Risk Management Tips for Craft Breweries

Craft brewers can spend hours searching for the perfect balance of hops and malt, tasting new ingredients, and dreaming up their next unique signature beer. Breweries generally understand the importance of keeping their tanks and production lines clean, as the consequences of cleanliness can be immediate and even ruin an entire batch of beer. However, as a craft brewery continues to grow, there are additional risks to consider. Proactive risk management can reduce the likelihood of loss, limit the resulting damage, and, in some cases, shift the financial burden to the responsible party.

Common Hazards in Craft Breweries

Equipment Failure

Breweries use a variety of beer production equipment to produce and store beer, from brewing equipment to beer packaging equipment. A malfunctioning thermometer on a cooler could ruin a batch of craft beer and ingredients, resulting in financial losses. Breweries are advised to hire a professional brewery equipment maintenance engineer. They can inspect the equipment and ensure it's operating as normally as possible.

Unsafe Working Conditions

Workers working on slippery floors can slip and fall. Furthermore, workers can trip and fall if there are objects in their path.

Hot Surfaces, Steam, and Boiling Liquids

Thermal burns are one of the most common injuries in craft breweries. Workers can suffer burns from contact with very hot metal surfaces (such as brewing equipment or steam pipes) or from contact with boiling water.

Hazardous or Flammable Chemicals

Cleaning solvents and disinfecting chemicals used in craft breweries can cause minor skin irritation, while some chemicals can cause serious harm to employees. Fire and explosion are also major hazards in craft breweries. For example, ethanol (alcohol) vapors can leak into tanks or kegs, causing a fire. Furthermore, if vapors are released into a confined space with an ignition source (such as a gas boiler), an explosion can occur.

Risk Management

Proactive risk management can reduce the likelihood of loss, limit your losses, and, in some cases, shift the financial burden to the responsible party. The good news is that a well-developed proactive risk management program is typically much less expensive than the cost of defending, paying a settlement or jury award, or rebuilding out of pocket if your brewery suffers a loss.

Risk Management for Craft Breweries

Owning the Right Small Business Insurance

Because operating a craft brewery involves unique risks, it's essential to have appropriate small business insurance. This provides protection and compensation in the event of any type of incident or claim.

Discussing Risks with Suppliers

Quality control can make or break a small business like a craft brewery. Craft breweries that use other suppliers for raw materials, brewing equipment, or piping systems should clearly understand the responsibilities of each party in the event of problems. Craft breweries should discuss risk sharing with suppliers, negotiate, and sign contracts rather than just agreeing on a whim. Craft brewing companies must maintain comprehensive quality control documentation and provide staff with thorough training.

Create a safety-related task list

All craft brewery employees should receive comprehensive safety training and be aware of the operating procedures and associated risks of all brewery equipment. Craft breweries have demanding work schedules and require multitasking. Creating a designated task list will help each employee adhere to safety procedures and stay safe.

How craft breweries can protect themselves from risks

Protecting the supply chain

Do all the hops used in seasonal brewing come from the same supplier? This could leave you vulnerable to supply chain issues. Ensure you have a stable and sufficient supply of raw materials to meet your needs. Contracting with growers in specific hop-rich regions may be more competitive. Develop a backup supply plan in case shipments don't arrive on time.

Develop a product recall response plan

Suppose there's a labeling issue that doesn't mention an allergen, such as wheat, or a foreign substance is found in one of your bottles. You need a plan that covers everything from how to notify customers and remove the product from shelves to hiring lawyers and responding to consumer concerns on social media.

Ensure your employment contract protects your intellectual property.

The contract should ensure that if the brewmaster leaves the brewery, all recipes remain the property of the brewery and cannot be copied at the brewery.

Employee Alcohol Training

Ensure that employees are trained to serve alcohol to patrons. If volunteers are not trained, assign them to other tasks other than serving alcohol.

Consider liability when hosting special events.

Events can pose a range of risks, including patron injuries, slips and falls in areas not suitable for visitors, and safety concerns. Consider installing lighting and warning signs throughout the brewery, and cordoning off areas that could be trip hazards or attract children. For large events, event management companies can provide security services and assist in risk management.