfest (Denver, CO), September 25-28, 2025, activities: keg bowling to stein hoisting, live music and more.
3. Oktoberfest La Crosse, (La Crosse, WI), September 25-28, 2025, longest running.
4. Big Bear Lake Oktoberfest (Big Bear Lake, CA), September 6- November 8, 2025, celebrating 55 years.
5. Helen Oktoberfest, (Helen, GA), September 25 – November 2, 2025.
6. Mt Angel Oktoberfest, (Mt. Angel, OR), September 11- September 14, 2025.
7. Wurst fest (New Braunfels, TX), November 7- November 16, 2025. Ten-day festival that raises over $20M for nonprofits.
8. Reading Liederkranz Oktoberfest, (Reading, PA), October 1 – October 5, 2025.
9. Schmidt’s Columbus Oktoberfest, (Columbus, OH), September 5-September 7, 2025
10. New Ulm Oktoberfest, (New Ulm, MN), October 3- October 11, 2025.
Bavaria in America
Here are some of the most delightful Bavarian villages in America:
1. Leavenworth, Washington: Leavenworth, set by the Cascade Mountains, has evolved from a logging town into a Bavarian-themed destination. Highlights include alpine architecture, beer halls, the Nutcracker Museum, the Christmastown Village of Lights, Oktoberfest, and year-round outdoor activities.
2. Frankenmuth, Michigan: Founded by German immigrants in 1845, Frankenmuth is known as “Michigan’s Little Bavaria.” The town hosts numerous annual festivals, including a Bavarian Easter, World Expo of Beer, and Christmas events. Don’t miss Bronner’s Christmas Wonderland, the world’s largest Christmas store.
3. Helen, Georgia: Helen is a village in the Blue Ridge Mountains, located about 100 miles northeast of Atlanta, recognized for outdoor recreation options. The town has cobblestone streets and offers wine tasting, mini golf, a water park, and German cuisine. September and October bring visitors for Oktoberfest, while the Christkindlmarkt is held during the holiday season.
4. Fredericksburg, Texas: Established by German settlers in the mid-1800s, Fredericksburg features architecture such as a replica of a 19th-century German church and has a local wine industry with over 100 wineries and vineyards. Located within reach of Austin and San Antonio for day trips, Fredericksburg holds more than 400 festivals and events annually, including a three-day Oktoberfest and a fall Food & Wine Fest.
5. Vail, Colorado: Vail blends Swiss and German architecture with notable charm, making it one of the top ski destinations in the United States. Stroll cobblestone streets, enjoy Austrian-Bavarian cuisine and stay in cozy Bavarian-style lodges.
German Heritage in the United States
It’s fascinating to examine the geographic distribution of populations identifying with German heritage.
Ready to Roll Out the Barrel? Is your beverage business prepared to leverage Oktoberfest’s popularity and success? Here are some insights and ideas to consider.
Leverage Technology
E-commerce and social media platforms are crucial for breweries to engage consumers and boost sales. Embrace digital media to fully exploit the Oktoberfest brand and its seasonal appeal. Think about how your business can capitalize on this by:
a. Utilizing e-commerce platforms
b. Engaging social media
c. Implementing innovative digital marketing strategies
Consider creative approaches, such as partnering with a sister city near Munich or livestreaming from events. Additionally, utilize technological tools like AI and ChatGPT to explore opportunities and gather insights.
Enhance Customer Experiences
Consumers are eager to invest in premium, high-quality, and unique beer experiences, providing craft brewers an opportunity to distinguish themselves. How can Oktoberfest be optimally utilized to create memorable experiences for patrons? Reflect on whether your craft brewery or distillery could host events such as an Oktoberfest celebration, “A Taste of Bavaria,” or even a live beer tent with Polka dancing. Additionally, consider how to enrich the taproom experience with food pairings, engaging events, and various activities that will captivate and resonate with consumers.
Share Your Story
Brewers focusing on regional storytelling, ingredient sourcing, and eco-friendly practices are likely to connect with today’s value-driven consumers. What compelling aspects of your unique business journey stand out? Can you collaborate with similar businesses or local events to enhance and promote your craft brew brand? This approach can help narrate your local company’s story. Emphasizing regional storytelling and sustainable practices can truly resonate with consumers seeking meaningful connections.
Diversify and Test
a. Explore brand diversification and testing to introduce new and improved beverage options. Diversify Product Portfolios: Offer a mix of traditional and non-traditional drinks to cater to a broader range of consumer preferences.
b. Sales of non-alcoholic beverages, both within and outside of Munich’s Oktoberfest beer tents, surged by 50% compared to the previous year.
c. This trend aligns with significant shifts in the U.S., where consumer interest in unique flavors, as well as non-alcoholic beers and beverages, is on the rise.
d. Invest in Non-Alcoholic and Low-Alcohol Options: Dedicate resources to research and develop high-quality, flavorful non-alcoholic and low-alcohol beverages.
Oktoberfest can be a flagship event to capture and reinvigorate beer sales. By exploring its history, aligning your beer brand with regional and local celebrations, and tapping into Oktoberfest’s brand equity, beverage businesses can capitalize on the festival and position their business for success.
Raj Tulshan is founder and managing partner of Loan Mantra. For more information visit www.loanmantra.com or connect with Raj at https://www.linkedin.com/in/tulshan/.
Purpose in Brand Owner and Manufacturer Relationship and a Look at Some Key Provisions
By: Brad Berkman and Louis J. Terminello, Greenspoon Marder
Brewers and brand owners both, do not underestimate the importance of a well drafted “contract bottling agreement.” First, for the uninitiated let’s briefly explore what in fact, a contract package arrangement is and brand development within the context of that arrangement.
Breaking into the realm of manufacturing alcoholic beverages can be a very expensive endeavor. Startup costs for opening a brewery, distillery or a winery can be immense. Even startup costs at the “craft” level are significant. Land and facilities must be bought or leased, mechanical, electrical, and plumbing systems need designing and buildout, and of course, manufacturing equipment such as tanks, stills, bottling lines, and pumps must be purchased and installed, among many other things. The costs can be very high. Hundreds of thousands of dollars, likely even more, will come out of pocket before the first bag of grain is poured into a mash tank, distilled, and bottled, labeled, and a corked brand comes rolling down the bottling line. Of course, merely producing an alcoholic beverage brand is just the beginning. The idea is to sell bottles, boxes, pallets, and container loads of happiness in the bottle. This of course requires tremendous expenditures on brand marketing, sales, and promotional initiatives. Happiness in the bottle can quickly turn into weeping in one’s glass if poor planning is exercised.
Enter the contract package arrangement. A business deal that benefits the independent brand owner and marketer and the skilled brewer, distiller, or wine maker. It is the foundation of a symbiotic relationship that cuts costs for both parties and goes a long way in increasing the likelihood for the economic success of each. In the simplest terms, in a contract package relationship, a brand owner will “contract” with an existing manufacturer to produce and bottle and alcoholic beverage for the owner. All production and labor are contributed by the producer, paid for by the brand owners, ultimately leading to a finished product owned and ready for sale in the market by the brand owner.
For manufacturers, contract packaging, in addition to bottling their own labels, can be a significant and badly needed additional stream of revenue. For the brand owner, the significant cost savings from avoiding building out a plant are immense and allows for valuable financial resources to be directed to advertising and marketing activities. After all, a bottle is not going to come off the retailer’s shelf by itself.
With the above in mind, this article will examine some of the key provisions that must be addressed in any well drafted contract packaging agreement that are likely concerns of both parties to any agreement of this sort. When crafted properly, the agreement will ensure that the rights, duties and obligations of both parties are clearly defined, ideally leading to an unambiguous business relationship. It is important to note that every deal is different, and the terms of a well drafted agreement will be deal specific. The below provides general but important guidance on some essential terms.
