I was very surprised to find those numbers to be so low. Given the enormous capital investment needed to start a brewery, I expected there to be a higher percentage of brewers taking advantage of the contract brewing model.

After all, if you want to start even a small production facility with a 5 to 10 barrel brewhouse, you’re looking at needing somewhere in the neighborhood of $200,000 to $400,000. I don’t know about you, but I don’t have that kind of money laying around right now. Give me 10 years, but not right now…

If I wanted to sell my beer commercially, but don’t want to assume the risk of investing several hundred thousand dollars, contract brewing seems like a viable alternative. So why don’t more people choose to go that route?

Before we dive into the pros and cons of contract brewing, let’s define contract brewing and the different arrangements that can be made between a contract brewery and the production brewery.

What is Contract Brewing?

At its simplest level, contract brewing is a term used when one company (the contract brewer) signs a contract with a production brewing facility to brew beer that becomes the property of the contract brewer.

There can be many different arrangements for this relationship, so I’ve broken it down into four basic types for the purposes of discussion, with each type increasing in the contract brewer’s involvement in the process:

Type 1 – The Marketer
This is the least involved that the contract brewer can be. Even using the term “brewer” is a loose connection. Under this arrangement, the contract brewer asks the producer to use one of the producer’s recipes or to formulate a new recipe for them that the contract brewer can then put a private label on and sell as their own. This is what someone might do if they know very little about beer, but they feel confident they can build a brand and sell product.

Type 2 – The Collaborator
This is a combination of types 1 and 3. The contract brewer knows what they want in style and character, but may not know the ideal recipe to achieve this on a commercial level. The contract brewer may bring an initial recipe to the producer, who will then work with them to tweak the recipe where they ultimately want it. The producers then makes the beer for the contractor according to the collaborated recipe.

Type 3 – The Architect
The contract brewer has formulated the exact recipe they want, hands it to the producer to brew, and the producer takes it from there.

Type 4 – The Renter
At this level, the contract brewer is a capable commercial brewer and physically participates in making the beer themselves using the producer’s equipment. Depending on the contract brewer’s level of expertise at the commercial level, they may assist the producing brewer or they might be able to handle the entire process by themselves with little or no involvement from the producing brewer.

Why Contract Brew? The Advantages.

“It dawned on me one day, ‘What if everyone hates my beer?’ I’m stuck with all this equipment. Worst case by contracting production, I’m stuck with a warehouse full of beer that I like. It takes out the ‘what if’.” That was why Terry Bumbaugh, founder of Kind Beers (Charlotte, North Carolina), ultimately decided to have Thomas Creek Brewery in Greenville, South Carolina, contract brew his beer when he went commercial.

Terry got his start as a homebrewer. Unlike someone like myself, who never brews the same beer twice, Terry took the approach of working on one recipe at a time until he got it exactly where he wanted it. After working on a few recipes for a year or two, he knew he was on to something when his friends would choose his homebrew over the commercial stuff he had in his fridge.

Once he made the decision to take his beer to the world, Terry decided the best approach for him was to form his company as a wholesaler, not as a brewery. He felt this gave him an advantage since he has the option of selling his beer directly to retailers and to other wholesalers.

When he first started, Terry would deliver his beer directly to his retail accounts. Now, after nearly two years in business, he only services two or three accounts directly. It makes more sense for him to work through other distributors, and Kind Beers has expanded distribution into five states: North Carolina, South Carolina, Florida, Georgia and Alabama (coming later in 2010).

Fred Block, the founder of BottleTree Beer Company out of Tryon, North Carolina, recently saw his dream come to fruition as his first pilot batch of BottleTree Belgian Blonde rolled off the bottling line at Thomas Creek. A homebrewer for eight years, Fred worked on recipes, entered homebrew competitions and spent countless hours researching the craft beer market and commercial brewing.

Fred Block, left, founder of BottleTree, helping bottle his pilot batch brewed at Thomas Creek

Through his experiences and research, Fred concluded the best way to ensure his success was to partner with an experienced brewery, “I work with a great brewery. I instantly gained 12 years of industrial brewing experience with this partnership. Every situation is unique, but for me, the folks that are showing interest in BottleTree are interested because of the 12 plus years that Thomas Creek bring to the table and the consistent quality they produce. It is a big positive.”

