Beverage Master Magazine/CBC Issue April May 2024

President & Publisher Jeffrey

Vice President & Editor

Cyndi C. Bricker

Assistant Editor

Alyssa Ochs

Sales Manager Jo Cloud

Staff Writers

Gerald Dlubala

Cheryl Gray

Becky Garrison

Tod Stewart

Hanifa Seleandi

Alyssa Ochs

Craft Beverage Practice

Bar & Restaurant Insurance PMMI

Loan Mantra

KaiderLaw

Distillery Now Consulting LLC

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KEG WASHING: Working Smarter to Conquer an Essential Brewery Task

By: Cheryl Gray

Imagine a dried egg inside a frying pan. Then, imagine the bacteria that immediately begins to grow because you’ve left the problem to fester, and, well, you know the rest.

The same premise holds true when cleaning the kegs for your brewery. If the job is not done properly, breweries are setting themselves up for all kinds of safety and hygiene problems, both inside and outside the keg. Ensuring that beer is safe to consume is not an option. It is a must.

Beer products are very sensitive to any outside contamination. Even tiny traces of bacteria or other

contaminants can ruin an entire batch of beer, costing breweries money in lost time, resources and, of course, product.

There are some key differences in cleaning the outside of a keg versus the inside. Cleaning the inside of a keg involves focusing on removing any beer residue, bacteria or contaminants. Success in this area can ensure that the beer dispensed maintains the quality its brewer intended and is safe to drink. A proper external cleaning, of course, guarantees the removal of any contamination or dirt that may be present on the outside surface of the keg.

While properly cleaning beer kegs is not an impossible task, choosing the wrong cleaning apparatus can be costly on all fronts. If you choose kegs for your beer products, knowing how to protect your customers from contamination is the job of expert companies with solutions that can help. Many breweries are opting for automatic solutions to clean and sanitize their kegs.

Fillmore Packaging Solutions, headquartered in St. Louis, Missouri, promises affordable solutions for keg washing designed for craft breweries of all sizes. Since owner Tony Saballa founded the company more than twenty years ago, it has focused on perfecting the mechanical side of production. Saballa says his company is all in when it comes to automatic keg washers.

“We don't offer manual keg washers since they typically require the same amount of labor and cost to construct as fully automated washers. We also have found that manual washers often have variable outputs with wash quality issues due to operator missteps and errors.

Our keg washers are built to completely auto-

mate the washing process utilizing state-of-the-art UL certified electronics. Automation simplifies the washing process so brewers can apply their attention to other tasks.”

Saballa adds that Fillmore's keg washers are UL Certified and constructed to meet the UL508a safety code standards for the United States and Canada. The washers are constructed at the company's St. Louis manufacturing facility.

“We aim to deliver American-made automation that functions to the highest standards at a cost that is affordable for both startups and expanding breweries.”

Saballa points out some major mistakes that brewers make when it comes to keg washing and how Fillmore can steer them in the right direction. One major error, Saballa says, is overdoing the cleaning process. He says that more is not better in the case of keg washing.

“Here at Fillmore, we often find that brewers tend to over-concentrate their cleaning and sanitizing solutions, sometimes using double and triple the

manufacturer recommended usage rates. More is not better. This increases the operational cost, and safety for the operator must also be taken into consideration. Other factors that exist are the accelerated wear on pumps, valves, seals and gaskets, which can lead to down time and costly repairs.”

Saballa explains how Fillmore’s keg washers are built to operate on a special voltage and designed for different breweries of different sizes.

“This is important since most new breweries are not located in industrial zones. Single-phase machinery offers a solution for brewers operating in areas where three-phase power is inaccessible or installation would be cost-prohibitive.”

Each Fillmore keg washer operates on either 120v or 220v AC and compressed air and is capable of handling advanced pressurized CO2. Equipped with an enhanced design and technologically advanced features, the semi-auto keg washers include a fully programmable interface designed for customized operation, high-capacity cleaning and advanced sanitizing for brewery kegs.

Another company specializing in keg washers is Craftmaster Stainless, headquartered in Rancho Cordova, California. The company manufactures production equipment for multiple beverage industries, including beer, cider, wine, spirits and coffee. Its clients range from small craft brewers to large global producers. With more than two decades of

Craft Brewery

experience in stainless steel fabrication, the company’s team has the capability to custom-design and build commercial beer brewing equipment.

When it comes to cleaning kegs, Craftmaster Stainless offers the Keggernaut Semi-Automatic Keg Washer. The product features a Siemens interface that gives breweries full state-of-the-art touch control over temperature settings and wash cycle timing.

The Kerrernaut is equipped with dual cleaning stations designed to wash two kegs of any size. It can clean up to 40 kegs an hour, contingent upon the length of the wash cycle. The user-friendly features allow the kegs to simply be inverted, automatically washed, sanitized and pressurized in minutes. This semi-auto beer keg cleaning equipment allows for a quick and easy option to increase productivity.

Craftmaster Stainless offers its customers lifetime support on all commercial brewing equipment. It also provides custom designs for its microbrewery clients.

Keg washers are also available from Alpha Brewing Operations. The company, headquartered in Lincoln, Nebraska, provides fully automated options for an entire brewery. Its automation options from breweries range from semi-auto to what the company calls its fully automated package. The works include features such as a large touchscreen interface and connectivity options with mobile devices.

For keg washing, Alpha Brewing Operations offers a product called the Alpha “Wash Dog Junior.” It is an affordable, compact, automatic version of the company’s larger and fully automatic counterpart. The “Junior” is still highly automated but requires manual coupling to kegs and comes in a smaller package. This smaller keg washer is designed to fit into the tight budgets and tight spaces of startups and small breweries.

Keg washers are also available from international manufacturers, such as Comac, which has its headquarters in Italy. Comac has several varieties of external keg washers, capable of washing anywhere from 30 to more than 1,000 kegs per hour. Comac offers customized keg-washing solutions for breweries of all sizes.

Comac's most compact keg washer is only about six and a half feet long, including a single section and one track. The company touts it as an ideal option for hot or recycled water washing. There is a larger option that performs multiple tasks for keg washing, such as pre-washing with recycled water, washing with a caustic solution to remove hard-toclean dirt and a final rinse with clean water.

For larger production facilities, Comac offers a dual-track keg washer to boost cleaning capacity. Other features include easy and cost-effective maintenance, quick changeover ability and savings in water consumption. Other options available for large production lines include a separate skid for components, such as pumps, valves and heat exchangers to simplify cleaning and maintenance.

Experts agree that keg washing, inside and out, protects the beer and the consumers who buy it. For breweries large and small, the task is an inevitable necessity made easier by automated machinery designed to make a mundane task easier to manage while increasing safeguards against cross-contamination.

Abita Brewing: Louisiana Life, in a Can

By: Gerald Dlubala

About 30 miles north of New Orleans, in Abita Springs, Louisiana, the Abita Brew Pub sits on the original site of Abita Brewing, which opened its doors in 1986. The brewery quickly outgrew this site, and in 1994, Abita Brewing moved about three miles up the road into a state-of-the-art brewery that now produces over 151,000 barrels of beer and 9,100 barrels of their famous root beer. Their popular lagers and ales are still brewed in small, hand-crafted batches. Quite the success story, it is the perfect example of how a dedicated and passionate team of brewery professionals combines quality, community and pride in what they do to continually grow and increase demand for their unique, hand-crafted beers and sodas.

The Abita Brew Pub is now family-run but remains closely connected to the brewery. The brewpub serves all traditional Abita offerings and is a priority account for new releases. Additionally, the brewpub serves food, some containing Abita beers in the recipes, while also providing expert advice on pairing Abita beers with different foods. Visitors can experience Abita Brewing’s historical roots while enjoying live music, great food and patio games, and they can also sign up for interactive events like Abita’s Painting on the Patio.

“It really is a museum of Abita's history, and just like walking back into 1986," said Heidi Guerra, vice president of marketing for Abita Brewing. "The brewpub still contains Abita’s original tanks, signage and historical memorabilia, and all of the

photos, articles and signage on the walls illustrate Abita's roots. It’s a really cool vibe and kept fresh while maintaining and paying homage to Abita’s beginnings. Then, you can drive probably less than three miles down the street to see the full brewery as it is today. The brewpub has all our beers on tap and in bottles and offers a wide selection of our brands. Unlike the brewery, where we bring in rotating local food trucks, the brewpub can pair your choice of beer with food from their full kitchen. The brewpub also uses our beer in its recipes and dressings. It's a great way to learn about the styles of beer and experience how different beers pair with different foods. The brewpub is located directly in the town square, so it's really a cute place to visit and just step back in time.”

Local Ingredients, Artesian Spring Water and Community Involvement Are Key

“Hands down, we will always use local farmers and source ingredients locally where we can,” said Guerra. “This community has made us what we are, so there’s no question that we will help our community whenever and wherever possible. We use local produce like Louisiana strawberries and pecans in our beers. And I think that makes us unique in some ways, that we brew these high-quantity beers while continually sourcing local ingredients and helping our local farmers. It's true to our roots. We like to consider ourselves Louisiana through and through, so one of our initiatives is to source locally. We've used Louisiana oysters in our oyster stout and Louisiana coffee beans in our coffee beers. Using pure, local ingredients in our beers and craft beverages instead of flavorings keeps our products exceptionally fresh. By sticking

with natural ingredients, we don't get that sugary, fruity, hard candy-type of flavor profile that some others do.”

“And, of course, the water,” said Guerra. “Who could forget our water? It’s pristine, pure Artesian spring water drawn from our Southern Hills Aquifer. It’s a unique point of difference for us. We drill straight down into the system. The water is amazing. It's the perfect pH for brewing. It's also untreated, and when you research Abita and the water, you'll run across stories about the water containing healing and medicinal properties. It really is a difference-maker, and here in Louisiana, we know how important the water is, so it leads us into being good environment stewards for the community."

