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Thread: "soft" market entrance in Kansas? Really?

  1. #1
    Join Date
    Sep 2011
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    "soft" market entrance in Kansas? Really?

    here is a dilemma, as everyone here knows, to even sell a drop of beer, there is a serious list of red tape and fees. We are really trying to pull back a bit with a very soft entrance into the market with only a 30-50bbl/yr production rate for the first year to test market. I am not comfortable going all in with the economy what it is.

    Kansas is a 3 tier state and we have already had that reality check that distributors do not want to hassle with a new/small brewer. We have decided that a 3rd party distributor license would be needed just to get the product to retail.

    One of the nifty issues in Kansas, the statute reads that a micro is one that produces a min of 100bls and max of 15,000. I asked "what if we make less than 100bbl"? In which they reply that we need to buy the mass brewer license at 4x the cost! I said "so we have to pay more to make less"... Of course the ABC said, you bet! That makes no sense at all. I am kind of thinking of just getting the micro license and doing what we can but certainly not paying for extra bbls that we don't make.

    Does anyone have any experience with a small Kansas start up or state with similar statutes? I don't think the term "soft entrance" is a term used with the ABC. They expect people to jump all in with a huge investment and hope it all works out. I just don't do business like that.

  2. #2
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    Nov 2010
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    Lakeland, Fl.
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    Good luck to you.

  3. #3
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    Sep 2008
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    Fawn Grove, PA, USA
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    Quote Originally Posted by fastline
    They expect people to jump all in with a huge investment and hope it all works out. I just don't do business like that.

    Pick another industry then bub! Maybe being an entrepreneur isn't your gig. Just cluttering the shelves with another brand without a personality or experience to support it, isn't going to get it done. Sorry if this sounds abrasive but, posts like this come in droves. The idea always being that someone thinks there is a way to mitigate the risk of starting a brewery. Your either committed to creating world class craft beer and have a passion for the industry or your just trying to ring the dollar out of a "hot" trend. Good luck!

  4. #4
    Join Date
    Sep 2010
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    80

    Budget

    Fastline,

    Sounds like you're going the nano route which does mitigate the risk but it's still going to require a chunk of cash. Do a search on here for other nano discussions and I think you'll find a lot of the info that might help (especially cost numbers). What size system are you planning on starting with? Will you have a tasting room as well? What is the budget like for your brewery? What is the area like (rural/urban)? How many other breweries are around where you're at? I think if you have the answers to some of these questions, you can find other nano's that went the same route as you. For example, if you're starting really small (10 gallon batches) with a tasting room only, check out Worth Brewing in Iowa. If you're starting with a production brewery that also does tastings and you're by a huge city, check out Enegren Brewing in San Diego. Check out the Hess Brewery Blog and you'll find all kinds of nano's to help use as reference and it could also help you get a little more confidence in your plan. Good Luck

    Cheers,
    Jared Kueker
    Kaskaskia Brewing Company

  5. #5
    Join Date
    Apr 2011
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    58

    It's always hardest for the first

    To temper what South County said as he has come out openly against "nano" breweries in many of his previous posts, it may not be as easy to open a nano scale brewery where you are located. You should look around to see if there are other nano breweries in your area as see what they are doing.

    With that said, he has a point, the permits should be the least of your fears for opening a brewery unless they are up in the thousands/yr. The building permits/mods will actually cost a ton in comparison. If you find the fees in that range, it's time for political activism. Contact your state representative and see about working that route and pave the way. It is always hardest to be the first, but many times they have the drive to be more successful than those that follow.

    Good luck to you and feel free to PM me as we are working through some of these issues as well. I can also introduce you to other nanos that are making it work.

    Nick

  6. #6
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    Sep 2011
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    14
    I guess I fail to see how a level of investment determines "dedication". Just because I am not willing to squander 100K just to see if things work out does not mean it can't work. I realize it is a hard picture to paint on the Inet but I have an education in entrepreneurship and pretty used to hearing "it can't be done". As I always say, can't never could.

    We have been brewing 1/2 bbl for 5 yrs. The issue is real simple, we want feedback on our beer. In order to do that, we have to jump head first and hope something soft is below us.

    I am not here to toot my own horn but I am also a manufacturing engineer so the process lines, etc would not create a road block financially but the red tape seems to.. In KS, the brewpub seems to be the common mode of start up but while it does reduce some dist, retail, etc fees, it does create the immediate financial risk of retail with residual costs.

    Probably a lot to think about here and I certainly am in no rush to get it done. I might have to get a multi-venture building anyway just to have to zoning required for other licenses.

  7. #7
    Join Date
    Dec 2009
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    173
    There is a piper to be paid no matter your brewery size. Deal with it and move forward to making great beer.
    Last edited by ParishBrewingCo; 09-08-2011 at 11:13 AM.

  8. #8
    Join Date
    Apr 2011
    Posts
    58

    Production with tasting

    Fastline

    I agree that level of investment does not always equal level of dedication. For your model, I personally would hesitate on the brewpub idea. Successful brewpubs are restaurants first and breweries second as people come in the door for the food so if you don't have restaurant experience, this is really tough.

    Law differ from state to state, but I think most breweries that size look at one or two different ways. (1) Production brewery with a tasting room. This allows you to get all the feedback on the beer and a way to sell to the public. (2) Keg distribution or bottle distribution. But, if you are in a state that doesn't allow self-distribution then this becomes more difficult.

