Sunday, February 5, 2012

Alternating proprietorship: new creativity in craft beer

Badger Hill logo from
Not being a professional brewers, it seems to me that those of us who are mainly drinkers miss the finer points of the business side of beer.  An article on Minnesota Beer Activists discusses in detail the relationship between Lucid Brewing and another upstart brewery called Badger Hill Brewing Co.  It's a business partnership known as alternating proprietorship (AP) in which two breweries exist side by side in the same facility.  In this case, in addition to sharing space and equipment, Lucid head brewer Eric Biermann will be the Badger Hill brewer until they get to a point that they can hire their own head brewer.  Interesting idea, and sounds like a great way to make more beer.

Pretty much every start up history I've read or heard on a brewery tour, begins with the milk tank or other franken-brewery story that was their way to control costs to get beer flowing.  For a larger, successful brewery, the next part of the story is how they needed to re-invest to build the next larger brewery.  This pattern always seemed wasteful to me, but there didn't seem to be much of an alternative.

AP sounds like a great idea that can mitigate the perceived negatives of contract brewing or the real costs of starting a brewery from scratch.  A quick search turned up this entry on a legal blog that gives a bit of history to the idea.  According to the article, AP gained traction in 2005 when the TTB (Alcohol and Tobacco Tax and Trade Bureau) issued a circular to highlight this less expensive idea to start a brewery.  Brewing is still a lot of hard work and not without risk, as attested by this blog of a budding professional brewer who found the idea interesting but has put the brewery on hold.  This recent post on the San Diego beer blog highlights interest in using AP as way to increase production for local breweries.  Since my research wasn't exhaustive, I'm guessing other beer geeks turning hopeful brewer or brewery owner are exploring AP as a path to their beer dreams. At the heart of all great craft beer is creativity, and it clearly goes beyond clever names and hop additions.

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