Abita Brewing is proud to be a good steward of the environment and its community. Guerra says they regularly offer special releases in support of different causes and initiatives close to home.

“We were one of the first breweries to donate money from beer sales after Hurricane Katrina happened, in the amount of a half million dollars,” said Guerra. “And we have rotating beer taps at our brewery for our Son-of-a-Saint initiative, helping fatherless boys in our city. That one is always on rotation in the brewery. But suppose someone comes to us with a cause. In that case, we will support that initiative, whether it's donating beer, letting them use our facility for a fundraiser or in some other way. We brewed beer to raise funds to support Sierra Nevada during wildfires. We’ve supported the Pink Boots Society. We consider all initiatives brought to us and look to give back to the

community. They’re the reason we are here.”

Passionate Employees & Open-Door Policies Keep Abita Brewing Fresh and Innovative

Abita Brewing remains locally owned and operated throughout its tremendous success and continued growth. The passion and success of its employees are reflected in the diverse products and in-demand Abita beverage options.

“We have a complete open-door policy,” said Guerra. “All ideas are welcome, no matter how far-reaching they may be. Employees can always text or call me. I have a whiteboard in my office where employees are free to jot down ideas for beers, names or whatever. And they do that. Our employees have a passion for craft brewing and for the industry. We have a Culture on Tap committee to ensure we're listening to employees and giving back to them. We buy into them and their goals just as much as they buy into us and our goals. We meet every month and hear their ideas about everything, including employee appreciation, but it's all about having a team that's passionate about the industry. We work hard to play hard, and our team, from top to bottom, is always ready and willing to explore new ideas, packaging designs, flavor profiles and more. Our employees get excited about new things. Pictures get circulated as soon as someone sees something new in the brewery, and text messages fly around. We have really great communication amongst all of the employees."

Guerra says that problems are met with an allhands-on-deck approach, which is demonstrated by the fact that she keeps her safety gear nearby in case there is a problem in the brewery that requires more hands.

The Ability to Play While Remaining True to the Brand Are Core Principles

“Our brewers love playing around with things," said Guerra. "Abita has a pilot brew system that we call the brewer's playground, where they can play and experiment with different taste and flavor profiles or styles they want to explore. They are very creative and make time to work through whatever whim or idea pops into their head. They are also very open to whatever ideas others bring to them.

“The Fluffernutter beer was an idea that stemmed from my son having a Fluffernutter sandwich at a friend's house,” said Guerra. “They got to making it into a beer and putting it on tap, and people loved it in the taproom, so our Fluffernutter beer went into production. That shows how open and reactive our brewers are to new ideas. They listen, but then they get to work to make the ideas come to life and see if they work. You know, we were brewing fruit and high ABV beers in the 90s before it was cool, so we don’t mind taking a risk on certain things. But we do it in the format of playing around with it in the brewery, putting it on tap and seeing how people react to it. But at the end of the day, we still want to focus on our core brands for mass production because that's what got us here, and that happens to be our fruited beers like Purple Haze, Strawberry Lager and our high ABV beers like Andygator®.”

Guerra tells Beverage Master Magazine that they’ve been brewing their root beer since the 90s, and it remains their most sought-after soda. "Root beer is perfect for brewing,” said Guerra. “We use Louisiana sugar cane for an authentic Louisiana flavor and great taste. It’s really a great product, and it's gone international, which is great and crazy at the same time. The root beer is our main soda, but we also do a vanilla crème soda as our root beer's wingman. During seasonal times, we'll make a King Cake soda. We do soda tours so kids can have a soda flight and feel involved when their family is here. We also have an NA option, our Hop Water, so we do dabble in other things. It's available on our website and locally here in Louisiana, but for the most part, we like to stay within ourselves, creating brand extensions off of the products that we know and love.”

Sustainability and Green Principles Are Included in Every Facet of Abita’s Brewing Process

Abita has a long history of energy conservation, recovery and reuse. Its brewhouse utilizes a self-sustaining EquiTherm system, wherein they capture the heat of their brew kettle exhaust system and combine it with heat produced during the wort cool down. That recaptured heat gets reused to heat water, creating an efficient cycle without biogas. Abita also has its own industrial wastewater treatment plant that generates energy. They use a Bio-Energy Recovery System (BERS) to treat their

wastewater, resulting in a 95 percent reduction of load on the local sewage system and a reduction of solid landfill waste.

From Abita's glass packaging to its truck delivery fleet, Abita uses processes to reduce materials and decrease emissions. Local farmers utilize the spent grain and hops from the brewing process as feed for their cattle.

Abita's Future Is Exciting, Innovative & Tasty

“A lot is happening at the brewery right now," said Guerra. “We just completed a brand refresh for our Strawberry Lager. We have our Beeracuda coming out in cans now rather than just bottles. And we've deemed this year "The Year of the Gator." So, the focus is on our Andygator®, an easy-drinking, high ABV Helles Doppelbock, our Strawgator, a combination of our Strawberry Lager and Andygator®, resulting in another flavored high ABV and Alphagator, our nine percent ABV double IPA. This gives us an awesome gator trio to offer to consumers.”

Guerra said that because Abita Brewing is known for its fruit beers, it just makes sense that it also offers a new berry variety pack. The new pack includes their popular Purple Haze®, Barney, Strawberry and Blueberry flavors in a 12-ounce can variety package.

“Other than that, we’ll continue to play around and see if something hits,” said Guerra. “We've been at this craft brewing stuff for about four decades, and we’re still excited about being in the industry and hope to be involved for another four decades, at least, because we truly love what we do. Not only are we a craft brewery but also a Louisiana craft brewery, so our big thing is just putting Louisiana life in a bottle. For those who are here, have visited Louisiana or want a taste of Louisiana, we continue to try to put it out there for them. We are a craft brewery, but we are also an advocate for the state."

To contact Abita Brewing, view a schedule of events, schedule a tour or plan a visit:

Tips & Trends Using Flavoring in Beer and Spirits

By: Alyssa L. Ochs

Every kind of beer and spirit has its unique flavor profile, yet many producers are getting creative by adding their own flavorings. Craft beverage makers can enhance natural flavors by adding flavor concentrates that tap into consumers' sense of nostalgia and help them stand out in a crowded marketplace. Flavors can make your beverages more enjoyable than ever before. Yet, their addition to your menu should consider your target customers and be part of a strategic marketing approach that reflects their current and future tastes and interests.

Beverage Master Magazine connected with experts in the flavoring field to help breweries and distilleries better understand this trend and how to make it work to their benefit.

The Role of Flavors in the Craft Beverage Industry

Breweries and distilleries may use flavorings to add complexity to a beverage or to highlight its uniqueness. Flavorings can draw in new audiences that might not otherwise try a beverage and entice the imaginations of curious consumers looking for the next big thing when they go out for a drink. Adding even a single flavor can offer your consumers a sense of comfort, escapism, adventure, indulgence or reminiscent memories – all powerful concepts that go beyond simple refreshment in a glass.

Blake Lyon, the senior applications scientist for FlavorSum, told Beverage Master Magazine that flavors provide another tool to bring your dreams to life. FlavorSum is the fastest-growing North American flavor company and has applications for alcoholic and non-alcoholic beverages, bakery and snack foods, confections and dairy.

“A flavor company can help create your vision of a strawberry fudge sundae beer or vodka cocktail and make little adjustments until you have a smile that shows you’re proud of something you created,” Lyon said. “Strawberry not juicy enough? We can adjust the flavor. Want to add a slight caramel note to the fudge to bring out more sweetness? Flavor can make it happen. Developing uniquely great-tasting craft beverages without flavor is extremely challenging and time-consuming. Even if your first batch meets your expectations, you may be unable to reproduce it. Flavors have your back!”

The type of alcoholic beverage you are developing should dictate the flavors you consider for addition. For example, flavors that typically complement beers and ciders include apple cinnamon, caramel and blueberry. Peach, strawberry and guava flavors work well with vodka, while honey, black cherry and salted caramel flavors go wonderfully with whisky. Lemon and lime flavors pair well with tequila and gin, while fruit-forward flavors like kiwi and cranberry might be perfect for your distillery's ready-to-drink cocktails.

How FlavorSum Approaches Flavors

Lyon at FlavorSum shared with Beverage Master that while every company has a mission statement, not all truly embody the words.

“When I joined FlavorSum, I noticed a different tone,” Lyon said. “We treat customers more like partners, and when a partner needs help, we go further than just supplying them with a great flavor. When I started, I was given a pyramid with three key points to keep in mind for every project and every customer interaction. Our core values are to strive for excellence, be a team player and do what’s right. I try to live those values every day,

and I see that commitment in my coworkers as well.”

When asked about what considerations breweries should keep in mind when adding flavors to beer, Lyon replied, “I may deviate from other companies here, but when we partner with breweries, we first ask, ‘Is your goal to do what others are doing, or do you want to forge your own path?’

The answer to that question helps FlavorSum collaborate on a framework to achieve the brewer’s objective.

“Flavors get a bad rap in the brewing industry,” Lyon added. “If I traded roles with the brewer, I might agree since creating a recipe as pure to the art as possible is often the objective. The purist approach does constrain what you can develop. I have heard of places ‘dry hopping’ with whole pies, but that won't have the same impact as partnering with a flavor company. With flavor, you're more limited by your imagination than by the ingredients available. We can use natural ingredients to help make your wildest dreams come to life and formulate a beverage that stands out at the tap room and

parties featuring beer.”

Flavorings from Mother Murphy

Another company that works in the space of flavorings is Mother Murphy’s, a family-owned and operated food flavoring business with headquarters in Greensboro, North Carolina. Mother Murphy’s comes up with innovative ways to serve the beverage, bakery, dairy and confections markets with flavor capabilities that extend to emulsions, extracts, liquids, powders and spray-dried offerings.

Al Murphy from Mother Murphy’s Flavors told Beverage Master how his company serves the alcoholic beverage industry by working with craft breweries and distilleries.