    Nick

  9. #9
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    Sep 2011
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    Quote Originally Posted by ParishBrewingCo
    There is a piper to be paid no matter your brewery size. Deal with it and move forward to making great beer.

    Is there a certification required for this work or just an inspection? We do have experience with food grade purge welding in 304SS. Though I might not seek to be the do-all on this project, I might for the a nano brewery start up until we can generate a revenue stream.

  10. #10
    Join Date
    Sep 2011
    Posts
    14
    Quote Originally Posted by ArmstrongBrew
    Fastline

    I agree that level of investment does not always equal level of dedication. For your model, I personally would hesitate on the brewpub idea. Successful brewpubs are restaurants first and breweries second as people come in the door for the food so if you don't have restaurant experience, this is really tough.

    Law differ from state to state, but I think most breweries that size look at one or two different ways. (1) Production brewery with a tasting room. This allows you to get all the feedback on the beer and a way to sell to the public. (2) Keg distribution or bottle distribution. But, if you are in a state that doesn't allow self-distribution then this becomes more difficult.

    Nick
    You got it Nick. I think one of the reasons there is not many breweries in Kansas is because of the 3 tier BS that really hampers a soft start. The ability for us to self distribute would be HUGE and probably exponentially improve our chances of success. I need to be the guy on the front line working with retailers and customers to ensure product awareness and get proper feedback. I have retailers that are happy to work with me but the laws are not written that way.

    We have already started research with a 3rd party to set them up as an independent new distributor exclusively to distribute our product. It seems very much a headache and over kill and I would MUCH rather get the law changed to allow self distribution.

    A production brewery costs 1000/yr here and a micro is 250/yr. production does not have any min or max production or zoning requirement other than a signature from our county. BUT, that signature will most certainly still force us into high priced zoning. We DO NOT want our brewery in the city but around here, getting ANY commercial zoning in rural areas is just not done.

    Still scratching...

  11. #11
    Join Date
    Dec 2009
    Posts
    173
    There are lots of permits, licenses, and compliance expenses at many levels of government and they are all significant. Your concern over $250 vs $1000 permit fee is alarming. $750 is pennies when you sum all of the required fees, permits, and licenses to startup. Breweries should expect to pay between $5,000 and $10,000, depending on locale, just on permit fees and other expenses related to government compliance and licensing. Again, doesn't matter your size. Permits are permits.

    Looks like you've only discovered one of the permits you will need.

  12. #12
    Join Date
    Oct 2005
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    155

    Wow

    I would take the time to think about what a distributor's thoughts might be. Why spend money on a start-up that doesn't want to risk the money it takes to hirer an experienced brew-master, or build the equipment capable of producing quality beer.

    These people are professionals and want to take on brands that will grow their business. I was involved in a brewery with over 350,000 invested and 100,000 of loan. We got it up and running, but it didn't take off like a rocket. The beer quality is excellent, but the market doesn't have the huge void of good beer it once did. Thinking that you will make it on 100,000, no brewing ex, no beer sales ex, and no ex dealing with distributors is XXXXXXX.

    I suggest you find people to partner with that have experience and a track record, park the ego's at the curb, and then see if your project is feasible. !00,000 is a lot for an individual but it is just the start of what is required to produce good beer on the scale required to turn a profit.

    Best of Luck
    Graydon

  13. #13
    Join Date
    Sep 2008
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    Fawn Grove, PA, USA
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    546
    Quote Originally Posted by ArmstrongBrew
    To temper what South County said as he has come out openly against "nano" breweries in many of his previous posts, it may not be as easy to open a nano scale brewery where you are located.
    Nick
    whoaa...slow the train down. My previous an current posts are made out of practicality. I don't have a "vendetta" towards any brewery of any size. We're not a very big brewery ourselves, so I would be a hypocrite If I singled out anything, which I haven't. My opinions align with Graydon's and others, and I have verified them time and time again with other brewery owners. So to clarify, I am a beer is good dude, in any form. I'm just dumb founded at the folks that start to find out what the brewing industry entails (or any other capital intensive business) and want to contest it on an open forum, which is fair to do, but when industry veterans (not myself by any means) give their advice and many warnings, people somehow get offended. In the end, whats to "test market"? Good beers sells, and you either have the know how and passion to make it work at any level or you don't.


    jump all in with a huge investment and hope it all works out
    Isn't that the point, the thrill, the definition of America, every great invention, every great idea.

    No harm meant and good luck to everyone.

  14. #14
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    Nov 2010
    Location
    Lakeland, Fl.
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    From I what I have seen all successful brewpubs/micros/regionals paid their own dues in the form of law compliant business, continual intensive capital investment, passion, blood, sweat, tears and ingenious innovation, marketing, luck, skill and lots of love for labor. I hope you will have the same drive & dedication in achieving your brewery goals of love for quality beer & consistency as those people before you have as they have long sinced paved the way for your standard of quality to be achieved. It sounds to me as though you do not have the drive & dedication. Good luck to you.

  15. #15
    Join Date
    Nov 2010
    Location
    Lakeland, Fl.
    Posts
    47
    From I what I have seen all successful brewpubs/micros/regionals paid their own dues in the form of law compliant business, continual intensive capital investment, passion, blood, sweat, tears and ingenious innovation, marketing, luck, skill and lots of love for labor. I hope you will have the same drive & dedication in achieving your brewery goals of love for quality beer & consistency as those people before you have as they have long sinced paved the way for your standard of quality to be achieved. It sounds to me as though you do not have the drive & dedication. Good luck to you.

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