Choosing a host brewery for your contract beer

Start with the licence, not the price

In India the beer you sell under contract is made under the host brewery's manufacturing licence. Whether a host can brew for a third party brand, how that brand gets registered and how its labels are approved are all state excise matters. Rules differ between states and change, so the first conversation is with the host's licensing team or your own licensing consultant, not with the head brewer.

Ask three things early. Can the host legally brew and package a brand it does not own? Who registers the brand and label with excise? Which states can the beer then be sold in? Beer that crosses a state border usually needs permits and duty in both states. A host just across the border from your main market can cost more in paperwork than one 300 km away inside it.

Our guide to contract brewing in India covers the wider model if you are still deciding whether to go this way.

Match the brew length to your volume

A host brews in whole batches. If its brewhouse makes 20 hl a brew and your fermenters at the host hold 40 hl, your smallest practical order is 20 hl and the efficient order is 40 hl. That is roughly 6,000 or 12,000 cans of 330 ml before losses. Work out how fast you can sell that much beer while it is still fresh.

A large regional plant with 100 hl brews may offer a low price per litre. It is no use to you if one batch takes eight months to sell. A smaller host with 10 hl brews may cost more per litre and still be the better deal, because you are not paying to store stale stock.

Check the beer they already make

Taste the host's own beers, fresh and from the market. If its lager is clean and its IPA holds up after a few weeks on a shop shelf, the brewery understands oxygen, cleaning and the cold chain. If its own beer is tired, yours will be too.

Match the host to your style. A brewery that only makes ales may not have the tank time or cold capacity for a lager that needs four to six weeks in tank. A brewery built for wheat beer may not have the dry hopping routine your hazy IPA needs. Ask what share of its tank space goes to contract beer today and how it decides whose beer waits when demand peaks.

Packaging decides your route to market

Your packaging format limits where you can sell. If your plan is bars and taprooms, you need kegs and a host with a reliable keg washer and filler. If your plan is retail, you need a canning or bottling line and someone who measures dissolved oxygen at the filler.

Ask for the line speed, the minimum run and the packaging materials the host will accept. Some hosts insist you buy cans, ends and cartons in their approved sizes. Others let you bring your own. Either way, find out who holds packaging stock and who pays when a run of printed cans is left over because excise rejected a label.

The questions to put in writing

• Price per litre or per brew, what it includes and how often it can change.
• Who buys malt, hops and yeast. Who carries the risk if a delivery is late.
• The agreed loss allowance from brewhouse to package.
• Specifications for gravity, ABV, pH, colour, bitterness and carbonation, with tolerances.
• What happens to a batch that fails specification.
• Lead time from order to packaged beer.
• Who owns the recipe and who owns the yeast strain.

None of this is exotic. It is what a quality agreement between two breweries normally covers. See our guide to the contract brewing quality agreement for the detail.

Visit before you commit

Spend a full brew day at the host. Watch how the brewers clean, how they record a batch and how they treat the cellar. One detail tells you a lot: ask to see the dissolved oxygen readings for the last ten packaging runs. A brewery that can show them, with most cans under 50 ppb, is measuring what matters. A brewery that has to go looking for the meter is not.

Comparing two or three hosts on price, capacity, risk and quality at once is where most first founders struggle. The numbers look similar on paper. The differences show up six months later in your cash flow and your reviews.

Think about the next two years

Your first host should also fit the brand you hope to be in two years. If you expect to double volume, ask whether the host has room to give you more tank space or whether it is already full in peak season. Ask whether it plans to add fermenters, a second packaging format or a cold store. A host that grows with you saves you a second search, a second audit and a second round of trial brews.

Ask, too, how the host treats clients who leave. Some hosts write long notice periods or minimum annual volumes into their contracts. Those terms are fine if you know them in advance. They hurt when you discover them the month you want to move. Read the exit terms as carefully as the price.

Your first step

Write down your realistic monthly sales volume for the first year, in litres and in cases. Then shortlist hosts whose brew length lets you order fresh beer at least once a month at that volume. Book a brew day with the top two before you ask either of them for a price.

Common questions

Can a contract brewed beer be sold in more than one state?

Often yes, but each state has its own brand registration, label approval and permit process. Check the rules for every state you plan to sell in before you choose a host.

What is a sensible first order from a host brewery?

One or two full brews, sized so you can sell the beer within about two to three months while it is fresh.

Should I choose the cheapest host?

Not by default. A lower price per litre can be wiped out by batches too large to sell fresh, extra state permits or a failed batch.