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  • #16
    Originally posted by mmmatt View Post

    Anyone want to talk about marketing and rebranding? LOL

    Matt
    Hi Matt,
    I run a 10 bbl packaging brewery w/ attached taproom. One of our local accounts wanted to rebrand one of our top brands. They asked if I would mind if they put their restaurant's name on it and not use the beers given name at all. After some thought, I told them to go ahead, thinking it could lead to increased sales at their restaurant. I understand the concept of "building a brand". I also realized the reality of "selling beer" and this is what it came down to: putting money into the bank. This account was one of our strongest for several years and the rebranded beer was their biggest craft mover. In my experience, it seems one should find a balance between pushing one's own brand versus letting accounts rebrand them. End of the day, it is all about selling more beer and both of these tactics can further that goal.
    My two cents.....

    Prost!
    Glacier Brewing Company
    406-883-2595
    info@glacierbrewing.com

    "who said what now?"

    Comment


    • #17
      Originally posted by GlacierBrewing View Post
      Hi Matt,
      I run a 10 bbl packaging brewery w/ attached taproom. One of our local accounts wanted to rebrand one of our top brands. They asked if I would mind if they put their restaurant's name on it and not use the beers given name at all. After some thought, I told them to go ahead, thinking it could lead to increased sales at their restaurant. I understand the concept of "building a brand". I also realized the reality of "selling beer" and this is what it came down to: putting money into the bank. This account was one of our strongest for several years and the rebranded beer was their biggest craft mover. In my experience, it seems one should find a balance between pushing one's own brand versus letting accounts rebrand them. End of the day, it is all about selling more beer and both of these tactics can further that goal.
      My two cents.....

      Prost!
      Thanks GB for the insight. I think you did the smart thing. Didn't hurt you to rebrand for that account and helped you by moving product. The establishment likely got behind the product more and sold more since it was their "house" line.

      This place is a great resource. I love how all the little guys converge here and seem to feel that the craft movement is strengthened by numbers. Really cool!

      Anyone have any insight on brewpub name same of different than beer name, outside of rebranding for a particular account?

      Comment


      • #18
        Stick to one business or the other.

        Mmmatt,

        A craft beer bar in the northwest had the same # of seats as you’re shooting for in a 2200 sq ft building. They’ve just moved to a 12000 sq ft space. They were going through 80 or so kegs a month just pouring out of 10 tap handles, yes it took a few years to get to that level. They also had a reach-in for bottles and cans with 10 doors. They had a lot of their bottle aged beers outside of the cooler and their beer count ranged from 400-800 throughout the years.

        This doesn’t fit you’re model at all, but if you’re going to make unique beers like you say you are, you could easily reach similar volume with just 50 seats in a few years. That’s roughly 10bbls/week just in draft beer. You can do the math to see how many brews you’ll need to do to keep up. If you’d add in the on-site bottle/can consumption, 40% of their volume, you’d be looking at upwards of 16-18bbls/wk of consumption. This isn’t your model, but it shows what you could be looking at if you focus heavily on variety in your brewing. Craft beer fans these days are always looking for what's new and creative.

        I’d agree with others that you might be underestimating the time it would take to make this kind of beer on a small system. My guess is you’ll quickly outgrow your system before you know it. Check out Rickoli Brewery in WheatRidge CO. He’s brewing 10 beers on a ½ bbl system, but he has two other people that run most of the rest of the operation.

        As for naming or branding those beers for others: Cross that bridge when you get to it. If you find yourself having the extra capacity it makes sense to sell that beer in 1/6bbls to local pubs. Some might not want it, but you live in a big city and you’ll find plenty of customers. With all that brewing and bartending, bill paying, … when will you have time to wash the kegs, deliver the beer, collect the $$ from them, and clean the beer lines at those pubs??? “Hey it’s Friday night and we just blew our keg. Can you bring us another?” If you don’t et one to them you might not have that handle the next week. Focus on what you can control within your own walls, then worry about branching out. They are two very different businesses.

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        • #19
          To answer your original question, definitely keep the D14 name for everything. Don't waterdown your brand name, it's not worth it...especially if you have a 2bbl system. Selling a restaurant specific branded name is a short sighted pay off. It doesn't help you in the long run.