“We manufacture flavors and extracts that are used to make flavored beers and seltzers,” Murphy said. “We have over 3,000 flavors that are TTBapproved with FIDS. They are used to make flavored liquors and flavored spirits. Flavors are typically used with sugar & acid to help make flavored spirits.”

When asked what makes his company unique while operating within the food and beverage flavorings industry, he said, “Our people, knowledge within the industry and our products set us apart from our competitors.”

Benefits and Challenges of Flavors

Lyon at FlavorSum shared some practical knowledge with us about the benefits flavors provide to brewers and distillers.

“Flavors can save you time – time fermenting or extracting while your product sits in tanks,” he said. “You’ll spend less time cleaning since you won’t have to climb into the tank to shovel out all the leftover fruit. Flavors also provide consistency. You won’t have to worry about how the crop will turn out each year. You won’t need to spend time adjusting your formula to dial in the same flavor you gave to people last year. Flavors are the same every time and have the same dosage. You’ll gain peace of mind. You put significant time and effort into crafting a beverage for your fans to enjoy. Now, you can turn out great products with a little less effort and a consistent profile. We’re proud of our short lead times, so you won’t have to worry about having the flavors you need to meet demand.”

The challenges of using flavorings in beer and spirits include staying authentic to the original beverage and retaining customers with the new innovations. There are also regulatory issues to be aware of, as the Alcohol and Tobacco Tax and Trade Bureau must approve flavors before they can be added to alcoholic beverages. Therefore, manufacturers need to be able to disclose the composition of their flavors to be compliant with the law.

Current Flavoring Trends

There is little doubt that flavors are trending right now as a general concept in the craft beverage industry. An increasing number of producers are becoming interested in highlighting florals, spices, exotic fruits and dessert flavors in their beverage lineups.

“We are watching the rise of bitter flavors showing up in craft beverages,” said Lyon from FlavorSum. “Drinks incorporating amaro (e.g., Campari) and botanical liqueurs (e.g., Aperol) have

been on the rise, which shows me people are looking for drinks with a little more complexity. As people explore beverages such as an Aperol spritz, a ripple effect could lead to more consumption of gin. Cocktails like the boulevardier, which has Campari and bourbon, could increase interest in other spirits.”

Lyon went on to share, “People may be looking for softer entries into these types of drinks, and the lower ABV found in some ready-to-drink cocktails gives them an option. We have been exploring the bitter flavors space and adding twists to classic cocktails. For instance, we put an Italian twist on the traditional Negroni to elevate the ready-to-drink cocktail experience. We used Aperol instead of Campari and added some blood orange to emphasize the sweetness in contrast to the bitterness.”

With regard to trends, Murphy from Mother Murphy’s shared with us that his company has noticed classic cocktails and super premium and premium RTDs are extremely popular.

“Sweet tea RTDs are on fire right now,” Murphy said. “Flavored whiskeys are trending with indulgent profiles.”

Mother Murphy’s has a “flavor industry insights and trends” page on its website where craft beverage producers can learn more and stay ahead of the curve of what may interest their customers. For example, flavoring trends often follow the seasons due to the types of foods many people gravitate to around their favorite holidays.

If your brewery or distillery is new to the concept of flavoring but is interested in learning how it may expand your customer base or help you branch out and try something new, consider reaching out to these companies to discuss your options. Even just a few subtle tweaks in your recipes could open up a whole new world of possibilities and help your business stand out from others in your community. Perhaps now is the right time to get creative and see how flavorings can enhance your current lineup of beverages!

Craft Brewery Brewery & Distillery

Mindful Drinking Culture & Beverage Marketing

By: Hanifa Sekandi

As consumers become health conscious, their alcohol consumption habits are under careful review. Alcoholic beverage companies need to take note. Keg party adverts are generally less appealing year-round. What works during football season will not work during the off-season. Mindful alcohol consumption enthusiasts lean toward brands that consciously market their beverages. Being the life of the party is desirable but certainly not sustainable. Being the “it” beverage is also desirable. But there are many ways to enjoy your favorite beverage. It is up to brands to illustrate versatility.

This is especially true for brands looking for lifetime consumers who value quality – consumers who do not consume alcohol for sport but rather for leisurely pleasure. Brands must take drinking

culture shifts into account as people look to change their relationship with alcohol. This type of consumer will also pay close attention to brand messaging. It is a confusing trend but the new normal that marketing teams must adjust to. Does this mean it is time for you to reconfigure your entire marketing strategy? No! Never lose sight of who your audience is. You are adjusting your marketing wheel, not reinventing it.

How did this happen? For many years, beverage companies could run the same marketing campaigns year after year. It was business as usual. TV commercials and out-of-home marketing always hit marketing targets and sales goals. Perhaps previous marketing strategies worked because sources of influence were limited. Companies knew where to find their consumers. And their consumers,

whether they liked it or not, would be exposed to advertisements everywhere they went. Traditional advertising gave companies more control over their audience and their brand messaging.

The golden marketing era of yesteryear is over. The digital world shifted this simplistic yet captivating force. A basic, giant billboard does not captivate the masses as quickly as it once did. Alcoholic beverage companies need to think outside the box. Modern consumers are distracted and overwhelmed by over-marketing. As a result, they look for brands that fit their lifestyle ideals. However, the digital world allows consumers to have direct access in real-time. It has also led to marketing blunders from overzealous marketing teams. Checks and balances are overlooked to keep up with a fast-paced social world. The beverage industry is not the only sector that needs to dial it back and rethink its marketing approach.

What is Mindful Drinking Culture?

Have drinking habits changed? This is hard to discern. Depending on where you live in the world, there may not be a significant shift. Drinking habits have diversified. People are not just influenced by drinking cultural norms in their city or country but also by other countries. International travel opens an opportunity to explore unique beverages and the social milieu of alcohol consumption. Traveling to Italy, one will discover that the cultural norms associated with drinking culture deviate from those in North America. Mainly, an alcoholic beverage is an accompaniment to a great meal enjoyed with friends and family. It is not the starter of the party or what holds the event together.

Believe it or not, a mindful drinking culture benefits your marketing strategy. Now more than ever, people desire meaning. They prefer to support brands that care about the quality of the beverages they produce and their overall impact. For some, mindful drinking is imbibing alcoholic beverages with clean ingredients and brands that use sustainable packaging and cultivation methods. Brands offering single-serving sizes of their beverages are quite favorable. Mindful drinking culture carries the idea that moderation is equally as good as excess. Supporting a brand should not contradict lifestyle goals.

Yet there is some confusion about the use of the

word mindful. What does it mean? Mindful living encompasses the ideal that people thoughtfully and actively make decisions with awareness and care— selecting a beverage thoughtfully and consuming it with this principle.

Embracing this trend is a wonderful opportunity to segway into the NoLo market. Or you might diversify your beverage portfolio with variations of a popular beverage from your product line. For example, Heineken recognizes this shift and embraces a mindful drinking culture with the statement, “We believe alcohol, when consumed in moderation, can be part of a well-balanced lifestyle.” A powerful stance that has increased consumer trust and opened the door to expanding their product line. Heineken has gone a step further by giving customers access to ingredients and nutrition information for all their beverages—a notable example from an industry leader in effective mindful marketing.

It is an approach that bolsters their bottom line while respecting consumer choices. Heineken is appealing to a consumer who may desire one or two alcoholic beverages and loves their beverages but would enjoy a comparable alternative option throughout the night. Heineken did not reinvent its brand but rather expanded its brand ethos for the future.

Mindful drinking culture also reminds us that how and where people choose to enjoy a cocktail does not have to fit into a stereotypical framework. Are consumers mindfully looking for healthier alternatives with less sugar, or are they preservative—and filler-free? Mindful marketing strategies should zero in on keywords and key elements that will draw this consumer to their beverage. It opens up a world of possibilities from a marketing perspective and brand development.

What Is Conscious Marketing?

Just because it is trending online does not mean your brand should participate. Everyone online is a post away from their audience turning on them. Conscious marketing is a steady and well-thoughtout approach that maintains your brand values. It also sees the consumers as a long-term partnership. What is unique about this partnership is that although your product may stay the same with a few new additions now and then, your consumer will not remain the same. Kathy, your loyal con-

sumer, will naturally experience life changes; with them, her views and lifestyle will change. What she will value in your brand is consistency and authenticity. If you are in the beverage industry for the long haul, beverage brands must get this aspect of their marketing ethos right.

The entry of competing new brands that appear to experience overnight success may spur the need to experiment or chase the competition. Expert-conscious marketers use “the tortoise and the hare” approach to ensure that their beverage becomes a mainstay in the sector, an approach that can lend itself to a mindful drinking culture. Conscious marketing is driven by consumer choices and not social trends, choices that are driven by lifestyle.

So, if you are worried about your customers abandoning your beverage in favor of new brands that have the advantage of marketing themselves as something new, what is the best approach? How can you still cut through the noise or maintain notoriety without being a one-hit, viral sensation? There is a lot to consider, but the approach is quite simple.

Pivot Your Brand Messaging

In most cases, the answers are not out of reach. Review previous marketing campaigns. What stood out? How did your audience respond? Then, conduct market research. Ask your consumers questions. This can be in the form of a mini-survey with a discount code as an incentive. Or a call to action on social media or in a newsletter. Ask your audience how they enjoy your beverage. What would be the ideal setting to have a cold beer? Once you gather your data, strategize a marketing campaign that maintains your brand mission while pivoting your brand messaging to inspire and captivate your audience.

A consumer-first strategy that aligns with conscious marketing is focused on asking people what they want and not telling them what you think they want. However, beverage brands have found a way to interplay with other facets of culture, from entertainment to fashion. What a famous shoe brand does to appeal to customers is not what beverage brands should do. Both the entertainment and fashion sectors are unpredictable. Beverage brands cannot afford to roll the dice and hope

a campaign hits the mark the way brands can in other sectors. It is easier for brands in these sectors to recover.

