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Thread: Nanobrewery - The Lessons I've Learned

  1. #1
    Join Date
    Dec 2009
    Posts
    173

    Nanobrewery - The Lessons I've Learned

    I've operated Parish Brewing Co. for over 2 years now, furiously brewing a nano-amount of beer. I get several emails every week from aspiring nano-brewers from all over the country and they all have the same questions about my experiences, my custom equipment, and other general info about starting a tiny commercial brewery. If the probrewer community would humor me, I'd like to use this as a place to get some FAQs documented since I cannot answer all of the emails I get with the full respect and well thought-out answers they deserve. Hopefully this can help some of you daydreaming out there get some answers. Some of these answers may not be what you want to hear, but they are based in fact and my actual experience. I know I would have appreciated some of this info before I embarked upon the nanobrewery path.

    1.) Nanobreweries are not profitable. Well, at least if you have to sell at wholesale. The only way a nano can be in the black is if you can sell most or all of your production at full retail price. Even then the return will not justify spending the capital required to get it going. A nano will never, ever make enough profit to pay for organic growth of the brewery. Period.
    1)(b) On the other hand, a nano is a great vehicle to get the investment needed to finance a viable craft brewery. In my opinion, that is the only rational reason to go through all of the trouble to build and operate a nano. If you do not have a plan to finance a viable larger operation, don't build a nano. The nano can be used to show real revenue and cost structure in your market, and can be extrapolated to any project size from there.

    2.) You can use cheap equipment, like plastic fermenters, and make great beer. They will not last very long, and you have to be seriously anal-retentive about taking care of them and sanitization, but they work. I used some stainless drums found on craigslist for the brewhouse, etc. There are some creative ways to make brewing equipment in the 50 to 150 gal size range and don't be afraid to try something new. I mean, some of the finest brews in the world are fermented in a wood container. Think about that the next time you drool over that cherry, stainless jacketed conical fermenter that probably costs more than my entire brewhouse and cellar combined. Also, most of the money you will spend getting the nano going will not be on brewing equipment. The cost of kegs, walk-in cooler, operating capital, etc will all be likely more than 50% of your total startup cost.

    3.) Save your money for another year or two and buy something bigger. Seriously, this is the best advice I can give. If your beer is halfway decent, you will sell way more than you can ever produce on a nano system. You will bust ass like you've never busted ass before and it will still not be anywhere close to being enough beer. Trust me. If your beer is good you will need more than a nano. If your beer isn't good, you probably wouldn't be reading this. Simply put a nano produces a painfully small amount of beer. Save your money for another year or two, get something at least bigger than 7 bbl brew length, and then send me a case of your finest when you realize I was right.

    4.) Permitting is a bitch. There are lots of government agencies, and they all want a piece. Get used to it. You get no special treatment because you are a tiny, low cost operation. If they want you to put covers on your fluorescent lights, you better be ready to shell out for that manlift rental. Start talking to your respective agencies as early as possible. There is no best way to start, there is no road map. Every professional brewer on this forum has had to figure it out on their own, unfortunately. Go forth. Be brave. Approach your various govt agencies, be polite, and you will eventually get all of your permits and licenses in hand.

    5.) Operating a nano every day isn't very fun. It makes a really fun hobby a painful job - a 2nd job that you work on the evenings and weekends. I know it seems like fun now. You need to have some serious stamina to keep up the pace required to work a day job and also the nanobrewery. I have a huge amount of respect for any of the other nano owners out there who have made it work. They will never get the credit they deserve from most of the craft brewing community for the pain and sacrifice it takes. Just because its a small brewery doesn't mean its any less work than a larger version. I only recently quit my day job to focus on our new large brewery, but until then I worked every weekend for over 2 years. Think about that for a minute. No more fishing. No Saints games. Countless hours of time lost with my toddler daughter and wonderful wife. Whatever you love to do beside brewing and drinking great craft beer, it will probably have to go on the back burner.

    6.) It is incredibly rewarding to brew for a living and to hear someone say they love your beer - and that's totally worth all of the bullshit noted above.

    Cheers!
    Last edited by ParishBrewingCo; 03-14-2012 at 08:19 PM.
    Andrew Godley
    Parish Brewing Co.
    Broussard, Louisiana

  2. #2
    Join Date
    Feb 2011
    Posts
    58

    Thanks!

    Andrew,

    Thanks for taking the time out to share your experiences. It is very helpful information indeed. Best of luck as you grow out of the nano category.

