Contract brewing often yields a wealth of positive results for both the host brewery and their client. But what happens if things go wrong and ultimately, who is to blame when it does and also where does the cost of the failed brew fall?

In this third article on contract brewing, we are looking at the relationship between host brewery and client. While this dynamic often produces positive results for both parties, there are times where the beer produced and packaged might not meet specification. When this happens, it’s important to know where you stand.

At Hepworth Brewery, founder Andy Hepworth and his team have worked with a wealth of brewing clients. The business prioritises quality and flexibility, featuring sterile filtration instead of pasteurisation and an annual brewing capacity of 30,000 brewers’ barrels annually with brew sizes starting from 20.

The importance of a trial brew

According to Hepworth, when it comes to working with a client a “written final beer specification is critical and must achievable”. The company has the capabilities to package its beer in bottle and can and also holds SALSA, SEDEX, Soil Association, and M&S certifications.

But if things go wrong somewhere during the process, Hepworth says the buck stops with the brewery.  “We expect to be judged on that. If we make an error we accept the cost of materials unless it is specified as a trial brew.”

And for brewing consultant Neil Playfoot, if a batch of beer is dumped owing to a technical error then the guidance is clear. “The brewery would cover the costs of re-brewing the beer. It’s on them for making the mistake and to be honest raw materials aren’t the biggest cost,” he says.

Playfoot adds that if the error was caught early then less of an issue. “The further along in the process then obviously the costs increase a lot,” he explains. “It should not make it to packaging.”

Meeting Total package oxygen (TPO) targets

And Total package oxygen (TPO) is considered one of the key quality parameters in beverage production. This represents the total amount of oxygen in a sealed container, both dissolved in the liquid and also what’s present in the headspace.

As most brewers know, accurate TPO measurement will supports flavour stability and also safeguard the beer’s shelf life while ensuring consistent product quality. “If there is an issue on packaging such as high Total Packaged Oxygen (TPO) then the brewery will cover the re-brew,” says Playfoot.

The issue of yeast in contract brewing and the possible financial issues that can arise from a flawed product is a complex one. But Playfoot says there is a simple and direct solution for the host brewery in this instance.

Utilising fresh yeast in the brew

“The host brewery uses fresh yeast for each batch for this exact reason. It will be propagated or expanded to keep costs down,” he says. These costs are factored into the pricing given to the client. “If you were to harvest all the yeasts required for all the SKU’s made it’d be unmanageable anyway. So, starting with fresh avoids any of these issues and make fermentations predictable as well.”

Andy Hepworth says this can be avoided by ensuring that an agreed recipe, production and processing specification and final beer spec are in place to protect both parties. “Any inherent flaws should be discovered at trial brew stage and eradicated,” he explains.

Minimise problems before they can occur

And at Kersia UK, technical sales consultant Belinda Jennings stresses that there are other scheduling issues to consider so to avoid any costly ingredient-based complications in the production of a client’s beer.

“High-risk guest brews should ideally be positioned at the end of a production week rather than the beginning. Running clean lagers and core brands first, followed by speciality products and finally sour or allergen-containing beers, can significantly reduce the likelihood of cross-contamination,” she explains.

According to Jennings this approach also allows enhanced cleaning and verification activities to be performed before equipment returns to mainstream production. In practice it is not always feasible to zone or segregate storage and process so procedural controls become even more important. All transfers should be completed using closed systems wherever possible.

As many business will know, when a brew lands outside its target specifications, whether an unexpected ABV variance, missed gravity, colour deviation, or a subtle off-flavour, the commercial relationship is immediately put to the test. 

Is an pale ale that lands at 5.2% ABV instead of the contracted 4.5% still marketable product, or is it a total loss? If a batch must be dumped, who absorbs the cost of high-value hops, brewing resources, and lost production time?

The cost of creating bad beer

If a problem does occur, Neil Playfoot says the host brewery needs to be firm on when it can deliver the finished goods as often a client’s beer might be for an event or going to a third party. A supermarket, for example have hard dates that can’t move. if the client doesn’t deliver the beer when they say they will they could get de-stocked. This can be ruinous financially to a client.”

And for Andy Hepworth, he says the company’s policy is to “hold up its hands” if things go wrong and to accept responsibility in the process. “But if you have all the records and specification you should not get to the position of a bitter dispute,” he explains.

“At that point the relationship is broken and lawyers wont fix, but cost you even more. In contract brewing no level of failure is acceptable, it is all costly and you will not be profitable.”

Hepworth concludes: “Basically you cannot afford to let that happen, do not take risks on other people’s behalf. One of the lessons I have learnt in business is not when to make a deal but when to walk away from one.”