Are Contract Brewers Evil?

One of the major drawbacks to the import section of beer is the higher price tags when compared to the local brews. Between extended shipping costs and import duties, you will end up paying a higher price. But one brand of beer seems to defy all of this logic. Because even though it’s from an obscure location its prices are very similar to local craft brews of similar quality. We are talking about the widely available Hawaiian brand Kona Brewing Company and its portfolio of beer offerings.

For more interesting articles on craft brewing check our What is Infecting all Our Beer.

The development of contract brewers

Four bottles of beer placed in a tropical setting.
Credit: https://www.thedrinksbusiness.com/2019/08/ab-inbev-opts-out-of-craft-brew-opportunity/

Brewers large and small often contract out some of their production to third-party brewing facilities to do some of their work. These contract breweries work with brewers to give them a boost in production if they don’t have the space. Or in a different location to reduce their shipping costs.

After the prohibition, only a few hundred brewing companies managed to weather the storm and restart their operations. These breweries were ready to crack out some great beers. But all the marketing work and great branding that existed before prohibition now didn’t hold a lot of sway in consumer’s minds.

For many brewers who were barely scraping by it was much harder to relaunch a brand, build customer trust and fight for market share with other desperate breweries. For many brewery owners, they took an easier route. Contracting their brewing capacity out to other established brands to get a piece of their already successful branding.

Craft brewing get in the contract brewing

A bottle and a glass of Samuel Adams beer
Credit: https://flagshipfebruary.com/2021/02/20/jim-koch-on-samuel-adams-boston-lager/

As a strategy for keeping your brewery operating this works well. For many brewers, it gave them a much larger buyer to sell to. The next 50 years saw significant consolidation in the brewing industry. By the 1980s there were very few independent breweries left to take contracts in the US.

Everything began to change with the lifting of the ban on home brewing in 1978. The story of getting a contract brewery to get a craft beer brand off the ground became increasingly common over the next 20 years. Many craft beer brands got their start with beer made in a facility that they didn’t own. Proving a quick way to profitability that made investors and banks more confident in lending money to new startups.

Turning over your recipe and brewing techniques to another entity that isn’t quite as invested in your success can be dangerous. Transparency and collaboration are the factors that are increasingly important with a brewer contractor relationship. As long as the brands are open and honest about how their beers are produced we don’t see any problem using contract brewers to give drinkers more choices.

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