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Thread: Nanobrewery - The Lessons I've Learned

  1. #46
    Join Date
    Jul 2011
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    Cape Town, South Africa
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    69

    Thumbs up Thanks...

    Thanks for the great post Andrew & all the great replies...

  2. #47
    Join Date
    Nov 2002
    Location
    Columbus, OH
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    417

    No Politics

    Quote Originally Posted by charron View Post
    Really, teatard ? insults? I'm a registered PUBLICAN anyway, as in barkeep. Insults aside your right, wrong forum. Teatard, though, why I never!
    not the venu for politcal speech...it certianly doesn't forward the conversation about Nano breweries...Stick to Facebook if you want to shake the fist please.
    Larry Horwitz

  3. #48
    Join Date
    Aug 2012
    Posts
    2

    Arrow

    Thank you all for your insights. We've been in the "planning phase" now for quite some time. We (my wife and I) are attempting to have a go at it debt free and are on the fence between buying a 3.5bbl and a 5bbl. While I'd love to go bigger, it's out of our realistic plan. (The 5bbl is teetering the fence)

    I really appreciate every little bit of insight from everyone.

  4. #49
    Join Date
    Jan 2013
    Location
    Austin, tx
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    4
    But what if your nano brewed premium high gravity beers packaged in 750ml bottles? Here in Texas a nano can self distribute and the brewer can sell their beers at $84 case. I think a nano could be profitable in such case

  5. #50
    Join Date
    Nov 2002
    Location
    Columbus, OH
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    417

    tough numbers

    Even at that rate it is SUPER tough to make a living. Check this out

    Gross per case $86.00
    Cost per case $42.00
    Net $44.00
    cases per bbl 12.9
    $ per bbl $567.60
    100 bbls $56,760.00
    300 bbls $170,280.00

    those are net after base COG on 750ml bottles. Now take out overhead, direct costs (chemicals, taxes etc. ) and you're down in the $25K per 100 bbl range. You won't be able to take a salary at that level.
    Larry Horwitz

  6. #51
    Join Date
    Oct 2002
    Location
    Boulder, CO
    Posts
    17

    Good talk.

    Nicely put. This is useful information.

  7. #52
    Join Date
    Nov 2009
    Location
    Cincinnati, Ohio
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    366
    Quote Originally Posted by Larry Horwitz View Post
    Even at that rate it is SUPER tough to make a living. Check this out

    Gross per case $86.00
    Cost per case $42.00
    Net $44.00
    cases per bbl 12.9
    $ per bbl $567.60
    100 bbls $56,760.00
    300 bbls $170,280.00

    those are net after base COG on 750ml bottles. Now take out overhead, direct costs (chemicals, taxes etc. ) and you're down in the $25K per 100 bbl range. You won't be able to take a salary at that level.
    Even at 100 BBL/year you are trying to sell 108 cases per month. How big of a distribution area will be needed to achieve this goal? Not sure where you are located but if you have to drive 50 miles away to get enough sales that will eat a lot of the profit from that sale.
    Scott LaFollette
    Fifty West Brewing Company
    Cincinnati, Ohio

  8. #53
    Join Date
    Jan 2013
    Location
    Austin, tx
    Posts
    4
    Here are my calculations: 4x4bbl fermenters turning 32 bbl a month. That's 423 cases a month at $84 a case totaling $35553 per month. Costs (ingredients, rent, utilities, debt payment, ins., etc) roughly $18k per month with a $17k net. An operation this size can be done with 1 or 2 individuals who are willing to hustle. Austin, Tx is centralized along the I35 coridor with lots of beer drinkers in between. That could work maybe...

  9. #54
    Join Date
    Nov 2009
    Location
    Cincinnati, Ohio
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    366
    yes that could work i suppose. keep this in mind too. you won't sell that many cases in month #1 or 2 or 3 etc.... Make sure you have enough cash reserves and a reasonable sales growth forecast (not too aggressive) to survive until then. i am putting out a little less than 30 bbl per month out of a low budget 7 bbl system right now. i am selling draft through a distributor so the numbers are different, but i have not yet reached the "break even point". The plan was to get to break even in about 6 months which seemed infinitely do-able (at the time). I am in month 7 and not there yet. My reserves are spent and my credit is about maxed.....

    cash flow is the key. the raw numbers always look good. sell $40 worth of beer for $80 etc.. the impact of not spreading fixed costs over decent volume, especially in the beginning can be a killer....