Terrapin Beer Company, budding craft beer stars out of Athens, Georgia, built their own brewing facility in 2007, but they got their start as a contract brewer in 2002. From the beginning, founders John Cochran and Spike Buckowski wanted their own brewery, but as John put it, “We didn’t have any weathly relatives, and back in 1999 the first craft beer explosion was dying down, so banks weren’t too eager to give hundreds of thousands of dollars to a couple guys who claimed they could make good beer.”

In order to get their start and brew commercially, they struck up a deal with their friends at the now defunct Zuma Brewery in Atlanta. Spike was allowed to use their equipment to brew Terrapin beer himself.

Terrapin took the same approach to building their brand as a contract brewer the same way they would have if they had their own place. They used a grassroots marketing effort, working at beer festivals, personally getting to know businesses and customers throughout Athens, and doing whatever it took to get their product in the hands of consumers.

Within five years, it obviously worked well enough for them to achieve their goal of building their own brewery, and they haven’t looked back.

If It Were That Easy, Everyone Would Do It. The Disadvantages.

To this point, I’ve painted a pretty rosy picture. So what’s the downside to contract brewing? In my view, there are two primary disadvantages: perception and independence.

As a homebrewer, I love the craft of making beer. From conceptualizing a recipe to the smell of the grains in the mash tun to the relief I feel as  I crack open the first bottle from a batch and know that it conditioned, I receive a great deal of satisfaction that I made a beer with my own hands.

In the minds of many craft beer aficionados, they feel that this sense of the craft should also translate to commercial brewing. As my friend Evan put it, he wants to know that the beer he drinks “has a soul.”

We have so much good craft beer available to us now, people now want to know the story behind the beer. The best way to build a loyal following is to create an emotional bond with your customers. People are more emotionally tied to other people, not to things.

That’s why Terrapin wanted their own brewery. As John Cochran put it, “The marketing aspect of having a brewery is huge. There is something about going to a brewery and seeing how it’s made and the people behind it. Being in a college town, Terrapin is the first craft beer that many of the students are exposed to. We’re their first love and they never forget that.”

However, both John and Terry Bumbaugh said their experiences as contract brewers has been positive. The average consumer really doesn’t care where the beer is physically made and if they own the equipment. As long as the beer is good, they are happy to lay their money down to buy it.

While they wouldn’t get specific, they both said the only backlash they received was from people within the craft beer industry. Terry has dealt with discrimination as a contract brewery. John said that once Terrapin started going beyond Athens, some other breweries tried to use their contract status against them.

Fred Block offered an interesting perspective on being a contract brewer, “There is no difference between how Thomas Creek operates and how I would operate if I had my own brewery. Every brewery has folks that make beer, folks that do the finances, folks that market and promote the beer. Every person has a role. In most cases in a small brewery, everyone does a little or lot of all of those things. I would have to wear all of those hats for a long time, but to deliver quality, we have to have our areas of focus.”

The other big disadvantage to being a contract brewery is the lack of independence and control. I believe this is why most brewers want their own brewery. They want to be able to brew what they want, when they want and not be constrained by the production brewery’s schedule.

Most people get into commercial brewing because they are passionate about beer. Most got their start as homebrewers, tinkering with recipes and building their own systems one piece at a time. Their passion is in making beer, not selling it.

Except for the biggest of the big, few breweries will survive if they’re only in it for the money. As a contract craft brewery, if that’s your motivation, odds are your beer will be seen as a gimmick and consumers will quickly see through it once they taste an inferior product.

Terrapin, Kind and BottleTree are perfect examples to show that many contract brewers are passionate about their beer. However, a brewery is a business, no matter how us beer geeks like to romanticize it. In business, reality sets in quickly, and owning a brewery may not make sense for everyone.

Everyone should have the opportunity to bring us good beer, no matter where it’s made.

¹ The New Brewer, The Journal of the Brewers Association (Vol. 27 No. 3 May/June 2010)

I have never used, or even heard of that particular hop variety before that day. It’s probably the most unique and distinct hop I’ve experienced. It comes through with an amazingly distinct lemon-citrus flavor. Yes, lemon.

