What Is Contract Brewing

This is a brewing agreement whereby company A pays company B to use its brewery for production. It`s helpful to think of craft beer as a fragile ecosystem and look at contract brewing as a way to strengthen that ecosystem and improve business. “You`re helping a younger company in most cases, or you`re helping someone who`s in transition, or you`re helping someone who has this thing, who has this vocation, who wants to bring it to life,” says DeLuca. The more good beer in the world, the better the world; The more breweries can help entrepreneurs bring their names and brands to the world, the better the craft beer industry will be. Augie Carton, the founder of Carton Brewing Company (Atlantic Highlands, New Jersey), is thinking about contract brewing in culinary terms. “I approach everything from a culinary point of view, just like the chefs. It boils when we make beer. Great chefs can go to any kitchen and make a good dish if they know the limits. I have nothing to hide when I work in someone else`s kitchen.

Depending on your goals, there are trade-offs between visiting a commercial brewery and visiting a contract brewery. According to Sleeping Giant`s Osterman, the two main benefits of going to a contract brewer through a commercial brewery to sign contracts are: The Sleeping Giant Brewing Company is a large contract brewery in Denver, Colorado. According to President Matthew Osterman, the majority of their successful contract customers turned to contract brewing when they were no longer busy, wanted to pack, wanted a dedicated contract brand, or just wanted to operate a faucet room. The valuation of a good partnership by a contracted brewery is similar to that of any investor who values a company. As a contract brewery, they won`t make money from the first batches, with all the pre-work to perfectly compose your recipe, so it`s an investment of the contracted brewery to work with you. Some of the questions they will ask are that since the construction of their new 35,000-barrel plant, Schmaltz has contracted about 75% of its capacity and brewery brands for the remaining 25%. Cowan Contract brewed its brands in other breweries for fifteen years, so it saw the difficulties of contract brewing in other establishments. This experience allowed him to build a brewery capable of handling under contract. On-demand contractual services for your company. We are able to provide a complete service from end to end.

Now to suck up all the fun from the room. Like everything else in the brewing world, the contract brewing business ultimately boils down to what is also the most boring and important component of management: money. The stigma has slowly faded over time and, more than ever, contract brewing is increasingly legitimized in craft beer communities. What is still in question is all. What exactly is contract brewing? How does it work? Who benefits from the symbiotic bond between entrepreneur and entrepreneur? And why can contract beer be so delicious in 2021? Contract brewing has been a revelation for craft beer producers. Once the contract brewery is convinced that it is right, they will work with you to develop a plan to ensure your success within a certain margin of error. It should be noted that some contract brewers do not require a binding contractual agreement for brewed drums. In other words, if you tell the contract brewery that you will produce 5,000 barrels next year and you will only produce 2,000 barrels, you will not be charged for the other 3,000 barrels.

The contract brewery will, of course, want to work with you to reconcile reality and your forecasts, but all the risk lies in the contract brewery. But it is also the case. Contract brewing is a barrier for brewers when it comes to producing, distributing, consuming, and ultimately being respected by beer geeks. But each brewing model has its own challenges. Contract brewing in this regard is only brewing. The most common case where breweries have managed to contract is the growing capacity and/or growth of brands. For example, Carton Brewing Contract brews what they call “cold beers” in 300-barrel batches at Two Roads Brewing Company (Stratford, Connecticut). They selected six specific beers with more shelf-life stability, designed to be brewed at this scale to be the consumer`s everyday beer. This strategy frees up their 15-barrel brewery to produce some of the most specialized and upscale styles.

Contract Brewing does not have a license per se. The licenses and permits you need depend on your type of contract. Let`s look at the requirements of both. If you`re considering contracting your beer, let`s take a look at what your thought process might look like: A much rarer (or successful) case where breweries have turned to contract brewing occurs when the person simply wants to run a faucet room without brewing on site. In this case, if you work with a traditional contract brewery, the size and volume of the lots will be a challenge. This model only becomes really feasible if you have a close relationship with a nearby brewery. The advantage of a pure faucet model with contract brewing is that your storage costs should be around 65% (around $110/barrel vs. $170/barrel) with initial investment costs (barrel inventory, ingredients, branding/marketing).

This is a viable way to test your market for an additional brand or private label. You also have the advantage of having something that no other bar in town will have. The contract brewer can help the host company refine the recipe, manufacture, package and ship the beer. Other terms you may hear for contract brewing are “gypsy brewing” and “nomadic brewing”. It`s quite clear here that you`re not really the brewer. After all, you only buy a finished product from the company, which makes you a wholesaler. In this particular case, you must have the right government licenses and the TTB contract brewing permit. More established breweries are also turning to contract brewing to save money.

As a brewer, you are responsible for all tax matters relating to your product. Also, you need to record the amount you are brewing. Austin Jevne, head brewer and owner of Humble Forager Brewery, a distribution brewery in Rochester, Minnesota, knows all about contracts of all stripes. He has a contract with the Fair State Brewing Cooperative in Minneapolis and with Octopi Brewing in Waunakee, Wisconsin. And both are like day and night. For someone like Matt Smith, it`s important to be “transparent about what I do, but also about the motivations behind it.” (Smith began brewing from a cabin in his garden to cope with the loss of his daughter after 8 and a half months in utero.) Meanwhile, Octopi takes care of everything for him, but it makes sense. It is a state-of-the-art contract facility that only brews contract brands. Not surprisingly, this means that the contract is more expensive. “Octopi brews all kinds of different drinks, not just beer, for all kinds of customers,” says Javne. “So technically, I think I pay a little bit for all these devices, even if I don`t necessarily use them.” Another case where breweries have managed to award contracts is the switch to distribution or the abandonment of the limits of mobile packaging. .