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Food Safety Modernization Act: Insights for breweries

Recently, I attended training for Preventative Controls for Human Food where I took a deep dive into the new rules in the Food Safety Modernization Act. Admittedly, it was more beneficial to food processors such as dairy and agriculture. However, I was fortunate to have both FDA and Washington State Department of Agriculture employees in the same class and I gained insights as to what they are looking for during inspections.  I also learned that although some information may not be required for breweries, there is value in having certain things outlined in a written food safety plan that is beneficial to both FDA inspectors and breweries.

New rules (CFR 21 Part 117) for breweries are rolling in and being prepared to meet the requirements means getting documentation ready for FDA inspectors in a format they are familiar with. A good place to start is by reading Quality Management: Essential Planning for Breweries available through the Brewers Association. This resource is an excellent guide for creating the foundation for a quality management system consisting of:

  1. Standard Operating Procedures (SOPs)
  2. Good Manufacturing Practices (GMPs)
    1. aka Good Brewing Practices (GBPs)
  3. Hazard Analysis
  4. Master Sanitation Schedule

This will require some time and effort, however, there are benefits for breweries, FDA inspectors, and consumers. SOPs create a solid foundation for a quality program and get everybody rowing in the same direction. GMPs can be defined by your SOP’s, since they should cover the details about how you clean, sanitize, and control processes. Hazard Analysis and Preventative Controls are a bit trickier.

Basically, Hazard Analysis is a process to collect and evaluate information to help determine if there is a significant risk to food safety (CFR 21 117.3 Definitions). Preventative Controls are meant to be utilized by a person experienced about food safety to reduce or avoid a known hazard. One of the major ones for breweries tends to be when bottles break during the filling process. The preceding covers the basics, but there are also some recommended (not required) parts of a food safety plan that may help make an inspection go smoother. In fact, although I had compiled our SOP’s, Master Sanitation Schedule, Recall Plan and Good Manufacturing processes I wish I had included the following prior to inspection as it would have saved me from having to supply much of the information during an interview with the inspector.

  1. Background Information
    1. Where are you located and how many locations do you have?
    2. How many employees do you have at the brewery?
    3. What do you produce? Be aware, soft drinks require an additional license!
    4. Where do you distribute to?
      1. Down to the approximate territory or county level in your own state.
      2. What percentage of sales in each approximate territory, county and/or in each state?
    5. Who distributes your products?
  2. Flow Diagram of Brewing Process
    1. Include times and temperatures at each stage. PowerPoint works well for this.
  3. Hazard Analysis
    1. Glass breakage needs to have a procedure of how it will be addressed.
    2. How will product be protected?
    3. How will suspected product be isolated?
    4. Cover lights in areas where broken elements could get into product.
    5. List of ingredients.
    6. List of Suppliers.
  4. Training
    1. How are production workers trained?
      1. It’s o.k. to use SOPs and on-the-job training.

There is a recommended format to supply this information that may speed up the inspection process as well (Food Safety Plan Forms). You won’t need all the forms as they don’t all apply to breweries, but they do provide insights about background information, flow diagrams, hazard analysis, recall, and sanitation. I found the formats contained in Quality Management: Essential Planning for Breweries worked well during our inspection. Plus, with a little editing most of the supplied text should work well for most breweries!

Benefits to supplying more information:

  1. Saves you time. Handing an inspector this information saves you from taking time to answer these questions in an interview.
  2. Knowing where you sell your beer and how much you sell there provides good data. Did you sell more or less? Why? This may provide an opportunity to adjust your strategy in certain markets.
  3. Provides an overall guiding document for your quality plan that captures essential information.

 

 

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Standard Operating Procedures (SOP’s) are the foundation for a successful quality program. SOP’s are a fantastic opportunity for everyone involved in production to think about how they perform tasks and share it with their co-workers. It also helps set a standard and at times even raises the bar at breweries where I have introduced and implemented the process.

