Hi folks. I'm new to this forum and I'm loving it. Been brewing for a few years but nothing professional. Not yet though.
I wanted to test the waters for a someone interested in providing a modicum of mentoring in professional brewing techniques and, at this point, terminology. Looking to be not just a jedi brewer but also looking to open one in the next few years.
I'm tired of making money for someone else and I simply want to make something fun...like beer.
Soon to be retired computer network junky.
Ahh....a virgin has wandered into the relm, wanting to open another brewery.
You want it rough or gentle?
You have ALOT to learn. Best start by just asking questions.
I'll help if I can.
Yes, a virgin to the field. Need to begin somewhere and I'm comfortable in the knowledge that at one point you too where where I am now.
I'm not looking for sugar coating either. If it sucks tell me...though it won't deter me and in fact will probably drive me harder. Tell me I can't do it and watch what happens.
Right now I'm working on the brewery design. Just getting myself familiar with the production equipment. If you have suggestions on fermenters, brew kettles, etc. please advise. Probably the first thing I need to do is settle on the size which I've not done.
Is it a pub as well?
Just a production plant for kegging and maybe bottling?
Do you understand that either of these senarios may well involve at least 1 million dollars?
I am in the same boat as you are. A homebrewer with a homemade all grain brewing system. Looking to opening a brewery in a few years. More for fun than profit.
As far as equipment, try looking at North American Brewery Services. They have a lot of used brewery equipment that will give you an idea of the multitude of choices out there.
By the way, what are you going to do different from all the rest that have tried and failed? Or even succeeded? What is it about YOUR brewery that will make it a successfull business? No need for answers here because if you know, you certaintly would not want to post it. This is "thinking" material.
Mr. Hops nailed it when he said "Do you understand that either of these senarios may well involve at least 1 million dollars?"
Making beer is a wonderful thing. Making beer for money can be...less wonderful. That's not to say it shouldn't or couldn't be done, it's just a lot of work before anything resembling profit occurs (if it ever does).
Figure out how much money you'll be able to raise (and lose, if it comes to that). Figure out if you want to do a microbrewery or a brewpub (which can be more fun for the brewer, but will require running a bar/restaurant/kitchen as well). Figure out where you want to do it (if a microbrewery, is it an area with a saturated market, opening another micro in Portland, Oregon or Denver, Colorado might be tough!). Figure out how you want to package, if you'll be keg only, bottle only, or both. Get a good accountant, and Quickbooks or similar accounting software. Get a good lawyer. Brew a lot of beer at home, refining your recipes so you'll be ready to go when you open, and will be able to "preview" your beer to potential investors, customers, curious bystanders...
Go right now to the local breweries and brewpubs and talk to the brewers and owners! Buy the brewmaster dinner, and ask him to tell you stories about the business. Go to beer festivals!
Take your time.
Here's an idea. Start small.
You can put together a 2-3 barrel system for around $20,000 and get your product out there. Even though its a lot more labour intensive to produce at a relatively small volume, you may find it easier to sleep at night having not borrowed $1 mill. You won't have the overheads, and you can see if its for you or not. And if you have to tip out a batch, it won't be that much of a loss.
You will find it easier to get finance once you have a product and a cash flow from the small distribution that you will manage yourself, rather than have to manage employees. You will have a better understanding of the entire business by controlling it all initially. I firmly beleive that the failure of so many micros can be attributed to being over ambitious at the outset. Even if you start at a 12-15 barrel brewlength, brewing once a week, you're soon gonna have a warehouse of beer to get rid of. It's a big step to move this much product from starting cold. Although most brewers will smirk when you tell them your production capacity, tell them "at least I am well positioned for big growth". When you see them in a month, you can tell everyone that your production is up 200%.
Just a theory - one which I am currently testing. I start brewing next month.
Start a brewery for fun? That is a grand idea! Brewing is very fun! Unfortunately, fun doesn't pay the bills nor does fun convince your lender that your business is doing well enough to re-pay your loan. A business is a business. Let me tell you this... Plan on working your butt off for the first 8 to 12 months. By working your butt off, I mean you may be working at least 16 hours every day...by yourself. Learn how to do all required brewing chores (kegging, bottling, scrubbing the mash tun, remembering what you have done and have not) all the while keeping the phone on your ear. If you can do that then you have an excellent shot at having fun!
