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Thread: What's the minimal amount of money that I need to start a 1-barrel brewery in pa?

  1. #16
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    Apr 2013
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    Quote Originally Posted by Catfish002 View Post
    http://www.breweryoperationsmanual.com/home.html

    Get the brewery operations manual, SOP book and the Frankenbrew DVD and you will get info and ideas. Tom Hennessy is awesome.
    This is excellent advice. Tom also has an SOP book that you can use as your own SOP. If you can spare $2500 and a trip to Colorado, take Tom's Brewery Immersion Course. You'll learn a lot about the business side of brewing. Personally, I think there are too many young guys out there that brew good beer in their garage or basement but they know nothing about the business end of brewing. The business end is extremely important and not just how well you can brew. Also, do not take quality control for granted. People constantly knock the macro brewers and throw around words like quality. Well, the macros know a helluva lot about quality and like it or not, you can pop a can of Bud Light in Fresno, CA and then fly to somewhere in central Florida and it will taste the same. That is quality control. You should also get Dan Woodske's book. He runs a successful nano in Beaver Falls, PA.

  2. #17
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    Feb 2017
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    Philadelphia, PA
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    re HogMountain

    Quote Originally Posted by HogMountain View Post
    This is excellent advice. Tom also has an SOP book that you can use as your own SOP. If you can spare $2500 and a trip to Colorado, take Tom's Brewery Immersion Course. You'll learn a lot about the business side of brewing. Personally, I think there are too many young guys out there that brew good beer in their garage or basement but they know nothing about the business end of brewing. The business end is extremely important and not just how well you can brew. Also, do not take quality control for granted. People constantly knock the macro brewers and throw around words like quality. Well, the macros know a helluva lot about quality and like it or not, you can pop a can of Bud Light in Fresno, CA and then fly to somewhere in central Florida and it will taste the same. That is quality control. You should also get Dan Woodske's book. He runs a successful nano in Beaver Falls, PA.

    I have a pile of books I need to read now including those books and dvd.
    I'm planning on doing something similar that is much closer to me on the east coast at a brewery in new york called hopshire farm and brewery that has a two workshop that will cost significantly less than that. Actually now that you reminded me I need to give them another call to see when they will be running the next workshop.
    Right now since I'm scaling down from a previous business plan that was incomplete I'm trying to figure out my true cost for what I want to do. Right now I'm trying to research brewery floors.

  3. #18
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    Quote Originally Posted by LaserKyle View Post
    I have a pile of books I need to read now including those books and dvd.
    I'm planning on doing something similar that is much closer to me on the east coast at a brewery in new york called hopshire farm and brewery that has a two workshop that will cost significantly less than that. Actually now that you reminded me I need to give them another call to see when they will be running the next workshop.
    Right now since I'm scaling down from a previous business plan that was incomplete I'm trying to figure out my true cost for what I want to do. Right now I'm trying to research brewery floors.
    Good luck and much success!

  4. #19
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    Apr 2013
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    monmouth, IL USA
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    Run the Numbers!!!!

    Dude.... run the numbers

    add up ALL the fixed costs stuff that you have to pay even with no beer sold...... rent, licensing, insurance, payment on debt and be honest the cheap part is buying the brew system

    Figure non fixed costs stuff that fluctuates depending on business.... labor and related costs


    figure cost of making beer and profit margin.

    so if your paying $3000/ month rent your fixed cost will prob be around $5000 lets assume $1000 in non-fixed costs not including labor

    beer costs depend on what beers you are making and how they are made for grins lets assume $150/bbl of material costs grain, hops,yeast ......

    wholesale for $75/ sixtil yields $450/BBL retail $1000 /bbl 80/20 of income yields $560/BBL (-$150 cost to brew) - (30% distribution costs $180) so for that wholesale BBL there is $120 left for the inhouse retail $850 averages to $266/bbl at 80/20 to cover all costs

    18.8 bbl sold just to cover the $5000 fixed costs !!!!!!

    That means optimistically your brewing 2bbl / day which means you have to hire someone to do everything else because your brewing 8 hours a day. So add another $2000 to $3000 in labor and related costs ....... and how much do you want to get paid??? Your now close to 40 BBL/month just to cover costs.

    I have a 1.5bbl brew system and ours doesn't lose money because its a hobby so we take no money out. Our fixed costs are licensing and insurance roughly $2000/yr. we borrowed $20,000 we have 3 fermentors brewing 4x month. You would need a minmum of 14BBL of fermentor space (assuming an avg of 7 days in the fermentor) , a bright tank to carbonate in and maybe 100bbl of kegs.

    sorry its better to hear from me. good luck

    steve

  5. #20
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    monmouth, IL USA
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    Run the Numbers!!!!