I was fortunate to be introduced to SOP’s during my first professional brewing job and am thankful I had the experience early in my career. The process of writing down how I performed tasks and comparing it to how my co-workers completed the same tasks proved to be a valuable tool for several reasons. First, it was a learning experience that helped develop my skillset since I had very little (almost none!) experience working in a brewery. Second, methods were refined in regards to efficiency and best practices that saved time and beer while improving quality. I also believe creating SOP’s provides an opportunity for teams to develop better relationships by working together through a problem solving process.

At Diamond Knot Craft Brewing we have had several successes with SOP’s that come to mind. The first SOP’s we worked on dealt with Clean-In-Place (CIP) for our fermenters and bright tanks. Our head brewer and production manager collaborated and created step-by-step hand written documents, some of which was done while performing a CIP. Next, this was typed up and given back our staff for review after which a final edited version was created.

During the final review by our staff, an issue developed with our carbonation stones not performing as well as they had in the past, resulting in beer taking twice as long to carbonate. We carefully examined our current procedure and I offered a few suggestions. Our staff went on to develop a method that improved the performance of our carbonation stones while increasing their knowledge of how the stones function. This trend continued and we went on to improve the quality of our overall sanitation through more effective CIP’s, lower dissolved oxygen in our brew house, cellar, and package, which resulted in higher scores from our sensory panels and longer shelf life. One could say SOP’s created an exponential return on our efforts!

Basic or Detailed?

SOP’s can be simple by just listing basic steps such as the purpose, time needed, temperatures, quantities, and list of equipment, which meets the needs of many breweries. More in-depth SOP’s have the added benefit of also being used for training exactly how to complete certain tasks and operations. Further details could include exactly how to set up a diverter panel and may even include a picture. This is especially useful when someone is new and on their first graveyard shift trying to remember how and when to do a key step!

An abbreviated example of a SOP format is shown below. The first section is intended as a header and using a footer that contains “Page # of #” helps ensure the reader is aware of how many pages there are. I recommend using an outline form for the body of the document to make it easier for the reader to keep track of where they are in the document and to easily reference sections they may have questions about. Editing the document also tends to go quicker.

Include a Record of Changes page, which can be seen just below the SOP example. This is valuable for tracking when, who, and why a change was made. There have been many times when I’ve asked why or when a change was made and received different answers. Record of changes as a last page of an SOP helps solve this issue!

Getting Started

The hardest part of creating SOP’s is providing the motivation to start and dedicating the time and resources. Having a team leader for creating SOP’s helps both getting started and coordinating resources and time. Remember, SOP’s are also a good tool to help develop your team’s skill sets, something many breweries struggle with. If you need further motivation, inspections by the U.S. Federal Drug Administration now ask for documentation of how equipment is cleaned and sanitized. It certainly helps to have your SOP’s already in-hand for unexpected inspections!

SOP Example

Name of Company

STANDARD OPERATING PROCEDURE FOR DEPT:Brewing             02-Cellar                             Issue Date: 9/30/2016                                                                                 Supersedes: 9/4/2015   Plant: Production Brewery                                                                        Document # 02-001

 

Title of SOP

Purpose: To ensure…

Safety Equipment: Gloves, safety glasses, boots, hearing protection (as needed).

Items Needed: Equipment such as brew hose, clamps, chemicals, etc.

Notes: List any important considerations or hints. May also list reference material to further explain certain items.

Procedures:

Title of Procedure

  1. Step 1
    1. Sub steps for clarification
  2. Step 2
    1. Sub Steps for clarification

Page 1 of 1 (Footer)

 

Record of Change

Date Change made by Approved by Description of Change and Why
1/26/2017 Head Brewer Head Brewer, Quality Manager Updated to show new procedure due to brew house modification.
 

 

Buy American Beer!

