Photo Credit: DALL-E
Though modest in scale, craft brewers play a significant role in the industry, with innovation being their defining hallmark. In 2024, the United States was home to more than 9,700 independently owned craft breweries, a testament to the industry’s growth and creativity. However, these businesses operate in a highly competitive landscape fraught with challenges, including legal risks that could jeopardize their success.
In this article, we’ll explore the most common legal challenges facing craft breweries and provide actionable tips to help you protect your brand, employees, and bottom line.
Types of Legal Challenges Craft Breweries May Face
Every industry carries some form of occupational hazard risk. However, some are more dangerous than others. Examples of the former would include aviation, fishing, logging, and construction.
This does not mean the craft beer industry has no unique difficulties to deal with. Here, employees must be careful against slip-and-fall accidents, equipment malfunctions, and chemical exposure.
In case of any fatalities or injuries, the company must cover the costs through a workers’ compensation program. Otherwise, they risk being sued by the injured employee. Moreover, there are other types of legal concerns.
These have to do with beer contamination, something which also leads to product recalls. In either case, the injured party can sue the brewery with the services of a personal injury attorney.
Typically, a legal battle only ensues as the last resort. TorHoerman Law states that most personal injury cases are settled via insurance, mediation, or negotiation. However, breweries must be prepared to go to court as it is not an impossibility. It pays to have an attorney of your own who can help navigate the complex legal landscape.
Ways to Protect Your Brand
Now, let’s look at the different ways in which craft breweries can stay safe against legal challenges.
Maintain Strict Quality Control Standards
Quality control refers to the process of ensuring a product meets customer requirements or quality standards. It involves monitoring a product after the development stage to detect any issues and address them at the earliest.
To produce high-quality beer consistently, a craft beer company must practice stringent quality control measures. Even slight negligence in this area can lead to financial loss and reputational damage.
A 2023 PR Newswire report disclosed that product recalls in the US had increased by 11%. That’s the highest surge in seven years. A noteworthy recall example in the brewing industry is that of Amory’s Tomb Brewing Co. The company had to recall its Man Bun Pilsner due to the presence of foreign yeast or bacteria in some cans.
Craft breweries need to maintain strict quality control measures in the following ways –
- Proper inspection of ingredients, their quality, ratio, and presence of any yeast
- Continuous process monitoring. This includes the pH levels, temperature, and other parameters.
- Regular microbiological testing to detect any potential bacteria or yeast contamination
- Tests that analyze the alcohol levels, bitterness, and other chemical components
- Human testing for beer flavor, appearance, and aroma
Implement Strategies for Employee Safety
Since workplace accidents also pose legal challenges, breweries need to implement safety protocols. Such protocols coupled with regular employee training can reduce the chances of occupational injuries.
In 2023, a whopping 2.6 million cases of employee injuries and illness were reported across the private sector. This number may reflect an 8.4% decrease compared to the previous year. However, it still highlights the importance of workplace safety.
Craft breweries need to create a safe working environment for their employees. This can be done in the following ways –
- Implementing strict safety protocols that are clearly communicated to all workers
- Regular maintenance of equipment
- Providing safety training on an ongoing basis
- Running routine inspections to ensure nothing is out of place
- Keeping the work areas clean and organized to avoid tripping accidents
- Establishing a system of reporting and documenting any accidents or near misses
Invest in Comprehensive Insurance
A prime way for craft breweries to steer clear of legal challenges is to invest in comprehensive insurance coverage. For the most part, microbreweries across the US spend between $500 and $1500 on insurance coverage every month.
This would include coverage for property damage, general liability, and product recalls. Higher premiums may be charged depending on the brewery’s scale and size.
It is important to evaluate one’s insurance needs to avoid purchasing beyond what’s necessary. Typically, comprehensive coverage is the best because it protects against a range of unforeseen risks. Such breweries are prepared to handle legal issues, potential accidents, product recalls, etc., without causing a dent in capital.
Our Take
As craft beer companies strive to stay safe from a legal standpoint, they must equally focus on brand loyalty. The modern customer is conscious of their needs and will not settle for anything less. As per a recent PwC study, 32% of customers were willing to walk away from a brand they love simply due to bad customer service. Such clients do more than just walk away; they also share their grievances across social media.
This can damage the brand’s reputation irrevocably. Let your customers know that they are a priority through solid customer service and product quality. That’s how you can stay relevant in the cut-throat world of the craft beer business.
