Craft brewers count pennies instead of calories
Source: USA Today
James Fisher, The (Wilmington, Del.) News Journal
February 14, 2016
The federal government wants you to know how many calories you are putting into your body.
So much so that starting next year, all restaurants with at least 20 locations will be required to print calorie content for every item on the menu.
For the diet-conscious, it will be easy to know how many calories are in the pizza, french fries and beers you consume. It will be there in not-so-fine print.
But for smaller chain restaurants and local craft brewers, the change is more than an inconvenience: Testing or calculating the calorie counts of their entire menus will cost serious money, forcing some to reconsider their business plans.
Brewers in particular are concerned the rules will introduce a whole new category of overhead, with costs to have their brews tested by outside labs running to $1,000 for each flavor of beer they sell. If they decline the expense, they’ll have no hope of seeing their products served in the country’s most widely patronized chain restaurants.
Brett McCrea, a founder of Georgetown’s 16 Mile Brewery, is downright incensed about the coming requirements. Testing his beer for nutrition information, McCrea said, would make little economic sense – even though it will be the only way for him to have a chance at wider distribution at chain restaurants.
“We’ve been trying for years to get into Grotto’s. This effectively shuts the door on that. It’s going to be the same with The Greene Turtle and T.G.I. Friday’s,” McCrea said. “Unless you’ve got your calorie counts, they won’t want to deal with you. End of discussion. Point blank, it hurts businesses like us.”
Federal lawmakers who backed the labeling law “have a very immature view of the beer market and all the dynamics this legislation puts forward,” McCrea said. “I get tired of people with that kind of view telling me how to run my business.”
Small breweries, which pride themselves on experimentation catering to the inquisitive tastes of younger customers, often release a dozen or more kinds of beer in a year. To test each could cost $12,000 to $24,000. For an outfit with just a handful of employees, the testing could cost as much as it would to hire another employee — an expense they say they can’t afford.
But if they don’t test, they can’t dabble in the wider market and essentially place a low ceiling on their sales potential.
“I’m not a fan of the entire concept, frankly,” said Hugh Sisson, founder of Baltimore’s Heavy Seas Beer. “While I understand the ideological perspective of transparency for the consumer, we’re not claiming to make health food here… I feel like we’re over-regulated and under-benefited.”
The food and beverage industry has known for some time that more disclosure requirements on restaurant menus were coming. The Food and Drug Administration, charged with crafting new regulations after the Patient Protection and Affordable Care Act was signed in 2010, issued draft guidance to restaurants about what it would propose as a final rule. In November 2014, the FDA released its final rules, which called for labeling standard menu items, including beer, wine and mixed drinks, listed on menus in chain restaurants with 20 or more locations.
The FDA originally said the requirement would come into play by December 2015. But when industry players requested more time – “a large retailer and trade and other associations” weighed in, the agency said – the FDA obliged, delaying the deadline until December 2016.
The 20-location benchmark had been a key component of legislation Delaware Democrat Sen. Tom Carper and Sen. Lisa Murkowski, R-Alaska, introduced in 2008 that was largely incorporated into the Affordable Care Act. The earlier LEAN Act, Carper and Murkowski said, was a response to alarming obesity rates, and meant to set a national standard for judging the health value of prepared foods.
The largest fast-food and fast casual dining chains, like McDonald’s and Panera, have had calorie counts on menus for months. For those eateries, where menus change little across thousands of outlets, the cost of testing can be easily spread out.
Those mega-chains made their peace with the federal standards quickly, in part so they would supersede state-by-state laws that didn’t all match up in terms of what menus had to disclose. “Before this law was passed, there seemed to be a patchwork of local laws and ordinances. That was really cumbersome for the multi-unit operators,” said Carrie Leishman, president and CEO of the Delaware Restaurant Association.
Big players in beer and spirits also publicly embraced the new normal. Diageo, the company behind Guinness beer and spirits like Johnnie Walker, Captain Morgan, Tanqueray and Crown Royal, announced in March it would put nutrition information on its products in all markets worldwide, not just the U.S. With revenue of $15.3 billion and $788 million in cash on hand, running the needed tests on its beverages is a snap decision for Diageo.
