MicroBrewr 074: Contract brewing for homebrew craft beer club with Noble Brewer.

MicroBrewr 074: Contract brewing for homebrew craft beer club

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Noble Brewer is an online craft beer club featuring homebrewers’ best beers. It’s not exactly legal to sell homebrew by mail, so Claude Burns at Noble Brewer connects the homebrewer with a commercial brewery. Then they ship great homebrew from their base in Oakland, California.

If you want your homebrew to be featured in one of Noble Brewer’s quarterly shipments, here’s how Noble Brewer picks the homebrewers:

  • Homebrewing competitions and BJCP results
  • Willingness of the brewer to share her story
  • Whether the recipe will scale
  • Style variety in relation to the past picks

Read: Homebrew craft beer club. And then I never left the house.

I think it’s pretty aweome, but the main reason we talked with Claude is to find out for to start a contract brewery.

“There are a lot of great brands and great beers out there that are made by people who don’t own their own brewery,” says Claude. “There is also a lot of great beer companies that do own their own brewery, but [production of their own beer] is very small. The vast majority of their beer is contract brewed.”

Other contract breweries—or breweries that got their start as a contract brewery—on MicroBrewr Podcast:

Alamo Beer Company

HenHouse Brewing

21st Amendment Brewery

Backshore Brewing Co.

Two Birds Brewing

Craft Artisan Ales

Of course, to sell alcohol, you need to have some kind of license. The process and licensing is different in every state. So Claude advises that you check with a lawyer. Usually a contract brewery is set up like a distributor.

In California, Claude says, most contract breweries would use a Type 17 license from California Department of Alcoholic Beverage Control. This allows you to have beer made for you by another brewery, then you can sell it to retailers.

“The ABC is very willing to work with you,” says Claude. “You go to them, and tell them what you want to do, they’ll be very willing to work with you to make sure you do things the right way.”

Be very detailed in telling your state licensing agency what you want to do. They’ll suggest the license that you need. Then ask a lot of questions to make sure you’ll be able to do the things you intend to with a given license.

Check this page for a list of state alcoholic beverage control boards.

Next you’ll nee to find a contract brewery to manufacture your product:

  • Ask breweries whether they have excess capacity for your beer.
  • Network with other brewers to find a brewery that makes contract beer.

Choosing the brewery to work with:

  • Look for a company that shares your same goals.
  • View the arrangement as a long term, mutually beneficial relationship.
  • Check references of the brewery, and trust recommendations of others.

Depending on your agreement, the different responsibilities will lie with one party of the other. Sometimes the brewery will do more, sometimes you’ll need to do it. So check with your brewery to see whether they’re expecting you to provide your own ingredients and packaging, whether you’ll need to get TTB approval on your labels, or other tasks.

“If you’re a contract brewer, and that’s going to be more of your long-term strategy,” advises Claude, “you’re going to do things like [contract directly with a hop supplier] so you’re going to have your own source of hops for your beers.”

“If you want to put a ton of really restrictive terms in an agreement, as a [small startup] contract brewer you may be less likely to enter that agreement. It’s really about developing that working relationship with each other and making sure that you have the same goals in mind and you’re working toward something long-term.”

“Everybody I have met has been more than happy to share their knowledge.” [Tweet This]

 

Listener question:

From Dan: How hard/easy was the licensing from the state? What local regulations did you have trouble with? Were the locals helpful in setting up the business?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Saison

Other resources:

You can reach Claude Burns and Noble Brewer at:

Sponsors:

Beer

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 073: Contract brewing: quality product with low barrier to entry with Craft Artisan Ales.

MicroBrewr 073: Contract brewing: quality product with low barrier to entry

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David Olsen dives into things all the way. He decided that he wanted to homebrew, so he read about 15 books and took some short classes at UC Davis. Within 6 months he was winning awards at homebrewing competitions. He started Craft Artisan Ales, in Pacific Grove, California, with contract brewing because it was an easier barrier to entry.

“Even to get like a 7-BBL system going, you’re going to need at least a half-million dollars,” estimates David. “Then you have the labor, the insurance, the overhead, the space, the lease, all those other factors that go into it.

“So to be able to go to a facility that can take your recipes and create a quality end product [in exchange] for part of the margin, is definitely an appealing way to get into the craft beer industry.”

Other contract breweries—or breweries that got their start as a contract brewery—on MicroBrewr Podcast:

Alamo Beer Company

HenHouse Brewing

21st Amendment Brewery

Backshore Brewing Co.