Opportunities for experimentation are open in some sectors. In the beverage industry, once you have your audience, it is hard to recover them if you lose them. A clear blueprint of your consumers, their behaviors and projections into future behavioral changes will help you accommodate a mindful drinking culture while remaining competitive in an ever-changing industry. Who will Kathy be in ten years? How can you ensure that she is a lifetime customer?

Is 2024 a Make it or Break it Year for the Beverage Industry?

By: Neeraj (Raj) Tulshan - Founder of Loan Mantra

Most small and medium business owners define this year as a “make it or break it” time for them, according to a recent survey from Slack. After dealing with the COVID pandemic, rising inflation, ongoing labor shortages, supply chain disruptions and other challenges, nearly a third of respondents (32%) aren’t sure their businesses will make it through 2024.

Is this year going to “make it or break it” for your beverage business? There are things that all beverage industry professionals can proactively do to mitigate risks and maximize successes.

The Future of Beverage Sales Looks Bright

First, the good news: after years of challenges and struggles – including a $200 billion loss in restaurant and bar sales during the pandemic – this year, sales are expected to top $1 trillion for restaurant and foodservice industry for the first time in history.

More promising news: significant growth is expected in the restaurant and foodservice industry, with a projected increase of 200,000 jobs. Additionally, 45% of foodservice operators report needing more employees to meet increased customer demand. Dining out is trending again, after taking a major hit during COVID shutdowns. Now, the average American dines out three times per month and orders takeout or delivery four and a half times per month. Statistics for the younger Gen Z demographic are even higher, with 10% of Gen Z eating out at least once per week. Demand is high, especially among younger consumers, as 52% of consumers – including 67% of millennials and 63% of the Gen Z demographic– say ordering takeout from restaurants is an “essential part of their lifestyle.”

This comes as Americans are spending more of their income on food than they have in 30 years. As food prices remain high, U.S. consumers spent more than 11% of their disposable income on eat-

ing, either in restaurants or at home.

But Costs are Rising

It’s not all sunshine and rainbows for the restaurant industry, which is facing increased operating costs that are cutting into their profits. In fact, over a third (38%) of restaurant operators said their restaurants were not profitable last year.

A big problem is that grocery prices continue to skyrocket, and 97% of restaurant operators say higher food costs are negatively impacting their businesses. Grocery prices have jumped by 25% over the past four years, outpacing general inflation (19%) during the same timeframe. Several factors –including supply chain disruptions, droughts, avian flu, and labor shortages – have contributed to higher food prices.

Another pressing issue: 98% of restaurant operators say higher labor costs are a problem for their business. For instance, unhappy employees cost U.S. businesses an astounding $1.9 trillion in lost productivity last year, according to a recent Gallup poll. Another report found that the highest per-

centage of paid time off (PTO) requests in the last four years (56%) occurred in January 2024.

Many employees are currently disengaged, dissatisfied, and burnt out, with only one-third of respondents saying they feel engaged at work. And that’s a problem for employers, as happy, satisfied, engaged employees have been proven to boost a variety of important metrics, including sales, profits, productivity, and employee retention.

With all this in mind, how can brewers, distributors and pub owners prepare to make it in 2024, with successful, profitable businesses? They should implement these tips:

Offer seasonal specialty drinks. Consider offering specialty and seasonal offerings, like Starbucks does with their popular lavender drinks in the spring and beloved pumpkin spice lattes each autumn. Think of best-selling and highly anticipated seasonal brews, like Sam Adams Octoberfest, that customers look forward to all year – and purchase as soon as they’re available. Offer “limited time only” drinks to boost customer interest, engagement, and sales. Also, leverage hot trends, like distilling, to attract

more customers and drive additional sales. Sell alcohol and coffee – and fun boozy coffee drinks –to attract a wider audience and increase sales.

Give customers what they want. For instance, the online ordering market has grown exponentially since the COVID shutdowns, and is expected to grow to a whopping $505.5 billion by 2030. Additionally, food delivery services are on the rise. Food delivery is the most popular way for consumers to engage with restaurants, with more than three-quarters of customers (77%) regularly ordering delivery. If you aren’t already offering online ordering and delivery options, it’s time to start! Tap into trends like lagers and new hop products and techniques (including hop extracts and oils). It’s also smart to offer a wider selection of nonalcoholic options for a growing population of people who are not imbibing. Also, be mindful of consumers’ favorite foods to order when dining out – including French fries, hamburgers, mashed potatoes, and grilled cheese– and include these items on your menu. When you give people what they want, they’ll be more likely to visit (and return to) your establishment.

Engage employees. As unhappy, disengaged employees cost U.S. businesses nearly $2 trillion in lost productivity last year, it’s clear that employers need to work proactively to keep staff satisfied, loyal, engaged, and motivated. To accomplish this, provide competitive salaries and attractive benefits packages. Invest in employee development, give tuition reimbursements, and promote from within. Create a healthy work environment and supportive culture, where employees feel valued and appreciated. Thank employees – sincerely – for their hard work. Recognize top performers at staff meetings, on your social media platforms and website, and via in-store signage. Give financial bonuses and other incentives – such as gift cards, extra days off, etc. – to employees who go above and beyond. Set sales goals and provide individual or team rewards when key metrics are met. Accommodate time off requests for personal commitments. These efforts will differentiate your brand from the competition, helping you attract, retain, and engage talented employees.

Tap into the virtual market. Ghost kitchens and virtual restaurants are the fastest-growing segments in the restaurant category, with a staggering 85% growth rate in the past year. They’re expected

to become a $71.4 billion industry by 2027. Ghost kitchens share physical space, focus on delivery, and offer an opportunity to run a profitable business with limited operating expenses. These virtual businesses allow brands to run their operations in a more cost-effective, risk-adverse way. Some brands are diversifying the ghost kitchen model, providing food and drinks for catered events instead of solely meal deliveries. Consider this trend – and get creative with it!

Embrace automation. Automation offers restaurants and bars the opportunity to supplement their existing teams and do more – even if they are short-staffed. By automating time-consuming and tedious tasks – such as inventory management –your employees can focus more time, energy, and attention on customer-facing, value-add activities. Tech solutions, like automation, can help boost your organization’s efficiency and productivity, reduce errors, improve accuracy, decrease waste and associated spending, leverage data for more informed decision-making, and improve the customer experience. Fortunately, tech tools have become more affordable, accessible, and intuitive, making them realistic for beverage companies of all sizes and budgets.

Reduce food waste. Food waste costs the industry a tremendous $162 million in America alone. With the cost of groceries still astronomical, taking proactive steps to cut food waste can have a huge impact on your bottom line. Some ways to successfully reduce food waste include getting creative with leftovers, training staff on portion control, avoiding over prepping foods, storing foods at proper temperatures, improving inventory management, and using the FIFO (first in, first out) system to cut down on spoilage. Repurpose ingredients, like using the bones from your roast chicken dinner special to make broth for the next day’s soup or risotto. Use lower-performing beers to make beer cheese dip or beer-battered fish. Additionally, rely on historical data to drive smarter purchasing decisions.

Be financially prepared. While no one could have predicted the black swan of COVID, it’s essential to be financially prepared for business curveballs. Perhaps your bar’s oven breaks or your basement floods. Maybe sales are down for a few months, or a supply chain disruption interrupts a key liquor delivery. Or maybe the increased costs of running

your business are cutting into your profitability and money has become tight. Prepare for any eventuality by getting your financial ducks in a row before a monetary crisis hits. Watch your credit report and creditworthiness. Organize your paperwork and financial documents in case you need to apply for a loan. Businesses can set up a free account online at loanmantra.com to keep records ready and secure. Get prequalified with multiple lenders, even if you’re tempted to just apply to your existing bank or credit union. While you may think it’s easier to have all your banking centralized in one place, you may save significant money with a different lender, so it’s worth doing some research. It’s also wise to meet with a financial advisor to get an objective opinion on your financial situation. A trusted professional can help you identify (and mitigate) risks, determine how to become more profitable, and provide valuable advice when (and if) you ever need a loan.

After four tumultuous years of nonstop challenges, hopefully many beverage businesses will “make it” in 2024, enjoying increased sales, higher profits, more engaged employees, and happier customers.

Give customers what they want, leverage trends, experiment with seasonal offerings, reduce waste, be financially prepared, and enjoy a better, more profitable, highly productive year.

About the Author

Mixology Meets Technology: Delivering Value Through Flavor Innovation

By: Doug Resh – Director, Commercial Marketing at T. Hasegawa USA

The alcoholic beverage industry has evolved in many ways in recent years, adapting to drastic changes in what consumers are looking for in their drink choices and the role that alcoholic beverages play in their lives. After years of the pandemic disrupting and influencing their relationship with alcohol, such as the growth of RTD beverages, at-home mixology and even a ‘drysolation’ low-ABV movement, consumers are cautious in their purchase decisions due to perceived economic challenges – yet still seek excitement and experience from beverages. As consumers tighten their discretionary spending on restaurant dining and drinking, they are looking for the most value possible in their alcoholic beverage choices. The role of the flavor industry is evolving and becoming more critical than ever in encouraging product trial and experimentation through exceptional taste.

According to Mintel research1, 80 percent of U.S. consumers feel that financial challenges would affect their alcohol purchase behavior, with more than a third of consumers citing reduced alcohol consumption in general and more than a quarter citing less alcohol purchase in foodservice. Decreasing patronage of bars and restaurants in favor of at-home mixology and drinking is a natural reaction to economic uncertainty, and North Americans are likely to continue increasing their consumption of beers, RTD cocktails, mixes and spirits at home in the future. To retain or grow their user base, brands need to continually explore creative new ways to demonstrate value to alcohol consumers, in the form of new flavors and products.

Premiumization Through Exciting Flavors

One of the biggest shifts in alcoholic beverages resulting from economic concerns is that consumers have heightened expectations for the experience and flavor of their beverages and demand more from the category, especially when dining out.