          Other than that, REALLY listen to the advice that Scott has been giving you. It sounds like you are seriously underestimating the time you'll spend in the brewery just doing the day-to-day crap. You can work 7 days a week, 14 hours a day, and you can't do it by yourself if your beer is in any demand at all. And I don't care how much you're cranking out the beer, at a 2bbl batch size you will not make money. ever. If you're lucky you'll break even long enough to invest in a bigger brewery. SO if you can scrape together the coin to buy a larger brewhouse now then DO IT. Think about it, for every 7 bbl batch you brew, that's 3 1/2 two barrel batches in the same amount of time. I run a 7 bbl brewpub in a small town with about 40% local distribution and 60% in house sales. We're moderately busy. Our annual production is around 850 bbl a year and we're just getting by in year 3. I'd give my left arm to start over with a 15 bbl brewhouse.

          It sounds like you're taking the right things into consideration, but I urge you to rethink your approach. Go bigger if you can! good luck
          Hutch Kugeman
          Head Brewer
          Brooklyn Brewery at the Culinary Institute of America
          Hyde Park, NY

          Comment


          • #20
            Originally posted by kugeman View Post
            I'd give my left arm to start over with a 15 bbl brewhouse.

            It sounds like you're taking the right things into consideration, but I urge you to rethink your approach. Go bigger if you can! good luck
            The point Kugeman is getting at is about operating leverage. It's appealing to start small to keep your break-even point low, but you'll be severely limiting your potential profits and growth. I'm a visual person, so here's a graph (notice the red line shows a higher proportion of fixed costs, the green line a lower proportion of fixed costs. If sales are low, the Red line company loses a lot of money. If sales are high, they make a lot of money. The Green line company breaks even first, but their profits are never as large as the Red line company's.)
            Click image for larger version

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            • #21
              Thanks guys for all of this insight. So good to actually get this stuff from people who have/are doing or done it.

              The problem with a larger brewhouse is the exponential cost. With the bigger rig comes a bigger building, and bigger tanks, more kegs, and bigger utilities and bigger electrical service, and bigger venting and bigger staff, more insurance, a bigger loss if one of my unique brews doesn't quite cut it, loan payments and on and on and on. If I can maximize its use then that is great but if not, I am throwing money away! I have no desire to try to market a beer nationally or even regionally. Too many good brewers already doing that!!! If I do distribution other than what I can handle in-house it would be down the road. If I am distributing from a bigger system, it goes from a few local bars to a distribution company and my profits get cut in half... so then I have to make more sell more make more sell more all to feed distributors and justify my bigger system! Then after paying everyone else, my percentage of profit is far less and my liability if I have a slow month is a lot more. Those are the costs I'm avoiding even more than the extra $50K it will take to do a larger brewhouse. None of this will work at my location going larger than about 3bbl, and my location is IMHO a potential goldmine for a corner bar sized brewpub.

              That all being said... I think I am swayed to go to a 3bbl brewhouse since I can fit 3bbl tanks in my cellar area and can run the kettle from the same sized vent and in the space I already have allocated. My net cost is only about 6K for the upgrade and that is manageable. My current electric service will only supply an 18KW system, but adding an hour to boil time and reducing the need to double batch or brew 7 days a week is a pretty good trade. That is something I can always upgrade down the road if I want more power.

              As for labor and me doing it all, I am actually covered there pretty good I think. I have a full time person in place to spend 1/2 time as manager and 1/2 time as bartender. Initially between that person and myself we should be able to handle all the office duties, tax filings, ordering and whatnot. I will have that person salaried and although it is a meager salary, it will be supplemented by bartending and around here that is easily $100 cash per shift and 2x that on a busy Friday or Saturday night. That position will eventually be split into a working bar manager and an office/general manager. So in my break even "100 beers a day" figure, I am including that persons salary, an additional 45 hours per week of bartending wages (pub open t-su at 3pm), and 60 hours of brewing labor. I have been planning on brewing 3 days a week and working behind the bar 2 night per week. Initially, that brewing labor $$$ will be mine, but as sales increase and I am busier with other things I will bring people in. If sales are light and I can't afford to hire anyone, then I should (in theory) be able to keep up with my own 2 hands. Keeping in mind my break-even is about 2.5 BBL's per week.

              As for distribution. At this time, it is furthest from my mind other than properly setting up my naming. You guys have scared me off of that for now!! Kinda puts the kabosh on my seasonal Halloween brew I was going to market. I was pretty excited about that because it doesn't have any pumpkin LOL. I am convinced at this point to just stick with my d14 name and keep things all the same.