A few Key Provisions:
Intellectual Property Rights and Licensing
The brand owner almost always has spent significant treasure in developing a brand name and identity. The first step in protecting brand ownership commences in fact prior to entering into a contract packaging agreement. The brand owner should make every effort to trademark the brand name and logo in the appropriate trademark categories prior to bottling and sale in the marketplace.
Building brand equity or value is a labor intensive and costly exercise. Trademarking the brand name is an absolute requirement to ensure brand value remains with the owner. As for the contract packing agreement, the brand owner will grand a limited, non-exclusive license to the manufacture to produce and bottle the product for the duration of the agreement. At termination of the relationship, the limited license shall cease to exist, and the manufacturer will generally have no future rights to the brand name.
Formulation, Ownership
Product formulation must be addressed in these agreements as well. Both the manufacturer and brand owner must agree prior to production, the formulation specifications and method of manufacture of the liquid in the bottle. A well-crafted agreement should address deviations from the agreed upon formula. If a dispute arises between the parties in regard to formulation and product quality or integrity, a means for determining fault should be incorporated into the agreement. It is highly recommended that third party laboratories are identified in the agreement where the finished product can be sent for testing and ultimately assignment of responsibility.
Compensation to the injured party for out-of-spec liquid should be codified as well. The contract should also address formula ownership and use of the liquid. Common place vodkas, as example, are drastically different from unique formulations with unique ingredients. Assignment of ownership of the formula should be addressed in any contract packaging agreement in a similar fashion as usage of the brand name as described above.
Raw Materials, Packaging
Every beverage product produced requires raw materials and packaging materials. Grains, malt, yeast, and other ingredients are required as well as bottles, labels, stoppers, and cases. These items can be secured by the manufacturer as part of the contract arrangement, or they can be secured by the brand owner and delivered to the producer’s plant (producer is used interchangeably with manufacturer). The acquisition of these items is very important for many reasons including the quality of the materials used and the costs involved.
Ultimately, the costs of these materials will determine the price of the finished product on the shelf. The parties to any agreement should establish roles and responsibilities for obtaining these items to ensure adequate supplies of the same at the right cost point. Storage of inventory of both raw materials and packing and how to deal with defective materials should be sorted through by the parties with the costs assigned accordingly.
Production Quantities
Production amounts are an essential element of negotiations and memorializing them in an agreement is vital. Both the manufacturer and brand owner need to align their expectations on this issue. Either party will quickly cry breach of an agreement if the manufacturer cannot produce the quantities the brand owner requires and conversely, the manufacturer will do the same if the brand owner does not contract and purchase the quantities bargained for.
Realistic volume expectations need to be established for both parties to the agreement. As an offering of sage advice, if there is not a meeting of the minds on this issue by the parties, it is best to walk away from any arrangement. Further, it is advisable to incorporate reasonable and realistic annual volume growth expectations, year over year, in a multi-year agreement.
Payment Terms
It goes without saying that payment terms may be the most important part of a contract packaging agreement. Clearly both parties need to know when they will make and receive payment and the timing of the same. In some instances, manufacturers may be willing to provide favorable credit terms, (most likely offered to a long-standing brand owner partner who has well established credit).
In many instances manufacturers may require all monies to be paid prior to production. In other instances, they may require one-half of the production amount prior to commencing manufacturer, the remainder due at pick up of the finished product. Once again, this essential term must be negotiated and memorialized in a well drafted contract package agreement.
Quality Control and Product Recall
This provision was briefly mentioned above but is worth restating here. Ideally, production moves along without a hitch and product quality and integrity remains excellent. Of course, that is not always the case. There are times when product formulation is off or foreign objects make their way into the bottle. The parties to a production agreement must memorialize issues such as the right to inspect finished product prior to leaving manufacturers warehouse, the procedures and allocation of costs if in fact product must be recalled.
As a final thought, contract packing agreements must be beverage law compliant. Additional terms in the agreement must comport with and be legal under alcohol beverage law and the parties to the agreement must be licensed accordingly.
The above is very much a sketch of some important issues that must be addressed in a well-crafted contract package agreement. There are many other areas that must be negotiated between the parties and included. A word to the wise, it is always beneficial to both parties to consult with attorneys who are experts in this area. Ideally, the agreement should provide a business framework that makes for a productive relationship between manufacturer and brand owner and anticipate problems that may arise and incorporates mechanisms and procedures for addressing reasonably foreseeable issues.
When the “craft beer revolution” began, there was a purpose. The craft beer industry was built by people who had been to the promised land and seen the light. That promised land was usually somewhere in Europe, and the light was not all that light. It was a revelatory moment in which a drinker found themselves confronted with beers that were not the light, bland, American-style macro lager they knew at home, but rather beers that were dark, moody, and hoppy. They were beers bursting with flavor and individuality, something that those American beers lacked. Those people returned from their promised land as evangelists, priests of a new order built to spread the gospel of those beers to a new, insulated, naïve market. Craft beer was born.
The roots of what we
learned to see as normal craft beer offerings came through the lens of one
book. It is so ubiquitous in the craft beer industry that some older beer
veterans have referred to it as “the Bible”. The reverence with which Charlie
Papazian’s book The Complete Joy of Homebrewing has been treated, as well as
Papazian himself, who recently retired from the Brewers Association, makes it
easy to draw a direct line from that book to the development of the modern beer
industry.
Ignore, for a moment, that
many professional brewers still brew with the dated knowledge presented in that
book: knowledge that still makes great homebrew but is fairly basic for a
professional brewery. The recipes presented in the book in the 1970s are the
harbingers of the industry’s path to maturation some 15 to 20 years later.
By the 1990s, in the first
big boom of the craft brewing industry, every brewery in the country worth its
salt was putting out the same simple lineup: Golden Ales, Brown Ales, Pale
Ales, IPAs, and Porters or Stouts. All the flavors of beer. Breweries with
extra tank space might have thrown in the occasional lager, but since money and
space were often limited, lagers sometimes fell by the wayside. Invention and
innovation in the brewing industry leapt directly from Charlie’s books. He
published what was probably the first pumpkin beer recipe. He let us know that
honey was a great addition to brown ales, that fruit belonged in dark beers,
and that historic styles that no longer existed were cool.
At the same time, the beer
industry itself was working as hard as it possibly could to lower the barrier
of entry to open a brewery. As startup brewers were treated like royalty by
eager homebrewers, those brewing pioneers began to release books regaling fans
with the tales of opening a brewery and all of their mistakes, so that you –
the eager reader – would not be doomed to repeat them. It seemed like writing a
business book was a prerequisite for owning a nationally-distributed brewery
for a decade or so. Ken Grossman (Sierra Nevada), Sam Calagione (Dogfish Head),
Jim Koch (Sam Adams), Tony Magee (Lagunitas), Steve Hindy (Brooklyn), Tom
Schlafly (Schlafly), and James Watt (Brew Dog) among others have all written
books about starting their breweries that, to some degree or other – mostly
blatantly – encourage the reader to believe the idea that starting a brewery is
an achievable task, even if you don’t know what you’re doing.
The Brewers’ Association itself followed suit by releasing a book plainly titled “Starting Your Own Brewery”. The first edition was a loosely tied together collection of academic articles and essays that acted as a dry review of boilers and floor sealants of the 1990s, but the second edition was transformed into an easy manual to start a brewery by Dick Cantwell (Elysian, Magnolia). The Siebel Institute of Brewing Technology even went so far as to hold a “How to Start a Brewery” course using that book as a rough textbook. The course did not teach people to make beer or run a business. It taught people how to start a brewery.
And so, the barrier to
entry became the notion that “It’s just so crazy it might work” and the
finances to afford the most minimal amount of equipment. Buoyed by an industry
(and industry association) that boasted double digit growth numbers for 20+
years, banks were eager to throw loans at anybody who could write a passionate
business plan.
But when those breweries
started, they were different than the earlier ones. They were not built by the
originators and inventors, the people that had traveled abroad and found new
ideas to bring home. They were started by their fans. They were started by
eager homebrewers who wanted to do the same thing their heroes did, and when
they started breweries, they started homebreweries instead.
