Micro-breweries and Micro-distilleries in the U.S.
Vintners and industrial-scale brewers (those that produce over 30,000 gallons of beer per day) have been enjoying a virtual monopoly in the legal production and sale of alcohol for nearly one hundred years. But it wasn’t always this way. In this paper, we’ll briefly discuss the roots of brewing beer in small batches (often referred to as family brewing, or more recently micro-brewing), review the current landscape, and conclude by looking at the opportunities and challenges for micro-brewers and micro-distillers today.
The Original American Spirit: Moonshine
Moonshine (aka hooch, white lightening, Tennessee white whiskey, and mountain dew), a term dating back to the Prohibition era (when Appalachian distillers who produced and distributed it, often did so by the light of the moon), generally refers to any high-proof spirit made in an “unlicensed still”. But that’s changing. Moonshine has become legitimate, with stores from Wal-Mart to Sam’s Club selling the stuff (often in authentic-looking Mason jars) right out in the open. The other name for Moonshine, Tennessee white whiskey, refers to the lack of color that characterises moonshine (along with Tennessee’s reputation as a central place for traditional moonshine production), which is essentially bourbon, or rum, or whiskey that is un-aged (aging in barrels is what gives spirits their signature amber hue).
The production and distribution of moonshine (typically made from sugar, corn, grains, or fruit) could be likened to a thriving cottage-industry, once upon a time. Even before the adoption of the Coffee still (sometime after the 1830s), legal distilleries in the United States numbered in the tens of thousands; the number of craft (or micro-) distillers and brewers peaked at 8,000 +/- during the 1880s. Larger producers began to chip away at the micro-brewing and micro-distilling industries before Prohibition, and after the onset of Prohibition (1920 to 1933) the small distillery market began a precipitous decline that lasted over a century.
Though legal small-scale distilling languished, illegal operations (bootlegging) continued. “Moonshine played a huge part in our history,” according to Georgia native Casey Teague, the manager at Mac McGee’s Irish Pub in Decatur, GA, “After the Civil War and Prohibition, it saved a lot of families. It put money in pockets and food on the table, especially in the South.”
And, like other notable American institutions and novelties of bygone eras, moonshine is making a comeback. In part because of the fascination with all things artisanal and local, and in part because of its economic potential. As one modern-day moonshiner put it, “When you think about it, there are not a lot of authentic American spirits: there’s Bourbon and there’s moonshine.”
For family producers during the Great Depression, micro-brewing/ distilling and distribution of moonshine was the sole thing standing between them and utter destitution, and as we’ll see later on, many states have begun to revoke anti-moonshine laws in the hopes that the influx of tourism and tax revenues it may generate will aid their ailing economies.
The U.S. craft distilling industry (another term for micro-distilling) renaissance got its’ start in California in 1982, with the start of micro-brewing operations at Jaxon Keys Winery (also known as Jepson Spirits) and Germain-Robin. Unlike California’s gold rush, craft brewing growth inched along and many years saw no new entrants. Eighteen years later, the field had grown to 12 states with operating craft distilleries. And today, a little over a decade later, craft distilleries operate in 45 states. The number of identifiable craft distilleries in production has gone from 24 in 2000, to 52 in 2005, to 234 by the end of 2011, and shows no signs of abating.
The chief determinant in a state’s development of a micro-brewing/distilling economy has been its revocation of the laws prohibitively restricting the legal sale and/or promotion of spirits by micro-brewers/distillers. And as the laws that affected these limitations have changed, the domino effect is a rapid escalation of micro-brewing/distilling operations in that state. A prime example is that of New York. After its passage of the Farm Distillery Act in 2007 (which eased the process for establishing a distillery), the number of craft distillers in New York grew from five in 2007 to over 20 in 2011.
Money in Moonshine
Business Time reported that in 2011, craft breweries contributed $3 billion to California’s economy (a substantial achievement given that California’s Napa Valley, with substantially more winemaking operations [391 wineries, more than 10 times the number of micro-brewing operations, has a $9.5 billion economic impact on the state). In New York, breweries support approximately 3,000 jobs, and according to a recent report, the craft brewing industry “footprint” accounts for over 100,000 employees nationwide.
Variety Is the Spice of Life
The variety of offerings among craft distillers has flowered during the renaissance, going beyond traditionals, such as gin, whiskey, rum, and brandy, to a host of specialty eau de vies, cordials, and liqueurs (i.e., Asian Pear based Eau de Vies, Arak & Ouzo, and honey-based “Bee Vodka”).