    Scott Partin
    Knoxville, TN

  3. #3
    Join Date
    Jan 2012
    Posts
    152
    Thank you so much for this! I need to hear as much of this as possible! In fact it's this kinda of info that made me decide to take the step up to 7 barrel...

  4. #4
    Join Date
    Mar 2008
    Posts
    123
    Thanks for the honest and up-front post.
    I've been researching this for many years and nano is the path I'm choosing. I could put together a great song and dance and pull in many investors and combine that with a hefty bank loan to start up at the 15 bbl level. That's not my style, however. I'm building a nano in a space that's suitable for the full production brewery. Yes, plastic fermenters, plastic kegs, home-built kettle and mash tun. Cheap. I should have about $25k into it when I've started. Hopefully (just hopefully), I can sell enough growlers and pints right from the brewery to break even without too many mid-week late-night brew sessions. I know I'm missing some details, but it looks like it'll work. Will it pay back the initial $25k? Absolutely not. Can I brew enough to pay myself to work there? Absolutely not.

    Is the end goal a 15 bbl brewhouse with matching shiny conical fermenters? I already have the trench drain planned out and brewhouse layout sketched up...

  5. #5
    Join Date
    Nov 2011
    Location
    Chestertown, Maryland
    Posts
    385
    Andrew,

    Great post. I'm wrestling with these issues right now, so your willingness to put this all down in writing is really appreciated.

    Out of curiosity, what size of a system did you start out at?

    I'd feel far more comfortable with nano if allowed to self-distribute...

    Kevin

  6. #6
    Join Date
    Sep 2006
    Location
    pembine, wi USA
    Posts
    142
    I am nominating that post to the ProBrewer Hall of Fame. We're 2 years into our nano venture too and find nothing to disagree with. I have found that this is not "fun." Recess is fun - running your own brewery is rewarding.

    I would add that permitting wasn't that bad. be polite ask lots of questions of the government entities before you spend money.

    I would say my biggest learning experience is to be less accomodating. You need to know who you are and what your brewery is capable of doing. Getting all excited because people love your beer and can get you in here or there or do this festival or that event has to work in your plan. What good does it do us to have a national magazine review our beer if we aren't distributing nationally? Things like that.

    Anyways thanks for posting that.
    Tim Eichinger
    Visit our website blackhuskybrewing.com

  7. #7
    Join Date
    Dec 2009
    Posts
    173
    Quote Originally Posted by ChesterBrew

    Out of curiosity, what size of a system did you start out at?
    Kevin - we started with (and will still use for another 2 weeks) a 1.5 bbl electric brewhouse. I have a few 1.5 bbl fermenters and also 3 bbl fermenters - all plastic.
    Andrew Godley
    Parish Brewing Co.
    Broussard, Louisiana

  8. #8
    Join Date
    Nov 2002
    Location
    West Chester, PA
    Posts
    393

    Best Post Ever

    +1 on hall of fame. Nice work
    Larry Horwitz

  9. #9
    Join Date
    Nov 2011
    Location
    Chestertown, Maryland
    Posts
    385
    Thanks for the reply, Andrew. By the photos I checked out on Facebook this morning, you're definitely doing a substantial upgrade!

  10. #10
    Join Date
    Nov 2003
    Location
    Hyattsville,MD
    Posts
    285
    Great job Andrew, here's to you collecting a paycheck sooner rather than later.
    Cheers,
    Mike Roy
    Brewer
    Franklins Restaurant,Brewery & General Store
    Hyattsville,MD

    Franklinsbrewery.com
    @franklinsbrwry
    facebook.com/franklinsbrewery
    Franklinsbrewery.blogspot.com

  11. #11
    Join Date
    Nov 2008
    Location
    Charlestown, MA
    Posts
    34
    I cannot agree more with every point that Andrew makes. Nanos are not profitable and anyone who thinks they are is kidding themselves. Can you build one that at least breaks even? Yes (depending upon your locale), but be prepared to work your tail off for zero money (seriously, I mean zero).

    three additional observations I would add;
    1. Take your timeline to getting it off the ground and double it. With all due respect for those that aspire to start one, you don't know what you are doing and it'll be a steep learning curve to build out a brewery, obtain all of the necessary permits and licensing, etc. And for those that do know what you are doing... you wouldn't be in the game of starting a nano in the first place because you already know better.