As we approach the 4th of July many of us will celebrate by grilling our favorite foods accompanied by the delicious elixir called beer. As the line-up of beers continues grow and spill into different parts of your local retailer (due to lack of shelf space for craft beer), I encourage you to consider the origins of your beer. Is your beer truly American or is it owned by a foreign company?

Although large brewers (i.e. AB InBev, MillerCoors) continue to brew in the U.S. and do provide jobs domestically, they are no longer American owned companies. This may be old news to many; however, there are still those that associate the larger beer brands with the stars and stripes. Some interesting facts about U.S Craft Breweries (Source: http://www.brewersassociation.org/statistics/economic-impact-data/):

– Contributed $33.9 Billion to the U.S. Economy in 2012 (includes non-beer products such as food and merchandise)

– Provided 360,000 jobs

I continue to choose craft beer for a variety of reasons. First, when I began homebrewing years ago, it led me to also seek out more flavorful local beers. One of the first craft beers I tried was Widmer’s Hefeweizen and eventually I “graduated” to Deschutes Bachelor Bitter and Black Butte Porter.

Today, with the incredible amount of craft beers in the market, even I can’t keep up with tasting them all! Don’t intimidated by the hundreds of beers offered, take your time and find the beers that fit your taste buds. Visiting a local craft beer bar can help as they often offer smaller portions or samples to help you decide which beer best suits you. You will also find that the food you decide to pair a beer with will have an impact on the flavor. Some beers may compliment a dish, while others will provide a contrast. For example, I find that a German lager goes well with a brat and India Pale Ale goes well with spicy foods. I recommend experimenting to discover what works for your particular tastes.

So, instead of picking up a Budweiser because it is in a 4th of July can, support your local craft brewery and community by trying their suds. The following link will help you find a craft brewery in your area:

http://www.craftbeer.com/breweries/brewery-locator/find-a-us-brewery

You can also find out more about how you can support your local brewery by becoming an activist for local breweries:

http://www.craftbeer.com/breweries/support-your-local-brewery/current-issues
Have a wonderful 4th of July!

Cheers,

Aaron

P.S. If your significant other insists they don’t like beer, have them try a Lindeman’s Framboise, which you can generally find at retailers with craft beer.

The Power of a Pint

Over the years, I have observed many pricing strategies for beer. Some look to their competitors and try to come in just below or match their price, while others use prestige pricing thus commanding a premium for their suds. Often overlooked is the impact that a slight change in price has over time. Of course, the full impact of your pricing strategy needs to be assessed from a consumer’s perspective and how it will affect the financial health of your company.

One example I can share of how pricing affected a company’s performance occurred at a chain of brewpubs. Their pricing strategy consisted of line pricing their beers with the intent that beers which were less expensive to make would essentially balance out the more expensive. This approach has also been used by large companies such as Southwest Airlines and uses the principle of price elasticity, which relies on large quantities being sold; some at a low price and others at a higher price. After much discussion with upper management I was able to implement a small price change for specialty and seasonal beers, which was needed to offset the additional ingredient expenses, especially when a different strain of yeast was used. After implementing increased pricing for specialty and seasonal beers in one location the benefits were noticed quickly. Revenue increased allowing the management team to attain bonuses consistently and the location became the most profitable out of five locations. This also led to other locations implementing the same pricing strategy.

Eventually this pricing strategy was implemented in all five locations resulting in increased revenue for the company. Revenue also continued to increase as managers adopted the same pricing methodology for other products. Some may have concerns about the price sensitivity of their customers, however, most craft beer connoisseurs (including myself) tend to be more concerned with quality than price. Further, maintaining quality and continuing to offer innovative products requires breweries to allocate funds for QA/QC programs and pilot brews to develop new, interesting beers for their customers.

