Big beer giants like Anheuser-Busch InBev and Molson Coors Beverage are known for brewing beers from diverse brands in their huge production plants. What might surprise many is the fact that various craft-beer brands operate without their own breweries, instead choosing to sign contract-brewing agreements with other brewing firms.
Typically, oversize brewing firms with free production capacity and brewing schedule space undertake the task of brewing beers for a different business. This encompasses brewing, fermenting, cellaring, and packaging into kegs, cans, and bottles. Generally, it also involves cold storage after packaging, before the client company distributes its beers to vendors.
In the late 1990s and early 2000s, contract brewing was viewed negatively. Many within the brewing sector perceived it as a short-cut used by brewers devoid of passion or skill. Fans of craft-beer during that period came to share those views and showed a distrust in a brand’s beers if they were brewed by a different entity. This wasn’t helped by the fact that beers brewed under contract were typically of uninteresting, commonplace styles offered by brands lacking an interesting narrative, point of view, or marketing moxie.
However, contract-brewing has evolved significantly over the past ten years, particularly in San Diego County, where it is increasingly common. It is benefitting both the companies that provide these services and their customers.
It’s not uncommon for business proprietors to choose to have their beers brewed by a different establishment. This choice can stem from various motivators.
A significant portion of these entrepreneurs harbor ambitious business goals and possess the acumen to attain them by establishing a brand and marketing beer. However, they may lack the desire or means to create and oversee a production facility. Constructing such a facility is not only a time-consuming endeavor but also a financially demanding one. Despite the possibility of reducing time expenditure by taking over a pre-existing brewery, the financial outlay is substantial. As a result, newcomers to the industry often find themselves with little capital to start with.
Electing to have one’s beers contract-brewed provides a business owner with the opportunity to concentrate on marketing and selling their product, as well as bringing in revenue. This option eliminates the expenses and liabilities associated with operating a brewery. Added benefits include not having to hire staff for production, cellaring, or packaging purposes. This circumstance allows a business owner to maintain a small, concentrated team primarily dedicated to sales and other revenue-generating sectors of the business. Additionally, clients significantly save on utility bills and other circumvented overhead expenses.
Apart from monetary incentives, hiring a contract brewing company also offers the advantage of professional expertise, particularly important for business owners with limited or no experience in brewing. Most brewing companies that provide contract services expand to a size capable of doing so based on their product’s quality.
A prime example of local contract brewing is AleSmith Brewing. This Miramar-based brewery has been around for 28 years and has been contract brewing for roughly ten. Known globally for their award-winning beers, AleSmith offers a diverse range of services in recipe development and refinement according to their clients’ needs. They are experts in their brewing system, beer styles, and ingredients while their clients appreciate the guidance they receive from the AleSmith brewing team.
Contract brewing is not only for entrepreneurs who do not own breweries. Brewery owners whose production capabilities are at full capacity also enter into contract brewing agreements. In such scenarios, the brewery owner will have their best-selling beers replicated as closely as possible by the contract brewing operation.
Typically, the contract brewery will have a larger setup and be capable of brewing the client’s popular beers in significantly larger batches. This is particularly beneficial for breweries that are expanding their distribution into new regions or states.
So, who contracts brewing and who is under contract?
AleSmith has become a contract-brewing powerhouse, joining Mission Brewery in the East Village, which has been a player in the arena for well over a decade. Miramar-based Ballast Point Brewing and North Park-based Mike Hess Brewing are other large operations that diversify their revenue streams in this manner, but other smaller breweries have dabbled in contract-brewing as well.
Earlier this year, San Marcos-based Creative Creature Brewing began working with Riverside County homebrewer and podcaster Justin Allen to produce the beers of his side hustle, BeerDad’s Brew Works. And over the summer, local chef and cookbook author Lauren Lawless teamed with Vista-based WestBrew to unveil the inaugural blonde ale of her Flawless Beer brand. While Lawless has plenty of experience developing flavors, she had zero experience with brewing or background in how beer is made. Working with experienced brewing professionals has allowed her to pour all of her energy into marketing her beer via television, magazines and news outlets, and getting her beer sold by bars, restaurants and other retail establishments.
Other local brands getting along with some help from their contracting friends include Cerveza Xteca, Hillcrest Brewing, Latitude 33 Brewing, Mason Ale Works, Paradise Hills Brewing, Shoots Beer and SouthNorte Beer. The lattermost of those concerns has won multiple gold medals for its beers at the most prestigious professional brewing competition in the world — Denver’s Great American Beer Festival — proving the quality that can be achieved in the modern era of contract-brewing, another key reason it’s now seen as a viable and intelligent option for certain individuals looking to make a splash in the beer industry.
Brandon Hernández is founder of San Diego Beer News (www.sandiegobeer.news), a site providing daily coverage of the county’s brewing industry, a beat he’s covered for 17 years. Follow him @sdbeernews or contact him at: brandon@sandiegobeer.news
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