The good/bad & the ugly

[Squintymcguinty]

Hi All,

I would like to start this post(As it is my first) by saying thanks for your help in advance.I am currently in the process of setting up a small microbrewery. Im not too far along in the process and Im in need of some help.

The Good - I come from a Manufacturing background. I am a process engineer by trade but have some experience in business. My father is a stainless fitter in the manufacture of dairy equipment so I have access to stainless tanks/fab equipment etc. I am an good home brewer but have not made the leap to recipe creation yet.
The bad - The market will be tough, not too open to Craft Brewing but this is changing daily. My capital is low but I can fabricate most of the equipment myself and I can raise the operation capital with a handle.
The Ugly - My question:Is it feasible to build the equipment myself, where is the best place to get plans. Should I get a consultant. I recon I can produce a a 10bbl setup, brew kettle, Mash/Lauder, 4-6 FV's for around $10k. I know it is alot to take on but I think it is good to be familiar with the equipment and I can save a fortune. I just need to get some plans etc.

Any help is really appreciated,
Thanks in advance.

Squinty

[yap]

hope you have more than 10k....

Even with a welder in the family and "free" tanks (assuming you could find them), I doubt you could build a 10 bbl system for $10,000. You will need lots of things for those tanks that you probably won't be able to get as cheap. You'll need either a boiler or direct fire burner, glycol system, clamps, hoses etc. I have a pretty low budget 7 bbl system and probably have 5,000 worth of triclamp fittings, valves, barbs etc (and keep buying more every day). thats not including the tanks, cold room, kegs etc.

and this is only the fixed assets. then you have rent, insurance, utilities, etc that you have to pay while you are putting everything together....

having someone who can do the tank fab is great, but you probably need someone familiar with brewing equipment to help determine what tanks will work for your needs and how best to modify them....

sorry, probably not a lot of help...

if you only have 10k then you need to be looking at nano scale. i would argue that 10k isn't enough even for that, but i know some that argue otherwise...

[BrewinLou]

Have to agree with Scott, 10k is not going to get you enough stainless to build a brewhouse, fermentation vessels, and serving tanks, at least a 10 bbl. Can you, yes but you need to triple or more your budget at least. With one welder and no experience at building brewing vessels plan on it taking a long time to build. Also do not forget you guys have to live while you build this.

[kugeman]

I have a good friend who's in the process of opening a new 7 bbl brewery. His family owns a machine shop & fabrication shop. He basically has a team of welders who are working for beer (more or less). After crunching the numbers they figured that it would be cheaper and better to buy most of the tanks and the brewhouse. They're using their expertise to save big bucks on installation, build out and building some ancillary items (like a 3 head keg washer) themselves.

I can tell you that this project is way more than $10K. That's just not a realistic number. Think more like $250K. And that doesn't include the building.

Sorry, not trying to rain on your parade but even if you were able to build everything yourself, not pay yourself or anyone else for the work, and get a very very cheap location I think you would be extremely lucky to do it for 50K. I've never heard of anyone opening a 10 bbl facility for that little to be honest...

[fa50driver]

consultants

I think that getting a consultant (check their references) is a great place to start, not necessarily for the tank fabrication, but for the business in general. They will have insights into packaging, distribution, licensing, and brewery construction that may be invaluable. I wouldn't have thought of using a consultant before starting this venture, but If I had, I would have learned concepts that took me by surprise several years later (distribution margins/markups, bottling costs/margins, etc) which had I known prior, might have found a different place to invest my life savings.

The bad - they will probably eat up a significant portion of your $10k.

If you are looking for a consultant for tank fabrication/brewery layout specifically - check out these folks - http://www.globalstainlesssystems.com/index.html

And as others have posted, you should probably have about 30x's that $10k available for other facets of your brewery.

[Fullcourt]

I am also thinking that having a welder in the family does not mean that person can produce a safe pressure vessel for fermenting and conditioning.
Putting together the cooking tanks is pretty straightforward, but pressure welding is a whole 'nuther story.
Best to put in your budget enough money to purchase the conical fermenters and brite tanks from a certified tank manufacturer.