Over the past decade and
more, homebrew took a natural step from Charlie Papazian’s creative recipe
starts into the concept of Extreme Brewing. You can thank Beer Advocate for it.
Though their tame definition, “A beer that pushes the boundaries of brewing” is
an easy definition to apply to even, say, the latest trends of non-alcoholic
beers and low-cal IPAs, their intent was made clear in their preference for
high alcohol offerings and rare, outlandish ingredients that was showcased on
their website, and at Beer Advocate’s Extreme Beer Fest.
In breweries at the time,
these extreme beers were fairly uncommon. Dogfish Head’s brewers stood out
among their peers as the people who were most likely to throw lobster in the
boil kettle, or have their entire staff chew corn to make a traditional chicha,
but in homebrew it was an easy step. Ingredients that are off-limits to
commercial brewers due to cost, scale, or regulatory reasons pose no impediment
to a homebrewer.
The only thing stopping
any homebrewer from making a beer out of 10 lbs of Snickers bars is the cost of
10 lbs of Snickers bars.
For years, the Brewers’
Association had a mantra based on fear: Quality is the most important thing.
The fear was that a potential customer would try craft beer for the first time
and it would be terrible and they would never try any craft beer ever again.
The idea that a macro American lager drinker would walk into a craft brewery,
drink a sub-par IPA, and then give up forever is a myth. Instead, that drinker
tried beer again, maybe not that day, but at some point. Everybody drinks craft
beer now, macro American lager drinkers.
For years, craft breweries
were not at the mercy of their customer’s tastes, they defined them. Now, the
educational period is over.
When thousands of
homebreweries started throughout the country, they brought their recipes with
them and taught millions of craft beer fans to love what they made: chock full
of lactose, breakfast cereal, candy bars, fruit, and all kinds of sugars. More
and more brewers experimented with more and more ways to get hops into beer,
because they had been trained by those giant hopheads of yesteryear, and they
found the gold mine in New England IPAs.
Today, our most successful
small breweries flourish on a small variation of hazy IPAs, fruited sours, and
dessert stouts. Our most successful large breweries cling to the waning
popularity of their flagships in a broken distribution system.
Now, most craft beer fans
value alcohol, adjuncts, and adjectives over quality and classic styles.
And they should. We taught
them to. The only way back to classics
is forward through education and inspiration of a whole new set of craft beer
fans.
Erik
Lars Myers is an author, brewer, and
lover of beer. He currently works as the Director of Brewing Operations at
Fullsteam Brewery in Durham, NC where he strives toward innovation every day
while supporting the Southern Beer Economy by using brewing ingredients sourced
and grown across the American South.
If you’re pouring your passion into distilling a quality crafted
product, you need equipment that’s manufactured using that same level of
passion. You want quality equipment that will not breakdown, is easily
maintained, and most importantly, matches the needs of your distillery. It’s
especially true for pumps because they are used throughout every stage of the
distilling process, from bringing in water, through the mashing stages, wort
recirculation, fermentation transfer, distilling, filtration and filling of
barrels, totes and bottles. Quality pumps are critical for a distillery to
retain the ability to replicate and deliver a consistent product for their
consumers and should be chosen based on needs regarding pressure, proof of
liquid to be transferred, head capacity, viscosity and acidity of the product
being pumped.
Yamada America Inc. Stresses Versatility, Experience and Partnership
“Diaphragm pumps have many advantages when compared to other pumping technologies used in distilleries, starting with affordability,” said Jeff Selig, National Sales and Marketing Manager for Yamada America Inc, an innovator in developing complete lines of air-operated double diaphragm pumps (AODD). “Additional out of the box advantages include infinitely variable flow rates needing no special controls and the ability to run dry and deadhead, all with the sensitivity to pump very clear, fragile liquids up through thicker liquids and even solids. Depending on a distilleries size, they are found in every application from simple waste transfer to product transfer to being used to pump cleaning and sanitizing solutions on through the final bottling.”
“It’s a whole pumping
system in a box,” said Selig. “With flow rates ranging from less than a gallon
per minute (GPM) to over 200 GPM and made from materials like stainless steel,
polypropylene and Kynar with food-grade diaphragms, an AODD is by far the most
capable and flexible pump for distillery application use. And due to their
unique flexible nature, the ability to be made explosion-proof and the ability
to operate on compressed air, an AODD pump is usually mounted on a portable
cart to use them for more than one application. The carts can be outfitted
complete with filter regulators and the needed hoses for any application.”
Diaphragm pumps are easy
to maintain, with less moving and normal wear parts than other pump types.
Diaphragms will eventually fail and need to be replaced, but preventative
maintenance based on the number of pump strokes can prevent an emergency repair
situation. Experienced manufacturers can estimate the life of their pumps for
select applications, and repair can be done by a distributor or trained user.
Kits are available that coincide with training videos to show the exact repair
procedure for the corresponding pump.
Selig tells Beverage Master Magazine that choosing a pump manufacturer with experience is important.
But so are their partners.
“You want to work with a
company who has been there and done that,” said Selig. “Someone who has the
right construction materials and the know-how to apply available technology.
Then you want them to have a strong distribution network to help you at the
facility level. Most distributors have trained staff with intimate knowledge of
the pumps, inventory, and available repair services. If a facility has an
experienced mechanic, he can quickly be trained to repair the pumps on-site as
needed. A distillery builds a partnership with the manufacturer and their
distributor to maximize uptime and be assured of timely repairs.”
“New technology is always
welcome,” said Selig. “For starters, companies are putting more effort into
making their pumps smarter, with things like monitoring pump cycles or allowing
externally controlled operation. Batching systems along with stroke monitoring
and leak detection can quickly turn a simple pump into a true process pump.
There are also evaluations on some material changes and modifications that will
lead to longer pump lives. Quality manufacturers are in the pump business and
strive to get their pumps to last as long as possible. They’re not in the parts
business. The longer the pumps last, the more likely customers will keep buying
them. We are currently introducing the next generation of pumps with upgrades
to the operating air valves, pump communication and material technologies.”
To add to the versatility
of their AODD pumps, Selig said that his customers have been able to use their
standard sanitary pumps without making any changes to switch to sanitizer
production. Additionally, Yamada pumps have been provided to some of the largest
sanitizer companies in the world.
Versamatic diaphragm Pumps Prove to be Gentle Workhorses
“Several different pump options are available depending on what phase of the distilling process we’re looking at,” said Tim Caldwell, National Sales Manager of Versamatic, a global provider of the air-operated double-diaphragm (AODD) pumping solutions. “But the AODD pumps are always great choices because of their ability in matching distillery applications. Diaphragm pumps require less attention, can run dry, are self-priming and are designed to be portable so they can be used where needed. Our diaphragm pumps don’t need constant monitoring like some types of equipment. They will deadhead pressure and then stop pumping, so once a certain pressure is built up in the lines, the pump shuts off but will hold the pressure for immediate restart. Deadheading capabilities are efficient and very functional for filtration and cleaning, which can produce clogged filters.”
Caldwell tells Beverage Master Magazine that Versamatic diaphragm pumps are popular in distilling because
they can all be grounded for use with high proof vapors or liquids. The air
inlet pressure and discharge valves are easy to adjust and control, and all you
need is a clean air source sized for your process. Diaphragm pumps are
excellent choices for everything from pumping tank overs through the bottle
filling and cleaning and sanitization processes.
“Diaphragm pumps work
great to clean sludge and solids buildup when tank cleaning too,” said
Caldwell. “They’re able to move what we call cake (semi-dry waste) out of the
tanks through the pumps and lines. When you think of everything that gets
included in the waste cleaning process, whether it’s naturally occurring sludge
or other waste, why pay to have all the unfiltered wastewater removed if you
can manage the waste by pumping it through a filter press that will allow your
wastewater to be deposited down city sewer systems? Then you’ll just have a
small amount of cake to dispose of, saving money.”