To quantify the power of adjusting the price of a pint consider how much an increase of $0.25 per pint can make. For example, if you charge $5.00 per pint and sell 75 pints a day it equals $375. Changing this to $5.25 per pint at 75 pints per day increases this to $394. On a daily basis, this may not appear to be substantial, however, over time the difference becomes more significant. The following was constructed assuming a six day business week and the traditional pint size of 16 ounces:

Beer Size Price Daily Quantity Daily Totals Weekly Monthly Quarterly Yearly
Pint $5.00 75 $375 $2,250 $9,000 $27,000 $117,000
Pint $5.25 75 $394 $2,363 $9,450 $28,350 $122,850
Pint $5.50 75 $413 $2,475 $9,900 $29,700 $128,700

Another similar pricing strategy in the craft beer market is to use smaller glasses for certain beers (similarly priced to a pint), which essentially has the same effect. In fact, some craft beer bars use three or four different glasses ranging in size from 6 ounces to the standard 16 ounce pint. If you have the space for additional glassware this strategy is well worth considering as it is also beneficial for monitoring how much your patrons consume.

To be effective and timely, reviewing your pricing strategy should be done on a regular basis due to increases in raw ingredient prices, changes in taxes, and other financial considerations for your business. Being more responsive with your pricing strategy will allow you to quickly address changes in market conditions and ensure you maintain your margins.

Recently, I had the honor of being interviewed about things to consider when contemplating starting a brewery. Some of the information I share includes:

– How to get the planning process started
– Free methods to obtain market research
– How to get support from the craft beer community
– What are the typical costs involved?
– Resources for learning about the craft brewing industry
– The importance of mission and vision statements
– What type of brewery should you open?

The podcast can be accessed via Microbrewr.com a fantastic resource created by beer lover Joe Shelerud Please help support Joe by visiting his website and making comments!

An internship at the Ninkasi Brewing Company for the best business plan has been added to Oregon State University’s Craft Brewery Startup II course. Students in the course will compete by submitting a business plan, which will be judged by Dick Cantwell of Elysian Brewing Company and Aaron Brodniak, Brewery Consultant. This internship provides a unique opportunity to experience first-hand how Ninkasi has been so successful, so quickly!

Thank you to Ninkasi Brewing for their generous support!

https://pace.oregonstate.edu/catalog/craft-brewery-startup-workshop-ii

osu-brewery-beer-cider-courses-poster (2)

Updates!

If you missed the webinar information session you can watch it here: https://www.youtube.com/watch?v=vXPITvWUBzc

Also, a craft cidery class is also being offered. Webinar information session can be viewed here: https://www.youtube.com/watch?v=CjOBgvStKws

Do you want to open your own craft brewery?

How would you like to gain valuable insights from industry leaders to help develop a business plan, create successful strategies and learn about the craft brewing industry?

Given the increasing amount of competition in the craft beer industry, crafting a plan on how you will differentiate is essential to success.To help prospective brewery owners, Oregon State University is offering a Craft Brewery Startup Workshop in Portland, Oregon at the Widmer Brothers Brewery. To prepare for class students will participate online for two weeks where they will begin to learn about the craft beer industry, draft an executive summary and create a business plan outline.

Featured instructors will include:

Dick Cantwell, Head Brewer of Elysian Brewing and author of The Brewers Association Guide to Starting Your Own Brewery, http://www.elysianbrewing.com/about/

Teri Fahrendorf, Country Malt Group Account Manager and former Corporate Brewmaster for Steelhead Brewing Co., http://www.terifahrendorf.com

Aaron Brodniak, Brewery Consultant and former Head Brewer for Pyramid Breweries, http://www.linkedin.com/in/brodniak/
Dates:
Online: April 21 – May 9
Onsite: May 10 – 13

An information session will be held on February 27th at 11 am P.S.T. Sign up at: https://www3.gotomeeting.com/register/816302966 For more detailed information about this course go to: https://pace.oregonstate.edu/catalog/craft-brewery-startup-workshop-ii

Make an Exit Strategy

While reviewing business plans for clients I’ve noticed the tendency to exclude an essential component; that of an exit strategy. Perhaps this is due to the negative connotation associated with exit strategies such as the failure of a business and even the end of someone’s dream. However, exit strategies are set in place to provide the best option for a particular scenario rather than making a decision in haste and increasing the likelihood poor reasoning.

