There are many routes to growth in the world of beer. And one an increasing number of businesses take is utilising contract brewing operations to help grow their brand without the commitment to bricks and mortar. Here we speak to the founders of some forward-thinking companies that did just that. 

In the first article in this series we spoke with some leading contract brewing operations to discover the factors they consider when pricing their production and packaging offering. In this second feature, we are focusing on business founders that have grown their brands by avoiding capital equipment spends to, instead, focus on market penetration.

Infinite Session was founded in 2017 by brothers Chris and Tom Hannaway with a focus on great beer that just happens to be lower in alcohol. Back then, lower-alcohol beers got sidelined. Bland, boring, or treated like an afterthought and the duo wanted to flip that.

For Chris, who had previously started soft drinks and frozen yogurt companies, utilising contract brewing was a given. “We’d always used contract partners for this and given we had absolutely no brewing expertise ourselves, it was the natural choice for us to find a brewing partner from the off,” he says.

In working with contract companies, Hannaway says the duo could focus their energies on other sides of the business. “We realised pretty quickly that the off-trade would be our main focus. As an alcohol-free beer, it seemed the biggest drinking occasion was in the home. About 90% of our customers are alcohol drinkers, so the main role we play in their lives is as a moderation option from the fridge,” he explains.

The costs of an asset-light approach

According to Hannaway, the founders couldn’t see how they could make the on-trade work, where the rate of sale is a greater challenge than with alcohol, without serious long-term investment. “This meant we needed the scale of production that would allow us to compete in supermarkets – so partnering felt right for us,” he adds.

Alcohol-free brewing company Mash Gang was founded by Jordan Childs. “We started in 2020, and building a brewery in 2021 would have been a reckless, romantic bet,” he recalls. “We came from outside the industry rather than from years on the brewhouse floor, and when we modelled the business, a decentralised model made the most sense.”

However, Childs adds that despite not having the costs associated with their own kit there were other commitments to cater for.

He says: “You don’t buy the stainless, but you pay for it in every can. Contract brewing packages the cost differently, but you’re still paying your share of that brewery’s existence; that’s what makes it a viable industry.

“Some partners, Northern Monk especially, were generous with us early on, but dedicated contract brewers were selling us beer made to specification, and that was their business.”

Early on Childs says the team had no buying power. “Our first quote was nearly £2 a can, which puts a pint close to £10 at the bar. We lost money on some early runs and treated it as a cost of development,” he recalls.

Achieving consistency and quality across the board

While working with contract production offers an array of benefits, maintaining recipe integrity and consistency at a third-party facility is an area any brand needs to consider. Chris Hannaway at Infinite Session says having a tight specification is all-important.

“Hitting gravity and bitterness are priorities in our brewing process,” he explains. “We once had a US brewing partner brew our 0.5% IPA at 50 IBU, about twice the specification – claiming that was normal for an American IPA – but seemingly forgetting that this impacts a 0.5% ABV beer much differently than a standard 6.5% US IPA.”

Mash Gang would go on to be acquired by DioniLife, the non-alcohol portfolio company, in 2024. And earlier this year the business announced it was working with Abita Brewing Company in the US and Hall & Woodhouse in the UK to produce its beers.

For Mash Gang, development is still handled by Childs and production is now handled by Flora McKinney but for Childs, the method to achieve quality and consistency “is the same wherever the beer is made”.

He says: “Define the process and bill of materials, follow it, and verify with QC and QA. In NA beers that meant rigorous micro plating and pH discipline, as well as carbonation and appearance.

“I brought lean manufacturing and quality management from my previous career, and we ran quality-first. If you haven’t defined what you’re making, with traits and tolerances you can check against, how do you know what you’ve made? And how does your customer?”

Catering for cash-flow concerns

Like any brewing business, cash-flow and the logistics surrounding it are all-important. Factors that any beer brand must consider without your own assets. “It’s common to get deprioritised for a brewery’s own production and beers,” says Hannaway.

“During Covid, when canning capacity was non-existent, our main brewing partner ended up using the canning capacity we needed at our main backup – not having these things in-house gives away some control in these situations.” 

Childs also warns you to expect that at a contract brewery you are rarely the biggest customer. “Larger clients’ runs often took priority, and it tended to hit at business-critical moments like Christmas and Dry January,” he says. “When you’re small and you’ve paid upfront and delivery is late, you have very little leverage; you wait. We ended up prioritising partners who did their best to help us. luckily in the UK, the good guys are by far the majority.”

And in the world of beer and brewing there has, at times, been a narrative surrounding brewers that operate solely using contract brewing services. But as countless have shown, it can lead to growth and success in the field. And for some it is also a stepping-stone before laying down roots with a facility of their own.

For Childs at Mash Gang, that conversation rarely comes into the equation today when five years ago it would have been central to it. “Most breweries outsource plenty anyway: cans, labels, boxes, hops, malt, often yeast, logistics and design. The biggest brewers in the world brew under licence and contract all over the globe. They’re two different models, and both are valid,” he explains.

Childs adds: “Hands-on experimental craft brewing is what moves the industry forward, and the place we started was a hub for exactly that.

“In retail conversations today, it barely registers. Buyers care about the liquid, the price and whether you can supply. we care about it because it’s special to us. But the end customer just wants a great beer in their hand a reasonable price.”