Why do some breweries have no physical plant?
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Why do some breweries have no physical plant?

On Behalf of | Oct 7, 2022 | Alcoholic Beverage Law |

Every now and then, you might come across a brewery without a physical plant. If you are interested in starting a business in this industry, you may be surprised. How can someone claim to work as a brewer when they don’t actually have a brewery?

This is commonly referred to as “contract brewing.” In this situation, the brewer owns their recipe but might hire an existing brewery to produce and package the beer on their behalf, or might rent the physical space of another brewery to brew their own beer on the premises. In either situation, the contract brewer does not own their own physical brewery. Let’s break down some of the benefits of considering this option.

Fewer costs to get up and running

A lot of times, the issue is that someone wants to start a brewery but the prospect of raising capital to own the entire physical plant is just too great, not to mention the costs of upkeep and overhead. This might prohibit them from producing beer the way that they want or at the level that they want.

As a way to get around that cost, they simply find a brewery or brewing facility that accommodates contract brewing arrangements. The contract brewer is then able to produce their beer without the often prohibitive costs of owning the building and equipment that comes along with it.

More room for creativity

It’s not just the financial advantage that helps these brewers. This can also free them up to be more creative, developing innovative new beverage recipes and styles. Those who have invested in the physical construction of their own brewery may feel that taking any risks is unwise because they need to create consistent income. Brewers who don’t have that restriction are able to take risks and be more creative.

Understand your options

While there are many benefits to contract brewing, some may struggle with a complete lack of control over the brewing facility they use. There are also important legal considerations to understand and contract brewers may benefit from working with an experienced alcoholic beverage law attorney.

If contract brewing is something that you’re interested in doing, make sure you understand your options and know about all of the steps you need to take to get everything set up.