    My $.02 worth...
    Scott LaFollette
    Fifty West Brewing Company
    Cincinnati, Ohio

  10. #55
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    Jan 2013
    Location
    Austin, tx
    Posts
    4
    Yes, sales are most important. The industry is booming in central Texas so I'm optimistic. Jester King Brewery has a similar model and do about 800bbl a year. They can't keep'm on the shelves

  11. #56
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    Nov 2008
    Location
    Leadville, CO
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    252
    Quote Originally Posted by Newdublin View Post
    An operation this size can be done with 1 or 2 individuals who are willing to hustle.
    I hope this doesn't come off as excessively negative, but even with two employees this seems just barely doable. Eight brews/month means you need one person in the brewery full-time (and then some), probably with some part-time help on packaging days. So your second employee has at most three full days/week on the road, meaning 60 accounts at the absolute maximum. Are there that many retailers within a few minutes' drive, accounting for the fact that you'll simply never reach 100% penetration? If you have to get into adjacent towns (increased driving time), can you move 400 cases a month through 40 retailers? 30? 20?

  12. #57
    Join Date
    Jan 2013
    Location
    Austin, tx
    Posts
    4
    At 4 bottles a minute, 1 person can knock out 4bbls in less than 3 hours. Capped, boxed and palletized, then go on to clean the packaging tank and fermenter for next days brew. So milling, brewing, packaging, cleaning would only entail 4-5 days every two weeks. San Antonio, New Braunfels, San Marcus, Temple, Waco, all beer thirsty towns are with in an hours drive from the Austin/Round Rock metro area. Dallas and Houston are under 3 hours drive and at $84 a case it *could* be worth going the distance. 2 people could easily accomplish this on top of book keeping, marketing and such.

  13. #58
    Join Date
    Mar 2006
    Location
    Ex-Germany / California
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    579
    In the end, it comes down to the quality of your beer.

    Once you have gotten over the "honeymoon" of everyone wanting your beer, do not expect more than a case per month per outlet. Meaning you need 432 accounts. Everyone must sell a case. Every month. Which means you will need about 1000 accounts because this will not happen. And then find out if there are even 1000 beer-savvy accounts in that area, which I highly doubt.

    Do yourself a favor and ask 20 retailers how much beer they are moving of the $84/case "semi desirable" beers, but not Jester King. Then you have a true feel for volume that you might be able to move. In my own sales area, I move about 1 case of $84 750 ml beers per 3-4 months. And that's a good beer. Remember, the competition is growing daily.
    Last edited by einhorn; 01-24-2013 at 09:35 PM.

  14. #59
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    Nov 2008
    Location
    Leadville, CO
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    252
    Quote Originally Posted by Newdublin View Post
    At 4 bottles a minute, 1 person can knock out 4bbls in less than 3 hours.
    What kind of equipment are you looking at? That's roughly the throughput of a 4-head Meheen filling 22s, with two operators doing manual (un)boxing.

  15. #60
    Join Date
    Sep 2012
    Location
    Denver, CO
    Posts
    351
    Unicorn is right, you won't be moving every unit you produce, every month.

    I would probably make a computer simulation with excel, using lookup functions for random numbers, or something fancier if you're computer savvy.

    Set up a normal distribution for expected demand, with 0 on one end and your max production on the other end. I would use a uniform distribution for the range of your variable costs, and just plug in your projected fixed costs. Run the simulation a couple hundred times and see how often you end up in the red.

    It's not a perfect analysis, but if you end up in the red a lot, that's a red flag.

    If your plan looks like you'll come out ahead, as yap said, make sure you have enough cash to stick with it until you start making money.

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