An exit plan can assist an entrepreneur in determining the most beneficial means to divest themselves of their company when they decide to leave their business. There may be numerous reasons for exiting, which can be similar to the reasons an employee resigns from a company. For example, employee’s leave for new opportunities for professional growth, increased salary or other more personal reasons such as a relocating spouse. Although, exiting from a one’s business may or may not be voluntary (i.e. bankruptcy) so having multiple strategies to exit is advisable (Prisciotta, & Weber, 2005).

Part of the exit plan should include the entrepreneur’s goal for exiting. For example, when a home owner decides to sell their home they consider the fair market value, market conditions and owner’s equity. From the preceding information the owner can determine the asking price, how much the sale will cost (realtor fee) and if they have enough equity to sell without supplying additional personal funds if the properties market value has fallen. Just as in selling a home, the best time of year to sell should be determined the particular type of business (Small Business Administration, 2013). Finally, acceptable terms should be determined such as how much cash, stock and if any hold-backs will be withheld in an escrow account (Kaplan & Warren, 2013).
Legal considerations such as filing the final tax return, paying final wages, benefit plans, paying final bills, reporting the business assets and reporting the sale of the business must all be addressed (Internal Revenue Service, 2013). To assist in the preceding tasks the services of a lawyer and tax accountant are useful to ensure legal compliance. Additionally, the Small Business Administration recommends a number of steps to close a business such as (2013):

– Document the choice to sell with a document
– Employ subject matter experts such as lawyers, accountants, bankers and brokers
– File documents to formally dissolve the business
– Cancel licenses and permits
– Adhere to labor laws (pay employees, provide adequate notice)
– Pay bills (taxes, debts), close bank accounts
– Keep documentation for 3 to 7 years

The Beer Shopper

You’re inside the store, so now what? With more stores providing more beers to choose from the task of beer shopping often leads to a paradox of choice for shoppers. I believe going beer shopping should be a joyous occasion especially with the growing selection due to the surge of craft breweries in the U.S. Even if you are a naysayer that claims “I don’t like beer” there is most likely an offering that will pleasantly surprise you. However, the increased selection has also led to some confusion for consumers. For example, I often get asked how to select “good” beer by friends and even other shoppers.

What is “Good” Beer

Plain and simple, whatever you deem to be good beer is good beer (for you). Your personal preferences are the most important factor, not beer ratings/reviews, friend’s recommendations, or following the Beer Judge Certification Program style guidelines. Everyone has their own likes and dislikes so let your palate lead the way.

A Beer’s Journey

Some factors you should know about that affect your beer are often out of your control such as the supply chain for beer or even the beer itself. Before beer is stocked on the shelf it has to be transported from the brewery to a distributor (some breweries do self-distribute). Some distributors may refrigerate during transit and storage while others do not. Once beer is delivered to a retailer such as your local grocery store some will sit unrefrigerated as back stock, on the shelf or in cases stacked on the floor. Also the beer itself may have been produced with certain defects making it more susceptible to becoming stale. So, how do you go about selecting the freshest beer?

Steps to Selecting Fresh Beer

1. Select beer that is on the shelf in the refrigerated section. Perhaps the most obvious choice, however, this also has the beneficial effect enjoying your beer a little sooner after you get home!

2. Go to retailers that have a good turnover on their beer. This will take some time and research as you get to know your local stores offerings, determine the knowledge of their staff and collect recommendations from friends. One shop that goes to great lengths to ensure beer quality is By the Bottle and use low UV screened lighting to prevent light struck (skunky) beer.

3. Read! Know when seasonal beers are being released so you can purchase them at the beginning of their season to ensure freshness. Beerpulse and Beer Advocate are good online sources as is Facebook once you “like” a brewers page. There are many more and you may find a local publication that works for you.

