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Thread: Good use of empty unitanks

  1. #1
    Join Date
    May 2007
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    Walla Walla, WA
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    Good use of empty unitanks

    I am the brewer at a small brewpub. We don't make a whole lot of beer, and there is always empty fermenter space. We have only serving tanks - no kegs, and no distribution outside the brewpub. The boss isn't real motivated to increase the beer sales, and I would like to be brewing more often, so here is my plan.

    I would like to rent the brewhouse and fermentation space from the owner for my own brand, which I would put in kegs and sell offsite. How much should I offer to use the space? Has anyone tried something like this before, and how did it work out for you? I would basically be contract brewing for myself. Thanks for any feedback.

  2. #2
    Join Date
    Mar 2006
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    Ex-Germany / California
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    I can see this scenario as having "conflict of interests" one day down the road. My suggestion: why not offer a "win-win" solution to your boss of expanding the brand with keg sales of his beer, or as a "no-name" beer which other customers could call their own, and you get a commission. This also gives you a chance to "practice" selling beer without the investment, if you've never done it before.

    One caveat: does your alcohol license allow either solution??

  3. #3
    Join Date
    May 2007
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    Walla Walla, WA
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    Unfortunately, I have already talked to the boss about getting kegs and selling our brand outside the brewpub, but he isn't interested. They used to sell kegs before I started working there and the boss says it is "just too much trouble."

    I would have to apply for licensing in order to make this work, but that is no problem. Especially since the site and brewhouse has already been approved by the TTB and in service for over 10 years.

  4. #4
    Join Date
    Sep 2009
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    18
    Could you contract brew? Not sure how much space you have though.

  5. #5
    Join Date
    Mar 2006
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    189
    I commend your enthusiasm, but have you considered the entry barriers vs. the outcome. You have to register the brand ($$$), have tap handles made ($$$), rent or purchase kegs ($$$$), find a distributor, find bars who want to purchase the beer, etc, all on your dime. If you are only working out of one tank (not sure the size, but I'm guessing it's between 7 and 10 Bbls) that gives you between 14 and 20 kegs. Until you create enough demand to sell them off, where will you store them? I'm guessing this is something that the owner has never had to deal with before. Does he have an accessible loading dock? Will your distributor need a lift gate on the truck (most are prepared, but it's good to find out ahead of time)? What happens if your glycol goes out, or there is equipment failure? Who eats the loss? A destroyed batch of beer could easily wipe out your capital reserves (which I hope you are planning on having). That's why when you brew under contract, this is always considered and discussed ahead of time.

    Is this a good learning experience for you? Probably. But I would count on laying out some bucks, with the possibility of little, if any return. My suggestion, if you are that ambitious: why not use your current brewery as a "lab." Design great beers, and tweak them to your liking. Use your customer base as "market research." Then, find a larger brewery to contract your brand out to. Use your current relationships with purveyors and sales reps as leverage in the future. It will cost you a bit more, and cause a bunch of headaches, but it is a great place to start. One small tank in a brewery with a "not-so compliant" owner could be more of a headache than it's worth. I know this because I was hired 4 years ago to replace a guy who wanted to do the same thing you are thinking about.

    Just my 2 shillings.

    Best of luck either way!
    Jay


    "Reach for a beer, glad that I'm here
    when I realize that your not around!"
    Last edited by mr.jay; 03-08-2010 at 04:15 PM.

  6. #6
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    Mr Jay has some valid points worth thinking about. In response to your answer to my post, you say that the owner said that keg sales are "just too much trouble." He may be right. What makes you think you can do it better? Selling is not easy - don't believe anyone who tells you differently. But it is very much based on the person who is doing it. Do you have this drive and possibly experience to prove him wrong??? Do it on his dime if you can.

  7. #7
    Join Date
    Mar 2004
    Location
    Salem, VA
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    You should talk to John Bryce at Roanoke Railhouse/Blacksburg Brewing Company. I believe he is doing exactly what you are talking about.

    R/
    Mike Pensinger
    Brewmaster
    Parkway Brewing Company
    Salem, VA

  8. #8
    Join Date
    Jul 2008
    Location
    Gresham, Oregon
    Posts
    22

    Contracting

    We started in just this way. I made the house beers, and distributed under my own label. Three years later, I had my own place.

    As for initial expenses, I think you can keep them pretty low, and let them grow as your sales increase. Tap handles can be made easily and inexpensively by thirsty under-employed woodworkers. I have rented walk-in cooler space (look for fruit and veg wholesalers, or call the local cooler repair shops and ask if anyone might have excess space) for about $40-50 / pallet (sixteen kegs on two layers) per month.

    In Washington state you can self-distribute. Right now, distributors buy micro-brewery kegs for $90-100 / 1/2bbl, and resell them to retailers for around $140. I would strongly argue that you NOT use a distributor at first; email for details.

    The one cost you cannot sidestep is kegs. General rule is that you need to own four for every one in use, but I would shorten that to three if you are self distributing. 'Fat boy' bung-sided are the cheapest ($60-75 each used) and easiest to deal with, but also the hardest to handle, easiest to puncture, and least welcome in bars and restaurants. 'Tall slim' 1/6 are all the rage, and cost about $100 new.

    Talk to places where you want your future beer to be on draft. Make sure you are talking to the 'beer decider.' Make very clear that you are not selling your brewpub's beer under a different label, that it is your recipes and your product (even very friendly business owners will not carry a product that will direct their customers to the 'competition').

    Good luck,

    Dylan Goldsmith
    www.capturedbyporches.com
    Dylan Goldsmith
    Brewer
    Captured by Porches Brewing Company
    Saint Helens, Oregon

  9. #9
    Join Date
    May 2007
    Location
    Walla Walla, WA
    Posts
    121
    Hey all thanks for the responses, there are some things in this plan that I hadn't yet considered, and some other things that you mention that I have considered, but it is good to see them all laid out in one place.

    As far as initial outlay of money, it seems to me that it is much, much cheaper to get started this way, than to buy my own tanks and make a go of it. Cost of kegs, tap handles, filling and cleaning equipment isn't cheap, but it is a cost I am willing to take on. Keg storage is a question that I don't have answered yet. I am in Washington state, so I can self-distribute, which is key to the whole venture. I think there are enough bars in town to take on my kegs, and to keep me relatively busy, but I need to do a little more research to see how fast the kegs will get emptied. I am not trying to make a killing on this, but rather get my name out there, gauge the market, and try not to lose a ton of money.

    My other big question is how much to offer the owner of the brewpub. These would be 7bbl batches, with the option of double batches. I think I would offer him something on a per-batch basis, but I am not sure where to even start. $100? $200? more?

    By the way, a pickup truck, a strong back and a hand cart is all you need to to get your beer in to a bar right?

  10. #10
    brewninja Guest
    Quote Originally Posted by troybinso
    By the way, a pickup truck, a strong back and a hand cart is all you need to to get your beer in to a bar right?
    I've delivered with a just the strong back and a minivan

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