Just as not all IPAs are the same, not all breweries are the same. There are more than 1,200 breweries across Canada, which are either classified as a craft brewery, microbrewery, nanobrewery, or brewpub. They might store their product at a third-party warehouse, outsource canning or distribution, or serve beer on their premises. Still, there are common risks that brewery owners face — and understanding those risks can help you protect your business and your bottom line.
Four common brewery risks
- Equipment breakdown
Smaller breweries might choose to purchase pre-milled malt and outsource their canning or bottling, but all breweries require a range of specialized equipment and machinery — from brewhouse systems to fermentation tanks to cellar equipment. Larger breweries might also have an on-site mill and canning or bottling lines, while brewpubs use serving tanks for on-site consumption.
Whether it’s the result of a sudden mechanical failure or due to a natural disaster, a halt in production can lead to downtime, spoilage, or safety hazards such as explosions and chemical injuries. Repairs and replacement can be costly, especially if it’s hard to track down a specific component or a specialized technician. Practicing preventative maintenance (such as scheduled cleaning and inspections) along with predictive maintenance (using IoT sensors and AI to predict failures before they occur) can help to mitigate some of these risks.
- Electrical Fires
Electrical fires pose a significant risk for brewery owners, largely because breweries rely on heavy-duty machinery that draws substantial electrical loads. From brewhouse kettles and pumps to refrigeration units, canning lines, and grain‑handling equipment, the electrical demand is constant and intense. Over time, wiring can degrade, components can overheat, and machinery can place uneven strain on circuits—creating conditions where an unexpected spark or overheating element can quickly escalate into a fire.
One of the most effective ways to mitigate this risk is to schedule routine thermographic scanning by a qualified electrical contractor. These scans—ideally performed annually—use infrared imaging to detect “hot spots” that aren’t visible to the naked eye. Hot spots often indicate loose connections, overloaded circuits, failing components, or areas where insulation has begun to break down. Identifying these issues early allows brewery owners to make proactive repairs before a small electrical anomaly becomes a costly or dangerous fire.
- Product recalls
In a worst-case scenario, a spoiled batch of beer might hit store shelves. The Canadian Food Inspection Agency (CFIA) handles food recalls and, while beer recalls don’t happen often, they can and do happen. Although, in many cases breweries voluntarily choose to recall a bad batch. In Canada, previous recalls have occurred due to spoilage, potential glass chips in bottles, and even bursting cans (due to over-pressurization). However, mislabeling can also be an issue, for example the wrong alcohol content could be printed on the label.
In some cases, a third-party warehousing company or logistics provider could be responsible for the issue — say, if they didn’t maintain a consistent temperature in their cold storage facility or cold delivery truck. But customers aren’t going to care who caused the problem. The damage to your reputation, along with the costs of handling a product recall, notifying the public, and potentially hiring a public relations firm for damage control, could be significant. Developing a product recall plan in advance can help you act immediately if a situation does arise.
- Liability
All businesses face the possibility of liability claims, such as slips, trips, and falls — and the possibility of costly lawsuits. But breweries are at high risk, thanks to the nature of the business. Water is essential to brewing, so floors are often wet and slippery during production, with potential tripping hazards present such as hoses. Workers also face a number of potential on-the-job risks, from heat and steam hazards to handling heavy kegs with pressurized air.
If you offer tastings during tours or serve beer in a taproom, you could also be held liable if someone drinks too much and injures themselves or other customers. That’s why it’s important to keep on top of housekeeping duties, such as mopping up spills right away, as well as ensuring employees who serve liquor complete mandatory responsible service programs. A risk management program can also help.
Insurance is key for your brewery business
While taking precautions can help mitigate many of these risks, sometimes things happen that are beyond your control, such as a natural disaster or a quality control issue with a third-party logistics provider. For these types of situations, having the right brewery insurance can help — from commercial general liability to specific coverages such as equipment breakdown, product recall, and business interruption. Learn more about our insurance for breweries today!
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage. See policy for details.