This is great stuff folks. I really appreciate your help here. And, I have another question. There is a local brewery where I live that is fairly small right now. But, they seem to have made some inroads into local restaurants. Last night, at dinner, I happened to notice their beer on the menu and I had to wonder how they got to that point. Maybe I'm making this overly complicated but if guy wants to market himself and distr. himself what is the manner with which businesses are approached to supply the product. Also, what assumptions are made by the supplier (me) and the customer. IE. does the brewer supply the taps, etc. for the business?
i have had my own small brewery for six years now and i started with very little capital and business experience. i think i have some useful insights for you.
first off, i have to disagree with mr. brau. unless you are a primarily a brew pub (selling beer by the glass as opposed to the keg or bottle) you cannot make money on a two or three barrel system. Brewing a batch of beer takes 6-8 hours whether you are brewing two barrels, seven barrels. or fifteen barrels. If you value your labor at fifteen dollars per hour, it will cost $105 in labor to brew a batch of beer. On top of that, you will have labor costs for filtering, kegging, bottling, and CIPing your vessels. Your cost of goods sold will run roughly $30 per barrel. You have to also factor in things like rent, excise tax, depreciation, distribution costs, and advertising costs. So if you are distributing two barrels of beer at $200/ barrel, it will be nearly impossible to cover costs. I started as a seven barrel brewery and expanded to a fifteen barrel brewery after three years. Expanding is expensive and time consuming. I recommend starting at least with a fifteen barrel system if you are going to be primarily a distributing brewery. there is plenty of used equipment at good prices at this size. check the classifieds on this site, nabs, ager equipment, or sound brewing systems.
secondly, i agree with bandit. be prepared to do everything yourself for the first year or two (I did it for the first three). I was the brewer, cellar man, delivery man, sales man, p.r., book keeper, and janitor for the first three years. also be prepared for sixty and eighty hour weeks. you must know that the pay is not that good. to this day my salary sucks, although i can now afford help at the brewery and work normal forty-hour weeks like most people. you own a brewery because you love what you do, not because your are going to get rich.
Bandit is also correct in that you will need your own capital. very few banks are going to lend large sums of money for a start up brewery these days. while i have a line of credit with a bank now, no financial institution would lend me money when i started. i used all my savings and borrowed from family members. however, i was woefully under capitalized. if i had had more money at the start for advertising and getting the word out about my product, it would not have taken as long to get where i am at today.
I live in a state that allows breweries to self distribute. if your state allows this, it is a good way to start. delivering beer yourself to restaurants is a good way to build repoire with the owners/managers/bartenders. once you have built up a customer base, your product will be more attractive to wholesalers. When customers need draft maintenance, i charge cost for the parts and do the labor for free. I also have one of my employees clean draft lines once a month for our customers.
hope this helps.
Thanks rbrewer for your response. It is great for all of us to hear from the coalface about the brave ones like you who set up small breweries.
I should clarify - I did not mean to imply that seegerp would make money a 2-3 barrel system, but rather he could discover all the trials and tribulations of the industry, and establish a product and brand without putting his financial future at complete risk.
Even upon your figures, a 2-3 bbl should almost pay its own way. Both you and I know that if you are running your own company that there is more than 6-8 hrs of labour in a brew - other associated tasks like marketing and promotion, organising deliveries, bookwork and all the jobs you list do add up to your 60-80hr estimate - a minimum labour cost (@ $15ph) of $900. If you remove labour and depreciation, both (in this instance) non cash expenses, the small cash flow from a 2-3 bbl system should sustain a business through the early stages - with a lot of hard work.
Realistically, seegerp will work evenings and weekends when he comes home from his real job, and sink alot of his disposable income into getting established. He will not expexct to become fabulously wealthy, but his life will be richer in other ways - he will be helping ugly people get laid, and also feel the satisfaction that you do when you walk around your brewery.
With the amount of used equipment on the market you can get bigger then 2-3bbls's for a decent price.
No one has addressed how you are going to get your beer out though. Is this a keg only operation or will there be bottles involved? A small bottler (Meheen) even used will cost upwards of 20K and 30+ if new and then there is the cost for glass. Small guys pay more. I know when we were looking for glass we had trouble finding someone who would deal with less then a truckload (we needed 2 pallets) and when we found them, the glass was not cheap. With glass comes cardboard carriers, minimum run orders etc...
If you are going to kegs, will you be purchasing them? Lot of good used kegs out there, but depending on your distribution you will need a good amount of them. Even having a small inventory of say 200 kegs purchased used could run you 10K. Then there is theft, replacement of the stems, tap handles for distro locations.
I worked at a small pub (5bbl system) and by myself I was able to put out 520 bbls a year all in kegs. We experienced the growing pains and ended up having to add serving tanks. (we went from 350 to 520 in a year). 5 single walled tankes new ran right around the 25K mark with everything included. We already had a cold room big enough.
Small additions can cost good capital. I would suggest you look bigger then the 2-3 bbl and maybe go for the 7 bbl brewery with several double sized ferementers (actually 15 not 14bbls) and spend some extra time on the weekend double brewing your most popular beers. When it is time to scale up to the 15bbl's you will not have to replace all the fermenters this way. You can then add another double batch fermenter or even triple for the popular brews. Keeping the fermenters like this will allow you to expand without replacing everypiece in the brewery.
For cost ideas on some of this stuff (glass, POS etc...) check out www.bevbuy.com
They have worked out some deals where they can buy in much larger quantities then we can.