Nanobrewery Buildout Question

[Ktown Brewer]

Hey all,

We're running our numbers on potential options for our space. Right now, we're looking at ~ 1,500 sf, a 7 bbl frankenbrew setup, tasting room and no distribution, and serving most everything from single wall tanks in our cold room (hoping for 5 -7 taps, with a few of these potentially served with kegs from small batches or remains from other serving tanks). Total cost estimates with contingencies are currently in the $150K - $175K range, which includes several facilities costs such as ventilation, ADA bathroom upgrades, floor drains, cold room, etc. This would be in an industrial area with rents in the ~$12 psf range, NNN, and these numbers are about as bare bones as we can get and still produce quality beer.

An issue that keeps coming up in our discussions is whether it would be cheaper to do this in a nano-type setup. My thinking is that, while the initial system cost may be cheaper, the facilities costs are basically the same, especially assuming you need to sell everything you make over the bar to even make it work. That said, I'm seeing a lot of nano owners posting in various forums about opening for numbers in the $50K range or less. My question to you nano owners (and others out there), is how are you guys getting the doors open so inexpensively? Are you guys just foregoing these facility improvements, or are you finding creative ways around some of these issues that I'm not thinking of? I would love to hear how you guys have made your spaces work for you in cost effective ways. For instance, did you forego floor drains and/or ventilation? Did you not need to make any plumbing or electrical changes? Inquiring minds need to know...!

Thanks,

KTB

[NS_Nano]

I am still in the research stage, but have been touring as many breweries as I can in Canada and the US. I don't know how much capital you have, but most people (who are not content to stay at a small brewpub-style level) are using their nano set ups to test markets, prove the feasibility of their business plan, and work on recipes. One brewery I visited might serve as an example for you: Navigation Brewing, in Lowell, MA. They make some excellent and award-winning beers, and were brewing out of an essentially non-upgraded small industrial space. As far as I could tell, the only modifications they made was the construction of a walk in "cooler" area for their plastic conical fermenters. (There were already basic circular floor drains.) Overhead would be very low... but they were also planning (and are currently moving into) a proper facility as soon as they could, as it is a pain in the ass to brew in those conditions.

If you've got the cash now, and are planning on spending it in the future, and are confident of your business model, then I am not sure what the advantages of steps are in quality.

[Ktown Brewer]

Thanks NS - those area some big "ifs". It would be great to be able to test the waters with less of an initial outlay.


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[brain medicine]

doesnt apply specifically to nano, but as someone who's done multiple bars/restaurants and now planning 2nd full size brewpub, i can tell you that location is key. not just your location /neighborhood/etc. but the actual location you are renting- your space.

when selecting a spot, avoid putting funds onto the landlord's side of the column (improvements, upgrades) and try to keep it on your side of the column (equipment and assets). in your search you should be looking for anything that already has a bunch of that stuff onsite- water lines, lots of power, and especially- DRAINS. plumbers are expensive, especially when you make them dig. try old food facilities, commercial kitchens, manufacturing spaces, an old vacant laundry mat is like WINNING THE JACKPOT!!!!! getting a bare-bones "raw" space is no bargain when you have to add all the infrastucture, and thats what happens alot in "flex, R/D warehouse, commercial condo" type spaces. all of it takes time and money, two things that work against you.

but-

since you're not doing distribution, you need a place with decent location and hopefully some foot traffic, since you're really be operating more like a brewpub, just without the kitchen. in that case, you should frame your project as such to landlords. ask for tenant improvment allowances, i.e. rent credits for the structural improvements you make to building like electrical/plumbing/hvac upgrades.

but this depends on the health of your local real estate market. lots of vacant spaces to choose from? your landlord should be very compromising. tight market with no vacancies? you're probly not going to get anything for free.

lastly, scrounge all you can. there are quite a few guys out there doing one-vessel brewhouses, at much less cost than two or three vessels. less equipment, less cost. all you need is decent ceiling height. look for used tanks where you can. if you're making ales, and room temp fermentations, think about plastic poly conicals. plenty of folks use them and rig them with CIP so you dont have to worry about scratching them with brushes/scrubbers, etc. DIY your chillers, use giant plastic tanks for HLT and CLT, etc. pick up a used walkin cooler, maybe troll craigslist and see what you can find for free. we did, got a free 20x16x18ft tall walk in cooler- with fans/compressor/etc).

maybe there is somebody who already has a commercial kitchen or huge restaurant near you? see if they have some extra space you can rent out/sublease, and piggyback off their hvac and mechanical.

basically just be as cheap and resourceful as you can.

