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Sunday, 11 October 2015 20:54

Craft brewers brace for FDA nutritional info requirements on chain restaurant menus

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West Michigan craft brewers could be on the hook for thousands of dollars in testing expenses as a result of federal regulations that will require nutritional information for beer and other alcoholic beverages to be included on menus at chain restaurants.

The new U.S. Food and Drug Administration (FDA) regulations will require chains with 20 or more locations to clearly display caloric and other nutritional information on their menus by Dec. 1, 2016 — including for beer and cider.

While brewers don’t welcome the added cost of compliance associated with the new regulations, many of them say it will become just another part of doing business for large- and small-scale craft breweries alike.

“I’m not real excited about it, quite honestly,” said Adam Lambert, vice president of sales for New Holland Brewing Co. in Holland. “Even some of the biggest breweries in the country I don’t think were really set up for this.”

In strict dollar terms, industry insiders have estimated the cost of nutritional testing will range between $200 and $1,000 per beer. While the cost to test one beer is not particularly onerous, breweries that send out multiple brands for testing could quickly run up a significant bill.

Moreover, Lambert sees the new regulations as providing a competitive advantage for larger breweries to secure more tap handles as they displace smaller breweries that lack the financial wherewithal to do the testing.

“It will be a competitive advantage for the big guys, which isn’t fun for us,” Lambert said. “The small guys aren’t relying on a ton of chain restaurants, but if you lose that account, it’s going to hurt.”

Currently, chain retailers — including restaurants like Buffalo Wild Wings — account for approximately 12 percent of New Holland’s business, he said. New Holland has not yet budgeted specifically how much the new nutritional labeling regulations will cost the company, Lambert said.

Other brewers such as Battle Creek- and Kalamazoo-based Arcadia Brewing Co. see the new requirements as another added cost of doing business. The brewery, which is slated to produce approximately 15,000 barrels of beer in 2015, plans to test the majority of the brands it regularly distributes to bars and restaurants, said owner Tim Suprise.

“Ultimately if you want to play, you’ll probably have to have all of your beers done,” Suprise said. “It will be a learning process for all of us in the brewing industry and in the FDA.”

Arcadia’s beers are distributed to chain retailers including Applebee’s Bar, Buffalo Wild Wings and Carrabba’s Italian Grill.

While the FDA regulations technically make the restaurants responsible for including the nutritional information, most industry insiders expect those chains to require that data upfront from the breweries to begin or to maintain a contract.

For its part, Shelby Township-based JK&T Wings Inc., which franchises five Buffalo Wild Wings restaurants in the Grand Rapids area along with a variety of other restaurants, doesn’t see the labeling as a pressing issue.

“We really haven’t put too much impetus on it to date,” said Kent Ward, co-owner of JK&T Wings. “It is a long way out and I guess it’s possible that some people are too small or don’t have enough wherewithal to make that happen. On our behalf, there are plenty of alternatives to choose from.”


UNCERTAIN PROCESS

Although the FDA has clarified many of the requirements in the new regulations since making the final rule in December 2014, breweries say the process has been far from seamless.

While Brad Stevenson, chief production officer at Grand Rapids-based Founders Brewing Co., is a “fan of bringing transparency” to the brewing industry, he admitted that the process of implementing the nutritional data requirements has “been a bit disjointed.”

In particular, Stevenson notes that the testing process was elongated because Founders was required to test its beer for a variety of nutritional characteristics, such as fat, even though beer does not contain fat.

Founders has spent approximately $11,000 in nutritional testing to date for a variety of its beers since first hearing about the menu-labeling requirement, Stevenson said in an email to MiBiz.

The question over which nutritional information to include in testing along with numerous other clarification requests from retailers on the new regulation resulted in the menu requirements being delayed a year, according to the FDA. The agency initially said the regulations would take effect on Dec. 1 this year.

Besides confusion over the new laws, some breweries also have expressed concern over adding an additional bureaucratic step in what can already be a long commercialization process of taking a beer from conception to production to distribution.

“With the amount of work the TTB (Alcohol and Tobacco Tax and Trade Bureau) has right now with new labels and processes, does the government even have enough time to manage the new FDA regulations?” Lambert of New Holland said. “What happens if the process gets stopped up and we can’t operate in the chain?”


OFFERING GUIDANCE

To help address some of the uncertainty from the menu-labeling regulations and make the process easier, the FDA in September 2015 released updated guidance to provide some clarification for both alcohol and food producers.

Under the new guidance, chain retailers are allowed to use a single calorie reference for a group of beverages with the same calorie count or a calorie range to be used for groups of menu items such as “light beer” when there are three or more items of the same type.

The new guidance also allows brewers and other beverage producers to tap the U.S. Department of Agriculture’s National Nutritional Database or other private databases for nutritional data if the description of the beverage matches one already in the database. If the description does not “reasonably” match the beverage in the database, the brewery then must conduct the testing, according to the guidance.

Beyond the uncertainties and changes to brewery operations, consumers will also likely see the impacts of the new regulation as the December 2016 deadline approaches. Because of cost, brewers could limit the varieties of beer their distributors supply to chain restaurants, leaving consumers with fewer beers to choose from, said Joe Infante, a Grand Rapids-based principal who heads up the alcoholic beverage regulation practice at Miller Canfield Paddock & Stone PC.

“What it may end up doing is really having a chilling effect on the variety that’s going to be at those types of restaurants,” Infante said. “You might not be able to get some of the more interesting beers at chain restaurants.”

Read 5821 times Last modified on Monday, 12 October 2015 12:37

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