    2. Take your original estimate for buildout/startup costs and double it. (see same reasoning above).

    3. Don't romanticize the business. The actual time spent brewing is 20% of the job. The rest of your time will be spent either cleaning, packaging, distributing, selling, accounting or any other one of the myriad of business related activities that goes into running a small manufacturing business.

    That being said, I echo what Andrew said, it is an incredibly rewarding experience but when you boil it all down it is long hours and back breaking work. Be prepared for it and constantly be thinking ahead of what your goals are and move towards them because operating at the nano level is not a sustainable business in the long run.

    Christopher Tkach
    Idle Hands Craft Ales
    Everett, MA

  12. #12
    Join Date
    Aug 2010
    Posts
    20
    Andrew,

    Thanks from a guy that emailed you a couple of years ago; nice job on the expansion! All you say makes perfect sense, yet I (and many others) persevere beyond all reason. Currently on my 4th or 5th location attempt to upgrade to a 7-10 bbl. The feds were ok with my nano, but not the state so I decided to go bigger. I still don't get it; why can't I just homebrew and be done with it? My wife thinks I need help.

    Thanks for the inspiration.

    Craig

  13. #13
    Join Date
    Sep 2008
    Posts
    75
    Just read this for the first time. I've been running my Nano, Healdsburg Beer Company, for over 4 years now and can't agree enough with the original poster's comments.

    Cheers, brother.


    Kevin
    Kevin McGee

    Healdsburg Beer Company
    Sonoma County, California

    "Because this town sure didn't need another winery."

  14. #14
    Join Date
    Mar 2011
    Location
    Hamilton, NY
    Posts
    37

    Exactly!!

    Quote Originally Posted by ParishBrewingCo
    I've operated Parish Brewing Co. for over 2 years now, furiously brewing a nano-amount of beer. I get several emails every week from aspiring nano-brewers from all over the country and they all have the same questions about my experiences, my custom equipment, and other general info about starting a tiny commercial brewery. If the probrewer community would humor me, I'd like to use this as a place to get some FAQs documented since I cannot answer all of the emails I get with the full respect and well thought-out answers they deserve. Hopefully this can help some of you daydreaming out there get some answers. Some of these answers may not be what you want to hear, but they are based in fact and my actual experience. I know I would have appreciated some of this info before I embarked upon the nanobrewery path.

    1.) Nanobreweries are not profitable. Well, at least if you have to sell at wholesale. The only way a nano can be in the black is if you can sell most or all of your production at full retail price. Even then the return will not justify spending the capital required to get it going. A nano will never, ever make enough profit to pay for organic growth of the brewery. Period.
    1)(b) On the other hand, a nano is a great vehicle to get the investment needed to finance a viable craft brewery. In my opinion, that is the only rational reason to go through all of the trouble to build and operate a nano. If you do not have a plan to finance a viable larger operation, don't build a nano. The nano can be used to show real revenue and cost structure in your market, and can be extrapolated to any project size from there.

    2.) You can use cheap equipment, like plastic fermenters, and make great beer. They will not last very long, and you have to be seriously anal-retentive about taking care of them and sanitization, but they work. I used some stainless drums found on craigslist for the brewhouse, etc. There are some creative ways to make brewing equipment in the 50 to 150 gal size range and don't be afraid to try something new. I mean, some of the finest brews in the world are fermented in a wood container. Think about that the next time you drool over that cherry, stainless jacketed conical fermenter that probably costs more than my entire brewhouse and cellar combined. Also, most of the money you will spend getting the nano going will not be on brewing equipment. The cost of kegs, walk-in cooler, operating capital, etc will all be likely more than 50% of your total startup cost.

    3.) Save your money for another year or two and buy something bigger. Seriously, this is the best advice I can give. If your beer is halfway decent, you will sell way more than you can ever produce on a nano system. You will bust ass like you've never busted ass before and it will still not be anywhere close to being enough beer. Trust me. If your beer is good you will need more than a nano. If your beer isn't good, you probably wouldn't be reading this. Simply put a nano produces a painfully small amount of beer. Save your money for another year or two, get something at least bigger than 7 bbl brew length, and then send me a case of your finest when you realize I was right.

