Insights for Your Industry According to the American Craft Spirits Association (ACSA), the number of producers of craft spirits more than doubled, from 906 in 2014 to 2,290 in August 2021, an annual compound average growth rate of about 20%. Of the latest total, roughly 2,000 are classified as “small craft distillers.”3 Hot Stuff The term“craft” evokes the image of an artisan practicing his or her art in controlled conditions, but it can be misleading to the extent it causes anyone to overlook the fact that brewing and distilling involve industrial-type processes with some industrial-type risks. Brewery and distillery fires are big news, not necessarily because they happen more frequently than fires in other establishments, but because they often result in a spectacular total loss. Dust from the grains and sugar used to brew beer are the principal culprit in brewery fires, according to Beall Brewery Insurance, a branch of Beall Financial and Insurance Services, a retail agency. The firm warns that dust can accumulate in the air as ingredients are stored, transported, and ground. Upon exposure to a heat source, the airborne dust can ignite into a flash fire or fireball which, if contained in a confined space, can create pressure at a high enough level to rupture equipment or even the walls of a building.⁴ Breweries have another type of explosion problem— cans of beer that explode in the possession of buyers. According to Kate Bernot, an independent writer who covers the alcoholic beverage business, brewers have been dealing for several years with cans of “unpasteurized, heavily fruited beers” that burst after the contents referment. Several well-known craft brands have instituted voluntary recalls of their products as a result.⁵ In distilleries, the principal fire danger is the flammable vapors produced during the distilling process. The National PAG E 2 The Risks and Rewards of Breweries and Distilleries Continued Fire Prevention Association (NFPA) states that hard liquor, usually 40% or more alcohol by volume, emits vapors that can ignite in the air at 79° Fahrenheit, a temperature easily reached within many distilling operations.⁶ The Gin Guild, an organization of gin distillers in the United Kingdom, notes that, “the increased numbers of new and often comparatively inexperienced distillers … gives rise to an increased risk of explosion, due to the use of ethanol as part of the distilling process.”⁷ Close Quarters The vulnerability of craft breweries and distilleries to sudden, devastating fires is made more worrisome by the fact where many of them are located in dense retail districts utilizing commercial structures not designed for operations involving flammable materials and heatproducing equipment. In such a setting, a fire or explosion in a brewery or distillery can trigger other types of potentially fatal losses to the enterprise. Since the event will almost certainly require closing off the immediate area for at least a short period, the establishment and its neighbors will suffer a loss of revenue until the location is reopened. Business income insurance is available for lost revenue and extra expenses needed to reopen, for businesses directly affected by the property damage or closed due to civil authority which denies access to the business; but many new and small businesses find it difficult to afford this coverage. E01-1028 PROTECTING YOUR PROPERTY 800.382.2468 | AdjustersInternational.com Sheila E. Salvatore, Editor | Editor@AdjustersInternational.com | 126 Business Park Drive, Bldg 2 | Utica, NY 13502 Copyright 2023 Adjusters International. 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. Robin J. Gentry - stock.adobe.com
RkJQdWJsaXNoZXIy NjIxNjMz