The Aloha Laws: Figure It Out

So I'm on Active Duty in the Army, so I volunteer my time where I can to help my husband with his brewery bent on doing good. I don't usually have much time to give, like most service members, due to heavy operation tempos. However, I had surgery and was home on convalescent leave and couldn't sleep from the pain so of course I:

1) Helped them join the Brewer's Association ($195 for a 'Brewery in Development)
2) Dug into the beer license laws in Hawaii (they appear to be county specific)
3) Found out Sampling is officially permitted
4) Downloaded the Independent Craft Label which we are authorized to use once we get our TTB Brewer's Notice and Sign the Brewer's Association Licensing Agreement that we meet their definition of a craft brewery.
5) Signed us both up for the Cicerone Beer Server study course: Beer Savvy ($199); you can take the in person boot camp if you are on the mainland or other big cities but that's not an option in Hawaii.
6) I researched the 25th ID On Post Business Regulations just in case; my neighbor has a successful wordworking business so she pointed me in the right direction. Turns out we are not doing business on post, so we do not need that license at this time.

Here are the local beer laws for Honolulu County that may apply to us:

HRS § 281-31 (r) Class 18. Small craft producer pub license. A small craft producer pub licensee: (1) Shall manufacture not more than: (A) Sixty thousand barrels of malt beverages; … (2) May sell malt beverages, wine, or alcohol manufactured on the licensee’s premises for consumption on the premises; (3) May sell malt beverages, wine, or alcohol manufactured by the licensee in producer-sealed packages to class 3 wholesale dealer licensees pursuant to conditions imposed by the county by ordinance or rule; (9) May conduct the activities under paragraphs (1) to (8) at one location other than the licensee’s premises; provided that: (A) The manufacturing takes place in Hawaii; and (B) The other location is properly licensed under the same ownership.

Figuring out Contract Brewing - 

Ownership
A brewer under Section 5092 of the Internal Revenue Code is a person who brews or produces beer for sale. The position taken by the TTB is that the brewer must have title to the ingredients in the beer to create the beer, and therefore the brewer also has title to the beer itself once produced. In a contract brewing relationship, then, the contract brewer possesses title to the ingredients and the beer until after production, payment of taxes and removal of the beer from the contract brewery. What this means is that the brewer that contracts with the contract brewery is not considered to be a brewer at all under federal law. In fact, the contracting party may need to be permitted as a wholesaler or retailer to receive and then sell the beer to others. - Great news for us! No TTB yet

Taxes
So much of alcohol production law is focused on taxation, and the question of which entity pays taxes is a vital one. In the case of ownership, the contract brewer is responsible for paying the appropriate amount of tax on the beer when it is removed from the brewery. As such, the brewer contracting with the contract brewer is not liable for any taxes directly. However, the brewing contract may contain a clause calling for the contract brewer to be compensated for the amount of tax paid.

Recordkeeping
Once again, the contract brewer keeps all records of production and provides operation reports to TTB. Any record-keeping required of the other brewer will be related to that brewer acting as a wholesaler or retailer under federal law.  However, we still have to keep good records as we are going to apply to the IRS as a nonprofit when we can logistically open our first taproom or brick and mortar brewery.

In a contract brewing arrangement, the focus of compliance with federal regulations falls mainly on the brewer actually producing the beer, which is why contract brewing is seen as a simple way for brewers to launch their business and grow their brand even before they build their brewery.

Thanks to McBrayer McGinnis Leslie & Kirkland PLLC - Masten Childers for several of these concise explanations. The setback a brewery can have contract brewing is a lack of local buy in and community support. I hope our mission and ministry speaks for itself and we are able to gain some traction with our adopted Hawaii Ohana.

We are counting on the wisdom we derived regarding how much this will all cost, "For $5,000, startups can launch a beer brand, says Page Buchanan, owner and founder of House of Brews in Madison, Wisconsin, which offers contract brewing services.  Once they start, owners need to think hard about marketing their beer and building a following, Buchanan says." Yes Ma'am!

March on to Marketing

If you read about a classic case study in breweries like Dogfish Head Brewery, they will tell you they started early and often with marketing. On the other hand, the SBA and investors will tell you brewers often show up without a marketing plan. Neither of our founders has a passion for marketing, however we understand the importance so we are digging into Brewery Marketing Podcasts like Market the Brew and Blogs like, "Where to Spend your Marketing Dollars on a Tight Brewery Budget" by Jenay Sellars.

