Contract brewing pros and cons

[Jonpol]

I am starting my research on a unique oppty I am presented with. Without setting you up with the peripheral outlook, I will be brief and direct with my question.
Is contract brewing a win-win venture ?
For example, why would a brewery such as Gordon Biersch put so much time into brewing and private labeling beer for Trader Joes ?
There is obviously an upside but what are the problems associated with this concept ?

Thank you in advance.

[josephtuer]

excess capacity can be used without the pain in the ass of marketing/sales

[frigatebay]

Having contract brewed for several years now I can tell you that there are several pros and cons from my experience.

pros.
-Very little start up compared to a brewery
-Get the experience of the brewery your working with in the beginning. Very valuable for me.
-Get a foot in the door possibly with thier dist. network

Cons
-at the mercy of their production schedule.
-dont have an actually brewery for customers to visits and "become attached to"
- some customers look down upon contract brewing
-VERY SMALL margin

These are just a few that came to mind. You can email me specific questions if you want.

sales@landmarkbrewing.com