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Contract Brewers Discover the Growing Importance of Brick & Mortar

“When 21st Amendment broke ground on its brick-and-mortar brewery, it did so with the help of bank loans from Union Bank and available cash flow. Ultimately, he said, the decision to back away from contract brewing again came down to margin.

“We get up to 10 improved margin points by brewing at our own facility versus. brewing at a partner brewery, depending on our own facility’s capacity utilization,” Freccia wrote in an email. “The easy math will show that at 100,000 BBLs capacity and $270 per barrel revenue, 10 margin points equals close to $3 million in annual savings in an owned facility versus a partner facility. Add to this savings potential in shipping by producing more volume locally and there is a significant ROI here.”

But even as more craft owners shift some or all of their production out of contract facilities, there are a number of breweries still focused on serving the needs of gypsy brewers.”

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Contract Brewers Discover the Growing Importance of Brick & Mortar