    Dude.... run the numbers

    add up ALL the fixed costs stuff that you have to pay even with no beer sold...... rent, licensing, insurance, payment on debt and be honest the cheap part is buying the brew system

    Figure non fixed costs stuff that fluctuates depending on business.... labor and related costs


    figure cost of making beer and profit margin.

    so if your paying $3000/ month rent your fixed cost will prob be around $5000 lets assume $1000 in non-fixed costs not including labor

    beer costs depend on what beers you are making and how they are made for grins lets assume $150/bbl of material costs grain, hops,yeast ......

    wholesale for $75/ sixtil yields $450/BBL retail $1000 /bbl 80/20 of income yields $560/BBL (-$150 cost to brew) - (30% distribution costs $180) so for that wholesale BBL there is $120 left for the inhouse retail $850 averages to $266/bbl at 80/20 to cover all costs

    18.8 bbl sold just to cover the $5000 fixed costs !!!!!!

    That means optimistically your brewing 2bbl / day which means you have to hire someone to do everything else because your brewing 8 hours a day. So add another $2000 to $3000 in labor and related costs ....... and how much do you want to get paid??? Your now close to 40 BBL/month just to cover costs.

    I have a 1.5bbl brew system and ours doesn't lose money because its a hobby so we take no money out. Our fixed costs are licensing and insurance roughly $2000/yr. we borrowed $20,000 we have 3 fermentors brewing 4x month. You would need a minmum of 14BBL of fermentor space (assuming an avg of 7 days in the fermentor) , a bright tank to carbonate in and maybe 100bbl of kegs.

    sorry its better to hear from me. good luck

    steve

  6. #21
    Join Date
    Feb 2017
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    Philadelphia, PA
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    Yes

    Quote Originally Posted by murmsk View Post
    Dude.... run the numbers

    add up ALL the fixed costs stuff that you have to pay even with no beer sold...... rent, licensing, insurance, payment on debt and be honest the cheap part is buying the brew system

    Figure non fixed costs stuff that fluctuates depending on business.... labor and related costs


    figure cost of making beer and profit margin.

    so if your paying $3000/ month rent your fixed cost will prob be around $5000 lets assume $1000 in non-fixed costs not including labor

    beer costs depend on what beers you are making and how they are made for grins lets assume $150/bbl of material costs grain, hops,yeast ......

    wholesale for $75/ sixtil yields $450/BBL retail $1000 /bbl 80/20 of income yields $560/BBL (-$150 cost to brew) - (30% distribution costs $180) so for that wholesale BBL there is $120 left for the inhouse retail $850 averages to $266/bbl at 80/20 to cover all costs

    18.8 bbl sold just to cover the $5000 fixed costs !!!!!!

    That means optimistically your brewing 2bbl / day which means you have to hire someone to do everything else because your brewing 8 hours a day. So add another $2000 to $3000 in labor and related costs ....... and how much do you want to get paid??? Your now close to 40 BBL/month just to cover costs.

    I have a 1.5bbl brew system and ours doesn't lose money because its a hobby so we take no money out. Our fixed costs are licensing and insurance roughly $2000/yr. we borrowed $20,000 we have 3 fermentors brewing 4x month. You would need a minmum of 14BBL of fermentor space (assuming an avg of 7 days in the fermentor) , a bright tank to carbonate in and maybe 100bbl of kegs.

    sorry its better to hear from me. good luck

    steve

    You are right. Far too much to spend on rent. The $3000 was initially based on one space I considered. I'm now looking elsewhere

  7. #22
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    Jun 2018
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    Western, NC
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    Quote Originally Posted by LaserKyle View Post
    You are right. Far too much to spend on rent. The $3000 was initially based on one space I considered. I'm now looking elsewhere
    I am currently setting up a brewery at a winery in western NC. My only overhead at this space will be insurance and raw materials. I'm installing a nearly turnkey 3bbl brewery. Ceiling height is only 9ft so I'm limited on size. I could probably squeeze in a 7bbl. As part of the deal, I have to sell kegs to the winery but I can also sell them off-site anywhere and even have an off-site tap room if I want (just no on-site tap room). But, I also don't have to pay a bar manager. NC is a self distribution state. I'm paying cash for the entire brewing system. I plan to retire at 60 which is in 3 years. This should keep me busy.

