Stealing Big or Stealing Small – They Both Hurt Your Local Brewer

Stealing Big or Stealing Small – They Both Hurt Your Local Brewer

By Mark Lasbury for Indiana on Tap

The cost of doing business covers a lot in craft brewing. There are the goodwill tastes that can cost up to $0.50 each when the style of beer and cleaning the glassware are combined. There is the breakage of glassware, the wear and tear on equipment that constantly needs maintenance, and even dumped batches of beer that don’t turn out as expected – these are all sources of loss. Even the beer that gets donated or bought at extremely low rates for festivals could be considered a cost of doing business. In many ways, breweries have to spend money to make money.

On the other hand, theft from breweries should not be considered a cost of doing business. It’s just wrong; but many patrons don’t see it that way. Too many brewery-goers see that sample glass, logo pint, or even keg as a perk when they make purchase from a brewery. But all that stuff adds up, and it keeps your local brewery from doing some of the things they might to make more beer, better beer, or offer more amenities. Let’s take a look at the problem…..

A Comparison. Just last week, Empyrean Brewing in Lincoln, NE had $100,000 worth of copper ripped out of its brewery by a thief. Copper pipes were cut out, copper wires from electrical boxes and solar panels were ripped out. A black duffel full of copper was found near one of the doors, but the thief got away with a lot more than what was recovered. And the recovery doesn’t help that much; the damage to the equipment is severe, and will require time to fix. And that’s time they can’t be making beer – you know, that thing they make that keeps them in business.

Most stolen “beer” is of this variety, but good beer gets stolen too. As SweetWater. image credit: WGNS

Another example, this one from 2016 – SweetWater Brewery in Atlanta had two trailers of packaged beer stolen from the brewery. All told, about 3000 cases of beer or 79,000 bottles, were taken during one night in June. Much of the beer was recovered, but since it was out of the brewery’s hands and the integrity of storage and handling couldn’t be confirmed, all the bottles had to be destroyed. Yes, they had insurance, but rates will change based on claims, and the loss of the product resulted in much greater financial hit than what they were paid from insurance.

These are just two of many examples where breweries were the targets of theft on a large scale. No one would argue that this is just part of the cost of doing business as a craft brewery, and we all believe these are egregious crimes that need be punished and shouldn’t occur. Yet walking out with a pint glass is no big deal to many people, and not returning that keg you put a small deposit on is completely your choice, right? So why we do think of $90,000 worth of beer or $100,000 worth of copper taken in one night as theft but taking kegs or glassware as cost of doing business? Is it just a matter of scale?

Actual Cost of Loss. Would it change your mind if I showed that glassware and keg theft are just about the biggest sources of loss in craft brewing? Dumped batches probably don’t come close the cost of replacing logo pints and tulips. And keg replacement is even a bigger deal. The numbers are staggering, yet few people care because it happens out of the public view and just a bit at a time. Believe me, it adds up.

A very casual survey in Charlotte, NC recently reported that NoDa Brewing is spending about $24,000 year to replace stolen glassware. Not broken and stolen – just stolen logo pints. Along that same line, Rhinegeist’s taproom opening day in 2013 finished with a loss of over 300 pint glasses – in a single day. Now multiply that by 6300 breweries across the country. This is a big problem across the industry, but it’s one that gets very little attention. Tree House Brewing had a taproom-only logo willi becher glass that they used for a couple of weeks. They weren’t for sale, and were just a different mode of delivering beer for a short time.

The rare brewery has started adding theft deterrents to their glasses. image credit: Pintrest

But the number stolen was spectacular (more than 300). It was so high that they had to post on their social media that if anyone saw an offer to sell one of these glasses that the potential buyers should recognize that they were stolen property and to report the seller so they could be banned from the taproom and have their information forwarded to the police. This is what people have forced breweries to do. The other alternatives: plastic cups? That doesn’t help anyone. Glass deposits? That will just reduce the monetary loss unless the deposit is equal to the cost of the glass. Security devices? That’s going to raise the price of your beer. Just stop stealing, and who knows, maybe the price of your beer will go down a bit over time, or at least won’t go up as quickly.

Walter and I have 350-400 glasses from breweries we have visited or from giveaways during tap takeovers. But we buy or are given them – it’s just another way to support a brewery in their effort to bring us good beer. Some people argue that they are doing the brewery a favor by stealing their logo glassware. From that point on, the glass is a passive advertisement for their business and, when used, may drive business their direction. I don’t buy it – just purchase the glass and be proud of yourself.

