There is no doubt that brewing is no different to culinary practices. Brewers should approach brewing the way a chef approaches cooking – when we make beer, we are cooking. A great chef can walk into any kitchen and produce great food when they know what they are working with. This is the principle of a good contract brewery, who exist to help other brewers achieve the best product they possibly can. Here are some of the reasons brewers turn to contract brewing, and the advantages it offers them.
A question of capacity
The most common reason why brewers look for success in contract brewing involves increasing capacity and growing their brand. For example, a brewery might contract brew their most popular beers in large batches by working with a contract brewery. They will nominate the beers with the greater shelf stability, which are optimised to be brewed at that scale in order to target customers looking for a new ‘everyday’ beer. By outsourcing the large-scale brewing of these products, their own brewhouse can be freed up to focus on the more high-end, speciality styles that will truly enhance their brand.
Contract breweries can also pave the way for geographic expansion. Many breweries start to serve their local neighbourhood, but the customer base often grows into a much wider base. Contract brewing is an efficient and quick way to expand distribution during the process of growing your own brewery so that once your operations are expanded to meet growing demand, you will already have the broader customer-base to distribute to. A good contract brewery will consider a partnership a success if they can help you grow to produce thousands of barrels to facilitate your own brewery expansion or acquisition.
Packaging and distribution
Breweries have also reaped the benefits of contracting in terms of moving into a distribution model or escaping the limitations of mobile packaging. Making the transition to packaging requires a significant investment in acquiring quality packaging equipment, stocking the packaging materials and hiring staff with the skills to run and maintain the equipment.
This kind of investment comes with an inherent risk – something which many breweries would prefer not to take on for themselves. Contract brewing is a brilliant way to test the market with a newly-packaged product, and could even be a more cost-effective way of packaging than getting the equipment for yourself. In any case, if you are planning to make that investment in the future, having a contract brewer test it first could help you learn about whether it will be a worthwhile investment. This may help take some of the risk out of the equation.
Many breweries experience great success with contracting by creating contract-only brands. The fundamental question on this front is whether you want to be a part of your community as a bar/pub, or whether you just want to sell and distribute beer as a brand. If you have the capital at your disposal, you can build and establish a brewery of your own. Alternatively, you can work with a contract brewery and spend your budget on marketing. It takes more than quality beer to find customers these days, so you need to have the budget to invest in marketing as well.
This kind of business model can work brilliantly in partnership with a contract brewery. Your business will not need its own brewing apparatus and premises to function. You can simply have the contractor handle the brewing, packaging and distribution of your product, while you focus on all the business that goes on behind it. Many brands have a lot of success by operating this way.
For bars or taprooms
A less common case where breweries opt for contract brewing is when a brand wishes to operate a taproom with no onsite brewing. This setup is more challenging for working with a traditional contract brewer, since the batch size and volume will be smaller. The most feasible way to make this work is to form a close working relationship with a local brewery.
The upside to this model with contract brewing, however, is that the cost of inventory should be relatively low once the initial upfront costs are handled. It’s a good way to market an additional or house brand because you will free up enough of your operating budget to focus on marketing efforts. Your venue will also have the advantage of offering a product that no other bar or pub can deliver.
Choosing the right brewing partner
The way a contract brewery assesses a good partnership is not unlike the way an investor evaluates a company for potential investment. A contract brewery won’t make much (if any) money on the first couple of batches, as there will be a lot of legwork up front to ensure your recipe is perfectly dialled in. As such, it is something of an investment on the part of a contract brewery to make the decision to work with you on your product. They will need to know about your team, the beer that has been brewed so far, the rate at which your brands are selling and the nature of your sales infrastructure.
If it all looks like a good fit, your contract brewery will collaborate with you to develop a plan for success with a predetermined margin for error. It may be a challenge, but with good harmony between your commitment levels and brewing philosophies, the relationship with a contract brewer can be excellent. At Contract Brewing, we love to partner with brewers with a similar methodology, commitment to quality and experience in similar styles of batches. We aim to help you set the standard with the product we create together, so we will always go all out to ensure the highest quality at all times.
If you are interested in working together, please don’t hesitate to get in touch and we’ll have a conversation about what a partnership could look like.