    4.) Permitting is a bitch. There are lots of government agencies, and they all want a piece. Get used to it. You get no special treatment because you are a tiny, low cost operation. If they want you to put covers on your fluorescent lights, you better be ready to shell out for that manlift rental. Start talking to your respective agencies as early as possible. There is no best way to start, there is no road map. Every professional brewer on this forum has had to figure it out on their own, unfortunately. Go forth. Be brave. Approach your various govt agencies, be polite, and you will eventually get all of your permits and licenses in hand.

    5.) Operating a nano every day isn't very fun. It makes a really fun hobby a painful job - a 2nd job that you work on the evenings and weekends. I know it seems like fun now. You need to have some serious stamina to keep up the pace required to work a day job and also the nanobrewery. I have a huge amount of respect for any of the other nano owners out there who have made it work. They will never get the credit they deserve from most of the craft brewing community for the pain and sacrifice it takes. Just because its a small brewery doesn't mean its any less work than a larger version. I only recently quit my day job to focus on our new large brewery, but until then I worked every weekend for over 2 years. Think about that for a minute. No more fishing. No Saints games. Countless hours of time lost with my toddler daughter and wonderful wife. Whatever you love to do beside brewing and drinking great craft beer, it will probably have to go on the back burner.

    6.) It is incredibly rewarding to brew for a living and to hear someone say they love your beer - and that's totally worth all of the bullshit noted above.

    Cheers!
    Andrew,

    We completely agree, understand, and feel your pain. We set out two years ago to start a nano-brewery (2bbl) and opened in January of 2012. A lot of work, paperwork, and just straight manual labor. We too get phone calls and emails at least 5 times a week from aspiring Nano-Brewers and it is hard to keep up, so thank you for posting this.

    On another note we are some of the fortunate ones, who had a dream and sold out of beer and enough so to connivence a bank that giving us a loan for the 7 BBL brewery we just built was a good idea. This happened in three months!! Now don't go getting all excited there nano-dreamers we have been super super fortunate and there is probably no chance in hell you would be able to make it that quickly in to a bigger system, unless all your stars aligned like ours. Again we are fortunate and we thank our lucky stars every day.

    Like Andrew has said, "save your money for another year or two and go bigger!!! "

    Cheers and good luck to all of you
    Cheers,

    Matt Whalen
    www.goodnaturebrewing.com

  15. #15
    Join Date
    Apr 2012
    Posts
    2
    Quote Originally Posted by goodnaturebrew
    Andrew,

    We completely agree, understand, and feel your pain. We set out two years ago to start a nano-brewery (2bbl) and opened in January of 2012. A lot of work, paperwork, and just straight manual labor. We too get phone calls and emails at least 5 times a week from aspiring Nano-Brewers and it is hard to keep up, so thank you for posting this.

    On another note we are some of the fortunate ones, who had a dream and sold out of beer and enough so to connivence a bank that giving us a loan for the 7 BBL brewery we just built was a good idea. This happened in three months!! Now don't go getting all excited there nano-dreamers we have been super super fortunate and there is probably no chance in hell you would be able to make it that quickly in to a bigger system, unless all your stars aligned like ours. Again we are fortunate and we thank our lucky stars every day.

    Like Andrew has said, "save your money for another year or two and go bigger!!! "

    Cheers and good luck to all of you
    I agree with everything everyone else has said, but you hit the nail on the head with our situation. We have been brewing on a 1.5 BBL system for three months now and are upgrading to a 5 BBL by august. Somehow the stars aligned and we have been selling out every weekend of our beer through the tap-room since our opening (however I like to think its the good beer!). This has directly led to us upgrading our equipment without much if any outside capital needed. However, our situation is not like most. Our expenses are as low as we can possibly get them. I negotiated a great rent to a building that needed virtually little improvements for me to get up and running. I am the only employee and I make less than $4 per hour working over 80 hours a week, and we rely heavily on family and friends volunteering to help with the tap room. Now I am 25 years old and don't have a family that relies on my income or time and I live with family members rent free, so I live virtually expense free (damn college loans!) and can afford to pay myself next to nothing to help the brewery grow. Thank god Ohio changed our laws to allow tap-rooms! I honestly couldn't image having a different situation and the brewery being able to survive none the less grow via 100% wholesale at this size. But if you put in the time and research (2 full years worth in my case before going ahead with it) and know how to operate a business extremely efficiently, and are allowed to have a tap-room, it is possible to some degree. But if you can go bigger by ALL MEANS you must start as big as your budget will allow! Anyway just figured I would throw out my 2 cents worth. I hope everyone's endeavor can work out for the best!

    Cheers,

    Pete

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