Nano for R&D or go for 15 bbl?

[mmussen]

A word on dealing with the TTB - you need to have a license before you can SELL a drop of your beer, regardless of how much you're brewing. As a homebrewer you can make your 100 gal but you better not get caught selling any of it to anyone. If that happens you can bet the TTB won't be letting you get a license any time soon.

[CharlosCarlies]

With all due respect to some of the previous posters...

Skip the nano.

Old post, but have to completely agree w/ Natrat...especially if funding isn't the major hold-up (which it sounds like it isn't/wasn't in this case). Killing yourself brewing 2 BBL batches is going to get really old, really fast. We were in a very similar situation: homebrewers w/ little/no "pro" experience and took the plunge w/ a 20 BBL system and honestly now wish we had gone bigger. The entire process of building the brewery can take several months or more which gave us plenty of time to research, plan, and visit/talk to as many breweries as possible. Most of the people in the industry are extremely helpful, and we try to pass on that same good will whenever possible.

A couple of things that helped tremendously (for me at least):

1) Read, read, read...especially on here. Can't tell you how many processes I didn't fully understand until digging through these forums. There are some incredibly knowledgeable (and helpful) people here.

2) Intern/volunteer at a brewery if they'll let you. I had to e-mail probably 30+ breweries and spend a month in a different city, but it was well, well worth it. I had done a ton of reading and had plenty of theoretical knowldge, but seeing/feeling/doing things yourself was a humbling, yet extremely educational experience.

3) Go w/ a reputable manufacturer and don't be afraid to ask them as many freaking questions as you can think of, no matter how stupid. We ended up going w/ DME and even yesterday I was on the phone w/ them trying to dial in our lautering process. You should see how many e-mails and phone calls we went back and forth with before pulling the trigger on our system and during the build-out.

4) A consultant is obviously another good option and one we almost went with, but in the end doing as much as possible ourselves will likely pay huge dividends in the future as we now have a much better understanding of how the process could/should work. I always joke that after going through the process of building a brewery, my second brewery build-out would be amazing.

Something else to consider, and I always hate thinking negatively...but if you do your research and purchase quality equipment, even if the brewery did fail you will have zero problem selling everything off for reasonably close to what you paid for it given the current market. We looked and looked and looked for used equipment but everything good always got snatched up immediately. Not exactly encouraging perhaps, but when calculating risk/reward it's good to consider an exit strategy.

[dhdarden]

Why is it not possible to be profitable as a NANO ?

A 2 BBL brewhouse with four 4 BBL CFVs and one 4 BBL BRITE ( brewing ales) should be capable of producing 416 BBLs ( 52/2 * 16) a year.

416 BBLs = 832 1/2 BBLs.

At $5 pint, that's a gross revenue of $499,200.

Seems like a small Nano operation should be able to eek out a pretty decent profit at that revenue level.... That is, if the beer is very good and the neighborhood supports the Nano.

Please slap me around and tell me what I'm missing.


Thanks,

Dan

With all due respect to some of the previous posters...

Skip the nano.

It is, unless you plan to have special beers in a taproom down the line, a waste of effort.

I get all the reasons to start off small, but this is small, hard work, and money losing. Not only that, but slaving away at brewing on a nano for two years will NOT prepare you for brewing on a 15 bbl or 20 bbl system. It is simply different. There is very little difference scaling from a half bbl to 2 bbl. But scaling to 15 bbl is like trying to fly a Learjet after training on a twin engine Cessna.

Granted, you might lose some money on some batches gone wrong on the big system, but it will be less money and less time than building and brewing on a dinky little 2 bbl.

I can think of about a hundred more reasons to skip the nano, and only two or three to go with it. You will learn SO much about things during the construction of the brewery...and hiring the right consultant can save you scads of money down the line...because your consultant should be able to see workflow problems and process issues from 5 years away.

Natrat

[uptown brothers]

A 2 BBL brewhouse with four 4 BBL CFVs and one 4 BBL BRITE ( brewing ales) should be capable of producing 416 BBLs ( 52/2 * 16) a year.

416 BBLs = 832 1/2 BBLs.

At $5 pint, that's a gross revenue of $499,200.

Seems like a small Nano operation should be able to eek out a pretty decent profit at that revenue level.... That is, if the beer is very good and the neighborhood supports the Nano.

Please slap me around and tell me what I'm missing.


