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Thread: Tell me i'm crazy.

  1. #1
    Join Date
    Mar 2009
    Posts
    19

    Tell me i'm crazy.

    I would like to start a small production brewery. I have the land, that will need to be rezoned. I'm gathering together a brew system. I would like to be a part time brewer till i can grow organically to a point i can go full time. Lots i don't know. I do not want to own a tap room. Is this crazy? Are there small production craft brewers around? Hoping to start at 5 bbl and grow. Please feel free to point out problems... In NC

  2. #2
    Join Date
    Oct 2009
    Posts
    20
    YOU'RE CRAZY.

    At 5 bbls a batch, your best bet will be to own a tasting room and sell pints for $5 each. Start the taproom open just Friday, Saturdays, Sundays. You can live off the tips as well if you work the bar. Brew during the week.

    Keep the kegs in house, keep control of quality, keep the profit.

  3. #3
    Join Date
    Jul 2013
    Location
    Idyllwild, CA, USA
    Posts
    101
    Quote Originally Posted by NCHIKER View Post
    Lots i don't know. I do not want to own a tap room.
    Sorry to be blunt, but the first sentence here is supported by the second one. I'm a partner and head brewer at a 5BBL brewpub and I can state unequivocally that trying to make a living (or even a partial living) from wholesaling beer at this production level is . . . well . . damn near impossible. The tap room is where you'll make your money. Period. I've been approached to distribute my beer a bit and my answer is and always will be "no." Do the math. Price your pints where you think they should be and figure out what a keg nets you in the taproom. Do the same for wholesaling kegs. I think that exercise will give you some good idea of where you should focus your sales. Oh, yeah, don't forget to figure in your overhead when doing the math above.

    Cheers,
    --
    Don

  4. #4
    Join Date
    Oct 2010
    Location
    Northern CA
    Posts
    374
    What they said. At a 5 bbl scale you need to sell your beer at the per pint price to make enough money to cover your costs.
    If you really want to make the no taproom distribute only model work you're going to need at least a 15 bbl system to make enough beer in a batch to make money selling kegs - and even then to make money you should be looking at double batching just about everything.
    Manuel

  5. #5
    Join Date
    Aug 2010
    Location
    Enterprise, Oregon
    Posts
    1,607
    Check with your local distributor--the chances are that you can't get a keg on a truck to sell, unless you plan on self-distributing.

    There's currently a glut of small breweries in most of the US.
    Timm Turrentine

    Brewerywright,
    Terminal Gravity Brewing,
    Enterprise. Oregon.

  6. #6
    Join Date
    Apr 2012
    Location
    Bainbridge Island, WA
    Posts
    758
    There is no, no money in small scale distribution.
    Russell Everett
    Co-Founder / Head Brewer
    Bainbridge Island Brewing
    Bainbridge Island, WA

  7. #7
    Join Date
    Mar 2009
    Posts
    19

    let me say.

    I think i can cash flow the building and equipment needs.
    If i can get it started, self distrusting and just making ends meet.
    making beer and working hard on the marketing side, then i could borrow capital to expand on what i whae going...
    May be five bbl is to small to start.

  8. #8
    Join Date
    Sep 2012
    Location
    Moorhead, Minnesota
    Posts
    519
    what's your reason for not wanting a taproom? Could it be solved by bringing on a partner who's focus would be the taproom? Small breweries are only viable with direct sales.

  9. #9
    Join Date
    Oct 2010
    Location
    Northern CA
    Posts
    374
    I'm all for organic growth, but I honestly doubt you've really sat down and looked at the numbers on both the cost and the time side.

    You say you want to start part time - how many hours are you willing to give to the brewery every week? Every batch is going to be 2 - 3 days of work between brewing, cleaning, cleaning kegs, carbonating, filling kegs etc. Then you have to add the time to market and do sales calls, deliver kegs, hunt down the empty ones that have wandered off....

    If you're trying to do it all yourself you WILL be putting in at least 40 hours a week to care of things
    Manuel

  10. #10
    Join Date
    Dec 2013
    Location
    Danielson CT
    Posts
    78
    You will not make ends meet self distributing a five barrel system by yourself. Or with an employee. Or with two employees.
    You will be making $55 a log. You will be using gas and taking time away from brewing/packaging/maintenance (oh god, is there ever maintenance!) to deliver that log. You will drive 30 minutes each way to deliver that log, and the next day the bar across the street from the place you delivered yesterday will ask for one, and you'll make two trips to the same area.
    You will then drive 30 minutes each way to pick up the keg and discover that the bar has plenty of beer right now, thanks, so you'll go home with your empty keg and no more sales.