[ArmstrongBrew]

Just my 2 cents

Here's my thought. Why not manufacture some brewing equipment to finance the business. You (and your father) have some great skills here. Use them to your advantage and see if you can raise the capital this way.

Many breweries use merchandise and other novelty stuff to help finance some of the startup costs, I just think this would be an interesting way to tackle the issue.

[Squintymcguinty]

Thanks a million for the feedback

Hi All,

Thanks for the feedback, it always amazes me on this forum how many people take the time to reply, also industry experience. Im currently working in electronic manufacture (Teir 2) and woe betide asking the for help from anyone who you are not writing a big purchase order .
I think you guys are bang on the money and I should clarify my detail above. My auld fella is a Stainless Pipe fitter making custom parts for small to mid-size Dairys(Tanks included). He works solely in stainless steel, with polishing and high-freq welding capability so from the fabrication side we should be ok. We also have a good stock of Tri Clover/Barbs etc so Im not counting those as initial expense. I can "Borrow" from his stock and buy back as needed once I get some operationg capital. I will have to buy a manway or 2 but this should be less than $500. The 10k euro would b solely on base material/ Stainless(No other overheads involved). I can salvage alot from old Dairy tanks that we have, just cut and make conical for the FV. All of this would be cost price but I might be to cheap on the 10k. The reason I said a 10bbl is so I can expand quickly if needed. I was originally looking at 5bbl to start(I am willing the sacrifice on the ROA labor) but from a costing point of view the cost to fabricate a 10bbl vs a 5bbl is not that much different(Considering the design stays the same)
Again all, thanks for taking the time to answer me on this.

Thanks
Steve

[nohandslance]

10bbl Frakenstein Build-out Breakdown.

Please send me your contact information so I can send you my cost breakdown of a 10Bbl build of a brew system with all beat up dairy tanks and my own hand at welding the on spot fab's. 10K is un realalistic considering the price of stainless on the market. You are still looking at 60K. Not to mention the 6 months of rent while awaiting TTB approval, cooperage and labels...etc...

Lance
Rebel Malting Co.
Reno, Nevada USA
ljergensen@rebelmalting.com
775.997.6411

[timbro81]

"I am an good home brewer but have not made the leap to recipe creation yet." Also might want to tackle this hurdle as well before you're in too deep.

[einhorn]

Not to be offensive, but it still amazes me to the number of people who think you can brew professionally on a shoestring. The reality is, it's a huge capital intensive business, and most banks still consider breweries to be "high risk". No matter how you want to manipulate the numbers on your spreadsheet, it just doesn't work for the cost of a used car.

[Natrat]

Not to mention high cost of space in Vancouver.

welding stainless is not the only requirement for being able to start a brewery. Even if you owned a stainless steel fabrication business, your costs would be in the 40-60K range on vessels alone. Probably more, since you'd want to do it well for yourself.
But don't fool yourself into thinking that is the only cost, or even the most significant cost! Wait til you total up your infrastructure and lease improvement costs (which will be significant in BC...your boiler cost will stagger you) not to mention cooperage!
There is a lot of experience in this forum. Almost all of us are willing to help, simply because we love good beer. But do the real math before you start chasing the pie-in-the-sky...

Once you've raised the $400K (about the minimum in BC, but I'd want at least $750K) to start up, then we can point you in the right direction to make good decisions. There's nothing like a good business plan to get you going, and once you're going, STICK TO THE PLAN.

That's not to say it can't be done...ask Matt Phillips in Victoria how he started out. But I'd not want to do it that way!

[Squintymcguinty]

Thanks for all the help

Hi All,

Thanks very much for the feedback and input. Its great to have a go to place to get such valuable info. A special thanks going to Lance Rebel Malting co. for the PM. Its really helping me get my costing on track.

Thanks
Steve