When matching pumps to
applications, Versamatic has pumps and lines for distilleries that are approved
by the FDA and also adhere to the EU Framework Regulation 1935/2004, meaning
that their products contain nothing that will leech into any food or beverage
applications that come in contact with or run through them. What comes out is
the exact same product that went in.
“Diaphragm pumps like ours
at Versamatic are just really good values for distillery use,” said Caldwell.
“They can be used throughout the distillery, are shear sensitive and won’t
damage or change the makeup of the product that flows through as can happen
with some centrifugal pumps. There is no damage by impellers, and maintenance
and repair are minimal. They can safely handle the distillery processes,
they’re reliable, easy to maintain with long life capability. Replacing normal
wear parts is fairly easy with parts or repair kits found at distributors that
include all consumable parts for your pump. It’s one less thing for the
distiller to worry about. And under changing conditions like those that we
currently work in, we’ve had good success using diaphragm pumps in hand
sanitizer conversions.”
KOVAL Distillery Chooses Diversity in Pump Selection
The type of pumps you use
may be a personal choice, but as Mark DeSimone, Vice President of KOVAL
Distillery believes, it’s a good idea to match equipment to specific needs.
KOVAL matches pump type to process and uses different manufacturers to get that
match. By performing normal daily visual checks, their pumps require minimal
maintenance with repairs done only when needed. Needed maintenance other than
routine cleanings are occasional services to the impellers and screw pump
stators.
“We typically produce
about 70,000 gallons a year using a variety of pumps in our distillery,” said
DeSimone. “All are grounded and explosion-proof for safety, and chosen based on
the material, alcohol content, viscosity and temperature of the product that
we’re moving. For water circulation, we use several centrifugal pumps that move
water through our heat exchanger and pump warm water captured during the
distillation process to our mash tank for heat up. Both of these processes save
us a good deal of energy as well. We move cold mash from the fermenters to our
still with impeller pumps. Screw pumps are utilized for moving hot, thick, or
sticky mash through our heat exchanger and for transfer to our fermenters. And
then we use air diaphragm pumps to move alcohol between storage tanks and when
filtering or bottling the final product.”
As to any new technology,
there hasn’t been a lot of groundbreaking developments to the traditional pumps
that continue to do the job, but DeSimone tells Beverage Master Magazine that new improvements are always welcomed.
“We’re always excited to
see new advancements,” said DeSimone. “Our centrifugal and screw pumps have dry
run sensors built into our automation systems that add to the lifespan of our
equipment. It’s very important to keep everything running or at least have a
backup for redundancy. It’s really tricky when something goes down and you’re
unable to produce, so we naturally try to prevent that as much as we can.”
As an experienced distiller, DeSimone said
that there are two critical components to look for when choosing a pump
supplier. “I feel it’s important to look towards and choose someone with
specific experience in the distilling field. But just as importantly, that
experienced supplier has to come with quality support that will be available
whenever it’s needed.”
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.
“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:
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.
Recently, the Craft Maltsters Guild – the non-profit association dedicated to promoting the manufacturers it defines as “craft maltsters” – announced The Craft Malt Certified Seal, a new initiative to promote the use of craft malt by breweries. In order to qualify, a beer or spirit must contain at least 10% of its grist, by weight, of malt sourced from one of the Craft Maltsters Guild’s members.
A craft maltster is
defined as a maltster that is independently owned, that produces between five
and 10,000 metric tons of malt per year, and that uses grain grown within a
500-mile radius of the malt house for at least half of their grain supply.
The Difficulties of Using Craft
Malt
Craft malt is an industry
that is still very much in its infancy. There are very few craft maltsters that
have been around for more than a few years, and even those that have been in
business for a decade or more are only recently seeing healthy and sustained
growth on the wave of a beer industry that favors local goods as a strong
marketing standpoint.
Craft maltster startups
have many of the same issues as small brewery startups: Capital intensive
equipment, a production process that requires a varied technical background,
and a competitive marketplace that’s dominated by a few, large, international
players. Craft maltsters have an added layer of complexity of – in many cases –
having to educate their suppliers in how to make the products that they need to
operate.
The end result can be, at
the worst of times, an inconsistent product: variations in color, moisture
content, diastatic power, protein or sugar content, uneven kernel sizes, or
inconsistent flavor characteristics, all of which can cause difficulties for a
brewery that is engaged in making a consistent product from batch to batch.
Like any brewery moving
through its startup phase into an experienced, scaled production facility, most
craft maltsters have grown past these initial challenges to create an even,
predictable, product, but the occasional problem may still arise – particularly
with an untested supplier or process.
Other difficulties working
with craft maltsters can come from simple supply chain issues. Smaller
suppliers with longer lead times and limited on-hand inventory can be
challenging to predict when managing a small brewery that is, itself, running a
just-in-time inventory process. One hiccup in that supply chain can affect
weeks worth of brewing.
Finally, it’s difficult to
ignore that all of the above also comes at a higher price point. While malt
from international maltsters can run as low as $0.40/lb before bulk discounts,
it’s rare to see a small maltster with the scale available to get a price point
anywhere near that, and most are at least double. Those craft maltsters,
themselves, are paying an elevated rate for grain from small suppliers who are
dedicating a small portion of their farms to malting barley. They do not have
the advantage of a scaled, international supply chain for cost benefit to pass
along to a brewery customer.
Using a local craft
maltster can often mean paying a premium for a product with uneven consistency
and unpredictable supply.
The Advantages of Using Craft
Malt
For all that, there are
definite advantages to having a relationship with your local small malt
house.
Working with a local
maltster gives a brewer a whole new palette of flavors and ingredients to work
with. In an industry where 7000+ players all use the same basic inputs, a local
maltster is an avenue toward differentiation: Each grain does have its own
“terroir” that follows through into the end beer, providing a very distinct
taste of place. Maltsters that have roasters might offer a lighter or darker
Lovibond roast of chocolate, caramel, or Munich-style malts than might be
available at a commodity maltster. It allows a brewer that many more variations
on ingredients that they can use to create a more distinct array of beers to
help differentiate themselves in a crowded market.
While there may be times
that a local maltster can’t deliver as fast as a larger supplier could, they
can also be the source of last minute saves and emergency help. Short a couple
of bags of base malt on the last brew of the day? Being able to drive over to
your local malt house to pick up 150 lbs of grain is a distinct advantage that
can definitely save you in a pinch.
Local maltsters also have
– like small breweries – the ability to make weird stuff without taking an
enormous financial risk. The capability to malt ancient, heirloom, or alternate
grains like triticale, spelt, buckwheat, or corn, sometimes in incredibly small
batches, can lead to truly innovative brews that would be otherwise unavailable
from larger maltsters.
From an environmental and
sustainability standpoint, it’s undeniable that using a local craft maltster
creates a smaller carbon footprint for your operation. Instead of shipping a
container across a country or across an ocean, most of that malt originates at
a farm within a day’s drive and never really has to move that much farther away,
meaning less fuel, lower emissions, less labor, and fewer aggregate resources
than it would at a large scale malt house.
Finally, the vast majority of the money paid to that local
maltster stays within the local economy in the form of wages as well as payments
to their suppliers – local farms and local agriculture. It’s a way that a
brewery’s dollars can make a significant and multi-industry impact on the local
economy.
But Is It a Marketing Advantage?
The most challenging part
of using malt from a local maltster, however, isn’t ingredient consistency, how
to use the ingredients, or any potential supply chain issues. It simply comes
down to this:
How Well Can You Tell the Story?
There is no barrier to
entry for a brewery to use a local maltster aside from price. As long as a
brewery is willing to pay the premium for the malt, they are an instant user
and it behooves them to become an instant evangelist. The added price of malt
comes with few immediate end-product advantages itself: A smaller carbon
footprint and better support of the local economy isn’t reflected in the taste
of the beer, in a better bottom line, or any sort of cost-driven advantage.