Even in an IPA, it was refreshing and tasty. It added such a unique element to the beer that I can honestly say I’ve never tasted an IPA like it.

Sorachi Ace was first developed in 1988 by Sapporo in Japan for use in their beer. It’s a cross between British Brewer’s Gold and the Czech Saaz hops and is primarily grown in Oregon.

It’s a high alpha hop, ranging anywhere from 11% to 14% alpha acid. From what I’ve read on some forums, it’s fairly smooth on the bitterness, especially for such a high alpha hop. From what I tasted in Bobby C’s IPA, I would agree. It was not harsh on the back end.

However, the unique character of the hops come out in the flavor and aroma, both of which are distinctly lemony. That type of character would go perfectly in a wheat or a saison-style beer. I think it would work in any lighter, summer-style beer where you are looking for a crisp, refreshing citrus character.

In my research I found very few commercial beers that used Sorachi Ace. The most prominent one I found was Brooklyn Sorachi Ace, a saison they released this year as the latest installment of the Brewmaster’s Reserve Series.

Another I found was Nodding Head’s Sorachi Ace Double IPA, out of Philadelphia. Stone, BrewDog and Cambridge Brewing Company also used it as a dry hop addition in a collaboration they brewed together in 2009 called the Juxtaposition Black Pilsner.

This summer, if you want to give your friends a brew that will wow them and bring about “How’d you do that?” questions, get your hands on some Sorachi Ace hops. It’s guaranteed to turn heads.

• Peanut butter and chocolate
• Cheese and pasta
• Strawberries and vanilla (either in ice cream or yogurt)
• Pizza and beer

Obviously then, Barley’s Tap Room & Pizzeria in Greenville, South Carolina, has a natural leg up with me from any other bars or restaurants in town. However, it’s not your average pizza and beer joint. Barley’s is a beer joint that serves pizza.

The Lay of the Land

Barley’s is my favorite hangout in Greenville. It may not be perfect (that only exists in my imagination) but it’s darn close. It has all that I ask for in a beer bar: a diverse, ever-changing beer menu, good food to accompany the beer, and a comfortable atmosphere for friends to accompany my beer and food.

First, let’s explore the space. Barley’s is located in a building that was a 19th century hardware and feed store. The first floor has tremendously high ceilings, exposed brick walls and creaky hardwood floors. It comes together to form a comfortable atmosphere with a lot of character.

With an open floor plan, the staff can rearrange tables to accommodate just about any party size. I’ve been tucked away in a secluded corner when it’s just me and Nicole, but I’ve also been at a table for 20.

The menu features appetizers, pizza, calzones and sandwiches. My favorite app is the garlic knots, which is essentially pizza dough served with marinara sauce. The artichokes and ale is also superb.

The pizza and calzones are top notch, with generous toppings and a thick doughy crust, just how I like it. The sandwiches are not to be overlooked, either. I went years only ordering pizza and calzones, never venturing out into Sandwich Land. I feel as though I’ve missed out on years of enjoyment.

The Italian and meatball subs are tremendous, warm, well-seasoned and delicious. The cheesesteak may not make it in Philly, but it does the trick on the mean streets of Greenville.

There is an upstairs bar, which is more like a traditional bar. There’s no seating or food upstairs, just beer and bar games. There are four dart boards, six pool tables, shuffleboard and Golden Tee. Everything a good bar should have.

In addition to all the amenities, Barley’s is one of those places that you can become a true regular because they have tremendous continuity in their wait staff. Every restaurant has some turnover, and Barley’s is no exception, but there are at least a dozen people on staff that have been there as long as I can remember. When you get to know their names and they know yours, you know you’ve found a home. It’s the greatest intangible that sets a bar apart, and Barley’s has it.

It’s All About the Beer

Now that we have all the frivolities out of the way, let’s get down to the beer. Barley’s has a lot of it. 70 taps, 50 downstairs and 20 upstairs. They also carry around 120 bottle selections, including a reserve list of rare and cellared beers.

However, it’s not a numbers game at Barley’s. It’s about quality and variety. You won’t find Miller or Anheuser-Busch products on the beer list. I love being next to a table when someone orders a Michelob Ultra, and the person has to either try something new or drink sweet tea. That gives me great satisfaction.

