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DRINK WINE, BEER, AND OTHER POTENT POTABLES.

AUG. 13 2013 5:00 AM

Your Local Beer Isn’t as Local as You ThinkAnd maybe that’s OK.By Adrienne So

(Continued from Page 1)

The most traditional contract relationship is known as an alternating proprietorship, in which a

host brewery lends its facilities on a regular basis to another brewery that legally “owns” the

facilities for the duration of production. For instance, 21 Amendment brews the beer served in

its San Francisco brewpub on the premises, but they produce their canned line via an

alternating proprietorship with Cold Springs Brewing in Minnesota. In addition to the

equipment, 21 Amendment owns the beer and its ingredients for the duration of production,

holds its own permits, and pays excise taxes according to its own barrelage, rather than Cold

Springs’.

An alternating proprietorship is a convenient arrangement if one brewery has invested in

equipment that another brewery doesn’t have. It’s also convenient if the host brewery is

located in a place that would shorten distribution time. Kona Brewing is based in Kailua Kona,

Hawaii. As mainland demand for their beer increased, Kona entered in an alternating

proprietorship relationship with Widmer Brothers Brewing in Portland, Ore., to produce kegged

and bottled beer stateside. In 2010, Kona merged with Widmer and Redhook to become the

Craft Brew Alliance.

“Beer is made up of water, and the island of Hawaii has been in a drought for decades,” said

Mattson Davis, Kona Brewing’s president. “It doesn’t make sense to be shipping this scarce

resource across the ocean to the mainland in bottles. Brewing closer to market has eliminated

800,000 miles and saved 1,500 tons of carbon dioxide, the equivalent to taking 319 cars off the

road for a year.”

A brewer that enters into an alternating proprietorship relationship legally owns

the other brewery while they’re brewing. Tenant brewers, however, like Dann Paquette and

Martha Holley-Paquette of Massachusetts-based Pretty Things, merely rent a host brewery’s

facilities for a flat fee. An experienced commercial brewer, Dann Paquette began tenant

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brewing when he was unable to find a brewing job in Boston. It’s a tenuous arrangement

because the tenant is entirely reliant on the goodwill of the host brewery. “The big downfall of

this model is that the host brewery can always make more money brewing their own beer,”

Paquette said. “If they decide to do that, then we don’t exist anymore. But we’ve always known

that. It doesn’t bother us.”

A third common arrangement is for a business or brewery to solicit the services of a contract

brewery to produce an entire beer for them, from recipe development to brewing to

distribution. If a restaurant has a line of house beer, odds are that it came from a contract

brewer like Custom Brewcrafters. Custom Brewcrafters’ brewmaster Mike Alcorn devises

original, exclusive recipes for clients who want a proprietary brew, and he also helps smaller

breweries like Three Heads Brewing scale up production for wider distribution.

Those who take issue with the concept of contract brewing see it as a matter of

misrepresentation. Greg Koch, founder of legendary Stone Brewing near San Diego, said, “As a

consumer, I want the truth to be easy to understand and require no special knowledge ... If [the

beer] is not brewed at the company whose name is on the label, I’d want to know.”

Many traditional brewers also see contract brewers as less willing to put their “skin in the

game,” as Will Meyers, the brewmaster at Cambridge Brewing Co. in Boston, puts it. A

homebrewer who raises $20,000 to develop a recipe and design eye-catching sweatshirts has a

lot less to lose than a brewer who has invested $500,000 to rent and equip a warehouse space.

A contract brewer is also more likely to spend more time marketing beer than brewing it—a

fact that is frowned upon by businesses whose primary marketing assets are the sweat and

tears expended by their founders.

But as the industry expands and competition for even the lowliest jobs becomes more intense,

brewers must put their vaunted creativity to use finding different means to get their beer into

the public eye. And contract brewing is changing to accommodate the new craft beer

economy: The Brew Hub, which recently opened a 50,000-square-foot facility in Lakeland, Fla.,

plans to help craft brewers who don’t have the money to expand or build their own premises to

scale up production and store, market, and distribute their beer. Like most contract brewers,

the Brew Hub’s clients aren’t evildoers out to grab a piece of the market at the price of their

integrity. They’re just craft beer aficionados who are trying to get a toe on the lowest rung of

the ladder.