It’s a marketing point.
While working with a local
maltster on a specific new roast or grain might lead to new recipes, without
something truly distinct showing up in the glass, telling the story of local
malt is a difficult one because drinking customers, in large, don’t really know
what malting is. It falls on the brewery to educate the end consumer as to what
a local maltster really is, and how using one positively impacts the
environment and the local economy. It also lies on the brewery to show their
customer the value of the added cost that local malt brings to beer.
Craft Malt Certified
Enter the seal of
approval: Craft Malt Certified. The seal, created by the Craft Maltsters Guild,
is a tool to help breweries and distilleries tell that story to their
customers. By creating a seal to go into packaging and the taproom, it creates
a conversation piece for customers to engage with. What is craft malt? Why does
it matter?
The odd stumbling block is
that rather than creating a freely-available graphic to help breweries raise
craft malt’s profile, the Craft Maltsters Guild has put a price on the use of
the seal, charging $150 per year to register as a faithful customer – yet
another cost, albeit a small one, on top of the premium cost of using the malt
in the first place.
That is the hurdle that
still needs to be cleared by craft maltsters and their end users: how to sell
the story of increased cost to their customers in a way that makes them care
enough to part with their money. Without the additional value proposition, the
story of craft malt becomes muddled into the same gnarled discussion of what
local means that the entire craft beer industry wrestles with: What does local
really mean? How far away does something have to be to no longer be considered
local? Is it your local neighborhood, your city, or your state? Is your beer
still “local” if it uses malt from another country? What about hops? Will the
customer pay a premium for “local” when it increases the cost of the end
product to well above regional market norms?
With the uncertain answers
to these questions comes the unfortunate follow-up:
Why does any but the most enlightened end-customer care?
The craft malt industry is an exciting new
development within the craft beer industry with reflections of what the craft
beer industry itself went through 40 years ago. In a modern marketplace focused
almost single-mindedly on hops as a key ingredient, it faces a bevy of
challenges that it may only get through with the help of its most ardent
customers.
Do you have real-time visibility into your financial
information? If so, are you confident
you’re monitoring the right type of data to achieve your business goals? We plan to explore these questions and more
as we dive into the issues breweries often face when it comes to financial
reporting. We will also take a look at industry best practices and technologies
brewers are leveraging in order to spot opportunities, identify risks, set
goals, measure progress and adjust their strategy.
Cash is King
Every business, large or
small, depends on cash. However, for many breweries, the focus tends to be more
on sales growth than anything else. While sales growth is fundamental to your
business, it is equally as important to monitor your cash flow.
Cash flow is the movement
and timing of money into, through and out of your business. In other words, it
provides a clear picture of your company’s financial health. A cash flow
projection estimates the timing and amounts of cash inflows and outflows over a
specific period, usually one year.
Let’s take a look at some
high-level benefits of a cash flow projection:
• Allows you to anticipate
changes versus reacting to changes.
• Encourages a
collaborative working environment between operations personnel, management and
owners.
• Fosters “bigger picture”
thinking.
• Enables you to run
different scenarios such as:
a. Impact of cash collection practices and terms (when and how)
b. Impact of accounts payable terms and discounts (when and how)
c. Cash flow for an event
d. Adding a new revenue source
e. Leasing or building a new brewery or taproom
f. Debt restructuring
• Can ease the burden of
sudden and significant changes.
The first step to creating
a cash flow projection is to define your approach and assumptions. For example,
you may want to evaluate the financial impact of adding a new seasonal brew. A
few key questions to ask are:
How much will I expect my revenue and
expenses to increase?
Will I need to tap into my line of credit or
find additional financing as I start up?
Next You Will Need To:
• Obtain historical
revenues, expenses and cash flow for last two to three years.
• Develop a template to
forecast one year into the future.
• Review historical growth
and forecast growth based on discussions with management.
• Prepare a formal report
outlining the significant assumptions and the forecast results.
a. Key assumptions
b. Increase operating revenue
c. Increase operating expenses
d. Capital additions: production or brewing equipment, delivery trucks
e. Debt service / borrowings
f. Cash reserves
To make sure your
projection stays accurate throughout the year, consider these variable
expenses:
• Months with three payrolls.
• Months when insurance
premiums are due.
• Increased estimated
taxes due to increased sales.
A good rule of thumb is to
designate an amount equal to 10% of revenues for “other expenses” under uses of
cash — so you’ll have some cushion when unforeseen costs arise.
To keep your projections
on track, create a rolling 12-month plan that you update at the end of each
month. If you add a new month to the end every time a month is completed,
you’ll always have a long-term grasp of your business’s financial health.
However, don’t try to project more than 12 months into the future or you’ll end
up spending a lot of time trying to predict something with too many variables
(prime rate could shoot up, sales could go down dramatically, etc.).
Cash Flow Projection Example:
After you define your assumptions and approaches and create your 12-month cash flow, you notice a net cash loss in the first half of the year as highlighted below (shown as 6 months).
You decide the next step to minimizing your negative cash flow in the first half of the year is to evaluate the impact of producing a new seasonal brew as seen in the projection below:
Using cash flow
projections is a cyclical activity. As months pass, you can compare your
monthly cash flow statements to your projections for each month and the numbers
should be close. You can get away with a 5% variance but if you start to see
large differences from month to month, you should revisit your key assumptions
to check for flaws in your logic.
Even if the actual numbers
come in higher than your projections, you should take a close look at your
assumptions, because higher returns in the short term could lead to shortfalls
later on. For example, if you predict your Oktoberfest brew to have the
greatest cash inflow during October and you start distributing it in September,
you may run out of product by mid-October. You’ll need to adjust for these
unexpected changes as you move forward month to month.
Once you’ve gotten into
the habit of using a cash flow projection, it should give you added control
over your cash flow and a better understanding of your brewery’s financial
position.
Beyond cash flow, it is important to
understand and consider all of your financials when determining your strategy
and planning for the future of your brewery.
By transforming your
finance and accounting data into key performance indicators (KPIs), you become
equipped to make intelligent, informed business decisions. Below are examples
of relevant KPIs for craft brewers along with items to take into consideration
during analysis.
1. Revenue trends: monthly
comparisons year over year and month over month, actual to budget comparisons,
revenue by category and/or style, revenue by package type, etc.
Are sales meeting expectations? Are any
seasonal brands selling well enough to go year round? Are there any year round
brands that could become seasonal? Are there brands that should be
discontinued? Are certain package types selling more than others?
2. Cost of Goods Sold
(COGS)/gross margins: monthly comparisons in total, by brand, by
category/style, by package type, actual to budget, etc. – report both in
dollars and as a percentage of revenue.
How are margins trending to expectations? Are there styles that
are cost effective to produce with a higher perceived value in the market? Are
costs increasing/decreasing due to raw material cost changes? Are there items
that may need a price increase? Are there potential efficiencies that can help
reduce costs in the brewing process? Should you brew larger batches for better
yield? Are your COGS fully loaded with labor, overhead allocations, excise
taxes, utilities, insurance, etc.?
3. Distributor/customer
performance: revenue, gross margin, rebate/discount tracking month to month by
distributor/customer, actuals vs projections, etc.
How is each distributor
performing compared to projections? Are their margins sufficient to cover
rebates, discounts, samples, shared mark-downs, etc.? Are certain geographical
regions performing better than others? Where should your inside sales team
focus their efforts? Consider additional reporting options that provide
visibility of distributor sales to retailer including: on vs off premise sales,
sell through turns, etc.
4. Operating expenses:
monthly comparisons year over year and month over month, actual to budget
comparisons, etc. – report both in dollars and as a percentage of revenue.
Investigate areas where expenses are
increasing (either in total or as a percentage of sales). Identify areas where
there are cost savings opportunities. Variable expenses should fluctuate with sales
levels, including staffing costs.
5. Tasting room and
restaurant metrics: Revenues and margins tracked by month year over year, food
cost as a percentage of food sales, staffing costs as a percentage of tasting
room revenue, daily sales trends, etc.
