Lawyers Anda Lincoln, left, with Lincoln Law Office in Fort Collins, Colo., and Melinda Sellers with Burr and Forman in Birmingham, Ala., presented information about selling beer, working with distributors and keeping things legal in their seminar at the Craft Brewers Conference, held in Portland in April. Photo by Patty Mamula
By Patty Mamula
For the Oregon Beer Growler
The 2015 Craft Brewers Conference, held in Portland in April, covered virtually every aspect of craft brewing and brought in people from every state, the District of Columbia and Guam, and 54 countries. The global reach and appeal of craft beer was evident. The numerous seminars were equally as diverse. Two presentations neatly bookended the spectrum of topics.
Steve Parkes, owner and lead instructor at the American Brewers Guild, presented a session entitled “Going Pro: Making the Transition From Home Brewing to Professional Brewing and the New Challenges That Await.”
Anda Lincoln and Melinda Sellers, lawyers from Fort Collins, Colo. and Birmingham, Ala., respectively, presented a session called “Can We Do That? Common Questions Facing Brewery Owners in Working With Retailers and Wholesalers.”
With an introductory disclaimer that he was NEVER a homebrewer, Parkes drew on his early brewing experience in the U.K. before coming to the U.S. to “join the revolution.”
“Homebrewing is a hobby. Craft brewing is a business,” he said.
He emphasized the importance of mastering the craft -- of taking the time to learn how to brew a style and become consistent at brewing high-quality beers. “John Coltrane took years to master his craft,” said Parkes, referring to the legendary saxophonist. “Don’t rush. Master a balanced, clean pale ale.”
There are numerous avenues to getting a job as a brewer, including formal brewing education, education in science or engineering, internships, volunteering (which he finds is all too common today) and moving up from assistant to brewmaster at a new pub. “Breweries are opening too fast for startups to find trained and educated brewers,” he said.
He recommended several ways to learn about brewing. Visit breweries to stay apprised of the latest developments and network, join the Master Brewers Association of Americas and state guild, read books and judge tasting contests.
Two of the biggest challenges when transitioning from homebrewing to professional brewing are ingredients and scale. “Going from a 5-gallon homebrew to 30,000 gallons is a 100-fold increase,” he said. “Current recipes use ingredients that may not be available in large quantities or economically.”
For example, the barley and malt market is global and a drought in Russia or a storm in Germany can affect a brewery in Wisconsin. The increased demand for aroma hops due to craft beer’s rise in popularity has created a tight market for some varieties, such as Cascade, Centennial and Simcoe.
Parkes hit on the importance of quality and mastery repeatedly, especially noting clarification and carbonation issues. Consistency and quality go hand in hand and are facilitated by record keeping, possessing the proper tools and instruments, accessing a working laboratory and acquiring education and training.
Once an experienced and dedicated homebrewer does go pro and has spent a solid amount of time in the beer trenches, perfecting and mastering his or her beer, it might be time to branch out and sell to retailers and wholesalers.
Anda Lincoln and Melinda Sellers said that any relationship with a distributor begins with “The Agreement.” They advised developing a complete, detailed and specific written agreement. “Build reports, delivery and payment into the agreement as well as quality standards in shipping, storage and delivery.”
The brewery needs to emphasize how the product is to be handled, Lincoln said. This is where it’s important to be very specific and detailed. List which product cannot be sold past a certain date. Put the rotation schedule in the agreement. Wholesalers don’t want to receive product that will be out of date within two weeks.
A question was asked about wholesalers not following the rotation schedule, even if the wholesalers claim they are trying to fix the problem by implementing a new system. The answer, said Sellers, is not black and white. “It’s a relationship, an ongoing relationship, like a marriage,” she said. Her advice was to check out state law and get a good lawyer. “Go to them early on and have them help you save the relationship.”
Instead of relying on email or even certified mail, she suggested the ideal route to communication was to get your brewery people into the warehouse and walk through it together. Another strategy she suggested was visiting accounts in tandem and detailing what you want to happen at events and tastings -- spell out all expectations to the distributor. For example, one of Sellers’s clients was starting business in a new area of the country. The brewery was afraid that the distributor might place them in an event they wouldn’t want to take part in, so they asked for prior approval.
In dealing with retailers and self-distributing, Lincoln asked, “What can you incentivize them with? What is legal and what isn’t?” Draft beer sales can involve equipment, tap handles, glassware, kegs and line cleaning. Check and see what is legal to provide, she said. Be aware of what your state allows and any other state you may be going into.
“Wholesalers, how many of you have been involved in contests by manufacturers where top sales won a trip?” she asked the crowd. It turns out, that’s usually illegal. Some states allow you to give T-shirts and caps and others say you have to charge for them. There are also rules on signage. Certain point-of-sale merchandise and materials are not allowed, such as coupons.
The best defense, to steal a sports analogy, is to have a good offense. Know the legal restrictions in your state and/or region and record keeping requirements.
Stories from the print edition of the Oregon Beer Growler.