Thanks,

Dan

i think you'll be lucky to get 14 bbl every two weeks out of that system--process losses, trub loss, yeast dumping, dry-hopping, etc. I also think you don't necessarily get a two week turnover, i.e. 26 turns a year, on everything you make. You might want to estimate closer to 20 turns, or be serving some green and under-conditioned beer.

Next, you won't get 240 pints out of every barrel. You might appropriately assume closer to 200.

Next, selling doesn't come automatically. You're going to have to spend some time, a LOT of time, drumming up interest. Time you don't have if you're making 4 double batches every two weeks, running your taproom etc. Your model anticipates selling just under 100,000 pints a year in your tap room. That's 2000 a week roughly. Assuming you're open weekdays from 4 to 10 and weekends from 12 to 10, and you don't take any days off to regroup, that's still 50 hours a week and 40 beers per hour constantly, no slacking off, every hour you're open. Obviously it doesn't go like that, Fridays are busier than Mondays, but I'm painting in broad strokes here. I definitely know some nanos who can sell 40 pints per hour from 2 PM through 6 PM on a sunny Saturday. Maybe even all of 'em in Denver (that I'm familiar with).

But I know very few that are doing it every hour they are open. And back to a previous assumption, I know very few that are open 50 hours a week, as well. Some take Monday and Tuesday off (not "off", they're working, just not open to the public for on-premise sales), many close at 8 or 9 instead of the 10PM I assumed, etc.

Another way of looking at it is that most customers will have average about 2 beers per stop-in. Yeah, some will have 3 or 4, but enough others will only have 1, that 2 is a good number to use. 2000 beers a week thus means about 1000 patron visits per week.

But, assuming you can sell everything you make, i.e. pay no attention to the cautionary notes of the preceding 3 paragraphs, there's still the first two paragraphs which I think are reality--the described system running full tilt is more likely to generate (at a maximum with no down time) 365 days per year/18 day per cycle * 14 bbl = 20*14 = 280 bbl per year *$1000/bbl = $280,000 per year. (IMO, obviously YMMV)

[dhdarden]

Thanks for the reality check

Thanks for the reality check.

I assumed there would be process losses. I was just not sure how large they would run. I can totally accept that 2 BBLs might be lost out of 16 BBLs brewed.

Losing 20 pints though out of each and every 1/2 BBL Keg seems high to me. Is there really that much beer lost to over-foaming or is this loss really a reflection of beer given away to customers or drunk by employees (a form of pilferage) ?

Just seeking to understand.

Many thanks,


Dan


QUOTE=uptown brothers;126403]i think you'll be lucky to get 14 bbl every two weeks out of that system--process losses, trub loss, yeast dumping, dry-hopping, etc. I also think you don't necessarily get a two week turnover, i.e. 26 turns a year, on everything you make. You might want to estimate closer to 20 turns, or be serving some green and under-conditioned beer.

Next, you won't get 240 pints out of every barrel. You might appropriately assume closer to 200.

Next, selling doesn't come automatically. You're going to have to spend some time, a LOT of time, drumming up interest. Time you don't have if you're making 4 double batches every two weeks, running your taproom etc. Your model anticipates selling just under 100,000 pints a year in your tap room. That's 2000 a week roughly. Assuming you're open weekdays from 4 to 10 and weekends from 12 to 10, and you don't take any days off to regroup, that's still 50 hours a week and 40 beers per hour constantly, no slacking off, every hour you're open. Obviously it doesn't go like that, Fridays are busier than Mondays, but I'm painting in broad strokes here. I definitely know some nanos who can sell 40 pints per hour from 2 PM through 6 PM on a sunny Saturday. Maybe even all of 'em in Denver (that I'm familiar with).

But I know very few that are doing it every hour they are open. And back to a previous assumption, I know very few that are open 50 hours a week, as well. Some take Monday and Tuesday off (not "off", they're working, just not open to the public for on-premise sales), many close at 8 or 9 instead of the 10PM I assumed, etc.

Another way of looking at it is that most customers will have average about 2 beers per stop-in. Yeah, some will have 3 or 4, but enough others will only have 1, that 2 is a good number to use. 2000 beers a week thus means about 1000 patron visits per week.

But, assuming you can sell everything you make, i.e. pay no attention to the cautionary notes of the preceding 3 paragraphs, there's still the first two paragraphs which I think are reality--the described system running full tilt is more likely to generate (at a maximum with no down time) 365 days per year/18 day per cycle * 14 bbl = 20*14 = 280 bbl per year *$1000/bbl = $280,000 per year. (IMO, obviously YMMV)[/QUOTE]