The craft beer industry has experienced explosive growth in recent years, with innovative brands and new beer styles capturing the attention of consumers. But launching or scaling a beer brand doesn’t always require building a brewery from scratch. Many breweries and brand owners turn to beer co‑packing or contract brewing production to bring their beers to market efficiently and cost‑effectively.
What Is Beer Co‑Packing or Contract Brewing?
Beer co‑packing (sometimes called contract brewing or contract production) occurs when one brewery (the “contract producer”) manufactures and/or packages beer on behalf of another company (the “brand owner”). This arrangement allows brand owners to leverage an existing brewery’s facilities and expertise, rather than investing in their own production infrastructure.
Common reasons companies use contract brewing include:
- Testing new beer concepts before committing to their own production facilities
- Expanding into new markets without exceeding existing capacity
- Outsourcing production to focus on other aspects of the business (marketing, sales, etc.)
Why Do Beer Brands Use Co‑Packing?
Beer co‑packing and contract brewing can offer significant advantages, including:
- Lower Capital Investment: Avoids the cost of building or expanding a brewery.
- Faster Speed to Market: Launch products more quickly by using an established production facility.
- Expertise and Resources: Access to trained personnel, quality assurance programs, and sophisticated packaging equipment.
However, beer co‑packing agreements require careful planning and clear written contracts to prevent misunderstandings or disputes.
Key Contract Considerations
If you are considering a beer co‑packing or contract brewing arrangement, it’s important to have a contract addressing:
- Production volumes and schedules
- Quality control and product specifications
- Ingredient sourcing and ownership of raw materials and finished beer
- Packaging formats, labeling responsibilities, and TTB regulatory compliance
- Pricing, payment terms, and risk allocations
- Intellectual property protections for recipes and branding
- Termination rights, liability limitations, and dispute resolution mechanisms
A carefully structured beer co‑packing contract ensures both parties understand their roles and responsibilities, reduces the risk of disputes, and protects both the beer brand’s integrity and the brewery’s reputation. A beer co‑packing contract attorney can help draft and negotiate these agreements, ensure regulatory compliance is properly addressed, and structure terms that protect your financial and operational interests.
How Lindsey Zahn P.C. Can Help
At Lindsey Zahn P.C., we understand the unique business and regulatory challenges faced by breweries and beer brand owners. Our law firm regularly advises clients on:
- Drafting and negotiating beer co‑packing agreements and contract brewing and co-packing agreements tailored to operational and financial needs;
- Reviewing existing contracts for risk exposure and compliance gaps;
- Incorporating TTB and state regulatory compliance into contract terms; and
- Structuring agreements that align with long‑term production and distribution strategies.
Whether you are a brewery exploring new revenue streams as a contract producer or a brand owner looking to bring your beer to market without building your own facility, our alcohol beverage law firm can help you structure a compliant and effective partnership.
If you’re considering working with a co-packer or have questions about a contract production agreement, contact us today to schedule an initial consultation. We’ll guide you through every step so you can focus on your business and your beer.
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