  8. #23
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    brewery at a winery

    Quote Originally Posted by AGB View Post
    I am currently setting up a brewery at a winery in western NC. My only overhead at this space will be insurance and raw materials. I'm installing a nearly turnkey 3bbl brewery. Ceiling height is only 9ft so I'm limited on size. I could probably squeeze in a 7bbl. As part of the deal, I have to sell kegs to the winery but I can also sell them off-site anywhere and even have an off-site tap room if I want (just no on-site tap room). But, I also don't have to pay a bar manager. NC is a self distribution state. I'm paying cash for the entire brewing system. I plan to retire at 60 which is in 3 years. This should keep me busy.
    did you get approved for this? From what I have read on ttb guidelines so far they will only allow one production license in one location. If you have gotten approved how did you get approved?

  9. #24
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    Quote Originally Posted by LaserKyle View Post
    did you get approved for this? From what I have read on ttb guidelines so far they will only allow one production license in one location. If you have gotten approved how did you get approved?
    Not approved yet. But, the brewery will be in the lower level of a stand alone winery tasting room. The production winery and vineyards about 1.5 miles away.

  10. #25
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    Apr 2013
    Location
    monmouth, IL USA
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    We tried this

    Our first thought was to try something similar. Feds were ok but the state (illinois)said NO. Their argument (which I understand and agree with) is that each license holder must be separate from and unincumbered by any other license holder. They don’t want anyone having the upper hand.

    I understand every state is different .

    Before you commit and spend money call your state liquor control office and explain the setup and ask if it is a problem.
    We didnt call until we has spent significant money on leasehold improvement that was lost.

    S

  11. #26
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    Quote Originally Posted by Catfish002 View Post
    The absolute best advice I can give is please just wait another year or two to personally save up enough to at least get a 5bbl-7bbl system. Seriously look into building a Frankenbrew style brewery instead. You can easily build a 5bbl-7bbl brewhouse for under $5k, use some wine fermenters, get one used single walled Brite Tank, used 1/2bbl kegs and build your own manual keg washer out of a utility sink. Whole set up would be around $20-$25k. You can make money at 5bbl-7bbl via taproom sales with very light distribution. No way it really works at 1 bbl. Success at 1bbl is a myth that is only reinforced by manufacturers of small systems. The only value a 1bbl system had is as a research and development pilot system in a larger brewery.

    Also, if you wait and save for the next year or two this craft bubble will hopefully pop somewhat and you might be able to scoop up some used equipment on the cheap. Same thing happened back in the late 90s and early 2000s. Great equipment came up for sale regularly for low prices because too many people got in the industry and didn’t either know or care about how to brew good beer and run a successful business. It was the “hot” thing to do, just like today. Just wait and save so you can be successful.

    To answer your question, probably $150k to start a tiny 1bbl brewery. And it would probably be around $150k-$175k to open a successful 5bbl-7bbl frankenbrew style brewery. Just save a little more :-)
    Hey there. So, you are saying a 1bbl brewery can never, ever, ever be profitable? We're about to open our 1bbl brewery with taproom, and we are going to sell basically everything out of the taproom via tap, growlers, crowlers, etc., We own the building outright, I am the only paid employee besides a bartender at $5 an hour + tips, open Thursday, Friday, Saturday, and Sundays. What in that scenario doesn't add up? We aren't distributing any beer besides maybe a bit just to spread the word around a bit, and even then, we can self-distribute. Am I missing something?


    Best,

    Lincoln Slagel

  12. #27
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    Quote Originally Posted by lrslagel View Post
    Hey there. So, you are saying a 1bbl brewery can never, ever, ever be profitable? We're about to open our 1bbl brewery with taproom, and we are going to sell basically everything out of the taproom via tap, growlers, crowlers, etc., We own the building outright, I am the only paid employee besides a bartender at $5 an hour + tips, open Thursday, Friday, Saturday, and Sundays. What in that scenario doesn't add up? We aren't distributing any beer besides maybe a bit just to spread the word around a bit, and even then, we can self-distribute. Am I missing something?


    Best,

    Lincoln Slagel
    There’s no one on here saying that a 1 bbl isn’t possible. Your scenario may be possible, but that isn’t normal. Owning a building and having cheap employees isn’t the standard. It may work for you


    Sent from my iPhone using Tapatalk

  13. #28
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    Apr 2013
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    monmouth, IL USA
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    run the numbers backwards

    Run the numbers backwards....

    start with how much money you need to make then being brutally honest figure out how much beer you need to sell to hit those numbers.

    s

  14. #29
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    I would double think about saving for 5-7bbl.

    Price difference between 1 bbl and 7 bbl is not 7x, especially if you are willing to spend some time DIYing. On the other side, brewday duration is about the same between 1 bbl and 7 bbl or even larger.
    As already said, Tom Hennessy is great guy with decent book for this type of business model.

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