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Thread: Another Start-up Projection Question...

  1. #1
    Join Date
    Mar 2014
    Location
    NJ
    Posts
    6

    Another Start-up Projection Question...

    So after over a year of planning my partner and I feel we’re finally worthy of posting to this thread to try and solicit some honest feedback. Two local breweries in our area feel our estimates below are within range, but on the higher end. We’re hoping you could help tell us whether our plans and projections are realistic, optimistic, or a near-death hallucination. Feel free to rip the following apart as you see fit and thanks ahead of time!

    We’re planning to open a 10 bbl production brewery with on-site sales in a suburban area 15 minutes outside of a major city. Our location is a 4,500 sq ft box, 1,250 of which will belong to the taproom, with 20 ft ceilings which we plan on owning. It will be just my partner and I doing all the brewing and business related functions with some servers for peak hours. To start we’ll have 1, 20 and 2, 10 bbl fermenters as well as 1 20 bbl brite and 2 10bbl serving tanks. We’ll look to use a mobile canner in year three. No plans for using a distributor.

    On-Site Unit Sales:
    Day of Week ......M T W T F S S Day
    1/2 keg inhouse ..- - - - 1 - - Units
    1/6 keg inhouse ..- - - - 1 - - Units
    Growler ..........- - 2 4 15 15 10 Units
    12 - 16 Oz .......- - 25 50 125 150 100 Units
    3, 4oz flights ...- - 25 50 125 150 100 Units

    Distribution, Staffing, Equipment
    Year 1 assumptions 9 sixtels and 3 halves per week
    Year 2 assumptions 15 sixtels and 6 halves per week
    Year 3 assumptions 20 sixtels, 9 halves, and 50 cases per week & hire sales associate, hire a driver, purchase another 20bbl fermenter and brite
    Year 4 assumptions 30 sixtels, 15 halves, 100 cases per week & hire taproom manager, purchase 2 more 10bbl fermenters and brites
    Year 5 assumptions 45 sixtels, 15 halves, 200 cases per week & hire another sales associate, purchase 2 more 20bbl fermenters

    Production
    Year 1 400 - 500 approximately 1, 10 bbl batches per week
    Year 2 600 - 700 approximately 1.5, 10 bbl batches per week
    Year 3 800 - 1000 approximately 2, 10 bbl batches per week
    Year 4 1400 - 1600 approximately 3, 10 bbl batches per week
    Year 5 1800 - 2100 approximately 4, 10 bbl batches per week

    We’re looking into O’Neill’s Brewing Systems, CraftWerks, and Criveller. We’ve visited a brewery who recently installed O’Neill’s and they had positive things to say. Any advice would be much appreciated, thanks!

  2. #2
    Join Date
    Mar 2014
    Location
    West Des Moines, IA
    Posts
    60
    With your current set up you will almost be maxed out at 600bbl per year. I suggest getting more fermenters and storage tanks. This will also allow you more flexibility in the number of different beers you produce. Right now with a good amount of kegs you will only be able to offer 3-5 beers. Try and have more serving tanks that fermenters. This will keep your keg waste down and kegs suck to clean.

    As far as sales estimates, these are hard to estimate. There are so many factors that go into making in-house sales and distribution successful. With that being said your figures might be high but that really depends on how you go at it. A good sales person could get that volume out.

  3. #3
    Join Date
    Apr 2012
    Location
    Bainbridge Island, WA
    Posts
    746
    Hope you've got some capital left over, because most likely you will be:

    - Hiring more staff. Rapidly.
    - Adding more fermenters. Under that plan I give it six months before you need another 20. And another, six months to a year after that. Might as well just put them in to start when it's easy. You can always do half-batches until you've got the demand.
    - Keg sales mix is hard to determine, depends on local factors. You might more easily be selling 5 1/2bbls and 3 sixtels than 3 and 9. Remember that since you have no sales staff, you or your partner have to be the one out there beating the pavement, then running deliveries. In all your spare time.
    - How many beers do you intend on serving? Three? Variety brings people to a taproom.

    Fortunately you've underestimated some things. I'd suspect you'll do many more growlers than that. Probably more pints too. Maybe fewer flights unless it's tourist season. See how five days goes, maybe try six. Took us a year before we went to seven days. We don't make a huge amount on the slower week days and if we lost money obviously we wouldn't do it, but it pays just enough for the staff and the rent that day, sometimes more. Short of it, remove your year 1 calculations and shift everything up. Year 2 is now Year 1. That's probably closer to the truth.
    Russell Everett
    Co-Founder / Head Brewer
    Bainbridge Island Brewing
    Bainbridge Island, WA

  4. #4
    Join Date
    Sep 2014
    Location
    Goshen, Indiana
    Posts
    61
    Quote Originally Posted by Bainbridge View Post
    Hope you've got some capital left over, because most likely you will be:

    - Hiring more staff. Rapidly.
    - Adding more fermenters. Under that plan I give it six months before you need another 20. And another, six months to a year after that. Might as well just put them in to start when it's easy. You can always do half-batches until you've got the demand.
    - Keg sales mix is hard to determine, depends on local factors. You might more easily be selling 5 1/2bbls and 3 sixtels than 3 and 9. Remember that since you have no sales staff, you or your partner have to be the one out there beating the pavement, then running deliveries. In all your spare time.
    - How many beers do you intend on serving? Three? Variety brings people to a taproom.

