We`re not too far from you here at Beltway Brewing Company in Sterling, VA! We are experts at bringing great ideas to life. Please call 571-989-2739 or email [email protected] While this is a longer version of the guide, we`ve also created a shorter, much more concise cheat sheet checklist that you can use to assess whether brewing contracts are a path you want to take. Here are some of the challenges you face when taking the contract brewing route: No matter how you choose, the goal remains the same: to produce a quality beer that stands out from the competition. We are interested in receiving contract brewing services. Hello, thank you very much for this very useful article. I am looking for contract brewers in New York or the surrounding area who can develop and produce a new line of craft beers. Could you drive me? Once that conversation has started and you`ve found someone who is open to a contract, it`ll be time to draft an agreement that will benefit both parties. More established breweries are also turning to contract brewing to save money. If you`re considering contracting your beer, let`s take a look at what your thought process might look like: If you`re considering going the contract brewing route, you just need to know the capital considerations, the impact of the expansion strategy, and the reputation challenges that will come their way. As a brewer, you are responsible for all tax matters relating to your product. In addition, you need to keep records of how much you are brewing. Contract Brewing does not have a license per se.

The licenses and approvals you need depend on your contract type. Let`s look at the requirements of both. Another case where breweries have managed to contract is to get into distribution or move away from the limits of mobile packaging. The shift to packaging means a capital investment to deploy high-quality packaging equipment, store packaging materials, and hire someone who has the technical skills to operate the equipment. The risk of doing this with a packaging operation over $300,000 is not something many breweries are interested in, and contract brewing is a great way to test the market with a packaged product. I also have a number of clients who have tried to brew contracts like a bridge to the next frontier. They did not go very well. Another option that breweries have is a business agreement called alternate ownership. In these agreements, the guest brewery can take possession of the beer during the production process using its own ingredients and facilities, and then return the title to the contract brewer when they receive their beer. They spoke to a brewery consultant with high falutin content about their expansion when the consultant suggested they contract brewing rather than build a new plant. More people than ever are making beer – the number of U.S. breweries has increased by 257% since 2013.

That said, it can be too expensive or too risky for many small breweries to expand their operations. A significant amount of equipment and expertise is required to properly scale a brewing operation. and the cost is high. Beltway Brewing Company is a full-fledged craft brewery with the equipment, knowledge and capacity to help small farms reach the next level. When you partner with Beltway Brewing Company, you tap into a brain confidence that can improve your product and your business. From recipe optimization to labeling support to business development, our team has the expertise to evolve the growth of your brand, whether through distribution or the convenience of our faucet room. We started brewing under contract and are now brewing for another brewery in-house. They certainly don`t have enough margin to make money, we did it to get to the market and prove our product to the banks so that we could get loans in full. When I was at CBC in Nashville this year, a friend asked me a question about contract brewing.

The relative consensus is that $180 to $250/barrel fully packaged is a pretty standard line for common beer styles. According to Sleeping Giant`s Osterman, “a 30% profit margin for the brewery is the goal” when working with their contract customers. Obviously, there are certain factors that make this more possible, the most important of which is the selling price at the retailer. It also indicates that the contract brewer you want to work with has the right licenses to brew. Peter Licht, brewmaster at Hermitage Brewing Company in San Jose, one of California`s 25 largest production breweries by volume, combines the emphasis on owning a physical brewery with a form of sentimentality. “The way the industry has evolved over the last 30 years,” says Licht, “there are a lot of romantic associations with stainless steel tanks, and having a whole bunch of them and filling them with your beer, and that`s how you get your share of the market.” Meanwhile, Octopi does 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 this equipment, even if I don`t necessarily use it.” “Brewers usually choose to become contract brewers to avoid the hassle of running a brewery,” says Jacob Gram Alsing, co-operations manager of Mikkeller, a Copenhagen brewery that has started brewing.

This is probably the best reason to mix, but there are others; Finding the money to start a brewery, for example, is not easy, and if it were, almost everyone would do it. Finding a place to house a brewery isn`t easy either. And as Alsing puts it succinctly, even though all things are the same, some people are simply not types of managers. They are happier brewing beer than they oversee the brewery`s operations. Since Fair State is its own concert, the contract is a little different, but Javne`s philosophy is simple: “If you have an empty tank, it`s an unfortunate tank.” If Fair State doesn`t use all of its equipment, it doesn`t maximize profits, so an entrepreneur like Javne can step in and fill that tank with a delicious beer and again everyone comes home happy. The approach taken by Jeremy Cowan of Schmaltz Brewing Company was more popular than he had started. “My idea was so simple – just making a beer or two – but it didn`t really work. We have never increased the volume enough. I needed four beers and much more interesting beers when I increased the prices and margin. The second is a tenant brewing contract.

With this arrangement, you rent the space of the contract brewer. In other cases, a contract brewery or tenant rents the time in the premises of its guest brewery so that they can use their own ingredients and brew their own products in the guest room. In this case, the contract brewer or tenant brewer owns their product from start to finish and is also responsible for keeping records, markings, certificates and taxes. As mentioned earlier, in this agreement you pay the fees to the contractual brewery. They would use their labor, equipment, space, packaging, etc. In fact, they can even help you ship the final product. With Fair State, Jevne consumes material costs while paying for rental space. With Octopi, he pays for the entire brewing process, from malting to shipping. That`s what brands like Octopi are for, after all, so their contract is mutually beneficial. Javne provides the idea for the product, Octopi does it, it can evaluate its beer competitively in the market, Octopi expands its brand and everyone goes home happy. In contrast, startups can launch a beer brand for $5,000, says Page Buchanan, owner and founder of House of Brews in Madison, Wisconsin, which offers contract brewing services. .