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  • Turnkey brewery or completely new brewery?

    I'm in the early stages of business plan formulation. During a conversation with my lawyer/consultant today, he said he was made aware of a brewery that is wanting to sell. He asked if purchasing an operating brewery instead of starting a new brewery, was something I had considered. To be honest I hadn't. I've always dreamed of starting up my own. But it got me thinking, maybe it could be a good business model. Its in SW Florida in a rapidly growing city. Of course I've got many questions regarding the "why" they are selling, but I'm very curious if anyone on this forum has considered buying an operating brewery instead of a startup, or ever considered it, or what your questions might be if you were approached with this same offer.
    Cheers, Ben

  • #2
    Hi Ben,

    I am currently in your exact boat. I am looking at purchasing an operating brewery instead of starting my own, which was also my original intention.

    My first question was the same, why. Essentially he is just tired of it, working by himself and barely breaking even. Take a hard look at the system and make sure it is something you are comfortable working on. The learning curve on someone else's system will be steeper than if you buy and built it yourself (my assumption there), so you will have to find the sticking points or trouble spots.

    You also have to consider if you are going to rebrand or try to revive the current brand. We are reviving, but in the last 2-3 years, some serious brand damage has been done, we have an uphill fight in front of us, never mind learning this system. The current head brewer is going to consult for us for hopefully 2-3 months to get us going, he is a friend of my partner.

    Take a hard look at the location, is it failing because the site sucks? Get your CPA in there and really crunch the numbers to make sure its viable.

    That is where we are currently, getting the CPA lined up and getting some chats set up with head-brewers and owners in our area to get a feel for the community.

    Good luck, I hope if works out well for both of us!

    Sean

    Comment


    • #3
      Hi Ben,

      Sean has some good advice above, what are the real reasons the seller is dumping the business. Buying a used brewery with a hard location introduces a bunch of variables. I have seen systems that are so difficult to make good beer with that you couldn't gift them to me. And as was mentioned, the location could very well have a bevy of negative attributes and the existing brand could be damaged beyond repair.

      You need to do some detailed research here before you sign on the line. I have built many breweries and help people all the time make the right decisions concerning this so please reach out to me if you need assistance. A little sage advice goes a long way here. Best of luck.

      Laurence Livingston
      Senior Consultant
      www.kettleandstillconsulting.com
      brewkahuna@hotmail.com
      541-207-4880
      Kettle and Still Consulting
      Laurence Livingston
      (541) 207-4880
      brewkahuna@hotmail.com
      kettleandstillconsulting.com

      Comment


      • #4
        Hey Ben,

        I will echo a lot of what Laurence and Sean have said in regards to purchasing another brewery. While it can save you a good deal of money and time upfront, purchasing a former brewery usually comes with a project of updating the space/equipment, brand, or both. I would especially caution against reviving a failed brand. Generally speaking, if a brewery is up for sale because the brand has been damaged, it is beyond the point of reviving it (Sorry Sean). It is not to say the brewery location and equipment can't be salvaged with a new brand and mission to be successful, but failed brands failed for a reason and that reputation is extremely difficult to recover and can be expensive to gain back.

        To that same point, when buying a brewery, be sure you take a deep look into the financials of when it was operating and why it went under. Is it due to mismanagement? Is the overhead too high to be maintained by tasting room sales alone? Are utilities or labor needs too high to operate profitably? Are they trying to have you buy their company along with debt obligations - BEWARE! All this said, buying a turnkey brewery can definitely be a big come up in terms of cost savings and permit/construction savings, but much like Laurence and Sean said, do your homework, ask all the right questions, and fully know what you are getting yourself into before signing on the dotted line. If you end up finding you've bought a severely neglected brewery and equipment setup, it can end up costing you more than you save in the long run.

        Hope this doesn't deter you from really considering it, and I hope it works out if you find it is right for you!

        Derek Wasak
        Plato Brewing and Consulting Inc.
        www.plato.beer
        derek@plato.beer

        Comment


        • #5
          A first rule in the hospitality business for success is always "Location, location, location". In the brewpub business, the atmosphere, management, service, food, and beer must always meet customer expectations. There is no room to let quality slip at any level. When considering reopening a closed location, I also have seen a lot of built in failure because of trying to open without a reasonable budget; ineffective and poor quality equipment, used kitchen equipment that breaks down frequently, lack of facility maintenance. Go over everything with forensic detail. Why did they go under in the first place. It is usually poor location or bad management/owners.
          Todd G Hicks
          BeerDenizen Brewing Services

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