As your brewery grows, so do the risks you need to be attuned to. Whether it’s a new lease for a larger facility, a bad batch of beer, contracts with glass manufacturers and canning contractors or an accident in your tasting room, brewery owners need to know how to protect themselves from business and economic risks that can hobble your business. At the 2018 Craft Brewers Conference & BrewEXPO America, in Nashville April 30 to May 3, there will be ample opportunity to address every single one of those issues.
Attend this seminar
For starters, the “From 1 Barrel to 1,000: Managing Risk from Start-Up to Rapid Growth,” seminar on May 1 at 2:40 p.m. will be cover topics ranging from how your insurance coverage can keep pace with your brewery’s rapid growth and how to set up bookkeeping from the start to establish solid footing. We followed up with panelists attorney Jonathan Dunitz of Verrill Dana, Brad Weller of Macpage, James Sanborn of GHM Insurance Agency, and Daniel Kleban of Maine Beer Company, to learn more about the issues at hand and what attendees can take away from their session.
What are some of the biggest problems you are dealing with today among your startup brewery clients?
Understanding the timeline of when startup breweries need to deal with different items, including a detailed, written business plan, entity creation, intellectual property, funding options, lease agreements, licensing, etc. Many smaller breweries seem to have problems choosing a name for the brewery and individual beers, which relates more specifically to their intellectual property issues. Failing to prepare a detailed budget with cash flow calculations that can lead to under capitalization of the startup. This also leads to issues determining the breakeven point — i.e. how many barrels of beer does the brewery need to produce to break even in the first year, year two, etc.
What about at that next phase of growth?
Employment issues. Brewers are good at brewing beer, but when they have to start managing employees and dealing with HR issues, training employees on safety practices and alcohol serving practices, things are often overlooked which can lead to numerous issues. In addition, if some of the foundational aspects discussed above, like intellectual property, proper entity formation and budgeting, are not addressed or addressed correctly, the impact may arise at this phase when the brewery is looking for cash for growth either through debt or equity. If the brewery can’t demonstrate value and income, loans and investment may be difficult to obtain.
What are three takeaways attendees can expect from this session?
- The importance of building your team both with qualified employees and outside support services; attorney, accountant, insurance/risk management.
- The risks involved with not doing it right the first time; bad lease agreements, distribution contracts, not setting up your accounting correctly, not understanding your insurance coverage.
- The importance of a well-developed business plan with regular updates based on growth — don’t write it for the bank and forget it once you open — with timely and accurate financial reporting to allow the brewery to make informed decisions on when and where adjustments to the business plan are necessary.
Expo floor visits
In addition to that session, you’ll want to seek out service providers and experts that can help better manage a lot of these functions and better mitigate these risks. Here are some examples.
Brewery Pak | Booth 1934
Brewery Pak is the dedicated brewery insurance division of specialty insurer Pak Programs LLC, and its team of dedicated experts will be on hand to answer questions about insurance issues covering a diverse range of exposures including beer production, tasting rooms, restaurants, special events, bonds, beer storage, retail sales, contract brewing and much more.
“Insurance is often the last thing on craft brewers’ minds when they come to a conference like this,” said Paul Martinez, Brewery Pak program manager, “But the fact is, just about everything that they come here to see or learn about will need some type of insurance coverage.”
“The people who come to this show love craft brews and the craft brewing business,” Martinez continued. “We will not be at this show to sell insurance. That’s what your insurance agent is for. Our goal is to be a resource to help craft brewers make informed decisions about protecting the business they love.”
For fun, also check out Brewery Pak’s blog dedicated to its travels drinking beer around the country.
Ekos Brewmaster | Booth 3236
Interested in seeing how efficient your brewery is? Ekos is offering a free Brewery Analysis at CBC this year. The company will review areas of your business with you — from operations, production, accounting and sales — and give you insights on how to streamline your processes.
Ekos Brewmaster is a provider of brewery management software to independent craft manufacturing businesses. Ekos partners with more than 1,100 craft beverage producers to manage their day to day operations in production, operations, sales and accounting. With just a few clicks of a mouse or swipes of a mobile device, they have made it easy for customers to organize, manage and integrate information from every area of their operation into one easily accessible location.
Brew x 5 | Booth 336
BREW x 5 is a complete brewery management software, made by FIVE x 5 Solutions, and was created with brewers in mind to simplify the day-to-day production so you have the freedom to work in your business, not on it. This company is new to us, but the BREW x 5 software seems like a simple and affordable solution worth checking out for tracking daily production, managing inventory, planning production and compiling federal reports.
“In the beginning of radio communication, operators needed to verify signal strength and transmission quality. ‘Five by five’ indicated the gold standard — the clearest possible communication,” said FIVE x 5 Founder and President Jason Lippa. “Clear communication is critical in producing gold metal products, and we support that pursuit of excellence with our products.”
OrchestratedBEER | Booth 2424
OrchestratedBEER offers an all-in-one solution to empower breweries to make optimal decisions. While at the booth, be sure to ask about its new CBC Exclusive Pricing. The company will also be hosting a panel discussion to explore how it is enabling brewers to constantly pursue better business decisions in today’s rapidly evolving industry. During this informal session you’ll hear from current OrchestratedBEER users of all sizes and learn why they’re passionate about helping you “Conduct Your Craft.” The session takes place May 2 from 11:30 a.m. to 1 p.m. at the Music City Center in Room 204.
Beer Law Author John Szymankiewicz | Booth 18
Beer Law: What Brewers Need to Know is now available on Amazon.com in paperback and ebook. John Szymankiewicz’s aim is to help brewers navigate the law of alcohol. Szymankiewicz is the founder and managing attorney of Beer Law Center. At Beer Law Center, the team focuses on helping small and independent breweries and craft beverage companies grow and achieve their goals. From corporate formation and fundraising to federal and state licensing to trademark and mergers/acquisitions, Beer Law Center can meet your legal needs while helping you stay on budget. A homebrewer for nearly 20 years, Szymankiewicz has devoted his legal career to the craft beverage industry and has been recognized as an industry expert. Szymankiewicz is an accomplished author and speaker. He is routinely invited to speak to groups and teach others, even other lawyers, about alcohol and alcohol law.
Kitto Insurance | 2157
Kitto Insurance at WeServeInsurance.com is a niche agency that was built to serve the food and beverage industry. Inside that, the primary focus and specialty are craft breweries. The company says: “We are not your average insurance agency. We do not wear suits. We do not hard sell. We are here to make sure you have the best product for the ever-changing industry you live and thrive in. You will see us at events and even brewing with our clients.” Kitto offers: True Product Recall, Head Brewer coverage, Retail Value of Beer, Beer in Process, Spoilage, Leakage, Contamination, Brewers Bonds, Commercial Auto, Umbrella, Workers Comp, Property, General Liability, Liquor Liability, Earthquake and many more supplementary coverages.
First Key | Booth 1214
First Key is a brewing industry consulting firm. They have been operating for more than 30 years and have worked in more than 50 countries. They offer a complete range of technical, commercial and financial services and have worked with breweries of all sizes. If you are in Nashville for CBC you can visit them at bgooth #1214 and also attend their seminar on Improving Your Brewery Performance on May 2 from 11:30 a.m.-1:00 p.m. in Room 205A.