“We know that consumers are increasingly discerning about what’s in their glass,” said Ivan Menezes, the company’s CEO. “We want to provide alcohol and nutrition information that consumers can quickly understand, instead of expecting them to do the math.”
Diageo’s database shows most regular beers come in at around 150 calories, assuming their alcohol by volume is around 5 percent. Light beers, with an ABV of 4.2 percent, contain about 100 calories, according to the company’s DrinkIQ website.
The Delaware craft brewer that routinely pushes the envelope on strong, distinctive beer, Dogfish Head Craft Brewery, does not supply nutrient information on labels or its website. “We don’t have a comment on new FDA requirements or nutritional information about our beers,” a Dogfish Head spokeswoman, Janelle Miley, said.
It’s small-to-midsize breweries that are the most uncertain about whether their beer can show up in establishments.
“If we distribute to chains and places that put this information on the menus, we would have to have our products tested and give the results to the restaurants ourselves,” said Lori Clough, co-owner and manager of 3rd Wave Brewing Co. in Delmar. “We just cannot afford to have a test run for every single beer that we make. It’s going to cost thousands and thousands. This is just my opinion, but restaurants will migrate to corporate-owned craft breweries” – labels like Goose Island, Leinenkugel and Blue Moon, which have craft-beer cred but are partly or wholly owned by the world’s biggest beer companies.
With less than a year left until the regulations take effect, chains and brewers are beginning to chart their courses. Paul Gatza is president of the Brewers Association, a nationwide trade group that lobbies on behalf of craft brewers.
He said his group is working to compile a database of nutrition information – calories, carbohydrates, protein and more – for a dozen or more common beer styles. They plan to give the data to the FDA, he said, and ask them to rely on it as an acceptable template for the kinds of beer most craft brewers produce.
“We’re going to submit that data and hopefully they will include that,” Gatza said. “They don’t want a firestorm of small brewers not being able to participate.” For brewers to submit their own beer to labs for complete nutritional testing, Gatza said, would cost thousands.
Sisson, of Heavy Seas, said he expected to spend $7,000 to $10,000 a year obtaining nutritional data on his most widely distributed beers. “The hit for me, while not pleasant, will certainly put me in a bind,” Sisson said. But for smaller brewers far under his 50,000-barrels-a-year output, he said, “that might be a couple thousand bucks you don’t really have.”
Moreover, Sisson said, the regulation could discourage brewers from the kind of ingredient experimentation that has defined the industry — fearing that unusual ingredients in their brews will knock them out of known calorie ranges.
“Part of the whole coolness of craft beer is, if you want to make the tweak, you just make the damn tweak,” Sisson said.
McCrea said the Beverage Association plan to supply a database of common beer styles runs counter to the craft beer mindset that values oddities and novelty. “That’s not what the craft industry was based on,” McCrea said. “It’s forcing people like me to say, ‘I’m serving bland, templated beers to chain restaurants.’ It’s stupid. It’s juvenile.”
Other breweries are unperturbed by the impending change.
“We’ll have to get calorie testing done on our core beers that might be placed (in chains), which we can send off and do. It wouldn’t make sense for us to do that for our one-off releases. We’ll stick with our cores and that’s about it,” said Ryan Maloney, head brewer at Mispillion River Brewing in Milford. “There’s labs we already work with, getting yeast from and whatnot. They can do the testing for us.”
Franklin Winslow, director of quality assurance at Philadelphia’s Yards Brewing Company, said breweries tend to know roughly how many calories their beer contains. If they don’t, calculating that number is not too hard to do.
“But we do not have a way to go back and look at protein and other fats that may be required,” Winslow said, without relying on expensive lab tests. “Cholesterol? That’s an expensive test. Why should we even pay for that? Unless someone’s putting bacon in their beer, because some brewers are doing that now.”
Nonetheless, Winslow said, “we are happy to help our accounts comply with the new regulations. We will help them get whatever information they need about our beers.”