PAGE 4 Alcohol and Food Like thousands of the new wineries that have opened in recent years, most of today’s craft breweries and distilleries rely heavily on revenue and marketing through sales at their production location. In these settings, patrons are coached to appreciate the unique flavors, textures, and consistencies of novel blends, making a visit a lesson in connoisseurship as well as a chance to have a drink. With that experience comes the potential for legal liability, however, an exposure that falls harder on craft breweries and distilleries than wineries. For the most part, craft-produced beers and spirits will have higher alcohol content than their mass-produced counterparts.⁹ A patron accustomed to driving home after drinking one 12-ounce beer at a bar may not be prepared for the impact of a craft brew that has a higher alcohol concentration. Given the importance of on-site sales to craft producers, their serving staff must be especially alert to detecting when customers have had too much to drink, and to insisting that customers under the influence of alcohol not drive themselves home. It’s an awkward but essential skill in the business. To reduce the risk of intoxicated patrons, while boosting revenue, craft breweries and distilleries, like wineries, will add food service to their experience. This, of course, adds a range of food service risks — for illness from tainted food, damage by smoke and fire to the premises resulting from food preparation, and accidents involving servers — to the overall risk of running an establishment. Labor of Love Anyone who envisions a brewer or distiller spending his or her day experimenting with ingredients and sampling different blends will be surprised to learn how arduous and time-consuming it is to maintain the equipment needed for brewing beer and distilling spirits. Collin McDonnell, CEO of HenHouse Brewing in Petaluma, Calif., describes brewing as “90% cleaning and 10% paperwork.”10 Yet McDonnell, who started his career as a communications consultant, has been in the brewing business for nearly 12 years, with no sign he’ll be leaving any time soon. Like so many other professionals who have migrated to the business of responding to America’s craving for a good drink, McDonnell apparently finds it to be a labor of love to do what it takes to make simple ingredients into a rewarding experience. To prevent their labor of love from becoming a nightmare of loss, aspiring brewers and distillers are urged to work with their insurance agents and brokers to develop coverage programs that address the potentially severe property and liability risks that come with creating and marketing alcoholic beverages. With such a program in place, you can toast your safety and success. Insights for Your Industry E06-1028 PROTECTING YOUR PROPERTY 877.482.1234 | aiblc.com Sheila E. Salvatore, Editor | Editor@AdjustersInternational.com Copyright © 2023 Adjusters International, Ltd. All Rights Reserved. Insights for Your Industry® is published as a public service by Adjusters International, Ltd. It is provided for general information and is not intended to replace professional insurance, legal and/or financial advice for specific cases. The Risks and Rewards of Breweries and Distilleries Continued 1 Mike Stobbe, “US drinking more now than just before Prohibition,” AP News, Jan. 14, 2020; accessed at https://apnews.com/article/public-health-health-statistics-health-us-news-aptop-news-f1f81ade0748410aaeb6eeab7a772bf7; see also Statista, “Alcohol consumption per capita from all beverages in the U.S. from 1850 to 2020;” accessed at https://www.statista. com/statistics/442818/per-capita-alcohol-consumption-of-all-beverages-in-the-us/ 2 Brewers Association, National Beer Sales & Production Data: Recent U.S. Brewery Count; accessed at https://www.brewersassociation.org/statistics-and-data/national-beer-stats/ 3 ACSA and Park Street, Annual Craft Spirits Economic Briefing, December 2021, p. 11; accessed at https://www.beallbreweryinsurance.com/craft-brewery-fire/ 4 Beall Brewery Insurance, “Where There’s Dust, There Can Be Fire,” Feb. 4, 2020; accessed at 5 Kate Bernot, “Tick, Tick, Boom — Regulatory Consequences for Exploding Cans a Potential Time Bomb for Small Breweries,” Sightlines, Feb. 5, 2021; accessed at https://www. goodbeerhunting.com/sightlines/tick-tick-boom-regulatory-consequences-for-explodingcans-a-potential-time-bomb-for-small-breweries 6 Angelo Verzoni, “Small Scale, High Proof,” National Fire Prevention Association, March 1, 2018; accessed at https://www.nfpa.org/News-and-Research/Publications-and-media/NFPAJournal/2018/March-April-2018/Features/Safe-Distilling 7 The Gin Guild, “Playing with fire – Safe handling of gin,” Dec. 5, 2019; accessed at https://www. theginguild.com/news/playing-with-fire/ 8 International Code Council, Significant Changes to the IBC 2021 Edition, p. 145, “Distilled Spirits;” accessed at https://www.iccsafe.org/wp-content/uploads/2021_SigChanges_ IBC_903.2.4.2.pdf 9 See Bo McMillan, “Craft beers get heavy ... on the alcohol, CNBC, Aug. 8 2015; accessed at https://www.cnbc.com/2015/08/07/craft-beers-get-heavy-on-the-alcohol.html 10 Collin McDonnell, So You Think You Want to Open a Brewery...,” Serious Eats, updated Oct. 31, 2019; accessed at https://www.seriouseats.com/challenges-of-opening-a-brewery-job-advicebeer-industry-collin-mcdonnell-henhouse
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