Keg Theft is Even Worse. The Beer Institute estimates that 350,000 kegs are lost each year because they simply aren’t returned to the breweries when empty. The reasons are many. Festivals and competitions may house kegs together and not return them to the owners once the event is done (it would be prohibitively expensive to ship them all back to their origins). Bars and restaurants get so many kegs over time that many are lost in the process. There are other ways to lose kegs that aren’t nefarious, but they still cost the brewery money.

On the other hand, sometimes it’s just plain theft. Some bars cut up kegs or weld them to other things as furniture, urinals, decorations, planters, etc. Hey, those aren’t their kegs, why are they doing that? It doesn’t mean that every keg urinal you’ve returned some used beer in has been stolen, but a lot of them were.

This is where many un-returned kegs end up. What an ignominious fate. image credit: pintrest

In terms of total dollars, that’s $50 million pissed away in keg losses (see what I did there?) every year across the entire industry. Perhaps the reason is that the monetary worth of the keg doesn’t match the deposit people pay on it, if there’s any deposit at all.

Many breweries let patrons buy kegs of beer to take to functions or serve on their kegerators at home. And they keep them way too often. Is it really that cool to have an empty keg in your home? No, they’re more likely selling them as a keg or for scrap metal. A brewery might charge $10-50 deposit on a keg that is actually worth $100-130.

The brewers want people to come in to purchase kegs, and they don’t want to scare people off by charging a full price deposit for the keg, so many people just don’t return them. MashCraft doesn’t sell kegs to patrons, partly because they sell so much beer at their three locations, but also in part because they don’t won’t to deal with the keg losses.

You can check Craiglist or eBay and find kegs for sale, although this happens a it less than it used to. The reason – breweries have started to search those sites too in an effort to recover some of the their lost kegs. So now, many of them end up in scrapyards, sold for slightly more than the deposit.

Does it matter – yes. It’s estimated by the Brewers Association that $0.46-1.37 is the direct cost of keg loss on every barrel of craft beer made in the US each year. With 30 million barrels of craft beer produced in 2017, that is, conservatively, $13.8 million dollars added to the price of making beer each year. Craft beer has enough issues dealing with the tactics of mega-beer, patrons should be adding to the problem.

BA and MicroStar have teamed up to try and get kegs back to their rightful owners. Click for a bigger image. image credit: BA

BA has tried to address keg loss with their biggest festivals (not intentional theft) and during the year with stray kegs ending up back at MicroStar (one of the biggest keg leasing companies). They can ship them back to a brewery, but there is a cost for that too. Anyway you slice it, keg loss is most often a matter of neglect or ill will, and it should not be considered something that a brewery should just have to deal with.

Other Sources of Theft. Wild accounts of major robberies from breweries, keg losses, and glassware theft are all sources of financial stress for breweries, but they aren’t the only sources by any means. Spent grain has been stolen from a brewery in San Diego – this is often donated, but the theft just shifts the loss from the brewery to the farmer who was counting on that feed for their animals. And there is corporate theft as well.

Systech, in Canton, OH, went belly up this past week in the wake of many lawsuits about how they stole money from breweries. The company purported to build brew systems, but in many cases, the equipment delivered was faulty, from a foreign source (they said they were American made) or wasn’t delivered at all. Systech had judgments against if for well over a million dollars in 2017 and closed last year, but they filed for bankruptcy protection just last week. That’s theft in my book, even if there is a legal term for it like fraud.

Finally, the issue of employee theft has to be addressed. No brewery wants to believe that their trusted co-workers would steal from them, but it does happen. Someone leaves a garage door unlocked and slides a few cases out to a waiting friend, or perhaps that shift beer becomes three or four, plus free beers for friends when they come into the taproom. It all adds up, and I can’t imagine how they don’t understand that they are just hurting themselves in the long run.

What’s worse, most brewery insurance doesn’t cover employee loss/theft. A separate policy would need to be purchased to cover this theft in most cases, and once again, this is adding to the cost of your beer. Theft is theft, no matter who is doing it or why. If brewery didn’t treat you the way you think you deserve – talk to a manager, don’t lift a glass or T-shirt to get even. We’re all in this together; margins on beer are low enough that every bit counts – don’t be the reason that a brewery doesn’t quite make it.

feature image credit: GQ

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