Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.
“Contract Brewing, an arrangement where a company brews and packages beer on equipment that it does not own.”
Garrett Oliver, The Oxford Companion to Beer
Have you ever ordered a brewery’s branded beer only to notice no fermentors on the premises?
There’s possibly a brewhouse in a separate location, but chances are that they engage in contract brewing.
Although the definition above gives us a basis from which to start, contract brewing can take on a wide variety of forms. Here are three archetypes that can be remixed in an astonishing number of ways:
- The host brewery brews & packages all of the contracting brewery’s products. This is essentially a private-labeling setup.
- The contracting brewery uses the host brewery’s ingredients and equipment.
- The contracting brewery uses the host brewery’s equipment but provides its own ingredients.
These categories don’t encompass every contract brewing situation, but we can use them as a foundation for discussion. Let’s start by looking at where the negative sentiment about contract brewing comes from.
Why has contract brewing been stigmatized?
Although the tides seem to be shifting, contract brewing has often been viewed as subpar in craft beer circles. Why is that the case?
Here are three critiques that seem to form the stigma as it’s been:
1) It feels disingenuous
At its core, I believe the lack of clarity is what most people find bothersome.
When I visit X Brewery, my expectation is that any beer “made by X Brewery” is either made on-site or in a production facility they own. If I find out the beer is made down the street at Y Brewery instead, my experience feels less unique, and I may even feel tricked. Why should I go to X Brewery if they just serve Y Brewery’s beer?
What adds to the confusion is that every situation is different, and contract breweries handle communication in a variety of ways. Some are up-front about where the beer comes from, and others don’t mention the host brewery at all.
In the latter situation, it’s almost like the general public is being told a white lie – a twisting of the truth rather than the whole picture.
That feels bad.
2) Less product control
The argument goes like this: Brewery X doesn’t brew the beer. Because Brewery Y, a less vested partner, brews the beer, they ultimately don’t care as much, and mediocre (or bad) product results.
Whether or not this is regularly the case (I’d argue it’s not), there’s no doubt that Brewery X has less overall control. Even if they’re physically brewing on Brewery Y’s equipment, they probably aren’t on-site regularly to check fermentation, they aren’t in charge of equipment maintenance, and they may not have a say in the source of ingredients.
A swath of control (for better or worse) has been forfeited to the host brewery in contract brewing situations.
3) Not always local
It’s one thing if Brewery Y, another local brewery, brews beer for Brewery X, but what if Brewery Z, located an hour (or even ten hours) away, is the host brewery instead?
This situation seems to exacerbate the previous two issues. Not only can it feel more disingenuous – it usually forfeits more points of control.
Why contract brewing should be embraced
Based on the previous three arguments, isn’t contract brewing’s stigma reasonably founded?
Before we jump to conclusions, let’s pause to look at three advantages it brings:
1) It’s a lower risk way for new brands to start
With brewery startup costs often ranging between $500,000 and $1.5 Million, it’s no surprise that contract brewing is an appealing option. The costs and associated risks of building out a brewery are prohibitive for many individuals, so it’s incredible that an option exists which allows owners to focus (almost) solely on marketing/sales rather than trying to juggle production, maintenance, sales, distribution, etc.
Of course, contracts bring their own costs, as you’ll be sharing margins with the host brewery, but the beauty is that they can simplify the process of starting a business. Not only can this be lighter on your wallet but it can be mentally freeing as well. Just like how minimalism can free up mental space, contract brewing can allow for laser focus in a business.
2) It’s a way for existing brands to test the waters
What seems to be a trend for taphouses is to eventually phase in their own brand of beer produced via contract. Whether it’s an owner’s dream to have their own brand of beer or they just like the profit margins better, contract brewing offers a clear path to giving it a try.
Instead of needing to invest hundreds of thousands in infrastructure updates, equipment costs, and labor just to see if their brand will play in the market, they can contract with a brewery for a period they feel comfortable with.
3) It’s tasty
The notion that contract-brewed beer is subpar is a load of crap.
Like every brewery, ingredients, recipes, equipment, cleaning practices, experience, etc. ALL play a part in the final product. If shortcuts are taken on any step, the final product will suffer, but that’s not unique to contract brewing.
Despite there being less product control for a contract brewer, it’s an unfair conclusion to assume the host brewery won’t care about product quality. In fact, you could argue that some brewers feel a greater pressure to produce solid beer when it’s for another establishment. Ego is intertwined in the process, and being told your product sucks by another industry professional isn’t appealing.
Final thoughts
To answer the title’s hyperbolic question – No, contract brewing should not be made illegal.
Although it’s without a doubt that some establishments have engaged in contract brewing with deceptive and greedy spirits, they are the exception and not the rule. Contract brewing is one means to growth, development, and progress in the industry, and that’s a wonderful thing that should be encouraged!
If you’ve found yourself being a critic of contract brewing, I’d urge you to consider drinking those beers with an open mind. Just as consumer expectations can affect the experience of a beer for the positive, consider that your negative sentiment of contract brewing may be reducing the enjoyment you’re finding in a perfectly good beverage.
Instead of worrying about what facility a beer is brewed in, what if we focused on the taste, taproom experience, and business practices of the brands we’re supporting?