              Thanks again to all who have commented.

              Matt

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              • #22
                If your plan works, you won't be able to keep up with in-house demand on a 3bbl system, so I really wouldn't worry about distribution. As Kugeman said, there are 15bbl brewpubs that can't keep up with demand.

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                • #23
                  go as big as you reasonably can

                  If the biggest you can fit in your space is 3 BBL then put in 3 BBL. Sure it would be nice to start with a bigger system but as you said, that means bigger building, bigger bills etc. Think of the 3 BBL as being the "proof of concept" to build something bigger/riskier later. It is only my opinion but I believe looking towards a longer term "end game" vs. doing as much as you can as soon as you can is the preferred path. Chances are your 3 BBL will be running you ragged day in and day out. You won't be able to keep up with the in house demand and you will end up hiring more people than you think you need right now in order to cover everything. It will be a lot of work without much financial pay-off. What it will do is prove to you and to potential investors that you have a viable business model and when you decide to build out that adjacent space with a bigger brewery, you will be able to acquire the funds more readily than if you were asking for them now. If the whole thing fails miserably, well then you aren't out all that much.

                  The key is planning for all of these situations/contingencies now. Most people plan for what to do to survive if sales targets aren't met in the early days. While this is important not enough people plan for what to do if things are "wildly successful". It's best to lay out volume expansion plans now before you get caught up in the heat of the moment and make a snap decision and overextend yourself. At the very worst you just never use those plans but I think it is a good exercise to begin thinking about it early...

                  I'm running a 7 BBL distribution only. I have many days where I say to myself "why didn't I start with a 15 BBL". Then I remember, if I started with a 15, I would never have gotten open because I didn't have the money to build a 15. So now I have a 7 BBL and very little debt. It will be much easier to fund an expansion now than it would have been to raise the capital in the beginning...


                  Again, only 1 man's opinion so take it for what it's worth...
                  Scott LaFollette
                  Fifty West Brewing Company
                  Cincinnati, Ohio

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                  • #24
                    This sort of scenario analysis is exactly why you need a good budget, detailing cash disbursements, with pro forma income statements and balance sheets. You'll be able to identify external financing needed, among other things.

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                    • #25
                      Hey Guys. I was just poking around the site and figured I would update this thread since things have changed with my location. In a nutshell, the footage of the building was only 1635 sq ft which ultimately meant it was too small for my use. You would think people would know this stuff before they go to lease a place right? I was told 2200 originally and then after I pulled a few measurements and said I doubted it I was told 1808. Then a foot here and a foot there and all of the sudden my 4-top tables are 2 and my hallways and doors all get squished. Basement mechanicals were then under brewing equipment which screwed up my basement cellaring plans and suddenly "the perfect location" was wholly inadequate.

                      Sooo. I went up the road and stumbled into an even better location. 2500 sq ft which is more than enough room for my needs and also a landlord that was willing to do most of the updates to the building that I need including hvac, 400amp electrical plus whatever 3-phase is already there, bath roughs for 2 bathrooms, part of the flooring cost, and assistance in obtaining a facade grant from the city. I feel as though fate brought me here! I don't have a beer garden or storage shed like the last place but the location is very high exposure, and does have a spot for tables in the front. It is on a multi road intersection that has multiple high-class joints that already cater to a craft beer crowd including one with 40+ taps and another with 64. There is a multi-level parking structure slated to be constructed right across the street, and the city just recently commissioned a $150K sculpture called the "art stop" for the median in front of the pub that will serve as a bus stop but also as a display of rotating local art. For those who know the area, I am now next door to Cafe Lulu.

                      Even though I have a little more space, I decided on 3bbl. I ordered my brewhouse from Brewmation using the Stout tanks and Kettles , and plan on starting out with 10 plastic 3bbl conicals, but I could put 30 more in the basement of this place if I need to. I will run the whole thing off 200 amps and will be able to fire both the kettle and the hlt at full blast at the same time if I need to double batch. If I am brewing 4 days a week I will be putting out 12 bbl per week of product which is a lot for a 40-50 seat pub I think, but if you guys prove me wrong on that one, I won't be upset one bit!!

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                      • #26
                        Awesome Matt! The new place sounds great.

                        If you need any help, please feel free to pm me. I love talking about boring stuff like accounting and finance.

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                        • #27
                          too small

                          This business is about love of beer, not profit. Even if a small brewery is super successful the margins are just too small for no debt expansion. Either way you do it you will still have to beg, borrow or steal to get money for expansion. Do it right first and give yourself the tools for modest expansion every year and it will be easier for you to grow in the black.
                          Your sweat is also your equity, so if your working too hard you are loosing money. If you are working 100 hours a week you cant afford to pay yourself for those hours. An initial investment in equipment that will save you time, will always save you money. Your time will eventually be worth more money than that piece of equipment that you skimped on.
                          I guess what I am trying to say is that you should not take your success or growth on faith. Planning and investment should be done based on where you want to be every year (ie 20% per year). Everyone here wants to make good beer, but thats not a good business plan. Think about where you want to be in 5 or 10 years and buy equipment and space that will provide you the best access to your goals.
                          good luck

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                          • #28
                            Update

                            Hey Guys! I just came across this thread on a google search and reread the whole thing for the first time. This was very early in my process, and after a long buildout of over a year, I have been open about 2 1/2 years. I thought some may want to know how much of the well thought advice in this thread I followed or didn't and my experiences.

                            I opened with a 3bbl brewmation system, 1 brite, 10 plastic conicals, 60 1/2 bbl and 20 1/6bbl kegs, and a lot of ambition. I don't regret doing a 3 bbl. I rarely have more than 5 or 6 tanks filled at any given time. I like rotating my beers a lot and the 3bbl system enables me to do that. A smaller system also allows me to do some things that I wouldn't be able to do with a larger batch. Fruited beers for instance can be done without pasteurization or filtering because kegs stay cold and I go through them before fermentation of the fruit sugars becomes a problem. My location doesn't allow for anything larger than a 36" door and most 3bbl equip is smaller than 36".

                            I brew 0-4 times per week and have released 123 different beers in about as many weeks. I average 3-6 bbl sold in the pub per week.

                            Almost 3 years in, I see consistent upward trends in sales. A recent brewery explosion in Milwaukee (10 or so since I opened) is bringing in lots of brewery tourism from around the state and Illinois.

                            I still brew everything myself, but I have had at least one assistant working since about 3 months in. I currently have an assistant that does most of the cellar work and a brewery maintenance tech who does everything from cleaning the brewhouse to cleaning the bar and fixing things. I brew, knock out, and walk away to do my other tasks. Next day one of my guys clears the grain and cleans the system before the pub opens.

                            I have gone through a few office people and am currently taking on those tasks again while my current OM recovers from a surgery. I have also currently lost a couple bartenders that were closing for me F, Sa, and Su. the biggest rub of owning a small location like this is that I have to absorb all this extra work and and when I do something certainly has to give. The two things that I need to be focusing on most are the things that don't get done. That is brewing and marketing. People come in for new beer releases and I try to do at least 1 per week, but if I'm not brewing I lose that excitement. Event planning is also key, and when I am taking on 30 hours per week covering these other jobs I fall behind on my own responsibilities.

                            I recently started distributing a little bit around town because I was ahead of the game on production for a hot minute. I market as D14 (same as the pub) and people are happy and anxious to get my beers in their bars. I keep it to friends and it is mostly seen as a hookup to have a D14 beer on tap. Another couple weeks of struggling to find time in the brewery will mean I can't distribute again until I catch up, and may mean guest taps instead of my own at the pub. At one point last fall I was down to 5 of my own and 5 guest taps because of a similar labor rift that drew me out of the brewery. But hey, that's the shakes! I get by and just jump on it again when I can.

                            Is it easy? Nope. Do I still love it? YES! I am anxious to go into the pub every day. Am I making money? No, not really. I piled on some additional debt to finish the buildout and a bit more due to loss the first year in, but with that aside I am showing profit, and will be moving around some things to clear all that debt in the next 6 month so I can show a good profit on paper and prepare for my 2nd location which will require investors.

                            No regrets here. If nothing else, I get tremendous satisfaction from watching a bar full of people drinking my beer and even more from their compliments and questions about how or why or whatever. I can and do talk about my beers all day long. I have absolute faith in my product and my abilities, and I have a lot of others that do as well. I get huge support from the local residents, neighborhood organizations, bars, restaurants, and all the other breweries in town. I really truly am a happy man. Not to disregard an increased level of financial success, but I have been very successful in every other way and know that as long as I keep doing what I'm doing that will follow.

                            Matt

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