What we’ve learned from 18 months of contract brewing
Every homebrewer has the same thought from time to time - my beer is as good as the big guys, I should start my own brewery!
If that sounds like something you’ve uttered to yourself after a long day rinsing, priming and capping bottles, then you might be right.
Contract brewing (or ‘gypsy brewing’) refers to the practise of commercially brewing beer using someone else’s brewery. We’ve been doing it for a bit over a year now, so we thought we’d share what we’ve learned so far.
Choosing your brewery
The brewing industry is built and operates on relationships. Hopefully if you are thinking of starting a contract brewed business, you won’t be stepping into a brewery for the first time on your first brew day. We did the SA TAFE Brewing course under Stephen Nelsen back in 2016, which is where we met John, the owner of Sow and Piglets in Victoria. We wanted to launch our range in cans, and John had a canning line on site, so it was a good fit for us.
After a couple batches there (and learning that freight between Pt Campbell and Adelaide is very expensive), we moved to using local guys Big Shed and Little Bang. It’s important to find a brewery with a team you trust, are open with their processes and works with you, not for you - these guys are just that.
When choosing which brewery you’ll brew your beer at, there are some things to consider:
• Price - some breweries will charge a flat fee no matter the volume of beer brewed. Others will charge per litre.
• Equipment - depending on the type of beer you want to make, it may affect what brewery you choose.
• Do they offer on site canning or bottling?
• Logistics - is the brewery near you, can you get there easily if there is a problem, or you just want to come and check on things?
• Availability - how often can you brew beer? Will you commit to a certain amount per month, or is it more casual agreement? What happens if you run out of beer, want to make more, but they are booked out for weeks? Do you have an alternative?
Designing your beer
When launching your beer for the first time there are a few factors you need to consider. Where will this beer fit into the market? Brewing beer is a fine balance between creating the beer you like vs your ability to market it, distribute it, and it to move off the shelf in the real world. You need to sell your beer twice to be successful - once to the retailer, and again to the end buyer. So it’s important to think about how attractive the beer may be to your wholesalers and target market.
When we launched we made the choice to do so with four beers - a session ale, single hop pale ale, new world pilsner and hazy IPA.
We felt that it was a good spread of styles, so that anyone could find one that they might like. To differentiate our pale ale from the rest of the market, we decided on a single hop recipe, using Idaho 7, one of our favourite varieties at the time. For the pilsner, we decided to dry hop it with some New Zealand hops, namely Pacifica and Wakatu.
What about the cost? Your triple dry hopped NEIPA might taste amazing, but hops are really expensive! Can you even purchase those hops from the suppliers? They might be contracted out for the next three years. Is the recipe prohibitively expensive at scale and you price yourself out of the wholesale market because of that? Keep in mind you will pay for the brew up front, along with the excise, long before your wholesale accounts pay you.
Once you have a recipe you like, you will give it to the contract brewery. They’ll plug it into their system and run it past you with some suggestions for final approval. Once you have that set, you’re ready to organise the ingredients.
Ingredients
Some contract brewers will offer to order your ingredients on your behalf, which can be convenient. They will put a small margin on top to make it worth their time, so it always pays to ask what your cost will be before agreeing. This might not be a bad thing, as they could be getting grain or hops at a cheaper rate than you could, due to volume discounts.
Alternatively, you can open accounts with the suppliers yourselves. We have accounts with our grain, hops and yeast suppliers. We’ll usually order all of these ourselves about a week before brewday and have them delivered directly to the contract brewery. Some ingredients such as brewing salts, chemicals, yeast nutrient, fermcap etc we have supplied through the brewery, as we’re only using very small amounts and it’s not worth us buying 1-5kg of everything when we use so little of it.
Brew day
You will need to attend brew day to ensure everything goes as you have planned. There are some things throughout the day you may need to make an executive decision on. Also, it’s a great way to learn the ropes of commercial brewing if you have plans to open your own place one day. Things can and do go wrong, but it’s a learning experience! Although it might be scary that you have a stuck mash, you’re over or under gravity or the hops you ordered didn’t arrive on time, usually things work out OK.