4. Shop! Shopping consistently for beer helps you become more familiar with what is new while providing your beer fridge at home with more variety. This allows for the opportunity to forgo buying refrigerated beer, if needed, since you know the beer has not been unrefrigerated for a long period of time if it is newly released.

5. Network! Social media, homebrew clubs and establishments that offer craft beer are fantastic places to sample and gain insights into what you like, when to seek it out and where. This has the added benefit of enjoying limited release beers that may not be available. I also text my beer drinking friends when I find favorite brands that are on sale.

6. Choices! With so many choices of beer it is easy to get overwhelmed. If you are so inclined it may be useful to track the beer you have tried with an app or written notes. Untappd is an app that enables you to rate and review beers, which also allows you to network with others after you have friended them on Untappd.

7. Take risks! At times you may have to step out of normal buying habits and try a beer you missed despite all your efforts. You may be pleasantly surprised. If you don’t like the beer, try trading with friend that may appreciate the flavor. In the worst case, if the beer is stale, use some to make chili!
Most importantly, drink and enjoy your beer in a glass to better appreciate all the efforts of craft brewers! Cheers!

Concerning the viability of the craft beer industry it is important to note that while it is currently experiencing growth it is still vital to conduct market research before expanding or entering the market. Conducting market research does not have to be an expensive endeavor; in fact, much can be accomplished using inexpensive resources, merely requiring an investment of time. For example, the Small Business Administration has a wealth of information and links to resources available to conduct market research (SBA Demographics). Other sources of data for market research include the U.S. Census (Current Population Survey), Bureau of Labor Statistics (BLS Demographics) and state and county websites such as for Houston, TX. Once research has been completed an identity for a brand should be established.

The craft beer industry identifies itself though product differentiation and consumer education. Swaminathan defines these strategies as “identity for critique” and “identity for education” (2001, p.1171). Identity for critique can been seen in how the craft beer industry challenges the large domestic brewers such as AB InBev by demonstrating how craft beer is produced in smaller batches with fuller flavors rather than mass produced with mild flavors (Swaminathan, 2001). Therefore, a craft brewery may be labeled as a specialist organization while a larger brewer would be a generalist organization (Swaminathan, 2001). Identity for education seeks to “challenge the dominant culture’s perception of itself” which craft brewer’s do by  marketing themselves as local, American-owned companies with strong ties to the communities in which they conduct business (Swaminathan, 2001, p.1171). Conversely, large brewers have been experiencing continued consolidation as evidenced by the formation of AB InBev.

Industry experts such as Dick Cantwell,  Co-Founder of Elysian Brewing and author of The Brewers Association’s Guide to Starting Your Own Brewery was quoted as saying, “They [breweries] can’t all be the same and expect to survive” (First Drafts). Cantwell recommends breweries need to differentiate themselves from other brewer’s by offering an innovative product mix. To address this, more breweries are using a product differentiation strategy by offering barrel aged beers, limited edition beers, collaboration beers and utilizing local ingredients such as honey, pecans, rosemary and thyme. So, as it becomes increasingly important to differentiate, choosing a region to establish a brewery must also be considered.

So, given the growing amount of competition in the brewing industry, is there an area in the U.S. that has the right market conditions to support more craft breweries? According to recent research, the southeast United States has the lowest amount of breweries per residents in the United States (Baginski & Bell, 2011). In fact, Houston, Texas, the fourth largest city in the U.S., currently does not have any operating brewpubs and only within the past two years have there been more brewery openings. Additionally, Houston has over 40 colleges, universities and other higher educational institutions and research has demonstrated there tends to be more breweries where the surrounding population has higher education levels (Baginski and Bell, 2011). Finally, recent legislation has improved the business environment for brewers and the Texas Craft Brewers Guild has indicated the changes in the law will facilitate further growth for craft beer (Texas Beer Bills). Given this information, Houston just may be the next boom town for continued growth in the brewing industry.