Contract Brewing: Do You Know What It Really Means?

Whether you are an avid follower of the craft brewing culture or not, you may have heard the term “contract brewing” thrown around before.  You may even know what the term means by its implied wording, but what does it really mean to the business of craft brewing?  What does contract brewing mean to the brewery that supplies it as a service?  What about the brewer that utilizes it as a service? Most importantly, what does it mean to the end consumer who drinks a pint of contract brewed beer at his or her local watering hole? I will try to answer these questions for you, because Crowded Castle had its humble beginnings as a contract brewer, and we believe it’s important you understand what that means.

I want to be short and sweet so I will skip the history and get right to the meat of things.  Contract brewing can be very simply defined as one brewer or brewery hiring another brewery to brew its product for them (dare me to say brew one more time?).  There are many different ways in which the contract can be written in terms of what is brewed, how it’s brewed, and who does what during the process, but for many it is quite simple.  Recently more breweries, like us, are utilizing this service as an opportunity to enter the market without having to jump through the hoops of acquiring real estate, insurance, equipment, employees, and all the extra time and expenses that come with building your own brewery.  Furthermore, this business model allows us to move quickly and react to better serve the modern drinkers insatiable need for variety…want a beer with elderberries?  You got it…Agave?  On its way.  Contract brewing is not just for the little guys either, in fact many large established breweries utilize contract brewing as a means of supplementing their supply and reducing shipping costs by having their recipes brewed locally in faraway places.  Seriously, I bet if you drank 10 different beers in the last month there’s a half decent chance at least one was contract brewed… I digress though, let’s focus on the basics for now.

As a brewery, whether you’re a supplier or a consumer, contract brewing represents an opportunity.  For large breweries with excess capacity, it provides an alternative avenue of revenue to keep the lights on.  Some breweries have even opened with the entire business model geared towards providing contract brewing services, with no beer of their own.  For the consumer brewery, it is a great way to enter the market with your recipes without having to put everything on the line by investing millions into a facility of your own.  Now, there is always some risk when you entrust someone else to brew your beloved product, but if done correctly this risk can be mitigated and contract brewing can be an extremely attractive alternative to the traditional path of starting a brewery.  Here at Crowded Castle, we spent much time and effort searching for a contract brewer that both met our standards and was a good fit for our business needs.  The process included interviews, tours, samplings, and much coordination between us and the producing brewery.  Lastly, and possibly the most important factor in establishing yourself as a quality brewery that uses a contract brewing, we committed to dumping any product that did not meet our expectations and eating the cost rather than passing it on to the consumers.  I am veryyy happy to say that we have not dumped a batch to date, but that hopefully gives you some insight into our side of the business.

Now, what does this mean to the beer drinkers? 

Crowded Castle is still the recipe designer and as such has the ultimate say on the recipe, the ingredients used and where they are sourced from, and the process of how the beer is brewed (within the limitations of the production facility).  We still have the final say on the finished product and are committed to providing unique craft beer of the highest quality to our loyal consumers.  We actually see this as a bit of an advantage for us to better serve the end consumer.  We have so many unique and delicious beers that we want to share with the world, and the more time we have to focus on that the better we can serve you. 

When you really look at the brewing process, it’s a science…a science that uses measured inputs and controllable processes to produce an end product that can be both consistent and scalable.  The real art is in the design of the recipe and being a contract brewer allows us more time to focus on that piece to keep delivering new and different beers in an already crowded market space.  That isn’t to say that we will be a contract brewer forever, the end goal for us has always been to build our own brewery, but it means we are using our current situation for the advantages it presents and hopefully we can pass the end result of that to you, the beer drinker. 

With that, I will get off of my soap box, for the Castle is Crowded right now and there is so much to do, but stay tuned because there are many exciting things in the works right now!