Despite the continued growth of craft beer, increased competition and slowing growth rates have resulted in a glut of excess capacity, hurting craft breweries. From the big minds at the Brewers Association (BA):
One number that really stood out was the amount of excess capacity in the industry. Bart Watson, chief economist for the BA who presented the annual State of the Industry presentation alongside BA director Paul Gatza, noted that total excess capacity was now sitting at 56 to 57 percent, which would take 12 years at current growth rates to fill.
While contract brewing and alternating proprietorships have always been excellent tools to manage capacity, breweries often discover these opportunities via word of mouth. With more than 7,000 craft breweries, this market has become far too fragmented to manage via word of mouth.
Capacity Tap alleviates the friction points in connecting contract brewing and alternating proprietorships. Our mission is to help the industry better manage its excess capacity and ensure that one of the greatest entrepreneurial opportunities of our lifetime continues to grow.
How it works
Supply side (breweries looking to offer contract brewing, private label or alternating proprietorships): Craft breweries open to contract brewing or alternating proprietorship arrangements create a free profile on Capacity Tap. The brewery includes information about their equipment, packaging capabilities, location and order size information.
Demand side (breweries in need of brewing capacity): Craft brewers interested in working with a contract brewer or finding an alternating proprietorship search Capacity Tap’s listings by attributes such as minimum order size, batch size, packaging capabilities, etc. When they find a contract brewer that could be a fit, they fill out a form, which sends the inquiry to the relevant contact at that contract brewer.
Connection: Once the two are connected, both parties can work through contracting, pricing and specifics. Brewers interested in additional support can contact Capacity Tap directly and contract with the site to walk them through the process.
Traction: Capacity Tap currently has 20 contract breweries listed on our site offering over 100,000 barrels of capacity across the United and with one brewery in Canada.
Highlighted scenarios where this is most useful:
- When breweries have outgrown their current facilities, they can contract brew or set an alternating proprietorship to quickly add capacity and de-risk their investment.
- For breweries looking to distribute in another state, it may be easier to contract brew in that state to reduce shipping costs and work with a brewer with the necessary regulatory approvals to brew in that state.
- For breweries with excess capacity, Capacity Tap offers a quick way to get up and running selling their capacity. For breweries dedicated to contract brewing, Capacity Tap offers an excellent channel to raise awareness of their services.
Comparison with the rest of the industry
While there are excellent sites that offer classified ads, Capacity Tap is exclusively focused on contract brewing and has developed targeted search and filtering functionality such as packaging capabilities, minimum order sizes, contract types available, etc.
Capacity Tap is 100 percent free to create a listing, search for listings and contact breweries. There are no hidden fees or charges.
The long-term vision is to make all aspects of the contract brewing process easier and more cost-effective. As the company expands into providing a better end-to-end experience, Capacity Tap plans to monetize via turnkey solutions that simplify the process and save costs for both the contract brewer and contracting brewer.
Capacity Tap was founded by Shaun Glassman, a tech entrepreneur and home brewer with experience in venture capital, management consulting and manufacturing.