In response to this shift, the prevailing trend within the alcohol industry is premiumization. Consumers are opting for ‘less, but better’ spirits, wines, beers and RTDs, and focusing on quality – buying fewer beverages to save money, but splurging for more expensive, premium brands and flavors. To many consumers, high-quality cocktails and RTDs are seen as ‘affordable luxury’ and an accessible way to treat themselves.

One area that continually defines premiumization is compelling flavors, especially among cocktails, hard seltzers and RTD beverages. Consumer interest has never been greater in adventurous flavors, many of which focus on delivering maximum flavor with minimum sugar. Foodservice mixologists are the forerunners of this trend, offering a broad range of sophisticated cocktails that go beyond the traditional citrus, berry and stone fruit flavors, exploring the exotic taste of botanical and floral notes and seasonal ingredients, spices and fresh herbs. Savory flavors have also grown in popularity, including chili pepper, basil and turmeric, since they help balance the sweet nature of many fruit-flavored beverages. Flavor manufacturers are focusing technology and resources on finely crafting these unconventional ingredients to produce great-tasting spirits that deliver the excitement that consumers are thirsty for in beers, RTD retail beverages or foodservice cocktails.

Beyond adventurous ingredients, both packaged beverage brands and foodservice operators are leveraging the power of nostalgia and fun in new flavor development. Indulgent ‘dessert’ cocktail flavors that tap-into nostalgia are growing increasingly popular, including s’mores, apple pie, churro, chocolate brownie and orange vanilla milkshake. Coffee has also experienced a major shift in demand over the last few years and is growing directionally in new product launches, including RTD “hard coffee” beverages, a fast-growing segment that is primed to appeal to younger adult consumers. Gen Z and Millennials are already decreasing their away-from-

home coffee purchases and limiting alcohol intake, plus they are influenced by the influx of espresso-flavored martinis in bars and restaurants in recent years, which creates an ideal opportunity for brands to capitalize on with alcoholic RTD coffee products.

While it’s no surprise that fruit flavors are popular across all beverage categories, the growth potential for fruity alcoholic beverages is in exotic varietals. To appeal to consumers who are seeking premium beverages, brands are going beyond traditional citrus and berry ingredients and tapping into the potential of international fruits in alcoholic product launches, such as Asian-inspired mango, papaya or dragon fruit. These unexpected ingredients encourage exploration and trial among consumers and brands are eagerly incorporating these tropical fruits in RTD spritzers, coolers and cocktails and specifically marketing these products for use in social occasions.

Leveraging Flavor Science to Deliver Value in Alcoholic Beverages

The path to premiumization is paved by flavor enhancement technology, which is especially pronounced within the alcoholic beverage category. In recent years, several new technologies have advanced the science of beverage flavors, producing alcohol concepts with complex, intriguing flavor profiles. California-based T. Hasegawa USA, a subsidiary of one of the world’s top food and beverage flavor manufacturers, is leading the industry in technology designed to optimize the way that alcoholic beverages taste, and even replicate the complex flavors of nature itself.

Recently, T. Hasegawa introduced HASEAROMATM to the North American market. HASEAROMA is a proprietary novel technology that creates authentic sweet and savory flavors that reproduce the ‘first bite’ sensation of experiencing a food for the first time, packed with intricacy and nuances of flavor.

“One of the many benefits of this technology is that it enables a higher level of specificity than other compounded flavors,” said Toshifumi Nozawa, associate director, sweet technology at T. Hasegawa USA. “While many brands in the past may have opted for a simple mango or peach flavor in product development, HASEAROMA can reproduce the specific flavor profile of an Alphonso

mango or Ataulfo mango, or accurately reproduce the distinct taste of a white peach or Golden Jubilee peach. The expertise of our flavor chemists creating HASEAROMA allows us to refine flavors on a molecular level and develop products that stand out within the market and deliver value to consumers.”

Development of HASEAROMA flavors includes an extensive sensory analysis process which isolates specific flavor molecules within food and beverages. Chemists then assemble these molecules to add depth of flavor, long-lasting mouthfeel and authentic aroma.

Lighter Libations: A Healthier Approach to Drinking

Another major outcome of the pandemic was a notable increase in alcohol consumption for some consumers, juxtaposed with the complete opposite for others. According to a 2023 Mintel report, 17 percent of U.S. consumers are aware of and interested in a sober curious lifestyle, up four points from last year2. More than 43 percent of U.S. consumers cited “a personal lifestyle change” as their reason for drinking less spirits, even above saving money (40 percent) or physical health (32 percent)3.

While many of these consumers still partake in alcoholic beverages, lifestyle changes resulting from the pandemic have created lasting changes in their consumption patterns and tastes. Despite impressive growth of non-alcoholic beverages – with more than 149 percent growth in mocktails on menus between 2020 and 2023, according to Mintel data4 – non-alcoholic beverages are not taking over. Consumers are simply taking a lighter approach to drinking by choosing low-ABV beverages that offer the intense flavor of favorite cocktails, wine and beer with less alcohol content. These options encourage moderation while still delivering enjoyment and refreshment, especially among younger consumers. Mintel research5 indicates that nearly 31 percent of adults who buy alcohol in the U.S. aged 22-44 seek out ‘healthier’ alcohol options, such as low-calorie and light beer, hard seltzer and lighter cocktails. The appeal in these products is a robust beverage flavor, often with lowered alcohol levels, for consumers who want to moderate their alcohol consumption or products with reduced sugar and carbohydrates.

This renewed interest in health and wellness has boosted demand for BFY (better-for-you) products, across all food and beverage categories – including alcoholic drinks in the form of low-calorie and light beer, hard seltzer and lighter cocktails. The appeal in these products is a robust beverage flavor, with lowered alcohol levels, for consumers who want to moderate their alcohol consumption while also reducing sugar and carbohydrates. In addition to limiting sugar and carbohydrate intake, many consumers are interested in alcoholic beverages that offer functional ingredients with some type of health benefit. For example, numerous beer brands are exploring the use of adaptogenic mushroom ingredients, which claim to have anti-inflammatory benefits, while many RTD cocktails are leveraging green tea, berries and other superfoods that provide antioxidants and other tangible benefits.

A key result of the moderation trend and shift toward healthier options is that consumers are more selective in their alcoholic beverages than ever before, which puts emphasis on delivering a heightened experience. When consumers are reducing their intake of alcohol, flavor becomes the key differentiator that leads to trial and continued purchase. The challenge that many brands face is creating clean-label alcoholic beverages that taste great with minimal sugar content while still masking the burning astringency of alcohol. Flavor manufacturers are leveraging innovative technologies and unique development processes to balance the requirements of a low-ABV and often low-calorie beverage.

“When you remove an ingredient such as sugar or other sweeteners, the other flavors in a beverage become more pronounced or even modified,” explained Briana Tran, beverage applications technologist at T. Hasegawa USA. “Our task is to reformulate the beverage to recover the optimal flavor profile, using technologies that either mask certain unwanted notes, or amplify desirable flavors that are already in the beverage.”

One such innovation that is being leveraged in the production of alcoholic beverages is T. Hasegawa’s BOOSTRACT®, which is a proprietary flavor modulation technology that recovers the kokumi mouthfeel and full-bodied richness. This rich mouthfeel is often lost in the filtration and distillation processes necessary to produce low-calorie fermented alcoholic beverages such as beer, wine, hard kombucha

and malted liquor.

“With this new technology, we’re able to isolate the most desirable flavors in a beverage and produce the ideal representation of that flavor,” said Tran. “For example, if we’re working on a strawberry profile, we can amplify the natural flavor that’s already there and produce a much bolder, true-tolife strawberry taste – even with low-sugar alcoholic beverages.”

RTDs and Hard Seltzers –the Epicenter of Flavor Innovation

RTD alcoholic beverages have been on a growth trajectory since early in the pandemic, as consumers at home were looking for convenient variety and were willing to explore new products withing the RTD cocktail and hard seltzer categories. While many RTDs do focus on reduced sugar and other tangible health benefits, these products are typically outliers within the trend of reduced ABV beverages. Hard seltzers are one of the fastest-growing segments in the alcoholic RTD category, and the combination of flavored sparkling waters with fermented alcohol has grown enormously popular among younger consumers in recent years as a BFY option that still offers a convenient way to add variety to at-home drinking.

RTDs are a prime source for flavor innovation. Since they are seen as “lower stakes” in price and offer ultra convenience, consumers are willing to explore flavors in the RTD alcoholic beverages category. Flavor innovation is especially welcome within this category, including bold profiles and special offerings. Nearly half of all U.S. consumers in a 2023 Mintel survey cited limited time seasonal flavors as the motivating reason for new flavor trial in RTD alcoholic beverages, including premixed cocktails, alcoholic teas, flavored malt beverages and hard seltzers4. More than a third of participants cited bold internationally inspired flavors such as horchata or mango lassi as their motivation for trying a new alcoholic beverage within these same RTD categories.

Regardless of changing consumer patterns, alcoholic beverages need to deliver excitement and refreshment. As consumers seek more from their cocktails, wine, beer and spirits, the flavor industry continues to innovate and meet this demand –helping brands adapt to shifting consumer preferences with attention-grabbing flavors which deliver an immersive taste experience.

Liquor Licensing & Insurance 101:

What Establishments Selling Liquor Need to Know

By: David DeLorenzo

When you’re operating an establishment that serves food and alcohol, being properly licensed and insured is crucial to the safety and the success of your business. Even if you’ve been in business for some time, it’s vital to stay abreast of ever-changing laws as they apply to serving liquor, specifically. Read on for some liquor licensing and insurance tips to keep your business running strong, while you protect yourself and your staff.

First of all, it’s important to consider the type of license that you have and the insurance that will cover it. A lot of people may have a misconception about the type of license they have and the dictation for what type of insurance that is needed. For example, a No. 6 license (subject to Arizona law), which is generally a bar license that is 100 percent liquor that will have some dictation on the type of insurance that you will need. You will have to go to markets that are fully vested in the ability to write 100 percent liquor or 50 percent or more liquor, because of that No. 6 license.