    Fortunately you've underestimated some things. I'd suspect you'll do many more growlers than that. Probably more pints too. Maybe fewer flights unless it's tourist season. See how five days goes, maybe try six. Took us a year before we went to seven days. We don't make a huge amount on the slower week days and if we lost money obviously we wouldn't do it, but it pays just enough for the staff and the rent that day, sometimes more. Short of it, remove your year 1 calculations and shift everything up. Year 2 is now Year 1. That's probably closer to the truth.
    Maybe. We dont know what their beer tastes like. If their food is tasty. Where they are located. What their local market is like. Who their competitors are.


    OP-
    You say you have talked to some local breweries and they think your numbers look right. As long as they aren't bullshitting they are a great resource. Look at what they are doing and why they are bringing in the customers they do. Is there something you can do that would appeal more to your local market? Of course there is. I'm assuming that the two local breweries you mention have tap rooms? Go to brewery A and talk to their customers about brewery B. Do the same at brewery B. People tend to get real honest after a beer or two.

  5. #5
    Join Date
    Mar 2014
    Location
    NJ
    Posts
    6
    Quote Originally Posted by gbrower View Post
    With your current set up you will almost be maxed out at 600bbl per year. I suggest getting more fermenters and storage tanks. This will also allow you more flexibility in the number of different beers you produce. Right now with a good amount of kegs you will only be able to offer 3-5 beers. Try and have more serving tanks that fermenters. This will keep your keg waste down and kegs suck to clean.

    As far as sales estimates, these are hard to estimate. There are so many factors that go into making in-house sales and distribution successful. With that being said your figures might be high but that really depends on how you go at it. A good sales person could get that volume out.
    Thanks gbrower. I think if we take away from our construction design I'm sure we can afford an additional serving tank. You're right we are definitely planning on serving out of 1/2s and we've budgeted for a keg cleaner as we're told it is worth every penny.

  6. #6
    Join Date
    Mar 2014
    Location
    NJ
    Posts
    6
    Quote Originally Posted by Bainbridge View Post
    Hope you've got some capital left over, because most likely you will be:

    - Hiring more staff. Rapidly.
    - Adding more fermenters. Under that plan I give it six months before you need another 20. And another, six months to a year after that. Might as well just put them in to start when it's easy. You can always do half-batches until you've got the demand.
    - Keg sales mix is hard to determine, depends on local factors. You might more easily be selling 5 1/2bbls and 3 sixtels than 3 and 9. Remember that since you have no sales staff, you or your partner have to be the one out there beating the pavement, then running deliveries. In all your spare time.
    - How many beers do you intend on serving? Three? Variety brings people to a taproom.

    Fortunately you've underestimated some things. I'd suspect you'll do many more growlers than that. Probably more pints too. Maybe fewer flights unless it's tourist season. See how five days goes, maybe try six. Took us a year before we went to seven days. We don't make a huge amount on the slower week days and if we lost money obviously we wouldn't do it, but it pays just enough for the staff and the rent that day, sometimes more. Short of it, remove your year 1 calculations and shift everything up. Year 2 is now Year 1. That's probably closer to the truth.
    Thanks Bainbridge. I'm not sure we'll be able to hire staff other than servers in our first year. To your point it might be more cost effective to do all 20s at the start. My worries were we wouldn't have enough demand. We definitely want variety hoping to have 6 - 9 beers on tap at the end of the first year. Thanks for the advice.

  7. #7
    Join Date
    Mar 2014
    Location
    NJ
    Posts
    6
    Quote Originally Posted by Floor Malted View Post
    Maybe. We dont know what their beer tastes like. If their food is tasty. Where they are located. What their local market is like. Who their competitors are.


    OP-
    You say you have talked to some local breweries and they think your numbers look right. As long as they aren't bullshitting they are a great resource. Look at what they are doing and why they are bringing in the customers they do. Is there something you can do that would appeal more to your local market? Of course there is. I'm assuming that the two local breweries you mention have tap rooms? Go to brewery A and talk to their customers about brewery B. Do the same at brewery B. People tend to get real honest after a beer or two.
    Thanks Floor. To give you some perspective I like to compare our beer to beautiful golden suds. We won't be doing food but will have on-site sales as part of a tour. That's good advice because it's only been recently that we've been spending less time with the brewery owners and more time with patrons. We'll have to probe a bit further as to what gets them coming back rather than going elsewhere. Thanks again!

  8. #8
    Join Date
    Jun 2019
    Location
    Clifton, NJ
    Posts
    3

    Question O’Neill’s

    BrewItNow

    Just curious if you ended up using O'Neill's? Three breweries in NJ have used them and all have had negative comments based on the equipment quality, customer service, and warranty. Feel free to message me if you want more specific details based on MY personal experience with O'Neill's Brewing Equipment.

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