    ALTERNATIVELY, that $55 log will generate close to $150 in revenue if you're filling $7 32 oz growlers/crowlers. Your double IPAs will gain you more like $200. You will not have to drive anywhere; your customers come to you. You will charge a deposit on the growler that your customer will bring back and reuse over and over again. If you set up a taproom where people purchase pints, you'll make even more. You'll make extra money in tips (especially when the tips are in cash). Your customers will have a face to put onto your beer, making them more loyal. There's no shelf space or tap space to fight for at your own location; nowhere for your beer to get lost.

    Speaking from experience. We got our permitting before we had finished our tasting room and worked our first 2 months or so just moving beer wholesale (1.5 barrel brewery). We found that all the bars that kept telling us how excited that we would be opening in an area with no craft breweries within 25 minutes didn't want our beer because a. we charged a premium price and b. they "didn't have the space currently." Some didn't know what to do with us, because they had never purchased product that wasn't from a distributor, and didn't want to tie up a tap line that could be used for a cheaper, already popular beer from their distributor. We were late on rent and all of our bills, and we dumped our own money into paying those bills (both of us had retained our FT jobs at that time), after having dumped so much of our own money already just to get the place open. And then dumping a couple batches because we jumped from home brewing to commercial brewing and had to deal with the inevitable learning curve.

    We will turn 3 years old this summer and have gained a solid reputation and loyal following that would have been impossible if we were wholesale only. We are in the process of opening a bar to be able to serve by the pint. We do a small amount of wholesale (we keep between 6-12 accounts active at any given time) but when we move to serving pints that will likely change even with a larger brew house.

    The advice you have received from everyone who responded should be taken seriously. We aren't just the old boys in town who don't see how a different model could work-we have watched our friends and colleagues try and fail to open successful breweries, even with retail sales, and we really don't like it when our friends have to pack it up after putting SO much effort into their passion.
    Last edited by wlw33; 02-17-2017 at 12:28 PM.

  11. #11
    Join Date
    Nov 2002
    Location
    Toronto
    Posts
    125
    don't listen to these naysayers, you are on the right track!

    oh shit where is the sarcasm button again?


    to build a brewery, first figure out how you are going to sell your beer.
    if you make your beer in a less efficient fashion, you need to sell it for a higher margin to compensate.

    bring in more money than it costs to make = success

  12. #12
    Join Date
    Apr 2013
    Location
    monmouth, IL USA
    Posts
    36

    small production brewery

    I have a small production brewery smaller than what you describe.

    Everything they say is true!!! ours is a "hobby brewery" we brew for fun make no money but have a blast.

    Here are some things to consider,

    I have a business partner to share workload. employees are expensive and a pain.

    we have no overhead. the brewery is in the basement of a building I own so we pay no rent/mortgage,or hvac. I do take some money for gas elect and water. The brewery pays its bills and what is left over be buy toys(the last one was a laser cutter/engraver to make tap handles).

    We did borrow some money for equipment but little as possible.

    It is much much more work than you imagine. Prob 3 hours doing business stuff for every hour brewing.

    We have a great situation.... we are the only brewery in our area. The days of beer selling itself is over. Ours sells with minimal marketing because we are the only game in town but we still spend alot of time on marketing.

    For us its all about the fun.... we just can't lose too much money or ours wives will make us quit.

    Think about your goals, run realistic numbers, be realistic about time spent, be realistic about your market ...... do they fit?

    s

  13. #13
    Join Date
    Mar 2008
    Location
    CO, WY
    Posts
    97

    Re

    Just give money to the Brewer's Association. Membership = Success.

  14. #14
    Join Date
    Apr 2017
    Location
    Sun City, CA
    Posts
    31

    Do what you want!

    If you want to open something up do it if you think you have a good product and you want to do something you love do it, the worse case scenario is you dont make it, but look at Walt Disney bankrupt 7 times before he made it.

  15. #15
    Join Date
    Nov 2009
    Location
    Moab, Utah
    Posts
    447

    Get Creative

    Quote Originally Posted by NCHIKER View Post
    I think i can cash flow the building and equipment needs.
    If i can get it started, self distrusting and just making ends meet.
    making beer and working hard on the marketing side, then i could borrow capital to expand on what i whae going...
    May be five bbl is to small to start.
    Look also at all possible angles to the situation. Possibly you could partner with some small road houses or cafe's that could sell your beer.
    I always looked at it the other way round, such as starting a small roadhouse with excellent food and ambience and then installing a small brew system and selling my own beer as an enhancement to the cafe operation.
    Network with creative people.
    Its absolutely invaluable to get some hands on experience in a small production brewery and tour-visit as many operations as possible in the Micro industry.
    I can recommend at least 3 in this part of the country at different production levels.

    All the best

    Star
    Warren Turner
    Industrial Engineering Technician
    HVACR-Electrical Systems Specialist
    Moab Brewery
    " No Cell Phone Zone."

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