However, the license itself is not as important as the percentage. It only matters that you have a license when it comes to insurance. For example, consider a No. 12 license, which is a restaurant license that allows you to serve 60 percent of your sales in alcohol and at least 40 percent of your sales in food. The insurance agency will look at that

No. 12 license, but what they really want to know is how much you are actually serving in alcohol and how much you are serving in food.

The reality is that most No. 12 businesses may serve 30 percent alcohol or five percent — a lot less than that 50 percent (which is generally what a No. 12 license allows for). All the insurance company really cares about or looks at is the actual percentage of liquor to food. However, if you served 60 percent alcohol and 40 percent food, the insurance company may still classify you as a bar and you will likely have a higher rate even though you have a restaurant license. It’s the percentage of food to alcohol sales that really matters when it comes to your insurance coverage and rates, not necessarily the license itself.

In the insurance world, if you serve 30 percent alcohol and 70 percent food, for example, that is generally the threshold and the maximum for you to get the most positive and beneficial insurance rate in Arizona because your liquor is 30 percent or lower. Once you exceed that 30 percent threshold, it puts your business in another category of insurance that basically does not allow you to go to those direct markets for your coverage.

You will need to go to a secondary market, generally a more expensive market, because your liquor liability is increased when you have more people drinking liquor. You have to be insured differently the more liquor you serve and typically those direct markets don’t want to take on that risk. However, there are other markets for that.

If at least 30 percent of your sales are attributed to liquor, you should look into an umbrella to go over your primary coverage. This umbrella will give you another layer of protection over what you’ve already purchased in terms of your insurance.

It’s also important to carefully analyze the amount of entertainment your establishment provides and the hours of operation if you’re getting into heavy

liquor service. Those two factors will impact on your rate just as much as serving more alcohol than a standard restaurant would.

There is nothing wrong with entertainment or later hours, but you do need to understand that those factors put you in a different classification at that point. Based on that you will need to adhere to higher rates. This is because the companies that write these have actuaries that have determined what they need to charge in order to create an actual rate that makes sense for the carrier to write the business.

When it comes to selling to-go alcohol, it hasn’t really come to full fruition as many thought it would after COVID. There are insurance companies that write liquor stores, convenience stores or even grocery stores, which is basically to-go alcohol. When you look at those types of establishments, to-go alcohol is already being sold. It hasn’t really changed the stance from an insurance perspective when restaurants are selling to-to alcohol. They just look at the total amount of alcohol sales coming out of that establishment. For example, if a restaurant is selling only three percent alcohol and the rest is food, the insurance company won’t really look at whether that three percent is from to-go liquor sales or not.

Ultimately, it is up to the establishment to perform in the act of not overserving a customer and not serving a customer that is already noticeably intoxicated. That is regardless of whether the alcohol is served at their establishment or purchased to-go. While selling to-go liquor as a restaurant or bar is legal, is it important to be properly licensed for that.

For any business selling liquor, it is important to review your policies once a year with your insurance agent to ensure there aren’t any changes that would necessitate an adjustment to your coverage. It is also vital to adequately train your staff, particularly in the awareness of not overserving or not serving a customer that appears to be already intoxicated.

Documentation of this training is also extremely important. Keeping that and all other documentation in a place that is safe and yet accessible can help protect your business if something were to go awry. If you hear of an incident, even if you don’t

know whether that person was at your establishment, collect your camera footage from that evening and save it in the event of a law suit. You may or may not be liable, but it is good to have, particularly if there was a wreck or even a death near your business. It’s a good idea to collect that data just in case. Security cameras with time-stamped data can be a lifesaver to your business and your staff.

It's always important to work with an insurance agent that specializes in the bar and restaurant industry. They will have the knowledge to support your needs and also ensure that you have the coverage you need to protect your business, your staff and your clientele.

Out of his passion to serve the restaurant and hospitality industry, David DeLorenzo created the Bar and Restaurant Insurance niche division of his father’s company The Ambassador Group, which he purchased in 2009. For more than 20 years, he has been dedicated to helping protect and connect the hospitality industry in Arizona. For more information visit our website:

barandrestaurantinsurance.com

MARKET CONTINUES TO EXPAND: Packaging Helps Meet Consumer Wishes Efficiently

By: Rebecca Marquez

With consumer demand rising, the craft beer and spirits market is forecast to grow from a projected 75.2 billion units in 2024 to 78.1 billion units in 2027, a 1% compound annual growth rate (CAGR), according to Craft Beer and Spirits: Success Through Packaging, a white paper and infographic published in February 2024 by PMMI Business Intelligence, a division of PMMI, The Association for Packaging and Processing Technologies. This growth will be achieved primarily by double-digit gains in the craft spirits segment and a shift toward hard cider and non-alcoholic craft beverages to compensate for flat demand for craft beer.

Metal packaging will continue to dominate with a 58% market share, followed by glass at 38% and rigid plastic at 3%. Liquid cartons, which account for an estimated 0.3% of the market, will experience the strongest CAGR, 2.2%, followed by metal at 1.5% and glass at 0.4%. The growth in these three formats will be at the expense of rigid plastic, flexible packaging, and paper-based containers.

Driving forces include a greater reliance on the e-commerce channel and a growing preference for ready-to-drink cocktails, as well as for variety and multipacks. As a result, craft beer and spirits producers face multiple challenges:

• Expansion of stock-keeping units (SKUs) and formats

• Sustainability demands

• Input costs

• Need for product differentiation and shelf impact

• Operational changes to meet evolving needs.

Expansion in SKUs/formats

The number of SKUs in the craft beer and spirits space has exploded in the past decade, resulting

in an ever-growing array of packaging formats and sizes to address shifting consumer preferences.

E-commerce is emerging as an important channel and is likely to continue growing in share. However, the more frequent and rougher handling experienced during distribution means craft beer and spirits producers, who wish to sell in this channel, may need to make packaging changes and related packaging line adaptations to ensure products arrive undamaged. Additional tracking and product verification features also may be necessary to succeed in this channel.

Sustainability Demands

Highly sustainable aluminum and recyclable glass packaging dominates the industry. So, craft producers must think creatively to find ways to increase sustainability and communicate those efforts to consumers.

It’s also essential to be prepared for a stricter regulatory environment. California, for example, has put regulations in place that require a 25% reduction in plastic packaging by 2032. The regulations also specify that all non-plastic packaging be recyclable or compostable by 2032 and set a sliding scale for recyclability requirements for single-use packaging at 30% by 2028, 40% by 2030, and 65% by 2032.

This is prompting makers of craft beer and spirits to take a more holistic, operation-wide view to improve the sustainability of packaging and production processes. More than half (55%) of survey respondents report adopting sustainability strategies such as

• Reduce or eliminate plastic

• Use less material, e.g., lightweighting

• Adopt 100% recyclable packaging

• Switch to material with post-consumer recycled content

• Implement returnable packages

• Adopt a tethered cap.

Labeling decisions are particularly important since ink and adhesive choices can determine whether a package is recyclable.

On the production line, sustainable operations mean minimizing product and packaging waste as well as conserving water and electricity. Efforts to reduce the carbon footprint of a product not only cut costs for processors but also boost sustainability credentials and reputation with consumers.

Input Costs

Stubbornly high costs for ingredients and packaging materials have compounded with shortages, particularly for aluminum cans, to create price pressure for craft producers. This should become less of an issue as inflation eases and new can capacity comes on line.

Differentiation and Shelf Impact

Craft consumers are accustomed to a huge variety of choices from a range of single-serve sizes to mixed 12-packs. This variety makes it harder to stand out on crowded store shelves. So, craft producers are turning to packaging to differentiate their products, project a premium image, and connect with consumers. Thus, producers adopt eye-catching labels, novel materials, unique shapes and sizes, multipacks, mixed packs, and special releases.

Special releases such as rare and limited batches, seasonal offerings, one-off collaborations, and rotating unique iterations, enhance a product’s image and draw a loyal following. According to the report, “These unique offerings tap into the premiumization trend by creating scarcity and uniqueness and speak directly to craft consumers' desire for new and novel offerings that expand their overall craft consumption experience. Specialty offerings also create a sense of community for individual brands and go a long way toward building a unique brand identity.”

The appeal of premiumization, one of the most durable consumer trends in the craft industry,

is expected to continue. That’s because even in the face of inflation, a substantial number of consumers buy quality over quantity and enjoy giving themselves a treat.

To deliver a premium product, craft beer and spirits producers must consider both packaging and labeling attributes. Strategies include the adoption of unique and novel packaging shapes; bundling with additional ingredients or mixing utensils; and dual-chamber bottles, especially for ready-to-drink cocktails.

On the labeling side, the focus is on visual aesthetics, tactile features, and smart, interactive label technologies like radio frequency identification, near-field communication, QR codes, and augmented reality, which link consumers directly to content designed to curate a luxury experience. Visual aesthetics are particularly important to product identity and include elements such as high gloss finishes, metallic flourishes with ink and foil, and clean lines with sharp colors. For cans, these features increasingly are supplied by shrink sleeves and digital printing, which can deliver the desired upscale image. Applying sleeve labels or digitally printing cans on-demand also can overcome supply chain constraints by eliminating the need to inventory pre-printed cans.

Operational Changes

Packaging lines are changing to adapt to the shifting needs of craft beer and spirits producers with the most desirable equipment features being sustainability (smaller carbon footprint, reduced waste), flexibility to handle a variety of formats and sizes, automation, and preventive/predictive maintenance-capable.

Investments include changes to accommodate e-commerce shipping, automate the assembly of variety and multipacks, and differentiate products. Thus, it’s no surprise that 46% of craft producers report they plan to purchase labeling, decorating, and coding equipment.

Multipacks and variety packs, which often require manual assembly, pose a production challenge. Thus, 24% of craft producers are planning to update operations by adding feeding, loading, and accumulating equipment, 15% are installing lines dedicated to multi/variety formats, 12% are invest-

ing in additional packaging equipment, 10% are increasing machine integration to coordinate runs, 9% are changing primary packaging format, 9% are changing secondary packaging format, and 9% are automating physical processes.