“Farm To Table” Movement to Micro-Distillers
For decades, wineries have been able to build and cultivate their customer-base by providing tastings of their products directly to the public. The local farmers’ markets, similarly, have created interest in locally-sourced, artisanal, and oftentimes obscure products, by offering samples of their products to consumers (and influential bar and restaurant owners, who often source from them). In 2012, New York governor Andrew Cuomo acknowledged the economic benefit of micro- (farm) distillers, by creating a new class for “farm distillers”, which allows them to sell their wares at farmers’ markets and fairs (exactly as their micro-brewer and vintner counterparts do). Two years prior, he extended selling opportunities to micro-distillers, by creating a new class of licenses for farm distillers which allowed them to have tasting rooms and retail shops at their facilities. Other states are also recognising that just as wineries bring tourism (and tax revenues) to their economies, micro-distillers are poised to do the same.
Past and Present: Challenges and Opportunities
The Ghost of Prohibition
One of the most persnickety barriers to growth in the micro-brewing/distilling industry stems from outdated laws that are vestiges of Prohibition. In California, for example, despite the fact that in most states where craft distilling is legal, tasting and sales on the premises are permitted, and the increasing popularity of artisanal liquors among tourists, craft distillers (with some exceptions) cannot sell and offer tastings of their wares directly to the public. The law, which is confusing and inconsistent, is being challenged by a new bill which would allow “all types of distillers to offer tastings for a fee”. The law would still exclude some liqueurs from being sold directly to the public, leading distillers to view it as a “hollow victory.”
Water Purity Reigns Supreme
Beer is 85 to 95% water, making the purity of water extremely important in the overall quality of the final product. Though commonly assumed not to be the case, studies have shown that certain undesirable bacteria, such as salmonella, can survive in beer for up to 63 days and it has been reported that pathogens can grow in alcohol-free beer. Some of these pathogens, such as acetic acid bacteria (belonging to the Acetobacteraceae family), can survive in high levels of ethanol (>10% v/v) and have the ability to oxidize ethanol to acetic acid, producing vinegary off-flavors and aromas.
Reducing the ingress of oxygen into beer (typically at the filling lines at breweries), has been shown to be effective in curbing the incidence of spoilage caused by this bacteria, but in a study of 1203 samples, 153 samples (over 10%) were positive for acetic acid bacteria (and each incident of contamination occurred at the filling and filtration processes of the brewery). Other sources of alternative bacterial contamination occurred in fermentation and storage tanks.
How does water affect beer?
- The character of water ions determines the efficiency and flavor of the extracted wort.
- It affects the hop utilization and (perceived) bitterness of finished beer.
- It adds flavor to the beer itself.
Perhaps this helps explain why chemical elements common to, and acceptable in, drinking water, such as chlorine, manganese, iron chloramines, tannin, nitrate, chlorides, and others, are considered unsuitable for brewing or distilling beer.[v] Carbon filters, water softeners, iron and manganese filters, reverse osmosis water systems, and ultraviolet disinfection systems, are a few of the systems commonly used to filter water in micro-brewing/distilling operations.
Micro-brewers Use Technology to Address Water Concerns
The consensus among brewers and distillers is that one cannot overstate the importance of pure, uncontaminated water in the making of beer, and consequently, micro-brewers/distillers, whose profitability depends upon much smaller economies of scale, must exercise due diligence in ensuring that the systems that maintain the integrity of every component of their operations in which water passes, are kept properly maintained.
Case Study: A Twenty-Year Old Craft Brewery
The craft brewery, after a modest start, grew to selling over thirty beers in over twenty-five states. As it expanded its brewing facilities, purchasing new brewing equipment to support its rapid growth, consistent maintenance management became a concern. The micro-brewery needed a continuous and reliable system for monitoring the health and productivity of equipment at all facilities. To go from producing 700 to 900 barrels of beer, while maintaining a consistently excellent product required that equipment operated continuously and therefore that any repair/replacement was managed preemptively not reactively.
The micro-brewery’s system of work order/request management (paper and spreadsheets), wasn’t up to the volume. Looking for a system that supported scheduling preventive maintenance (PM) tasks, tracking history, and capturing maintenance operations costs, the micro-brewery’s maintenance management chose to implement an enterprise asset management/computerized maintenance management system (EAM/CMMS) solution.
The EAM/CMMS solution selected allowed the team to more efficiently track assets and maintenance, and beyond that, to capture and manage all aspects of their operations (including packaging equipment and production), which is crucial to a brewery’s bottom-line. Moreover, by consistently and properly maintaining their water purification systems, they were less prone to contamination. “When production lines go down, beer gets tossed, because the quality of our beer is compromised.” Having a system for PM that automatically and continuously schedules routine maintenance, dispatches the appropriate personnel and/or contractors, and provides detailed asset history documentation, has enabled the micro-brewery to avoid the bane of downtime and spoilage.
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