[Ktown Brewer]

Thanks Brain. All good advice.


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[sjcarter]

one word of caution - serving from tanks is a privilege reserved for brewpubs. Breweries are required by the feds to keg/package all beer, even if it's never going to leave the taproom.

[Ktown Brewer]

I actually didn't think that was true, so long as you went from your fermenter into a tax determination tank(s) using a properly calibrated flow measurement device. Is that not the case?

[mmussen]

The only production breweries that I know of that using serving tanks for the taproom do the following.
Run all the beer into a brite tank for tax determination. Then transfer some of the beer from the brite to the serving tank, keg and package the rest.
You may be able to use a calibrated flowmeter for tax determination. I don't know offhand though.

[Ktown Brewer]

Thanks Manuel - appreciate the insight.

[brain medicine]

Manuel has the gist of it. I think that technically there is no prohibition on anybody serving anything from brites or servers or even unitank fermenters. the issue for the feds-*****as i understand it****** is that after you have fermented alcohol, it needs to wind up in a tax determination tank. whether that is a brite/serving tank/unitank/etc is irrelevant. it just needs to be measured and taxed accordingly. then you can put it in kegs, bottles, cans, growlers, sippy cups or anything else your local license will allow.

we have both a brewpub and a small brewers license, so we've never had to worry about it. just measure and tax it and then we put it wherever we want.

[RipRap]

one word of caution - serving from tanks is a privilege reserved for brewpubs. Breweries are required by the feds to keg/package all beer, even if it's never going to leave the taproom.

This is correct. However there is no federal requirement to serve food to be classified as a brewpub. We dont serve food and federally we are classified as a brewpub simply by how we measure and tax our beer. Locally and state we are a microbrewery. This also allows us to serve right from the tank which helps save keg space in a cramped walk in cooler.

[sjcarter]

This is correct. However there is no federal requirement to serve food to be classified as a brewpub. We dont serve food and federally we are classified as a brewpub simply by how we measure and tax our beer. Locally and state we are a microbrewery. This also allows us to serve right from the tank which helps save keg space in a cramped walk in cooler.

What you need to do to be a brewpub is a state level thing. You should speak to your local Brewer's Guild to find out what your state laws are,

[Andy Miller]

I would not go nano.

We could not keep up for just the pub with 4 7 bbl fermenters and 6 brites. Then when we upgraded two fermenters for 15s our production went down for a couple weeks due to logistics.

I really wish we had a 15 bbl brewhouse right about now.

I would also suggest trying to get newer equipment. The 7 barrel tanks we still have are from 98 and while you can make great beer in them it's a pain in the ass. We didn't have racking arms for a while which was a disaster. They also do not crash very well and the cones are very shallow making harvesting yeast a pain.

I understand the temptation to go cheap because I was there a year ago but I doubt we would have made it with anything under 7 bbls. The week we upgraded was the most stressful week of my life trying to brew to keep up, accept a tank delivery, and hook up tanks all at the same time while knowing we were going to be out of IPAS and sours for the weekend.

Good Luck,
Andy

[populuxebrewing]

The way I got the doors open for <$35k was to make a lot of decisions that have come back to haunt me. Mainly:

Leasing a building which is entirely unsuitable. (an uninsulated shack)
Doing all the work myself. (a valuable learning experience, the kind banks don't care about)
Not paying myself. (I saved a lot of money on my business plan)
Not valuing my time. (all the time i've spent crushing grain will definitely be on my mind on my death bed)

But I think you're looking for valuable, positive tips for how to do it so here goes:

Save money wherever you can.
Plastic FVs work fine if you treat them right.
You need trench drains.
You don't need a cold room, but you need some way to keep your beer cold. I opened with a used kegerator and some craigslist refrigerators.
Buy everything used except your cold-side stuff. Kegs, furniture, mill, brewhouse, air-conditioners (for the eventual cold room), everything...
Make running beers. That is, low ABV beers which aren't dry-hopped. Milds and Cream Ales will crash out well enough in the mid-40s, but double dry-hopped IIPAs will take forever.

You may also have the option of forgoing the local health department, not installing the requisite number of sinks and serving out of single-use plastic cups. That was beyond the pale for me personally, so we hand washed in a 3 compartment sink for the first year. Later we upgraded to a glass washer.

There are 1000 different ways to open a brewery, but my best advice is to plan on being successful. I failed to do that and the result is evident in my location choice. A building which is too small and unsuited for anything more than a 7bbl brewhouse and 4 7bbl FVs. I should have opened in a space which was able to support a production facility, or a kitchen for a brewpub. I have neither so now I'm trying to shoe-horn everything into place...