Collaborative Suppliers

To grow the market, makers of craft beer and spirits seek collaborative packaging material and equipment suppliers who can provide turnkey solutions and extraordinary technical service. Third-party manufacturing and packaging services also are in demand.

New equipment must be flexible enough to handle multiple formats and sizes and accommodate variations in packaging materials. Other machine requirements include quick changeover, simple operation, and compatibility with washdown conditions.

The Craft Beer and Spirits: Success Through Packaging white paper was compiled from the opinions and responses of craft beer and spirits industry professionals. Participants were asked to expound

on their experiences to better understand craft producers' packaging needs and the future trajectory of the industry.

Explore the latest craft beverage processing and packaging innovations at PACK EXPO International (Nov. 3–6, 2024, McCormick Place, Chicago, Ill.). Ranking as the biggest packaging and processing event on the planet in 2024, the show will present 2,500 exhibitors spread across more than 1.2 million net square feet of floor space and foster idea-sharing among 40+ vertical industries. Highlights for craft beer and spirits producers include free educational sessions, a myriad of networking opportunities, and solutions to address automation, production efficiency, sustainability, flexibility, and e-commerce needs as well as other hot topics and trends.

For more information, visit packexpointernational.com

Testing the (Still) Waters

By: Tod Stewart

A30-year friendship solidified by a passion for whisky, a desire to put this passion into practise, and a determination to break new distilling ground in an environment where practically everything was against them - welcome to the story of Barry Bernstein and Barry Stein (affectionally known a “the two Barrys”) and the evolution of Ontario’s Still Waters Distillery. It’s a story that should inspire craft distillers around the world - and entrepreneurial types thinking about joining the ranks.

Today, Still Waters Distillery continues to grow and its flagship - STALK&BARREL Canadian Whiskyshould soon be available nationally across Canada, and plans are in the works to expand distribution into the US market. Beverage Master Magazine caught up with the Barrys to talk about past challenges, current successes, and future plans.

* BM - Beverage Master Magazine

BM: Initially, your venture involved importing whisky in bulk for blending. And, again, if my recollection is correct, you ran into some regulatory hurdles. Assuming I’m correct on both counts, can you elaborate a bit on this part of your past?

Barry Stein: Our initial venture, in 2005, was as an independent bottler of scotch for the Canadian market. We were importing single casks of scotch and bottling here in Canada. We were, at first, restricted to selling scotch in an “adulterated” fashion - by adding one per cent domestic whisky to comply with an obscure Canadian law. This meant

we couldn’t call it scotch, which presented some marketing challenges. After much negotiation, we were able to finally get permission to bottle without blending, but that was short lived as the Scotch Whisky Association brought in rules that prohibited the bulk export of scotch for bottling purposes outside of Scotland.

BM: When did you decide to actually create a distillery? Though the regulatory landscape for small distillers has changed a bit over the years, what challenges did you face - both physically and regulatory - in setting up your operation?

Barry Bernstein: While struggling with our importing business, we were also seeing the growing small distillery industry in the US. It was clear that our importing business was not sustainable, with the regulatory restrictions, and we thought there was an opportunity to be the first craft distillery in Ontario and one of the first in Canada. We opened the doors to our distillery in 2009 after a great deal of work with the Canada Revenue Agency - CRAon federal licensing.

BM: Where there issues with the CRA?

Barry Bernstein: The local CRA office had never seen a small scale distillery, and it required extensive documentation and due diligence. The Alcohol and Gaming Commission of Ontario - AGCO - had rules that only allowed large distilleries to sell direct to the public, and the only sales channel available to us, The Liquor Control Board of Ontario - LCBO - hadn’t dealt with a small local spirits producer, and it gave us no preferential treatment, expecting the same from us as it would a large multinational brand. Our local municipality relied on building code regulations that only described large scale distilleries, which forced us to invest heavily in facility upgrades. At every level of government there were significant challenges, but the constant “you cannot do that” only strengthened our resolve. We were determined to prove everyone wrong.

BM: Was your aim always to make whisky, or were you interested in a broader range of spirits - or was

Craft Distillery

it the case that you were more or less forced to produce other spirits until your whisky was legally old enough to be called whisky?

Barry Stein: When we started, our focus was on whisky. But, by Canadian law, that requires a minimum of three years maturation, so we made vodka as well. By virtue of being the first in Ontario, we also attracted attention from others looking to get into the business, and we did both contract distilling and bottling. This gave us an opportunity to make different vodkas, gins, whiskies, liqueurs, and so forth.

BM: Sounds like you certainly gave the various authorities pause to reconsider what could and couldn’t be done. Have things got any easier for craft distillers from a regulatory standpoint?

Barry Stein: The ability to sell direct, which didn’t exist when we started, was significant. There has been some small wins on the taxation front, but it is still very difficult to be profitable. For us, the most significant changes have been the growth of the industry. Everyone now understands what a craft distiller is, and it is a lot easier to make noise as a group than as an individual.

Barry Bernstein: Our biggest challenge is taxation, federally and provincially, that take the vast majority of the sale proceeds. Canadian excise rates for spirits are ridiculously high. We’d like to see reduced rates across the board, and special rates or graduated rates for small producers, similar to what is in the US - or even in Canada for wine and beer producers. Though small producers can now sell direct to the public - which took years of work to make happen - significant distribution can only occur through the government run liquor stores, and it remains a difficult sales channel for a small player.

BM: Would tapping into the export market help you bypass the stranglehold of Canadian liquor boards?

Barry Bernstein: My role at Still Waters Distillery is primarily new business development, and I can say there are plans being made as we speak to be launched in the USA, which we are very excited about. We should have more details on this later on this year. In the meantime, I think it’s important that we focus on core competencies,

and that is making truly great tasting Canadian whisky. We have perfected the STALK&BARREL Canadian Whisky blend and this brand is gaining significant distribution, which includes Ontario, Newfoundland, New Brunswick, and Alberta. Hopefully STALK&BARREL will be nationally distributed across Canada the near future.

BM: It’s said there’s strength in numbers. Have you collaborated with other distilleries or joined any trade organizations that are pushing for things like excise parity?

Barry Stein: We founded the Ontario Craft Distillers Association and are a member of national organizations. These organizations are more directly helpful to our clients, the brand owners, but that indirectly helps us. The more our clients prosper, the better we do.

BM: Are there any plans to expand production facilities in the future, or perhaps change locations?

Barry Stein: Yes, although we are still working on a plan. We have been increasing our production capacity incrementally. Our space is very tight and is an ongoing challenge. We actually have three facilities (production, bonded storage and non-bonded storage) and are looking at consolidating in a single location. We expect to have some definite plans by the end of year.

BM: Can you give us a sneak peek as to what new SWD spirits may be in the works?

Barry Bernstein: I think right now we are focusing on the rebrand of STALK&BARREL Canadian Whisky. This brand is definitely getting noticed by whisky lovers and cocktail enthusiasts. STALK&BARREL Canadian Whisky is now the Official Canadian whisky of Golf Canada, so with the RBC Canadian Open in June, and CP Women’s Open in August, we are ramping up production to meet the anticipated demand.

With the ongoing expansion of the Still Waters Distillery - and growing market for its balanced, warm, vanilla and butterscotch-tinged flagship STALK&BARREL Canadian Whisky, not to mention the Golf Canada partnership - the “two Barrys” appear to have hit a Canadian distilling hole-in-one.

Ready To Drink Cocktails are Here to Stay

By: Kris Bohm - Owner of Distillery Now Consulting

Canned cocktails also known as ready to drink cocktails (RTDs) are taking the distilled spirits market by storm. RTD sales in the US grew 24% from 2022 to 2023. (Neilson) Part of this growth came from breweries branching out into spirits by canning cocktails using their existing packaging equipment. There are many ways to create canned cocktails and an abundance of variety in flavors of canned cocktails. Moving from an idea to a finished product is a lengthy and challenging venture but there is immense potential in the RTD market. This article will take a dive into how brew-

eries are producing RTDs and the lessons learned from launching ready to drink cocktails for a few different companies. Let's learn about canned cocktails!

Many breweries are looking to the next trend in beverages to grow their business. While some folks say non-alcoholic drinks are the upcoming trend, we believe RTDs are the answer. 5 years ago, RTDs had a sense of uncertainty among those working in the distilled spirits industry. The uncertainty came from the fact that the perceived price

point was too high for canned cocktails compared to beer and retailers were not willing to give RTDs space on their shelves. Flash forward to today and canned cocktails are thriving and selling at a much higher price point per unit than beer. Consumers have become more health conscious of what they drink and low calorie spirit based drinks fit that bill. If your brewery is debating between getting into producing seltzers or RTDs there is no question that RTDs are the way to go. Before you jump right into making your own RTDs let's talk about how to develop a product.

Product and Process Development

Whether you are a distiller or a brewer looking to produce RTDs there are many aspects to consider to achieve the goal of creating an RTD. Below is a list of the questions that you should answer before putting a product into a can.

• What kind of flavor or style of cocktail?

• What is the desired ABV and what kind of spirits will go into the cocktail?

• What will flavor the product? Extract flavors or raw ingredients?

• Will there be sugar in the product?

• Will there be juice or other natural ingredients and are they readily available?

• Is the recipe and product shelf stable?

• How long of a shelf life can you expect?

• Does the product require refrigeration once packaged?

• Will the product be highly carbonated, lightly carbonated or noncarbonated?

• How will the product be branded and marketed?

It is essential to answer these questions early in development. RTDs are a very different product than beer or distilled spirits. Take the time and diligence to give careful consideration to the product formula, flavor, cost, packaging process and shelf life. Time spent in development will save you money and avoid problems as your project moves

from idea to a finished product.

