Growlers and Crowlers Only

[Ktown Brewer]

Hey all,

Quick question for the board - sorry for the long post.

We're in the planning stages to open a small brewery and tasting room (~1,700 sf) - no distribution, just on-premise. System is 5 bbl. In order to regularly (and successfully) sell pints, we will need to invest ~$65-75K in restroom upgrades, entrance/exit upgrades and decor, and will also need to hire or bring on someone to run and hire/manage staff for the taproom, which is obviously an additional cost. All told, we're talking about an extra $100 - $125K our first year. This is a lot to swallow without really testing the market with our product (we're confident in our product and branding, but also understand that craft consumers are promiscuous and fickle!). Planned location is (surprise) and industrial area adjacent to the major thoroughfare in our market (46,340 auto trips/day, according to the county) with another production brewery/tasting room with 2 blocks of us).

At any rate, one option we've been kicking around is to open with only doing growler and crowler sales on site, as well as a modest CSB program. We would be open 3 days/week for ~5 hours per day. We would avoid almost all of the costs above since we're not serving on-premise, and would not need to spend as much (or anything) on staffing or on fitting out the space to make it an appealing hangout for a pint. The goal of this interim step would be to (a) test the market at a lower cost, (b) generate word of mouth about our products and community goodwill, and (c) generate cash flow we can pump back into the business. FWIW, our projections show us breaking even from a monthly cash flow perspective ~115 bbl with a 60%/40% growler/crowler split, pricing the growler refills at $15.00 and the crowlers at $9.00. Being open 3 days a week, that implies 27 growlers and 37 crowlers/day (64 units total)

Anyone out there doing anything like this, or had any success/issues trying?

Thanks all!

[Ktown Brewer]

Sorry - to clarify, that's 115 bbl/year


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[ChuckD]

This was our original plan as well (we are only a 3bbl brew house). What threw us directly into taproom mode was the requirements from my states Dept. of Ag. Most of the build out that was going to be our "Phase 2" was required for Phase 1. Such as floor coatings, sinks, bathroom. etc. Even though we just wanted to sell growlers it was still a retail space and they had requirements. When the dust settled, moving into phase 2 was just a couple more steps. It was a crazy train (growing so fast unexpectedly) but I am glad we did it. Our taproom did not open the taproom with anything fancy (a stainless service table was our bar) and some tables and chairs, but it allowed customers to be a part of our progress and make a real connection with what we were doing beyond grabbing something to go. Just my two cents on what we experienced. Our projected plan was to only sell roughly 42 bbls the first year working the day job and opening on weekends. Within that first year we sold over 300 barrels, employed with two full time employees (head brewer and taproom mgr) and 6 part timers helping staff the taproom. And this is in a town of only 2900 people.

[Ktown Brewer]

Thanks Chuck. Very good points.


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[panadero]

That is not much income in the first year, if you are looking to save enough to afford the 75k for year two. It will definitely give you a chance to see if the market is willing, giving banks or investors more of a chance to see what you are worth. Good luck! a long road ahead, but totally worth doing.

[Ktown Brewer]

Yeah, agreed. I was really just trying to model out what a break even production would look like. Thanks man.


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[Bainbridge]

Well let's check some math then.

115 bbls x 31 gal/bbl x 0.5 gal/growler = 7,130 64oz growler fills.
7130 fills x 10% foam loss, samples, etc. = 6,417 fills.
industry stretching $15/fill x 6,417 fills = $96,255 gross.

So if, after COGS, rent, equipment payoff, and salary you can make it on $100k gross, then hey, there you go.

or

115 bbls is about a brew every other week on a 5bbl. You're under-utilizing your equipment. Can you really make any progress developing recipes if you're brewing twice a month? How many varieties will you produce, and at that sales rate, how old will they be when that last keg kicks? Say you do four beers, and they all move equally (which they totally, seriously won't). That's 28.5 bbls of each beer annually, or 5.75 brews. Basically each beer will be about two months old before the last of it kicks. Not so bad. But given how these things work, how long until you're brewing 8 beers? Have you got storage for all that beer on site for the average of four months it'd take to move any one brand?

or

64 units a day. Five hours a day. 12.8 units an hour. About one every 5 minutes. Just for comparison I pulled May's report for us. 31 days open. 386 growler fills. 194 squealer fills (32oz). So about 12.5 growlers and 6.25 squealers per day. We also have 22oz bottles, which I didn't factor in. But fills worked out to only about $5k out of the $32k Retail Draft Beer pie for that month. YMMV, of course. But it's a shame to lose out on draft. You'll never make more money than you will selling a $5 pint of something that cost you $1 to make. Say you did 100bbls more in draft. It's one brew a week now. 100bbls x 248 pints a barrel x 10% loss x $5 a pint = $111,600 more moolah. But at that rate you need to sling about 30 pints an hour for your 15 hours. Doable if you're busy enough.