Due to an abundance of new breweries, its more important than ever to tell your story and stand out in the crowd of great craft beers. In the 90's craft breweries had shrunk to several hundred in the US. Now, craft breweries are moving towards 6000 with economists saying they have not 'tapped out' the market yet. Because we aren't doing this to get rich and mainly just want to help people while clearing the beer clutter from our kitchen, I'm less concerned about these numbers than other new breweries might be. However, even though we will be a 'nonprofit' that doesn't mean, no profit. We still have to make money to give back to Veterans and the community so brewery marketing for contract brewers 101 carries on in Hawaii.

Please comment with helpful craft brewing marketing websites, books, tips, etc. Mahalo!! 

Aww Snap; Honolulu On Tap

Having missed Honolulu on Tap my first year on the island, there was nothing that was going to stop my attendance this year!  As I walked into the Blaisdell Center, I was greeted by the sound of what seemed like a thousand conversations going on at once.  There were booths of beer vendors lining the exterior and vendors back to back running down the middle of the aisles.  Tiny glasses filled with tiny bubbles and giant smiles adorned everyone in the room.  All my local Hawaiian favorites made it: Waikiki Brewing, Maui Brewing, Lanikai, Home of the Brave, Honolulu Beer Works.  Some of the newer breweries on the scene like Beer Lab were also there.

Some of the beers I sampled stood out as new and interesting, like Belching Beaver's: Mexican Chocolate Peanut Butter Stout.  It was slightly spicy, with the smoothness of their usual PB Stout.  It was definitely worth a pint...but not more than one in a session.  Lanikai was serving up a Double Dry Hopped Sour Ale called Pinehopple Swipe that was a great Sour; not over the top with the pucker factor, smooth and drinkable.  The latest craze in IPAs  made it's showing with Heretic Bewing's Make America Juicy Again which was a great example of the hazy, juicy, and smooth style of IPA.  Beer Lab brought out several samples, which I tried all of…and vaguely remember that I really enjoyed their Rye Kage.

 I could go on and on about all the beers I remember sampling, but I love beer...so I don't remember all of them. Note to self, next fest...take better notes! If you have never been to a beer fest you should go now!

What Comes After War...

On Easter (Resurrection Sunday for us Christians) AND April Fools' Day (apparently for the ironic Atheists), I got an email from a nice lady named Katie at Fort Knox. I'd like to share it with fans and encouragers of our brewery:  

CPT Lane,
 Your request to transfer Post 9/11 GI Bill benefits to your eligible dependent(s) has been approved with an incurred obligation until 20220322.

V/R,

Katie B

Why is this important you may wonder? People transfer GI Bills all the time you may ponder. I'll tell you why this email had my heart pattering with excitement. After I had my Call to be a military Chaplain and before I had been sworn into the Army by my mentor & best friend LTC (USA RET) Keith Donnelly, I met my husband, James at a local pub (literally The Pub) in our hometown, Robinson, IL. We talked for hours that first night about our fallen friends and brothers. My roommate in San Diego was on the SEAL Team 3 that lost Heroes like Michael Monsoor and Mark Lee and later Chris Kyle and Ryan Job. I had great empathy for James’ pain after losing so many of my own friends.

Ryan Job, Navy SEAL

 He spoke through a few tears at my Swearing In Ceremony at Hutsonville Baptist Church, IL (the first Church to Call me to preach in Illinois) about his rough tour in Iraq in 2004 and the power of military Chaplains' (Army for him) presence on the battlefield nurturing the living, caring for the wounded and honoring the fallen. Later, my Call would lead him back to his own Chaplain, now a LTC, at my Army Chaplain graduation at Fort Jackson, CH (LTC) Gary Fisher. All along our crazy journey that allowed a Cavalry Scout to marry an Army Chaplain, my Calling was front and center for both of us. He repeatedly has told me since day 1 that he's as passionate about my Call, because of what he saw on the Battlefield, as I am. I wrote about some of those experiences in "Healing Soul Wounds from War" which is under consideration for publication. 

He has been a tireless supporter even when others might reject what God had set before me to accomplish. I love James and greatly appreciate what he and his brothers (including his Chaplain) sacrificed during over 160 Combat Missions in 1 year in Iraq, mentally, physically and spiritually. The least this country can do is honor him with free education to follow his dreams (mainly this nonprofit brewery.) He used his first GI Bill in the foggy PTSD lense of post-war barely knowing what he needed or wanted. After counseling, reflection and growth, he will now be able to go to school for brewing, culinary, his IT Masters or whatever he would like to learn about! I am SO proud of him and happy to serve helping other Soldiers until 2022 as an Army Chaplain to make that happen for him!

