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  • Number of Kegs needed estimate

    I am in the process of opening a 3BBL per week brewery, and one thing I am kind of clueless on is how many kegs I will need to purchase/rent. I am figuring a mixture of mostly sixtels with some 1/2 barrels (80/20). At first we will be self distributing with no tasting room. Any input would be greatly appreciated. We will approxiamately be distributing over an area that is 30 miles long 5 miles wide on Long Island

  • #2
    This is a bad way to start small brewery.
    Just my 2cents.

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    • #3
      I suggest that you should really run the numbers on having a taproom. Profits are considerably better. I too am in the start up stage and I am in a state with antiquated laws. I would focus more on a taproom if I could.

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      • #4
        Unfortunately we do not have the capital for a tap room, I have run the numbers and we can still maintain decent profits until we save up enough capital to buy a tap room. Retail space is not cheap on Long Island. I have run all the numbers, I am aware that having a tap room would increase our profits greatly.

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        • #5
          Well, in that case there have been other threads on this issue. But I would think if you are self distributing then you should get at least 3 times the number of taps. I would however go with more. You need to account for those in service, those that need to be picked up, cleaned, to be cleaned and also those that walk off. So I would look at 4-5 times personally. I think this is actually more of a personal choice. Everyone will do it different. Best of luck.

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          • #6
            Originally posted by Biggness View Post
            I have run the numbers and we can still maintain decent profits until we save up enough capital to buy a tap room.
            I'm not sure how on <$50k in revenue, but to answer the question…

            At a minimum, you need three shells per account/handle. One on tap, one sitting at the retailer, one at the brewery being cleaned/filled. Four per handle gives you a lot more wiggle room. Given that, you just need to survey your retailers to find out how fast their beer moves. If they're averaging a half-barrel every 10 days, then you need 3*52/(.5*365/10) = 8.5 handles, or 26-34 half-barrels. Check on their sixtel mixes too; 80/20 sounds really high.
            Sent from my Microsoft Bob

            Beer is like porn. You can buy it, but it's more fun to make your own.
            seanterrill.com/category/brewing | twomilebrewing.com

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            • #7
              Originally posted by a10t2 View Post
              I'm not sure how on <$50k in revenue, but to answer the question…

              At a minimum, you need three shells per account/handle. One on tap, one sitting at the retailer, one at the brewery being cleaned/filled. Four per handle gives you a lot more wiggle room. Given that, you just need to survey your retailers to find out how fast their beer moves. If they're averaging a half-barrel every 10 days, then you need 3*52/(.5*365/10) = 8.5 handles, or 26-34 half-barrels. Check on their sixtel mixes too; 80/20 sounds really high.
              The 80-20 may be way off, I will be contacting all potential customers as to if they prefer sixtels/half barrels. From what I have heard from my friends around here most of the craft bars prefer sixtels, for the high turnover rates, where as the high volume places will certainly prefer half barrels. Thank you for a base number for the kegs. I received an estimate from a keg rental company that seemed alot more than I had assumed, and according to your number, my estimate was ballpark. They had me up around 100 barrels of kegs.

              To briefly answer the profitability question, I am doing this with 2 other guys, we all have full time jobs. We got a very reasonable price on contract brewing on a 3 barrel system. I personally went to college for engineering, wrote a spreadsheet, broke down every cost. With very realistic numbers we can make about 800-1000 per week after all costs. We plan on putting all this money directly back into funds to grow the business. We are debating on bringing on an investor. I personally love the idea of a tasting room, but I would love to directly test the market first without too much risk. I know I can make good beers, I have won numerous awards on my brewing, and had a few of my recipes commercially brewed already. If the numbers look well after a few months, we will have to cross that bridge, till then we have a while waiting on our paperwork, and many things can change between now ans then. I have 3 young boys, so I have to be very cautious with my finances

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              • #8
                Originally posted by Biggness View Post
                With very realistic numbers we can make about 800-1000 per week after all costs.
                I get that you're in an affluent area, but even wholesaling at $300/bbl, you'd only *gross* $900/week. I could see someone breaking even on that volume as long as you have no payroll, but I just don't see much profit potential. For whatever my opinion is worth.
                Sent from my Microsoft Bob

                Beer is like porn. You can buy it, but it's more fun to make your own.
                seanterrill.com/category/brewing | twomilebrewing.com

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                • #9
                  I greatly appreciate your input, for 1/2 barrels we will be getting around 300, for sixtels we'll be up around 500+, and we also have a deal with the contact brewer that they'll be directly selling our beer, and that deal will leave us around 600 per barrel. Any costs that you feel I might be missing, I would greatly appreciate.