Evaluate seasonality trends to determine
staffing needs and consider training time needed when hiring new staff for busy
season. Monitor food costs to determine if menu price increases are needed.
Assess daily sales trends for potential promotions on slower days of the week
in order to increase business.
6. Capacity/efficiency:
Production volumes as a percentage of full capacity month over month, direct
labor costs as a percentage of revenue, etc.
Are you at capacity and losing orders? Is it
time to increase capacity? Are you consistently under capacity? Possibly
consider contract brewing or other ways to fill capacity. Evaluate labor costs
to ensure efficient production staffing levels.
So, now we know what type of data successful
brewers are tracking but what technology is needed in order to access that
data?
Introducing new technology
to any business is commonly viewed as complicated, timely and costly. However
with the rapid expansion of cloud-based technology, there are now a number of
applications tailored to meet the needs of small and midsized businesses in any
industry.
Most of us are familiar
with the phrase “moving to the cloud” but, what does that really mean? In its
most simple form, cloud computing is the use of a shared resource on the
internet to store, manage and process data. Unlike the historical way of
hosting a technology platform on your own server, cloud-based technology allows
unique users to access the same software application from any device, anywhere,
at any time. Information is easily updated and shared between team members without
the need to manually input reports or be in the same physical location. Cloud
applications are also being built with an open-interface approach which allows
for more seamless integration amongst individual solutions.
Business processes that
are commonly handled in the cloud include:
• Accounting
and General Ledger Management- Such as: Sage Intacct, QuickBooks Online
• Accounts
Payable-
Such as: Bill.com
• Expense
Management
-Such as: Expensify, Nexonia
• Inventory
Management- Such as: Ekos, OrchastratedBEER
How leveraging those tools
can provide data-driven insights while saving you time and money:
Real-Time Data and Reporting:
Because cloud-based
technology can be accessed from anytime, anywhere, the data really is “at your
fingertips”. This accessibility is becoming increasingly important as the
competitive landscape continues to intensify in the craft beverage space. The
ability to integrate your existing applications with multiple cloud solutions
allows for a comprehensive view of your data (i.e. sales, operations and
finance) and thus, enables you to make timely intelligent business decisions.
Plus, you can use these tools to create tailored management dashboards with
customized reporting capabilities – so you see what you want to see on a
regular basis.
Taking it one step
further, the ability for craft brewers to access data in real time also makes
that data more useful in identifying trends, comparing results to industry
benchmarks, monitoring key performance indicators and, ultimately, being a
better business partner to your distributors and retailers.
Automation and Scalability:
Most growing craft
breweries tend to run lean and have limited personnel resources. In these
cases, leveraging innovative technology to streamline finance and accounting
functions and reduce the need for manual processes can be very beneficial. For
example, cloud-based accounting software typically automates processes by
importing transaction data on a real-time basis. The cloud computing model
empowers team members to collaborate and share information beyond traditional
communication methods – allowing multiple facilities and/or taprooms to
co-manage production, raw materials, packaging levels and distribution
scheduling.
Successful craft brewers
are growing at an unprecedented rate and the ability to scale on an as-needed
basis is one of the biggest advantages of cloud technology. Accelerated
business growth typically leads to growing pains and missed opportunities
resulting from the mismanagement of more data, infrastructure and customers.
The right cloud solution will grow alongside your business to meet market
demands and accommodate growth as technology shifts, revenues grow and your
business needs evolve.
Brewers face many
challenges in an industry that is becoming less predictable with fewer loyal
consumers. Staying a step ahead of your peers in this rapidly changing
environment is critical to maintain a competitive advantage and realize long
term success. Having real-time visibility into your cash flow, sales and
operational data is a key part of that success. This will allow you to
determine KPIs that align with your business goals and track them so you can
plan for the future. Take advantage of the many cloud-based tools that can help
you transform your data and streamline processes so you can get back to what
really matters, running your brewery.
About the Author
Kelly Addink is a Controller in Baker
Tilly’s outsourced accounting practice. She has nearly 25 years of experience
in providing financial accounting advisory services to companies in a variety
of industries. Kelly also worked as a Controller at a craft brewery for more
than 6 years. Today she combines her technical skills and industry expertise to
deliver customized accounting, finance and operational assistance to Baker
Tilly’s craft brewery clients.
North American regional and local cider makers are throwing elbows at major corporate producers, trying to respond to consumers’—particularly those in the 18–24 demographic—demands for alternatives to mainstream products. This is good news for producers eager to tap into the young but evolving cider sector. Current market analyses indicate cider sales will dip slightly through 2022, but some experts report this is only because larger, national brands are losing footing as the craft ciders surge forward.
Nevertheless, there are
growing pains within this emerging product line, especially when there’s so
much education necessary to help the public understand that cider:
1) Isn’t beer or wine.
2) Is just as complex as
those beverages, with particular nuances and unique profiles.
It’s an interesting
challenge for a beverage that relies on a fruit with approximately 2,500
varieties in the United States alone. Apples are grown in all 50 states in
America, and five of the 10 provinces in Canada. This means regional and local
orchardists offer unlimited possibilities for crafters.
To share the knowledge that’s plentiful for wine, beer and
spirits, but less so for cider, we reached out to the following experts:
Peter Glockner, co-owner, director, and brewing/filtration sales, Cellar-Tek. The company started in 2004 as a two-person operation in British Columbia, specializing in winery supplies. Now based in both British Columbia and Ontario, it also provides equipment and supplies for craft brewing, cideries and distilleries.
Bill and Michelle
Larkin,
co-owners, Arsenal Cider House, established in 2010 and headquartered in
Pittsburg, Pennsylvania, with additional tap houses in Wexford and Finleyville,
plus taps in rotation throughout Philadelphia. Another location in Cleveland,
Ohio, is scheduled to open by the end of 2019. The Larkins produce hard apple
cider, cider-style fruit, grape wines and mead. Flagship pours include Fighting
Elleck Hard Apple Cider, Archibald’s Ado Hard Apple Cider, Picket Bone Dry Hard
Apple Cider and Murray’s Mead, with various seasonal and one-off releases on
tap at each location. Annual production is more than 50,000 gallons.
Molly Leadbetter, owner, Meriwether
Cider Company, with two locations in Idaho: a taproom in Garden City and a
cider house in Boise—the first in the state. Opening in 2016, Meriwether is
owned and operated by the Leadbetter family: Molly, sister Kate, and parents
Ann and Gig. Notable award-winning ciders include Foothills Semi-Dry, Strong
Arm Semi-Sweet, Blackberry Boom, Ginger Root and Hop Shot, crafted with Citra
hops. Annual production is approximately 30,000 gallons.
Michelle McGrath, executive director, United
States Association of Cider Makers, based in Portland, Oregon. Its mission is to “grow a diverse and
successful U.S. cider industry by providing valuable information, resources and
services to our members and by advocating on their behalf.” The USACM also
stages the popular CiderCon each year, which provides new and existing members
opportunities for workshops, cider tours and networking.
Tie Information to Innovation
The Larkins started
Arsenal with $60,000 and zero working capital in the basement of their city
row-house. Bill was an accountant, and Michelle, a pre-school teacher. His
winemaking hobby expanded into a passion for cider and mead. “When we started
in 2010, there wasn’t anyone doing what we wanted to do anywhere around us. We
had to essentially make up things as we went and hope for the best,” Larkin
said. “This is why I always tell new people in the Pittsburgh industry to feel
free to reach out to me if they have a question.”
The Leadbetter family,
after years in other professions, chose to band together and open a cider
house. “My sister, my dad and I all took cider-making classes at Washington
State University’s extension program, and Mom took a business of cider class.
And webinar-based classes on our specific areas inside the business,”
Leadbetter told Beverage Master Magazine. “We also attended the
USACM’s CiderCon the years before and after we opened, which was incredibly
helpful, and I recommend to everyone!” They launched Meriwether with a
Kickstarter campaign.
