Chris Drosner writes the Beer Baron column for the Wisconsin State Journal.

There’s only one Waunakee in the world, and there’s only one brewery in Waunakee that could make a pineapple IPA for a nationwide chain of grocery stores.

Having “Waunakee, WI” on the side of the bottles of Campanology Brewing beer sold at Trader Joe’s 700-plus stores from coast to coast is a nice little bump on the national radar for a nice little suburb of Madison.

Isaac Showaki, owner of Octopi Brewing in Waunakee, declined to confirm that his brewery was making the three Trader Joe’s-exclusive beers Campanology has released so far. But unless Lone Girl Brewing, Waunakee’s other brewery, scaled up quickly and added some impressive equipment, it’s a pretty easy deduction to make — even without the federal label approvals that list Octopi and Campanology on the same documents.

A spokeswoman for Trader Joe’s declined to comment: “We don’t talk about our business practices.”

While Showaki declined to comment on any arrangement with Campanology or Trader Joe’s, he did speak with me about the sometimes shadowy contract brewing business that is his livelihood. (Octopi opened in 2015 with an intended focus on contract brewing.)

There are three basic arrangements that allow clients to make beer at a contract brewery, each with a different level of disclosure required on the label by federal regulators:

  • Conventional contract brewing allows essentially anyone to make beer at the contracting brewery. Specifically, it does not require the client to have a brewery permit. Under an example cited by Showaki of a Madison-based hypothetical contract client with very questionable branding ideas, the label under this arrangement must say Beer Baron IPA by Chris Drosner Brewery, brewed by Octopi Brewing, Waunakee, WI.
  • That disclosure can be narrowed with some extra paperwork by the contract brewery. Octopi can apply to extend its own brewery permit to Chris Drosner Brewery, which allows Beer Baron IPA to have no reference to Octopi because it is essentially Octopi doing business as Chris Drosner Brewery. Waunakee, however, must remain on the label because Chris Drosner Brewery doesn’t have a brewery permit anywhere else.
  • Under the most secretive arrangement, known as an alternating proprietorship, the client literally rents space in the brewery from the owner for the time the beer is being produced. Under “alt prop,” the client must hold its own brewery permit, which usually means it is brewing beer in at least some capacity elsewhere before entering to the partnership. “When they brew, it’s technically their brewery, not my brewery,” Showaki said. In this example, federal regulations allow Chris Drosner Brewery to put either Madison or Waunakee on the label.

All of this is to say that there are a lot of ways to make beer without actually making it yourself, although Showaki said many of his clients are on hand and intimately involved in the process every brew day, and many ways that plays out on the label.

With several good-sized to huge contract brewers, Wisconsin is a bit of a hotbed for production of store-brand beers. And because of the brewers’ locations in relatively small towns — Minhas Craft Brewery in Monroe, Octopi in Waunakee, Stevens Point Brewery — their Wisconsin origins are relatively plain because retailers rarely if ever secure the brewery permit required of an alt prop.

In addition to the Campanology beers, two other Trader Joe’s house brands are made in Wisconsin: the Boatswain line of low-cost craft beers and the Simpler Times macro-style lagers are both made at Minhas in Monroe, according to federal label approvals. (Trader Joe’s has two other exclusive brands of craft beer: the Mission St. line, made in Salt Lake City, and Josephbrau, from San Jose, California. Campanology is the only house brand in bombers.)

Nationwide mass merchandising giant Costco makes two of its Kirkland Signature store brands in Wisconsin: Standard macro-style lagers at Minhas under the name Regal Brau Brewing Co., and some craft-branded beers at Point under the name Bricks and Barley Brewing Co.

“I think what’s cool is that everyone competes in a different niche,” Showaki said. His shop specializes in high-end craft beer; Stevens Point Brewery contract-brews craft beers, some labeled for special occasions like weddings and birthdays; Minhas specializes in low-cost beers. Another big contract player in Wisconsin, City Brewing in the former Heileman brewery in La Crosse, is where to go if you need high volume — 1,000 barrels at a time, Showaki said.

While it hasn’t done any store brands, Wisconsin Brewing in Verona has done some high-profile contract brewing recently, producing Warpigs Lazurite IPA, a collaboration between Indiana’s Three Floyds Brewing and Danish brewer Mikkeller. A second Warpigs label was approved this month for production at Wisconsin Brewing: Foggy Geezer Hazy IPA.

Wisconsin’s central location makes it attractive to large contract clients who want to easily ship beer to either coast, Showaki said. Another asset is its $1 per barrel state beer tax, which Showaki said is the lowest in the country, along with Missouri — another home to a brewing behemoth. Showaki, who co-founded 5 Rabbit Cerveceria in Chicago, said Illinois’ state tax, which is in the middle of the pack among states, is $7.50 a barrel. That means a brewer — or a retailer who wants to make beer — will save $13,000 on a 2,000-barrel order by choosing to make it in Wisconsin.

While not every contract brewing client wants their business out in the open, it’s quite the opposite for Showaki, whose contract business is now on its own with the demise of Octopi’s house brand, 3rd Sign Brewery.

“Octopi is really proud to be a contract brewery. We want our clients to shine,” he said. “If they win awards and stuff like that, great. We don’t necessarily need the credit to achieve our goals.”

Got a beer you’d like the Beer Baron to pop the cap on? Contact Chris Drosner at cdrosner@madison.com or follow him on Twitter @WSJbeerbaron.

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