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                  • #10
                    Another thing I forgot to mention is that we will be able to directly sell growlers to customers at farmers markets. Not that that'll be a huge portion of our sales, but it'll be a nice profit margin

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                    • #11
                      Number of Kegs needed estimate

                      I see that you contract brew.

                      At the end of the day, people want to see your brewery where you make your beer. Full contract brewer has an "image" issue. How does it connect to your story?

                      Not to rain on your parade. If you do not want to fully commit yourself to the project, then why to start. Professional brewing is not Homebrewing.
                      Last edited by Thirsty_Monk; 11-22-2014, 06:33 PM.

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                      • #12
                        I produce 4bbl/week. I have 36 1/2 and 36 1/6bbl. I'll be adding 12 more of each. And more down the road. I sell 75% tasting room 25% wholesale.
                        Don't be fooled by the higher gross for 1/6BBL. It takes the same labor to clean, fill and deliver as a 1/2. At small scale, if you net over $175 per barrel wholesale it's a good day
                        Prost!
                        Eric Brandjes
                        Cole Street Brewery
                        Enumclaw, WA

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                        • #13
                          All very valid points. We might have to aggressively look more into how we can get into a tasting room immediately. I fully understand that this is not homebrewing, hence why I am running the numbers on anything that might be possible $ wise. Ultimately in this project I am responsible for recipes, the brewing process and future construction jobs. My partners are responsible for marketing, financing and sales. I am trying to do the best I can with what we have money wise. I personally can not quit my job, and my partners understand that. My job is to create recipes that'll create a buzz, fine tune my partners brewing process and when we can afford train another brewer so that we can brew more than once a week.

                          I truly appreciate the reality check from you all, I take it all to heart, and will have some future points I need to discuss with my partners.

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                          • #14
                            NY Taproom rules/Jockeybox

                            We are a 12Hl brewery in Nevada/3 tier State, and purchased 100 used 1/2barrels, 50 new 1/6ths. Distribution is to Las Vegas and Reno. We are 200 miles from each city.
                            Why cant you set up a Jockeybox and do tasters and fill growlers, get some chairs etc.

                            Lance
                            Tonopah Brewing Co.
                            Nevada USA
                            775.997.6411

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                            • #15
                              "Brewing beer is easy, selling it is a bitch."

                              It'll take a lot more legwork to sell even 3bbls a week than you think, so factor that in.

                              I find that the standard 3-4 kegs per handle rule is antiquated given then near total lack of dedicated handles in the current market. (At least out here anyway, YMMV.) On the one hand this means more opportunity with more rotating taps out there, but that opportunity is more fleeting too. We've got more than 200 accounts right now, but only a minority are dedicated handles, where you've got one on tap, one as a backup. Usually it's sporadic ordering across a wide swath of territory, meaning more kegs are needed because more are out in the field, spread more thinly. I love accounts that take the same one of our core brands consistently each week, but those are few and far between. It's "what have you got that's new..." Best you can hope for is regularly rotating various beers through a regular and busy account along with everyone else.

                              The 1/2 bbl / sixtel mix is highly variable and locally dependent too. Many of our local accounts take sixtels, but out in the wider world we sell way more 50Ls. Some places just flat out won't take sixtels. And then you get the accounts that are an hour and a half drive away that take one sixtel every month, but when they want it, by god, they want it now. Sigh.

                              Good luck! But I must add that by and large the nanos around here that have closed have all been the ones only doing wholesale. It's a volume game, pure and simple.
                              Russell Everett
                              Co-Founder / Head Brewer
                              Bainbridge Island Brewing
                              Bainbridge Island, WA

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