Barley’s is constantly rotating in new selections and seasonals. In fact, the beer list is reprinted at least every two weeks. It’s the only way to keep beer geeks like myself interested. I’m constantly in search of new beers to try, and if a place has the same selection every time I go, I’ll get bored quickly.

Josh Beeby, Head Beer Wrangler

The driving force behind Barley’s commitment to beer excellence is its owner, Josh Beeby. Born in Australia, and still retaining his awesome accent, Josh spent the greater part of the 90s as a professional snowboarder. He always enjoyed and admired the United States, so in the late 90s, he moved to Denver to pursue new slopes.

This was all taking place in the days before the X Games came to be, so pro snowboarders didn’t make much money. They built courses themselves with shovels and sold equipment they received from sponsors to make extra money. Josh worked as a cook in restaurants in the evenings to support himself.

In Denver, he met and married his wife, and they decided to move to Greenville to be closer to her family. His wife got a job waiting tables and Barley’s, and Josh worked in the kitchen at Soby’s, another restaurant in town. Soon after, his wife was able to get him a position at Barley’s as the front house and bar manager. Within a year, he took over as the general manager.

In early 2003, the original owners of Barley’s Greenville location (there are now four independently owned Barley’s locations, the original being in Asheville, NC) decided to sell off that restaurant. As part of any sale, they built into the contract that Josh would remain as GM and would receive a 10% equity share. However, it dawned on Josh, “Why should I do all the work and only get 10%? Why not do all the work and get 100%?” So he put together a plan to buy Barley’s himself.

Within six weeks, which Josh described as the most stressful of his life, he took over Barley’s on December 1, 2003. He began making changes immediately, improving the food menu, dropping the live music, and focusing on the beer list.

From the beginning, it was Josh’s goal to make Barley’s “the best beer bar in the country.” It’s an ambitious goal, but setting the bar high is the only way to continually improve.

However, South Carolina’s beer climate was a lot different in 2003 than it is in 2010. Josh explained, “Back then, we’d have a few beers, like Sierra Nevada Pale Ale and Sam Adams Boston Lager, that we’d plow through three or four kegs a week. Everything else sat for months.”

Josh quickly realized that education and awareness were the only way to make progress. Barley’s started offering sample racks and invited breweries to come out for promotional nights. However, Josh made the breweries work for it. “Pint glass giveaways weren’t going to cut it. We wanted lots of cool swag, new beers and brewery reps to be there in person. It was the only way to differentiate ourselves and entice people to come out.”

It didn’t help that until 2007, beer sold in South Carolina had to be below 6% ABV. “It was like doing my job with one hand tied behind my back,” Josh said of the laws. However, salvation came when the cap was popped, and the whole game changed.

It was around that time that Josh and bar manager Drew Moren had the idea to start the Reserve List. They often traveled around the country and always picked up cases of rarities and stuff they couldn’t find in South Carolina. They would put some of these beers away in their “cellar,” but as time went along, the cellar got to be too large. They had to do something, so why not start offering the beer in their cellar to Barley’s customers?

Some of the gems on the Reserve List include 2007 North Coast Old Rasputin Russian Imperial Stout, 2007 & 2008 Abbey St. Bon Chien, and a keg of Founders Canadian Breakfast Stout that won’t tapped for at least another year.

Despite awareness improving and beer sales increasing every year since he took over, Josh fears that the locals are still behind the beer curve in other parts of the country. “Many people still don’t appreciate the rare beer we bring in. We’d love to bring in more, but we don’t want to spend a lot of money on a hard-to-find keg, only to sell a few dozen pints in the first night and then have it sit around for another month or two and then toss the rest to make room for another beer on that tap.”

So the quest continues in Greenville to bring good beer to the people. We have come a long way, and there are now several other bars and restaurants that have taken up Barley’s lead and offer good craft beer in Greenville, including the Mellow Mushroom, Addy’s Dutch Cafe, Chicora Alley and Smiley’s Acoustic Cafe, but Barley’s continues to work hard to lead the way.

I, for one, am glad they’re here.