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  • Seeking Feedback From Successful Nano's

    I'm looking for stories of successful nano's that have opened up in industrial/business parks. My wife and I are in the funding stage of our nano in Ashland, Oregon and are looking for other examples of successful nano's in order to back up our projected sales volumes. We're wondering if you met, exceeded or fell short of your projected volumes from your tap house. Was your tap house a successful "destination" or did you have to come up with other ways of meeting revenue requirements.

    Thank you all for your time.

    Cheers!
    --
    Brandon Overstreet
    President, Co-Founder
    Swing Tree Brewing Company
    300 E. Hersey St. #7
    Ashland OR, 97520
    c. 541-591-8584
    boverstreet at swingtreebrewing.com
    www.SwingTreeBrewing.com

  • #2
    define success as a nano

    We had sales to pay the bills from day one and were successful in that way. As far as making enough dollars to grow, have paid employee's or take a salary myself that just won't happen with a three BBL system. Our projections were off, not by how much we could sell, but the amount of waste there would be and the cost of all sorts of little stuff that bleeds you dry. Things like freight, gas, taxes you've never even heard of (county property assessment tax, what do you mean, I paid sales tax on that equipment when I bought it!?!), having to donate kegs to beer festivals and such and often having to make three or more $80 trips a week to home depot for odds and ends will bleed you dry. Anything you tell yourself you can live without will come back to haunt you sooner or later after having to half ass some process or another for the 500th time. And no, we could not keep up with demand. The only way to not be out of beer constantly is to brew only a couple of styles, but that will hamstring your tap room business because people want variety. Yes we had a successful tap room, but you have to constantly augment that with special events to keep folks interested and coming back. Some events cost you a little and some cost you allot, and you can never tell which it's going to be. Sometimes you have a really good weekend for no apparent reason and sometimes it's slow for weeks at a time for no reason, but if you don't have strong distribution sales or cash reserves to get you through a slow month, that can be trouble. If you rely solely on tap room income you will always be flying by the seat of your pants.
    We found out the hard way that the only way to grow from nano was to borrow a significant amount of money (again) and start all over. Despite running as a nano successfully for over a year we got turned down by two banks for that loan. Their reason? We didn't have enough money in the bank. No kidding. If we had not gotten lucky and had a wealthy patron that saw our potential I would still be struggling with that awful manual three BBL system working 90 hours a week for no paycheck and planning an exit strategy. Now I have a 15 BBL brewhouse, a functioning bottling line and paid employees. I still can't afford to pay myself. I'm not trying to piss on your dream, but with 1300 breweries in planning this year (that's about a 65% increase) it's getting harder then ever to make a buck. Since we opened we have had THREE more breweries open within two blocks of us in either direction. 53 breweries here in San Diego today and 34 more slated to open next year. Even in San Diego where craft has better market share then most places that is crazy. It's just not possible for every homebrewer in the country to have his own brewery.

    The moral of this story: Save your money and get a system that is big enough to turn a profit with or open a business that isn't struggling with market saturation.

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    • #3
      Thank you very much for your insight. That is exactly the type of story we are looking for. Our plan has a large amount of distribution in it just for the very reasons you point out. We are planning on 1.5 to 2 bbl's a week of taproom sales and 9 bbls a week out of the door split between draft accounts and cases of 16oz cans. We do not want to be a distribution brewery, but as you point out, I feel the only way I can pay myself a salary is to supplement the tap house sales with distribution. We are starting with a five bbl brewhouse and expect to yield 3.5bbl finished product per batch. We have 2-10FV's & SV's to support the distribution beer. The problem we foresee is that the distribution alone doesn't appear to support the project without that volume of tap house sales and that volume of tap house sales doesn't support the project alone either.

      I feel that our model is sound if we can maintain 1.5 to 2bbls of taproom sales, yet if we want the added security of paying the bills on distribution alone then we'll need larger equipment to support that and this then drives the start-up budget higher than the returns could support.

      I feel our market is sound here, for the moment. Unlike other parts of Oregon, the Rogue Valley is not as nearly saturated as other markets in our state. Although, the craft distribution market is not local at all. This is the precise reason I feel that a distribution brewery alone is not a sustainable model. I feel that the package market is very saturated just about anywhere in the country and a model that expects the type of growth that the industry as a whole has seen in recent years is flawed. However, I do believe that our local market is still very open to the small "neighborhood" brewpub and focusing on in house sales and marketing may still stand a very good chance of success.

      Thanks again for the great insight, and I'm hoping for more of this type of candid discussion from this thread.

      -Cheers!
      --
      Brandon Overstreet
      President, Co-Founder
      Swing Tree Brewing Company
      300 E. Hersey St. #7
      Ashland OR, 97520
      c. 541-591-8584
      boverstreet at swingtreebrewing.com
      www.SwingTreeBrewing.com

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