For God and Country - CH (CPT) Jennifer Lane, wife of an amazing 19D & US Army Veteran & Brewer

CH Lane with SPC Alston at Pohakuloa Training Area Hawaii

In the Beginning.,.

I had a call, a good old-fashioned Call from God. God told me I was going to be a military Chaplain. I couldn’t believe it; couldn’t hear it; didn’t understand what God wanted with a barely working Contract lawyer, former bartender & slightly bitter Preacher’s daughter. And from the moment I had the Call to my admission to buddies to admission to Seminary & swearing into the Army was less than a year. God had other plans & a CLEAR path. All obstacles fell away. Enemies became friends & my bigger purpose in life started speaking and had a name.

I’ll have eternal gratitude to F. Heinrich & all the Anti-Terrorism Taskforce buddies that made me follow that initial Call. Fast forward to January 2012 when God placed a former Army SGT Cavalry Scout in my path in Robinson, IL who supported my mission, and our paths aligned 23 June 2012 in a beautiful wedding in a cave in Bowling Green, KY. My wedding present answered his interest in science, creating, and a love of craft beer. Little did I know I was unleashing my new husband's passion at brewing with that first Irish Stout brew kit. I just remembered he liked Guinness. Our love of craft beer and helping others began that day in 2012. 

Once Upon a Beer...

My appreciation for beer began in Germany. I was stationed there in the US Army in 2001.  I had only been there a few days, when I bought a six pack of a well known American beer (rhymes with butt wiper) from the shoppette by my barracks.  I hadn't even made it to my room before I got several disapproving looks from my fellow troops.  My roommate took one look at the beer in my hand, laughed and said "FNG!" while shaking his head.  That was the last American beer product I purchased during my time there.


SGT James Lane, US Army

I then began to broaden my beer horizons.  Tasting my first Hefeweizen was mind blowing.  There was so much flavor!  I was hooked!  I began sampling all the different styles of German beer I could find. My love affair with Hefeweizens almost caused me to fail a height and weight test.  Eventually my beer travels led me to Kreuzberg where I reached beer nirvana! 



Kloster Kreuzberg Germany



For those of you who are unfamiliar with Kreuzberg, I'm sorry for your loss. Kreuzberg is the home of a Monastery where the Monks brew and sell their beer on site.  You have to make the trek up a giant hill to reach it (no small feat in the winter of Germany).  Once your weary legs reach their taproom you are rewarded with a Kloster Kreuzberg Dunkel that is barely carbonated, has a dark amber hue, and a faint butterscotch taste.  You sit down, thinking that you will never leave this taproom, and you will just live here.  However, four pints later your face hurts from laughing and carrying on with your friends, and you are ready to slide down the hill on your belly like a cartoon penguin.  There was something peaceful and joyous about the atmosphere in their taproom.  It was this beer that ultimately led me to become a home brewer.

Fast forward to June of 2012: I got married to a courageous woman whose passion for life warmed my heart and made my head spin.  As a wedding gift, I received a Irish Stout beer kit. It was an Extract beer kit. I purchased a brewers starter kit at a local homebrew supply store and with the aid of my brother Chris, we made our first batch of brew.  I don't think we let it age in the bottle for longer then a week before it was gone.  The brewing bug sank its teeth into me, and I've been brewing beer ever since.

As of today, I've brewed around 30 batches of beer.  I've acquired more patience and appreciation for the process then I had when I started brewing.  There is something magical and therapeutic about brewing.  Staying present in the moment and the process, realizing the parts of the process that are in your control and the parts that aren't, grounds me.

Please join us on our path to brewing great beer, honoring the sacrifice of our fallen brothers and sisters in arms, and spreading benevolence to mankind.  No matter who you are, or where you are on your journey...there will always be a seat at our table for you.

Why a Nonprofit Brewery?

Our passion is doing ministry & honoring our fallen Brothers and Sisters. We also love to brew and drink great craft beer. We love to help people who are also doing great missions. My wife used to represent nonprofit organizations as a lawyer and understands the complexities of what we’re setting out to do. We have met with several law firms and think this is challenging & doable considering our background and experience. Join us on our journey as we tell our stories, tell the stories of the Fallen & share creative best practices in how to help others while brewing craft beer. Salud!