[Ktown Brewer]

Thanks Russel. Good points, as always. Re: the points below:

Well let's check some math then.

115 bbls x 31 gal/bbl x 0.5 gal/growler = 7,130 64oz growler fills.
7130 fills x 10% foam loss, samples, etc. = 6,417 fills.
industry stretching $15/fill x 6,417 fills = $96,255 gross.

So if, after COGS, rent, equipment payoff, and salary you can make it on $100k gross, then hey, there you go.

Your math is right on. I have it at 4,111 growlers and 5,481 32 oz crowlers out of 110.5 bbl, assuming a 15% loss. That gives $110,986 gross sales, less 10% unsold product and 2.5% credit card fees, I get $97,390. Subtract production expenses ($20,245) and fixed expenses ($68,540), and you get net positive cash flow of $8,426. Again, just looking at the break even math. This is a part-time gig, so maybe that works for a start, but let's be honest, I'll need to have better cashflow than that to make it worthwhile.

115 bbls is about a brew every other week on a 5bbl. You're under-utilizing your equipment. Can you really make any progress developing recipes if you're brewing twice a month? How many varieties will you produce, and at that sales rate, how old will they be when that last keg kicks? Say you do four beers, and they all move equally (which they totally, seriously won't). That's 28.5 bbls of each beer annually, or 5.75 brews. Basically each beer will be about two months old before the last of it kicks. Not so bad. But given how these things work, how long until you're brewing 8 beers? Have you got storage for all that beer on site for the average of four months it'd take to move any one brand?

Excellent points. I'm actually looking at a system that can either do 5 bbl at once or 2 separate 2.5 bbl batches. The goal would be to have 6 beers on tap at all time, from serving tanks in a cold room. I absolutely agree that brewing anything less than once a week it totally under utilizing the system. If I were to go this route, i would probably look to go the frankenbrew route with a smaller system.

64 units a day. Five hours a day. 12.8 units an hour. About one every 5 minutes. Just for comparison I pulled May's report for us. 31 days open. 386 growler fills. 194 squealer fills (32oz). So about 12.5 growlers and 6.25 squealers per day. We also have 22oz bottles, which I didn't factor in. But fills worked out to only about $5k out of the $32k Retail Draft Beer pie for that month. YMMV, of course. But it's a shame to lose out on draft. You'll never make more money than you will selling a $5 pint of something that cost you $1 to make. Say you did 100bbls more in draft. It's one brew a week now. 100bbls x 248 pints a barrel x 10% loss x $5 a pint = $111,600 more moolah. But at that rate you need to sling about 30 pints an hour for your 15 hours. Doable if you're busy enough.

Yeah, draft is definitely the way to go. My numbers work out to ~5 growlers and 6 crowlers an hour, give or take. Feels very heavy.....

Great points all around, and thanks for your thoughts on this one.

[BeerBred]

"Industry stretching" $15. Freaking love it. Hey, if there is a brewer out there with Russel's Brewing, Technical, Mechanical and business expertise who would wait through the pain of a startup and want to work in the Cave Creek/Carefree town North of Phoenix... Please get in touch with me. That's what's holding me back.

[Bainbridge]

Hah, no way. It's hot out there!

But yeah, we charge $11 including tax for a regular fill. You see more around, and you see less. And we do $16 for Big Beers. May raise the price a bit next year. Irks the hell out of me to see pints of my regular beers for $8 at places in Seattle. City's going nuts right now. Wish I could charge that...

Course one time I paid $50 for a fill of something particularly rare and sour at Russian River. (Totally worth it BTW) And I once asked why a local bar was doing fills of something crazy big they had, think it was like Dogfish 120, and they were like hey, if someone wants to pay $75 more power to them.

[jacklem1]

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