McGrath said the USACM
strives to provide as much insight as possible. “Our Certified Cider Professional
program educates distributors and retailers about cider, but cider makers may
gain tools for conversations with those audiences as well,” she said. “We also
have marketing resources our members can use to educate their accounts about
cider. Lastly, our recently-refreshed cider lexicon project aims to curate a
language for talking to customers about cider. Having the same talking points
is good for any campaign—including spreading the cider gospel.”
Refining cider lexicon is
one way to lessen the gap between what consumers currently understand about
cider and how makers want to communicate flavor profiles and other
characteristics. For example, the USACM suggests “focusing on the accepted
scientific classifications of apples: sweet, sharp, bittersweet and
bittersharp.” There are also grouping categories so consumers can more easily
select what taste appeals to them and have confidence in that choice. So the
USACM considers input from producers to create classifications that might
include something like:
• Does it taste dry or
sweet?
• Is it tart? Spicy? Sour?
Floral?
• Is it fruit-forward or
tannic?
• Is it light-, medium- or
full-bodied?
This type of universal
messaging helps all cider producers continue to create beverages people want.
“Don’t make products for yourself unless you’re planning to buy them all, or
you are a social media star influencer,” Glockner said. “Know your market and
cater production to the customer base(s) you’ve researched and proven will
trade their hard-earned money for your product.”
Progressive success
depends on customer relationships—it’s not a cliché when it’s true. “We have a
gold standard of treatment for all of our customers whether they’re tasting
room visitors or on-premises licensees,” Larkin said. “Everyone in our company
in retail, sales and distribution know the customer is always right and that
we’ll bend over backward to make them happy. I can’t overstate the importance
of this.”
“We have four core values:
family, integrity, generosity and fun. We don’t make any company decisions
unless they fit into this framework,” Leadbetter said. “We run a business we
can be proud of, that strives to make our community better, our guests happy,
and makes our and our employees’ professional and personal lives fulfilling.
Working with nonprofits, connecting with the community, and educating people on
cider are huge parts of doing all those things.”
Arsenal Cider House
partners with a local activity and tour provider that plans community
excursions. Meriwether Cider Company’s approach includes integrative actions
such as Purposeful Pours, a quarterly event that raises money for different
nonprofits in its community, and Cider Crews, a tiered club program to
encourage a dedicated clientele.
Mind Your Business
The foundational
practicalities of your start-up are often a mashup of reality and possibility.
So start with the right advice.
“We always advise an
in-person consultation with one of our cider equipment sales gurus to ensure
that our potential customers are correctly assessing their equipment choices
using the correct data and math,” Glockner said. “We also try to get them to
think ahead, so they don’t face having to upgrade their equipment two-or-three
years after opening because they didn’t plan for growth. He stressed the need
for reinforced vision. “Production plans and projections need to be backed up
with solid sales plans and projections. Otherwise, you’ll have an expensive
hobby, not a business.”
He also pointed out
there’s no “right” way for cideries to choose equipment. “’Right’ could mean
the equipment fits their budget, or it could mean it matches the processing
rates they need to achieve for the total volume fruit they harvest. Assuming
that matching equipment sizes to the customer’s projected harvest numbers and
product plans is the ‘right’ equipment, doing so can minimize the required time
to process a given volume of fruit—typically expressed in kilograms per hour of
fruit processed,” Glockner said.
“If one producer is doing
multiple small-batch productions of different styles or varietals, their
equipment and tank size choices will be smaller than another producer looking
to make large volumes of one or two,” he said. “The latter would benefit from
equipment with higher throughputs and larger tanks to process bigger batches
for longer continuous periods of time. So getting the ‘right’ equipment is all
about creating operational efficiencies for the type of production the customer
wants to do.”
Here are some additional tips from Cellar-Tek’s Co-owner:
1) Most equipment for the
cider industry isn’t produced in North America, so expect a supplier of
specialized processing equipment containing electrical components to have the
equipment UL- or CSA-inspected and approved when it lands in North America.
2) Also, expect to have the
supplier set up an appointment at your production facility to start the
equipment and provide basic operations training along with any applicable
maintenance and safety advice. This tutorial might not be necessary for “basic
on/off equipment,” such as manually-fed fruit mills, pumps, or manual gravity
fillers.
3) If you can find used
equipment in relatively good condition and see it working before purchase, it
may save you capital during the start-up phase of development. However, lack of
warranties and local factory support from a supplier makes it a difficult
decision when your equipment breaks down in the middle of harvest, and there’s
no technical support in the area to repair it quickly. The cost of lost production,
spare parts and labor to repair a broken machine can easily surpass the price
of a similar piece of new equipment.
4) If you don’t have
experience with fermentation, hire a pro to do it for you, or at least a
reputable consultant with a list of references who can teach you the many ins
and outs of a successful fermentation. “The pitfalls of fermentation are many,”
Glockner said.
Our experts all
recommended allowing an ample amount of time and patience to make it through
multiple layers of bureaucracy to establish your cidery. “Cider regulations are
incredibly complicated,” McGrath said. “Anybody thinking to jump into the
market should take some time to understand how they differ from wine, beer and
spirits.” The USACM intends to provide more checklists to help answer
producers’ questions, but consult your regional association for more specifics.
Larkin added, “Many people
think the biggest hurdle is getting the liquor license, but it goes way beyond
that. There are zoning and building codes, county and state health
requirements, general business licensing, taxes etc….To be in any business, you
have to be determined and not let anything get in your way. You need to be a
jack of all trades. There’s a solution to almost any problem—you just have to
keep on it. You’ll get through it.”
Leadbetter also pointed to
the need for fluidity in your business approach. “We still have our original
lineup of year-round flagships, but we added many seasonals, one-offs,
barrel-aged and small batches to the mix every year—much more than I thought we
would,” she said. “And we never envisioned having a second Meriwether retail
location when we started. Truthfully, at the time, we were barely two years old
and not ready to expand. But we felt an urgency because downtown Boise was in
the midst of a renaissance with new businesses and bars, and we lucked into the
perfect space. We might have balked and given up if not for that.”
Larkin said, “If an
opportunity seems like a good one and we can afford it, we do it.” This
approach applies to both Arsenal’s stair-stepped location expansion and
shifting model.
“When we first opened, we
planned to sell half our inventory by refillable growler and the other half by
bottle conditioning in Champagne bottles. We sold through the initial inventory
so fast, we never had the opportunity to do any type of packaging, and we’ve
just been trying to keep up all these years,” he said. “We finally started
canning one product and bottling a mead product for the first time after eight
years in 2019. We now have the capacity to expand our product offerings and
plan to do so in 2020. It only took 10
years to get to it!”
McGrath told Beverage Master Magazine that “there are certain pockets of the cider market managing to
make apple-forward ciders cool. That’s always been a challenge, especially in
today’s craft beer culture. It’s controversial, but I think putting these types
of ciders in cans is part of what’s helping drive that. It makes a complex,
nuanced beverage more approachable.”
She added that it’s
important to “figure out how to incorporate educating consumers about apples
into your marketing and branding. Apples are what this industry is all about.
We can celebrate a diverse range of products and styles, but when consumers
catch on to the variation an apple variety (and season) can provide, it will be
good for cider makers and orchardists alike.”
Expanding the Industry
All of our experts are
excited to contribute to the reawakening of this pioneer beverage. Here are
some final thoughts they believe about cider’s potential.
Cellar-Tek’s Glockner: “By
far the most exciting trend is the growing global acceptance of locally-made
craft beverages—be it cider, wine, beer or spirits—by the sectors of the
general public that used to gravitate to the large, corporate-produced
beverages.”
Larkin of Arsenal Cider
House: “High-quality products aren’t optional. It’s not just important for your
business, but the business segment as a whole, especially in one as young as
mead and cider. This philosophy extends to how we source our ingredients, as
well. If care isn’t taken with raw materials, we can tell.”
