Private label beer for restaurants and hotels and how the deal works

What private label means

In a private label deal, a brewery produces beer that is sold under another business's brand. The restaurant or hotel gets a house beer that matches its identity. The brewery gets volume without having to build demand from scratch. The two parties share the work differently from deal to deal. That division is the first thing to settle.

It overlaps with contract brewing, which we cover in contract brewing in India. The difference is mostly who brings the brand and who brings the recipe. In private label, the customer usually owns the brand and the brewery often provides the recipe and the know-how.

Who wants it and why

Hotels like a house beer for their bars and banquets, partly for identity and partly for margin. Restaurant groups want a beer that matches their food and their story. Some bar chains want a consistent lager across outlets. Each one has slightly different needs. A five-star hotel will care about consistency and presentation. A busy restaurant chain will care about price and supply reliability.

Ask early what the customer really wants. A beer with their name is easy to promise. A beer that tastes identical in every batch for three years, supplied on time through a monsoon and a festival rush, is the actual job.

Licences and labels come first

In India, beer sold under any name must go through the state's excise process: brand and label registration, MRP approval where it applies and the right licence for whoever brews and whoever sells. Labels must also meet FSSAI labelling requirements. Which party registers the brand and in whose name can vary by state. Some states have specific rules for brand owners who do not brew. Rules vary by state and change, so work through it with a licensing consultant before you agree a launch date.

If the beer is draught only, served in the customer's own outlets, the requirements may be different from packaged beer. Do not assume. Check.

Recipe and quality

Agree who owns the recipe. If the brewery develops it, the brewery may want to keep it or license it. If the customer pays for development, they may expect to own it. Write it down either way. Agree a specification: target gravity, alcohol, bitterness, colour, carbonation and a sensory description. Agree how batches will be approved and what happens if one is out of specification.

A quality agreement protects both sides. It sets out tests, tolerances, record keeping and who decides when a batch is rejected. Our guide to contract brewing quality agreements sets out what to include. The brewhouse-floor reality is simple: a house lager is judged by the hotel's regulars every night. A batch that drifts in bitterness from 18 to 26 IBU will be noticed at the bar long before anyone opens a lab report.

Minimums, forecasts and tank time

Private label beer occupies your tanks. Agree minimum order quantities per batch and per month, lead times and a forecast that the customer updates regularly. Without forecasts, you either hold too much stock or run out. Hotels with seasonal occupancy will order very differently in peak season and off season, so plan for that.

Think about what happens to your own brands when tank space is tight. Private label volume should fill spare capacity, not starve the beers you are building.

Pricing the deal

Price from your full cost per litre, not just raw materials. Include labour, utilities, tank time, packaging, excise and taxes as they apply in your state, plus any development and label costs spread over the expected volume. Our beer pricing strategy guide shows how to build up a price. Then add a margin that makes the deal worth your capacity.

Agree how prices change when costs move. Malt, hops, packaging and excise all change over time. A fixed price for three years with no adjustment clause is a gift to the customer.

The written agreement

Put everything in a contract: specification, minimums, lead times, pricing and price reviews, payment terms, recipe and brand ownership, quality and rejection, confidentiality and how either side can exit. Have a lawyer review it. A private label deal often starts with a friendly handshake between a brewer and a food and beverage manager. It needs to survive both of them changing jobs.

Common questions

What is private label beer?

Beer brewed by one company and sold under another business's brand, such as a hotel's or restaurant's house beer.

Who owns the recipe in a private label deal?

Whoever the contract says. If it is not written down, disputes are likely, so agree ownership before development starts.

Does private label beer need excise registration in India?

Yes. Beer sold under any brand goes through the state's excise and label process. Rules on who registers the brand vary by state.