Pros And Cons of Contract Brewing

Contract brewing and packaging is a popular option for craft breweries looking to increase production and distribution. A contract brewery, also known as a co-brewer, is a brewery that agrees to produce beer for a business that doesn't have its own brewing facilities. Similarly, contract packaging involves working with a third-party supplier to package the beer. While this approach has its advantages, there are also potential drawbacks to consider. This blog post will explore the pros and cons of contract brewing and packaging beer.

What is contract brewing?

Contract brewing occurs when a company brews and packages beer using equipment it doesn't own. Although this model has long been common among large breweries, you can hire another brewery to brew and package your beer, or you can rent equipment from another brewery and brew it yourself. The beer remains yours; you own the recipe and decide how it's brewed.

This option is particularly popular with craft breweries that lack production capacity. Large breweries may also choose contract brewing to expand their operations and increase production capacity. Contract brewing is a cost-effective way to produce beer. It eliminates the need for breweries to purchase and maintain equipment, while still allowing breweries to access the proven expertise and production capabilities of established breweries.

Why contract brewing is important

• A brewery needs to increase production. This may be temporary, but may require the purchase of more equipment or a larger order.

• Companies looking to expand their product portfolio.

• Individuals looking to build a brand before purchasing equipment.

• Institutions requiring customized beer (i.e., pubs, bars, hotels, restaurants, attractions).

• Brewpubs seeking a wider variety of beer.

Contract brewing is a cost-effective way to produce beer. Small-batch contract brewing is particularly popular for those looking to experiment with new recipes or enter new markets without the costs associated with building a large brewery.

Advantages of Contract Brewing

Contract brewing can be an attractive option for brewers looking to increase production capacity, expand their geographic reach, and grow their brand. It also offers brewers the advantages of specialized packaging. Purely contract brewing brands can achieve market success, expand, and even acquire a brewery.

Contract brewing also offers a low-risk entry into the brewing industry. Compared to establishing and operating a production brewery, contract brewing requires significantly less capital expenditure, making it particularly beneficial for startups with limited budgets.

Small-batch contract brewing offers very low operating costs, providing startups with an opportunity to succeed in the competitive beer market.

Disadvantages of Contract Brewing

One of the main disadvantages of contract brewing is that it can diminish your brand's influence in the community. Because contract brewing involves working with an outside brewery, you may have less control over the brewing process and the origin of your beer. Contract brewing can also be more expensive than traditional brewing.

Contract brewing can lead to a tarnished brand image. Our advice is to demonstrate transparency from the outset and actively promote your business to create a positive impact. Finally, contract brewing carries quality control risks. You must trust the contract brewing company to deliver high-quality beer. This can often be avoided by including laboratory testing in the agreement, protecting both parties. It's important to weigh all of these factors before deciding whether to choose contract brewing for your business.