Starting a beer brand with contract brewing

What contract brewing means

A contract brewer makes your beer on its equipment, to your recipe or a recipe you develop together. You own the brand and sell the beer. Arrangements vary: some brewers only make the beer, some also package, store and deliver. Some sell the beer on your behalf.

A related model is gypsy brewing, where a brewer rents time on someone else's kit. The principle is the same.

Be clear who does what. The brewery brews. You do the brand, the sales and the relationships. If you also want to control the recipe tightly, say so at the first meeting and expect to pay for dedicated tank time.

Some breweries offer a second option: you rent their equipment and brew yourself with their supervision. That lets your own brewer learn the process while the brewery carries the overheads. Check who must hold the licence in your country.

Why founders choose it

It needs far less capital than a brewery, it lets you test whether people buy the beer and it lets you learn the market before you commit to a lease. It also has limits. You depend on someone else's schedule, their quality and their willingness to keep you as a customer.

It also lets you start with a single product. A founder with one well-made beer and a clear story can learn more from six months of real sales than from a year of planning. Keep the range small until you know what sells.

Choosing the right brewery

Visit more than one. Look at cleanliness, how they handle yeast, whether they have a lab and whether they measure what they claim to. Taste their own beer. Ask for a brew log and a sample. Check that they can package in the format you need and hold the right licences for your market.

Ask what happens if your beer fails a test. Who pays for the loss? Ask how much notice they need and how much volume they require.

Ask to see the brewery's cleaning routine and its record of microbiological tests. A contract brewer who cannot show these is a risk to your brand, because a spoiled batch carries your name and not theirs.

The agreement

Put the arrangement in a written contract drawn up with a lawyer. Typical terms cover the recipe and who owns it, minimum volumes, price per litre, payment terms, quality specifications, testing, what happens to a rejected batch, packaging materials, storage, insurance and how either side can end the contract. The details depend on your country, so take legal advice.

Ask who holds the licence to produce and who is responsible for duty. Rules differ by country. See brewery licensing: the steps most countries share.

Think about exit too. What happens to unsold stock, leftover packaging and the recipe if either side ends the contract? A clear exit clause protects both of you.

Controlling quality at a distance

Agree a specification for the finished beer: gravity, alcohol, bitterness, colour, pH and packaging checks. Ask for a certificate of analysis on each batch. Taste each batch before release and keep a reserve sample. If you can, be at the first brew.

The less you control, the more you need data. A simple batch log will show trends before customers do.

Visit the brewery on brew day at least once. Seeing how the team handles the process tells you more than any certificate. Share your sensory notes openly so the brewer knows what you expect.

Counting the real costs

Add up ingredients, brewing fee, packaging, storage, transport, duty and your own marketing. Compare the cost per litre with a brewery you might build. Contract brewing is usually dearer per litre but cheaper to start. See start-up costs founders forget for what a brewery adds.

Set a point at which you will re-decide. If volume reaches a level where your own plant pays back, it is time to run the numbers.

Remember that you still need a brand. Name, label, trademark, packaging, pricing and sales all stay with you. See launching a beer brand in a new market.

Common questions

Do I need a licence if a contract brewer makes my beer?

Often yes, for selling or importing, even if the brewer holds the production licence. It depends on the country, so ask the regulator or a licensing adviser.

Who owns the recipe?

It should be set out in the contract. Agree it before the first brew. Take legal advice.

Can I switch to my own brewery later?

Many brands do. Keep consistent records of recipes and quality so the beer can be reproduced on a new plant.