Two Birds Brewing

David has some recommendations to nail down your beer styles and recipes:

  • Spend a lot of time working on one single beer, then develop other recipes from there.
  • Take some brewing classes, even weekend classes or 2-week classes.
  • Be super careful about sanitation and temperature control.

You’ll need to have accounts confirmed to buy your beer when it’s ready from the brewer. Here’s what David did:

  • He pushed the local angle in his products by using local names and themes.
  • Friends who owned restaurants agreed to carry his beer on tap.
  • The owner of the homebrew store helped make other connections.
  • He put samples in a cooler pack and walked into stores to talk to the manager.
  • He provided a sample, sales sheet, and business card everywhere he went.

Contract brewing is a much easier way to enter the craft beer market. The cost is a tiny fraction of what it costs to open your brewery. The time that you would have spent brewing can be spent marketing, delivering product, nurturing relationships, and all the other things required when you own your own brewery.

Brewery specs:

Kettle size: 25-BBL contract facility.

Size and quantity of fermentation tanks: 25-, 50-, and 100-BBL tanks available.

Size and quantity of bright tanks: Same.

Annual brewing capacity/last year’s production: Capacity is 15-20K BBL for the contract facility. Last year Craft Artisan Ales produced about 1,000 BBL.

Square footage: 80,000 sq. ft. at the contract facility.

Years in operation: 18 months (opened February 2014).

“I don’t have an exit plan because I want it to be a career. All I have are expansion plans.” [Tweet This]

 

Listener question:

From The Beer Sommelier: What is your exit plan?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Sour beers

Other resources:

You can reach David Olsen and Craft Artisan Ales at:

Sponsors:

Beer

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 072: Batch 4,000 and brewery law reform in Minnesota with Fitger's Brewhouse Brewery & Grille.

MicroBrewr 072: Batch 4,000 and brewery law reform in Minnesota

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Dave Hoops has been brewing for decades. He brought what he learned in California to Minnesota and helped change the brewery laws there. Now his West Coast style beers have been working well for Fitger’s Brewhouse Brewery & Grille, in Duluth Minnesota.

Minnesota does not allow breweries to self-distribute to outside accounts. So Fitger’s has “tied houses,” restaurant/bars that are “tied” to their brewery. That is, their production brewery makes beer for the restaurants that they also own.

If they wanted to package beer for outside distribution, state law would require them to sell the restaurants and just be a package brewery.

To make matters trickier, each brewery under this scenario must have a restaurant (a “production brewpub”), which can make no more than 3,500 BBL per year. So if they were already maxed out at 3,500 BBL per year and they wanted to add another restaurant, the new one would have to be another production brewpub with the limits on annual capacity.

“The only reason that these laws haven’t been challenged,” says Dave, “is because nobody has gotten to this level yet. I’m sure they’ll change it when it happens.”

It’s peculiar because Duluth is right on the border with Wisconsin, which as less stringent laws. So they move their company just 5 miles to the south, they would be allowed to sell their beer to a wider audience.

Still, Dave says the Minnesota brewery market is expanding rapidly. The state recently passed a law that allows productions breweries to have a tap to serve food and their own beer.

Dave was on the board of the state brewers guild and, like Jeff Mease from Bloomington Brewing Co., he helped change laws to make it easier for breweries—like the ability to sell growlers.

“I’m a veteran now, I’m a little more patient,” says Dave. “It’s in [the state’s] best interest to help us sell more beer. So eventually they come around.”

Dave’s advice for reforming brewery laws in your state:

  • Visit your state capital and find the legislators who are sympathetic to your cause.
  • Find enough legislators for a caucus.
  • Be persistent, be positive, and talk to a lot of people.
  • Research to show the stats and facts of how breweries can help the economy and the community.

Brewery specs:

Kettle size: 10 BBL.

Size and quantity of fermentation tanks: 4, 10-BBL fermenters; 12, 15-BBL fermenters.

Size and quantity of bright tanks: 20 tanks, most 15-BBL bright tanks.

Annual brewing capacity/last year’s production: Annual capacity is 3,200 BBLs. Last year’s production was 3,000 BBL.

Square footage: 3,600 sq. ft. over two floors.

Years in operation: 20 years (opened 1995).

“I feel really lucky to be a part of this artisan trade that’s been around for centuries.” [Tweet This]

 

Listener question:

From Lisa Boban: Can you make something other than beer?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Session IPA

Other resources:

You can reach Dave Hoops and Fitgers Brewhouse Brewery & Grille at:

Dave’s social media:

Sponsors:

InMotion Hosting

“Fast, reliable, affordable, web hosting.”

advert-inmotion-hosting_250x250

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher