Brew-on-premise planning

[ULynch]

Greetings all,

I'm in the planning stages for opening a new brew-on-premise shop in the midwest US. The concept is similar to the Canadian-style BOP, but using partial-mash techniques, quality ingredients, staffed by reasonably knowledgeable homebrewers, all performed with care and excellent hygeine. We'd like to emphasize craft beers, offer lager options and welcome recipe modifications. We'll only grudgingly allow Bud/Miller/Coors clones.

The initial plan is limited to BOP operations. Later stages may include small scale local distribution, then brewpup and restaurant expansion.

I need help in developing financials for this plan. It's proving difficult to find startup costs for equipment, and even harder finding detailed info on production costs, ingredient costs, etc. I need some clues to determine how many units at what price point are required to break even.

Anyone here been involved with the business side of a BOP? Would anyone have a business plan for a similar shop they'd be willing to share?

Thanks in advance for any info y'all can offer.

Dan Lynch
Nevada City, CA

[MikeRoy]

Dan,
I worked for nearly 5 years in arguably the country's most successful BOP IncrediBREW(Nashua,NH) which has been open for 10.5 years under the original ownership. IncrediBREW is the 2nd oldest BOP in the country behind one in Boulder but the oldest one with the original owner. Dave Williams, the owner has consulted on many startups as well as theorectical startups(which most become after they learn the inside of the business.) Email Dave he's usually happy to help out and if you're seriously interested, then fly out here and see how it's done. I might be biased, btu I have visted several other BOPS and I have never seen one run in such a great manner as Dave runs his.

Goodluck,

[rlangley]

There is a BOP in Albuquerque called Kelly's Brew Pub. To be honest they serve crap, but there is no denying that they have done very well with the format. Many of there popular brews they contract out to Sierra Blanca and then do all of there special reciepes on premise. They are almost completely using extract recipies with some partial mash. There one saving grace is that they have a beautiful patio and are within walking distance of the University. But the food is bad, beer is worse and service is practically non-existant. Why worry when you are packed every night I guess. Not one respectable home brewer would be caught dead in the place, but every brewer in the state would love to have the place. As they say location, location location.

Just my opinion, but why not go with a full mash BOP, along with homebrewer merchandise store. You could get around 10 to 20 of the Sabco Systems - or the much prettier More Beer systems for probably around $20,000 to $30,000 and then use walkin refrigerators for your ferment temp control. I think it would be a great way to teach homebrewers the right way to do it. I would even think it would be possible to contract out with one of the companies to push the sales of there systems and get a better deal on start up (Just an idea though).

Anyway, good luck.

Ray

[MikeRoy]

You sound angry Ray.

More importantly though, with all due respect you have no concept of the BOP industry. An all grain/full mash BOP would never work. No matter how many systems you purchase you simply can't expect a person to give up the time in their busy schedule. Using extract makes sense because it allows a customer to walk in and brew a batch of beer in under 2 hours(something you can't do with an allgrain system). Fanatical homebrewers like yourself may think that brewing beer with extract can't provide you with a quality product, but it can. it all comes down to the design of the brewing system and the skill of the brewer.

[beertje46]

You sound angry Ray.

More importantly though, with all due respect you have no concept of the BOP industry. An all grain/full mash BOP would never work. No matter how many systems you purchase you simply can't expect a person to give up the time in their busy schedule. Using extract makes sense because it allows a customer to walk in and brew a batch of beer in under 2 hours(something you can't do with an allgrain system). Fanatical homebrewers like yourself may think that brewing beer with extract can't provide you with a quality product, but it can. it all comes down to the design of the brewing system and the skill of the brewer.

I agree with Mike, people that use the BOP have more money than time. Locally (100 miles from Louisville), we've had two BOP's open/close. Cincinnati had a cool little place with a seven bbl. DME brewery that produced generic blonde, unhopped sterile(at least clean) wort for the BOP base (as opposed to diluted malt extract) and brewed some really good beers to serve in their taproom. Breworks in Covington (KY, just across the Ohio river from Cinci) had a standard HDP-style steam kettle BOP system. Both failed. Why? My guess is the fanatical homebrewer is busy building the ultimate wet dream RIMS based home brewery and using the finest beer parts available.

My 2 cents...

[Chris Garrett]

Feel free to call me. I'd be happy to help. I've been running a Cask BOP system for 4.5 years. I use it primarily for my producing my brands, but I do open occasionally for Brew On Premise. I bought the system from a defunct local BOP. As far as I know, I have the only BOP left in the SF Bay Area. In the early 90's, there were 6 BOP's in the area.

As for the true BOP side of the business....

For me, it's great ancillary revenue, but the BOP fad from the late 80's and early 90's has tappered off. It's hard to find folks that want to spend $150 for 5 cases of beer. Sure, I have a few regulars (individuals and corporations for team building), but I don't see that you could build a sustainable business by just running a BOP alone.

The cost to produce extract based beer is nearly twice that of an all grain system. I suppose that you could use a mash tun to make a large quantity of base wort, but this brings in a whole host of issues. First, you would have to use all of this wort in the same day that you made it. Wort just doesn't keep for any period of time. Second, you would be limited to a fewer styles of beer. Mini-mashing will not make a Pilsner base into a Barley Wine. I could go on an on .... call me for more details...

This past year, we produced more than 700 BBLs. on the little 8 Kettle BOP system with 55 gallon drums as fermenters. Yes, it's an extract base and yes, people tell me the beer is good. Not that it matters, but we win awards. I'm damn tired, but I sell out of and pre-sell everything I can make. Oh, I now also have a 10 BBL. system...

I made many mistakes starting my business. After 4.5 years and much of my savings and sanity, the company is finally on track and moving forward. If you must start a BOP (I understand, I too love what I do), I would open a small brew pub with; a 7 BBL. all-grain system and a 4 kettle BOP. You would have captive audience, the ability to brew all-grain, and the option to offer BOP.

Cheers,

Chris Garrett
Devil's Canyon Brewing Co.
650-592-2739

[rlangley]

You sound angry Ray.

More importantly though, with all due respect you have no concept of the BOP industry. An all grain/full mash BOP would never work. No matter how many systems you purchase you simply can't expect a person to give up the time in their busy schedule. Using extract makes sense because it allows a customer to walk in and brew a batch of beer in under 2 hours(something you can't do with an allgrain system). Fanatical homebrewers like yourself may think that brewing beer with extract can't provide you with a quality product, but it can. it all comes down to the design of the brewing system and the skill of the brewer.

Fanatical Homebrewer - now that's funny. Probably true though. I come from a scientific background so when I start a project I go 100%. Once I became involved in homebrewing I felt that I wanted to learn from the start the complete process. I brewed maybe three extracts - the first was terrible (I didn't appreciate the effect of UV light on hops at the time - quickly learned my lesson). The other two were decent, but I wasn't happy with the quality or more importantly the price per pint. A friend in a homebrewing club had a Sabco system he reverse engineered so I decided to copy many aspects of it. It took about a year and $500 to build - which is what I would have spent if I stayed with extract recipes over the long run. With each improvement to the system the better the beer quality. Nothing against those that choose to extract brew, but I felt why waste my time learning one art only to uprgrade down the line and practically start from scratch.

That being said, that is why I feel it could be done, but I see your point in regards to time. The place I mentioned earlier doesn't seem to have that much business in regards to it's BOP. Primarily they are a brew pub that gets great business from the University students taking advantage of the large patio facing the mountains. While contracting through Sierra Blanca provides pretty good beer, it seems to me they would be better off getting a 7 to 14 bbl system and dropping the BOP since I doubt any of there profit comes from that side of their business. I personally would have liked to have learned the complete process from the start which is why I believe in the homebrew store/all-grain BOP might work. A small tap room, grilled burgers and chicken sandwiches along with the BOP services and the homebrewer supply store.

Interestingly though, a brewer I know that used to work there (when the quality was quite good I might add) said that often people that came in to learn would often hand him a $20 tip and just asked for him to do it all while they ate lunch and "watched." They just wanted to be able to impress there friends at a party that they brewed the beer. That being said it bolsters your point that not too many people wouldn't invest the four plus hours it would take to all-grain brew when many aren't even interested in learning the extract side.

Anyway, one last point not angry or even jealous just expressing my opinion about a place that is doing quite well with a BOP despite the limitations.

Cheers and happy brewing to you all,
Ray

[Natrat]

With all due respect,

It is perfectly viable to do all grain BOP operations, and make a tidy profit. It all lies in the planning and the method of operations.

I recently left an all grain BOP in Canada that offered 26 styles, was all grain, and used whole leaf hops. The operation required the customer to be present for one and a half hours at brewing and for about an hour for bottling, two weeks later. For busy people we offered a "pitch n run" option.

Operational setup is low if you can find used equipment (not so hard...a lot of BOPs are mismanaged and go belly up) and margins run in the 8-12% range after all costing. We had 1000 regular clients in a town of 250 000 and a 50 litre batch was $130. Standard day was two or three brews of 6 kettles each, for a production of up to 1500 HL a month in busy months.

Let me know if you want more info, or take a look at their website,
www.bedfordbrewing.com

Cheers, and good luck!!

natrat

[JPrazak]

Has anyone seen any success or failure with charging a monthly membership fee? Where someone could get free access to equipment and storage as well as discounts on ingredients and possibly discounts in the taproom?

James Prazak
North Carolina

[hexalite]

Sorry to interject,

I have a quick question about the BOP process. Do BOPs need a liquor licence? Perhaps someone with experience or living in Canada can answer this. I want to setup a very small BOP (no need for full out BOP since I'm still a student) and was wondering what is required by law to run one and what are the minimum stages of the brewing process must the customer legally be required to attend.

Thanks!