It’s an early start between 7 and 8am and you can expect it to take around 8 hours. You will be exhausted at the end of it, but there’s no better feeling after a successful day and you’ve got a full fermenter of your very own beer!
Ferment checks
You will have to supply a fermentation schedule to the brewery for your beer and if possible it’s a good idea to pop in a few times while the beer is fermenting. The team there will be keeping a ferment log so you can check the temperature, gravity, pH and try a sample. If there is a dry hopping schedule you can make sure that is being adhered to.
Packaging
Bottles, cans or kegs? We always wanted our beer in cans, so we based our decision on where our beer was made based on that.
Our first few batches were made with our friends at Sow and Piglets in Victoria. They have a canning line on site, so it was a fairly straightforward process. When you are contract brewing, your volumes will probably be too small to have printed cans from the start. The minimum order volumes for printed cans start at around 50,000 units.
We use sticker labels and if your contract brewery does too, they can usually recommend their printer to supply them for you. It’s a good idea to do this, as they will know the correct adhesive, label roll size and feed direction to ensure a smooth application. There are guidelines as to what you must have on your labels to be compliant - the IBA has a great resource on this: https://www.iba.org.au/Public/Resources-folder/Technical-and-Legal-Documents.aspx
Alternatively, if your contract brewery does not have an on-site canning line, there are mobile canning operators in Australia such as East Coast Canning or Pro Canning. For a set fee they will come to the brewery, roll out a canning line and pack all your beer into finished cartons.
Another option is moving your finished beer to another location for packing, usually in an IBC or similar container. It’s then transferred to a brite tank for carbonation before canning.
This should be considered a last resort as it adds another point of possible oxidation to the beer. But, if you know what you are doing, it can be done and is done by many breweries.
The best option as a small contract brewer for kegs is a rental service, such as Kegstar or Konvoy. They will supply kegs to you for a daily fee. Once your keg has been delivered to a venue and emptied, they will then come and pick it up. It’s really convenient and saves you having to chase your kegs around town, even better if they go interstate.
Purchasing kegs is an option but it’s a cost we chose to avoid until we have our own venue.
Along with kegs comes the need for keg collars and tap decals. There are many suppliers of these that you can find online, but most have large minimum orders. We order our keg collars from a printing company on thin A2 cardboard, and cut them out by hand. Our decals are printed acrylic, but you can get away with laminated paper or thick cardboard also. It all depends what you want to spend vs how you want your brand to be perceived in the market.
Selling your beer
Selling your beer could be a blog post unto itself and is something we are still learning about. We initially contacted our local ‘crafty’ bottleshops via email and social media (shoutout to the Old Spot for being our first ever order!). It can be hard to get a retailer’s email address and they can be non-responsive on socials, so the next step is to show up in person. It’s always a good idea to call ahead to arrange a time, and don’t go late on Thursdays, Fridays or on weekends. Drop off a sample of each beer along with your card, have a quick chat to explain your range and what you’re about, and then follow up a few days later. It can be really hit and miss and is more of a slow burn - it gets easier the more stores you are in. It is tough, especially if it is a part time gig for you when you begin. Keep your chin up and keep going!
Kegs are a whole different story. Most venues will have contracted taps, meaning they are reserved for the big breweries. It is also becoming more common to have taps tied up to other craft brewers - they will arrange a deal with the venue to keep a beer on tap for an agreed price for a set length of time or volume of kegs. Your best bet as a small independent is to target the really crafty, high turnover bars as there will be more of a chance they will take you on. Your keg prices will probably be on the higher end as you’re paying contract rates as well, luckily the all-craft focussed bars will be less worried about cost compared to the more mainstream pubs.
There’s much more involved in running a contract brewed brand, such as logistics, bonded storage, marketing, festivals etc but hopefully this gives you a good insight on how it works. Cheers!
EDIT: Chris from the Beer Healer podcast interviewed James about gypsy brewing - have a listen using the links below, or find it on your podcast app of choice by searching ‘Beer Healer Ep. 92’.