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  • 3 bbl gastropub... 2 seperate businesses

    Im working on a plan to open up a 3 bbl brewery by subleasing in a existing restaurant. Would this type of business work well? My main idea would be to sublease about 500 sqft for enough space for 2 3 bbl fermenters and 1 7 bbl fermenter. i would have a small area to sell beer and growler fills, but the dinning/ drinking area would be shared.

    As a business owner/ brewer, what would be the best advice to make the most money for myself possible?
    How can i get paid for the beers if the beer is bought thru the restaurant side?
    What is the average sales per bbl?
    How many bbls per month would need to be made to pay $50k / year to a brewer?
    How many taps should be on at all times?

    These are questions running thru my head while im at work? Just hoping someone has the answer or experience in something like this as 2 separate business.

  • #2
    I have seen a lot of these arrangements go sideways pretty quickly.

    It will be difficult to pay a brewer $50k/yr on a 3 bbl system in 500 sq ft. It will be impossible if the brewer is a different person than the owner of the brewery.

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    • #3
      Originally posted by redlodge.sam View Post
      I have seen a lot of these arrangements go sideways pretty quickly.

      It will be difficult to pay a brewer $50k/yr on a 3 bbl system in 500 sq ft. It will be impossible if the brewer is a different person than the owner of the brewery.
      I will be the owner/brewer. im planning to brew 1 day a week, sometimes it would be a double batch brewday. with a 3 bbl system i figured:

      15 gal. keg = 130 pours of 16oz @ $7 = $910 / keg

      312 kegs / yr @ $910 a keg = $283,920 a year

      I understand theres lease, taxes, fees, ingredients, etc. but, to pay myself a salary of $50k a year + dividends seem unlikely even if I were to sell all the kegs in the taproom/restaurant only?

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      • #4
        A few things...

        I've seen a couple breweries separated that way. Most of the ones I've seen were actually owned by a single person and the businesses were spit to make taxation and revenue easier.
        In your case you'd have to see what the TTB would allow, with seperate owners you may well have to make sure that the restaurant can't help themselves to beer they don't 'own.'
        You may well have to sell kegs to the restaurant and then let them sell the beer by the glass/growler to make the system work.

        500 sq ft is probably too small for your needs. Yes you can fit the brewhouse and a couple FV's in the space, but where are you going to store empty kegs, full kegs, malt, hops, the mill etc etc etc?

        Your idea of revenue is probably off. a keg has about 120 pints of beer, before any losses due to foaming, or samples etc. So you won't get that much per keg. Also depending on the equipment you're going for you may well not get a full 3 bbl of finished beer per batch. Keep in mind the losses you will have during brewing, fermentation, transferring etc...

        Personally I have not talked to anyone that has a 3 bbl brewery that is actually making any real money on their system. The numbers may say you should make plenty of profit but the reality seems to be that breaking even or making just a little money is the rule on that scale. Keep in mind that by having a smaller system and tight space means you'll be ordering more frequently - and hence paying more for shipping. And that the economics of scale will constantly work against you.

        Also keep in mind the amount of time you'll be spending working and not making sales etc... You may only be brewing 1 day a week. But you'll still have to fill clean kegs, place the orders, clean the equipment and the tap lines, do the paperwork etc... Depending on your setup that can easily eat up another day or 2 of work every week.
        Manuel

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        • #5
          You make some valid points. I may consider a 5 bbl and more space

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          • #6
            We have a 3bbl system and have been paying 3 full time people 35,000 per year plus 7-8 part time bartenders, and we had a surplus of 30,000 in profit last year. I find it frustrating when people say you can't make money on a 3bbl brew house, such a blanket statement. It's all about the business model.

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            • #7
              Junkyard, that's impressive. I'm on a 3bbl system and I agree that it can be profitable but that might not always equal very fun times.
              Just curious, how many barrels did you do to meet these figures?


              Sent from my iPhone using Tapatalk

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              • #8
                There's a place with a 3 bbl brewery with 3 fermenters in SF that's doing really well. They brew once a week, turn beers around pretty fast and they're expecting to payback loans in 3 yrs when they planned for 5.

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                • #9
                  I'm not going to say it would be impossible in my state but it would be very difficult to get the licensing-state and local--to do this. You can't do it here WITHIN an existing licensed premises (I represented a tavern licensee who allowed a chocolate shop to set up in a small area of their music theater, a no-no because it involves an entity not part of the licensed group to make profit from a licensed premises). So the restaurant would have to do a "modification of premises" to exclude from their license the area you propose to sublease.

                  But even that--a defined sublease--might be problematic because they would then be benefiting "directly or indirectly" i.e. via lease receipts, from a manufacturer (you), which is a prohibited practice for a retailer. Now maybe if your possession was, instead of pursuant to a sublease from the licensed restaurant, a new lease directly with the building owner....

                  Of course then laws where you are very well may be, and probably are in fact, different...

                  So I'm not saying impossible, I'm saying that I'll bet there are some potential major hurdles in your jurisdiction, and before you spend a thousand hours of planning time and any money on equipment, an early step might be to consult an attorney nearby who has some experience with micro (and even better, nano) brewery licensing issues where you are.

                  (And I'm not even getting into TTB issues here, just state/local)

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                  • #10
                    Originally posted by Crosley View Post
                    Junkyard, that's impressive. I'm on a 3bbl system and I agree that it can be profitable but that might not always equal very fun times.
                    Just curious, how many barrels did you do to meet these figures?


                    Sent from my iPhone using Tapatalk
                    We brewed 450 bbl last year, projected to do more this year. We also only pay $975 for rent per month and have no loans to pay back for overhead so that helps.

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                    • #11
                      Gotcha. I have 3 - 6bbl fermenters and project around 285 this year. You must have a few more fermenters to get to 450


                      Sent from my iPhone using Tapatalk

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                      • #12
                        3 - 7 bbl, and 3 - 3 bbl ferms, we usually get beers through in less than 10 days if they don't need dry hops and less than 14 if they do need dry hops.

                        Im sure it would be possible to brew 750 bbl per year if we had a bit more space and another 7 bbl tank or two.
                        We are in around 350 sq feet for the brewing space, and taproom is about 900 square feet, bathrooms and cooler take up the last bit of our total 1500 sq feet

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                        • #13
                          Tied into the space and legal issues is the question about whether that space will accommodate the necessary sinks, drains, safety equipment, etc. to account for your brewing within that space and what TTB/state/local regulators will require. It is probable that the restaurant's back of house has sinks and drains within specifications for state/local regulators for food preparation but likely not to also accommodate what you need for brewing. That means you need to plan out for construction on additional drains, water lines, sinks, etc. into your costs and space requirements.

                          500sqft may seem like a lot of space but you may quickly lose some of that space to fire code requirements (evacuation paths) and ADA spacing requirements depending upon where that space resides in the building.

                          But first you need to see if there is even any reasonable possibility that this arrangement works for each level of regulation and you can/must do to thread the needle between three layers of regulations on you, the restaurant and the property owner.
                          DFW Employment Lawyer
                          http://kielichlawfirm.com

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