Leadbetter of Meriwether
Cider Company: “After creating a good product, our main mission is to create
what Danny Meyers (restauranteur and CEO of Union Square Hospitality Group in
New York City) calls ‘enlightened hospitality’: ‘treat your employees well, and
they will take care of your customers.’”
McGrath of the United States Association of
Cider Makers: “Most people who love cider also love food, and the consumer
knowledge that cider pairs really well with food is increasing. Regional
cuisine cider-pairings, geographical cider cultures, a focus on
locally-celebrated apples (like Gravenstein for Sonoma County in
California)—these things all make it a really fun time to create cider right
now.”
After all the time and energy spent on vine training, pest-free growth and meticulous care that hop farmers put into raising the best possible crop, the harvest can feel like a whirlwind that’s over in a flash. Depending on the types of hops grown and the climate in which they are farmed, hop harvest can run anywhere from early August to late September. But the actual timeframe to get hops picked during peak ripeness and quality is a short, week to 10-day span.
Hop ripeness and quality
are directly related to the moisture content and alpha acid levels of the hop
cones. Hops too high in moisture aren’t considered at peak alpha acid content.
Hops harvested too late can degrade quickly in storage, be more susceptible to
oxidation, and become more vulnerable to disease and pest contamination. Timing
is everything, and sampling is critical to make sure hops are at peak ripeness.
“It’s not that you can’t
harvest and get good hops after that peak ripening period,” said Sean
Trowbridge, co-owner of Top Hops Farm, LLC in Goodrich, Michigan. “It’s just
that after peak ripening, the hop integrity comes into question and can result
in product shatter during the picking process. Then you’re talking about the
potential of considerable product loss.”
Even when the harvest is
completed, there’s little time to relax. When not evaluating the year in
general, focus switches to working on sales and starting the farm tasks
involving post-harvest sanitation, soil care, weed eradication and addressing
any pest and disease issues that need attention. Since hops aren’t generally
considered a pick and pack crop, there are several drying techniques to bring
the moisture down so they can be stored safely without damaging the qualities
that they bring to craft beer.
“Immediately after
harvest, it’s drying and baling time for the hops,” said Trowbridge. “Then we
move 100% of the harvest to our pelletizers to have a fresh crop of current
year hop pellets for the breweries.”
Fall is Spent on Cleaning and Maintenance
“Cleaning, repairing and
readying our equipment for next year is usually done in the fall. Just by their
nature, hop cones can be pretty sticky, so after harvest, our equipment and
work areas can get gummed up just with all of the contact with the hops,” said
Trowbridge. “We take the time right after harvest to thoroughly clean the
pickers, conveyors, belts, totes, wagons and anything else that gets used
during harvest. Equipment like sprayers, whether boom or air blast type, need
to be winterized. You know, it’s initially just a lot of manual work, cleaning
and maintaining our equipment and getting our barns ready now for the next
growing season.”
Trowbridge told Beverage Master Magazine that after the equipment and buildings have been taken care of,
late fall is generally spent in the hop fields on end-of-season
responsibilities and plant management issues. Hopyard sanitation and cleanup is
a critical function to get done right after harvest because it decreases the
chances of disease and deters pest infestation for the next growing season.
This also includes some type of weed suppression, usually by laying down a
pre-emergent herbicide.
“As far as our hop yards
here, we let our vines go into dormancy and apply a pre-emergent in spring.
There’s no specific reason for that other than it seems to work better for us,
and just like in farming in general, each farmer has his way of doing things
that may not be the norm but have shown success in the past,” he said. “You
still have to monitor moisture levels, because even after harvest, the hop
vines need moisture for optimum winter survival. But once temperatures dictate
action, we have to blow out our suspended drip lines and irrigation systems to
prevent freezing and damage. Fall is the best time to get soil samples analyzed
for pH to see what’s left in the soil and what needs to be replenished. Hops
thrive in soil with a pH between 6.2 and 6.5, so fall is the time to make
corrections if needed. Liming is common, but takes time to become widely
incorporated into the soil.”
Hop scrap can be a subject
of contention. Some farmers take the hop scrap and compost it for use
elsewhere. Others return the composted scrap right back onto the fields, while
others take the scrap that’s not composted and spread it onto the fields. Every
farmer has their opinion on the matter. The decision on what to do with the hop
scrap is largely based on its condition. Were the hop vines healthy? Were there
any signs of downy mildew or other diseases that can overwinter in clippings
and on the ground?
“Late fall is also when we switch our tractor to a mowing head and weed badger to cut all the remaining parts of the hop vines down. There’s usually about 1½ feet left of the vines after harvest, so we cut them and leave them be,” said Trowbridge. “Then, in spring, we go back over the rows with a brush head to remove all of the debris off of the plants and leave only clean rows for new growth. We won’t typically tear out or replace any vines that are healthy and productive. Good healthy rootstock can last fifteen years easy.
Some of the European heritage farms may have fifty to a sixty-year-old rootstock. Sometimes after about ten years, the Western-based hop farms will replace a portion of their hops with a more vigorous growing stock or different variety, but it’s not common. We’ve only done it once, and that was based purely on economics, replacing a portion of very low-income generating hops with a higher income-generating variety.”
Winter Involves Building Relationships And Business
Trowbridge told Beverage Master Magazine that winter activities differ depending on where the hop is
grown. West Coast farms can just keep growing, putting their harvest into the
hands of brokers while they get back to producing more. In Michigan, Trowbridge
first focuses on wrapping up sales for any product that remains unsold. Much of
the harvest might already be spoken for, but any unsold product will be made
readily available for anyone interested.
In addition to sales
duties, Trowbridge said that winter is typically the time to refresh and renew
business contacts and associations and try to get more exposure for his farm.
He uses the winter months to attend any conferences or expos put on by hop
farmers associations or by the Craft Brewer’s Guild. He especially likes those
that allow him to set up a vendor tent or booth so he can personally get his
hop farm more exposure, make new contacts, refresh older ones and reach
potential customers on a personal basis.
Growing Organic: Norton’s Hop Farm
On the other side of the
hop growing spectrum, smaller, organic hop farms have a different view of the
post-harvest season.
Don and Tina Norton
maintain and operate Norton’s Hop Farms in Springfield, Oregon. Since 2008,
they have grown Cascade and Nugget varietals on their family-run, certified
organic hop farm. Because they’re organic growers, their post-harvest routine
is a little different than others.
“Well, we obviously don’t
have to spend the time applying the herbicides or pre-emergent weed killers,”
said Don Norton. “Most of my days are spent doing a lot of grass cutting and
weeding out in the fields. We don’t chemically treat for unwanted growth, so it
has to be continually weeded and mowed. We get a lot of blackberry growth in
this area in addition to the grass and weeds, so it all has to be kept up with
regularity. I do get basic soil testing done to see if we need to add lime and
adjust pH levels in our fields. We don’t fertilize until just before we expect
the new growth to appear, and that can happen in early January.”
In between weeding and
cutting, Norton spends time in the off-season on equipment maintenance as well
as checking and winterizing his water and irrigation lines. He doesn’t have the
same sales and marketing push that some larger volume farmers do because one of
the benefits of being a smaller volume, organic farm, is that his product is
generally sought after and already spoken for by regular customers.
“We’ve sold to our local
craft breweries in the past, but as of late, our harvest is sold to a locally
well-known organic herb company—Mountain Rose Herbs in Eugene, Oregon. They
need the whole flower of the hop, so we supply that to them. There’s also an
emerging market for our hop cuttings and vines for use in-store or in other decorative
displays, and also by local florists that like to use them in their creations.”
“One thing that makes us different than a
regular hop farm is that we don’t plant any cover crops or use any mulches in
between rows,” said Norton. “Instead, we lay a ground cloth with holes cut out
over the growing area for our hop plants to grow through. Doing it this way
helps keep our weeds and grasses to a manageable level so we can remain
organic.”