Selection of the packaging itself is important to give consideration to early during the planning and development phase of creating an RTD. The package itself will dictate the equipment used, the label on the package and many other key factors. Cans are by far the most common and affordable choice for packaging. Cans come in a variety of sizes, shapes and different liner types. A second option for RTD packaging is aluminum bottles. Aluminum bottles are closed with a screw cap or crown top. Aluminum bottles cost more than cans but aluminum bottles also are unique and provide differentiation to stand out in the sea of canned beverages. Volume and shape of the packaging must be selected early, as part of the TTB formula and label approval process must include this information. The options are numerous for packaging in most instances the best choice is to package in containers that are compatible with your existing equipment.

Packaging Lines

Hopefully your business already has most of the

equipment for packaging of RTDs. If you do not have all the equipment there are numerous vendors who build the equipment necessary to package RTDs. A few key components and pieces of equipment are essential to transform distilled spirits into canned cocktails. Below we have detailed equipment and steps needed to produce a carbonated canned vodka soda.

A water filter is a key tool to produce clean and sterile good tasting to make a good cocktail. A chiller and a brite tank are essential to build the product. The chiller provides the cooling capacity to bring a liquid down in the tank to the proper cold temperature, which makes it possible to carbonate the beverage and fill cans with minimal foaming. The product is transferred from a brite tank to a packaging line anywhere from 34 to 40 degrees F. A canning line is a complex piece of equipment that handles the movement of the liquid and cans in sequence to clean the cans, purge cans of oxygen, fill with liquid, then place a lid on the can and seal the can. Canning lines can vary in speed from producing a few cans a minute to over 100 cans a minute.

Several manufacturers build reputable canning lines suited to canning or bottling RTDs. A critical component to consider before selecting your canning line manufacture is the beverage itself. Some packaging equipment is built to handle high levels of carbonation, while some equipment will only work with lower levels of carbonation. Determining the complete formula of your RTD is important to do before producing the product on the packaging line. It is prudent to discuss the specifics of your concept product with the equipment manufacturer, including product PH, carbonation level, gravity.

An alternative option to buying a packaging line for canning cocktails is to partner with a mobile canning company. Nearly every large city in the US has at least one company who offers mobile canning service. A mobile canner will come to your facility with all of the equipment needed to can cocktails. Mobile canning is an excellent choice if your business is looking to quickly produce products but might not have the space and or resources to install packaging equipment. It is important to consider the downside to mobile canning is the additional cost per item. The cost of packaging through a mobile canner is typically twice as expensive as canning using equipment that is owned.

There is also sometimes a cost per unit added to the total cost to hire a mobile canning company. The plus side of utilizing mobile canning is that there is no major capital investment in equipment required to get started which means you can start canning cocktails sooner rather than later.

Creating canned cocktails is a challenging endeavor with strong potential for success if done well. There are many steps and much complexity to producing RTDs. Developing a successful RTD will certainly be a challenging and serious project. Good equipment and knowledgeable people are the two most important things needed to get it done. Sales of canned cocktails are growing tremendously year over year. Take the leap and join the RTD revolution. Canned cocktails are the future of spirits and can be the key product to grow your beverage business.

Kris Bohm is the owner of Distillery Now Consulting, who loves pursuing outrageous adventures. Bohm has also helped to create successful RTD products for Grand Canyon Distillery and Toddi Cocktails. He can be reached at distillerynow@ gmail.com

Sourcing Grains for Craft Distilled Spirits

By: Becky Garrison

According to Michael Swanson, co-founder, farmer and distiller for Far North Spirits (Hallock, Minnesota), craft distillers have an excellent opportunity to highlight the difference between a crop grown for flavor compared to a crop grown solely for yield. This distinction affords them unique opportunities to explore how to source the specific grains that will produce a spirit with a particular desired flavor profile.

Swanson cites rye as an example, as that's the primary grain he utilizes in his whiskeys, and he observed how this scenario plays out similarly to

many crops. As he observes, historically and across multiple countries, winter rye has been grown and sold as a commodity. There are exceptions to this, particularly in pre-prohibition Pennsylvania, where rye was grown specifically for use by the many distilleries across the state. But for the most part, rye was and still is treated as a commodity. However, when they started growing rye to distill into whiskey, they realized that their particular variety had a distinctive flavor profile.

So, Swanson and his team conducted a three-year crop research study that was the first of its kind. In

this study, they grew 15 different varieties of rye and then milled-mashed-fermented-distilled them individually. From this, they could determine that all other things are equal, the variety of rye alone affects the flavor of the whiskey. Also, after barrel aging the whiskey, they found that the aging process amplified the differences in flavor between the varieties. In particular, the open-pollinated varieties showed a much broader flavor spectrum than the hybrid varieties.

Despite the increase in flavor in the open-pollinated varieties, the hybrid varieties have been quickly gaining acreage across the U.S., Canada and Europe because of their much higher yields. These high yields enable farmers to increase their gross revenue to the point that growing hybrid rye can be almost as profitable as a corn/soybean rotation, with much lower input costs. But growing the majority of open-pollinated varieties at this price point isn't profitable. Hence, mass producers of whiskey aren't willing to pay more for open-pollinated rye due to the massive number of bushels that they consume in a year.

Talking About Terroir

Swanson has observed that craft producers who focus on producing products based on flavor rather than yield are willing to pay more for grains with a broader spectrum of flavor. To this end, craft distillers have started conversations about terroir that are very similar to defining a wine by taking into account factors such as the vineyard where the grapes came from and the AVA where this vineyard is located. Simply put, place matters, with regional differences emerging among whiskeys produced by craft distillers based on where the grains are grown.

Miles Munroe, master blender for the Portland, Oregon-based Westward Whiskey, views barley similar to how a winemaker considers different wine styles, the different grape varietals and the various climates in which they're grown.

"We know that barley types, soil, and climate bring diversity and complex flavors to whiskey. The shape of our custom pot stills and the way we approach distillation allows for the most amount of grain character to come through, so we're focused on high-quality barley that has a sense of place," he reflects.

In recent years, the Skagit Valley in Western Washington State, situated along the same latitude as the Scottish Highlands, has emerged as a major agricultural hub. This distinction led to Copperworks Distilling Company (Seattle, Washington), Westland Distillery (Seattle, Washington) and Westward Whiskey emerging as leading players in the evolution of the creation of American Single Malt as a new spirits category.

Sourcing from Malthouses or Direct to Farmers

Except for a select number of distilleries that malt their grains in-house, distillers work with a malt house to source and then malt the grains according to the distiller's particular specifications for a given spirit. These malt houses can ensure that the grain meets minimum specifications so that it can be malted.

Some craft distillers follow the model of distilleries like Westward Whiskey, where they work with malt houses that source local barley, which gives their spirits a sense of where the grain is from. Miles Munroe, master blender for Westward, chooses two-row barley because it meets the standards of what craft brewers also expect. So, they select their malt houses with these criteria in mind.

Others, like Tyler Pederson, master distiller at Westland Distilling, work with a network of local malt houses and brokers to source their malted barley. These partners work with regional farmers to select and procure the raw barley they malt to their specifications. Pederson describes this process, "It's a very involved effort, and we collaborate with everyone throughout our supply chain, even going so far as funding a barley breeding program

Craft

to develop new varieties for the whiskey industry."

Westland's Colere editions were created specifically to reflect how different varieties of barley offer different flavors. To date, they've released three expressions: Colere #1, made with Alba, #2, made with Talisman and their current expression and #3, made with Pilot. How Westland sources its grains was one contributing factor to its achieving B-Corp Certification in 2024.

A small but growing number of distillers like Far North Spirits purchase their grains directly from the farmer. According to Jason Parker, co-founder of Copperworks Distilling Company, "This represents a new way of doing business where a customer is getting better flavor, sometimes at the expense of a good yield." He cites his experience sourcing a barley variety named Alba as an example. After they created a delicious whiskey using Alba, they found their local malt house had encouraged their supplying farmers to quit growing it because they found another barley that was easier to malt and produced a higher yield. But it didn't taste like Alba, and now the flavor it produced is no longer possible to produce.

To convince farmers to grow specialty grains like Alba that may yield fewer bushels per acre or perform less efficiently in the malthouse, they put the word out to farmers that they were willing to pay the farmers per acre instead of per bushel. Once they contract with farmers to bill by the user rather than the bushel, thereby sharing the risk with the distillery of planting grains for flavor rather than yield, they will contract with a local malt house, such as Link Foods, to malt the barley.

Before contacting farmers, Swanson recommends

doing research into the specific varieties of grains that grow best in one's particular area. This knowledge will help ensure that the farmer can grow this particular grain variety in a large enough quantity without sacrificing quality such that the farmer can make a profit and the distiller can produce a quality spirit.

Gabe Toth, lead distiller for The Family Jones (Loveland, Colorado), describes how working with Olander Farms/Root Shoot Malting, which is less than five miles from their production distillery, affords them multiple opportunities. "We can develop local, unique flavor, keep our dollars local and support local businesses. We can also reduce our supply chain footprint, reducing both our vulnerability to disruption and our carbon usage via transit and work directly with our farmers to experiment with new grain varietals. This helps us support on-farm sustainability initiatives or collaborate on other projects that are a result of having direct relationships and even friendships with them."

Challenges in Sourcing Grain Directly from Farmers

In Toth's estimation, price is probably the major factor working against this approach, followed by uniformity. As he reflects, "Commodity agriculture over the last several decades has increasingly squeezed small farmers out of the market, and the relatively small farms we work with don't have the economies of scale to leverage for competitive pricing. Local grain can also be more prone to variability compared to a large processor that can over-contract and be more selective or blend away variation."

However, Parker reminds craft distillers that focus on making value-priced whiskeys, as opposed to flavor-driven whiskeys, that they can't compete with the big producers on price. Big companies have economies of scale and contracts that are not available to craft distilleries. "So, you might as well chase the one thing you can control, which is good, unique flavor. To do that, you probably don't want to be putting the cheapest ingredients in but rather use grains and other products that make a real flavor difference."