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Thread: New brewery conundrum

  1. #1
    Join Date
    Dec 2018
    Location
    Youngstown, Ohio, USA
    Posts
    15

    New brewery conundrum

    Hello,
    I am the brewer at a new 2bbl brewery in my area. I won't bore you with all of the details unless warranted but the main issue is this; We have been open for three months now and while we are typically busy on friday and saturday nights, tuesday through thursday has been typically very slow....like sometimes 3 patrons slow. The owner is pushing to have more of our beer pushed out to accounts, while I suggest we focus on getting butts in seats in the taproom. Even though I pointed out that taproom beer sales provide way more profit per keg than a wholesale sale, he still wants to focus on local distribution saying "it gets our name out there and will bring people in", even though we really don't have the capacity (keg constraints and that's another story) for much more distribution than we already do (3 accounts so far).

    Am I wrong for wanting to get the taproom going reasonably well before pushing more beer out to local bars? I am only able to brew part time as I have a separate full time job (and he can't afford to pay me as a full time brewer) and it has been working to keep up with demand ...so far. I also do all of the cleaning; FV's,brites, kettles, kegs etc.

  2. #2
    Join Date
    Feb 2018
    Location
    Fort Wayne, Indiana
    Posts
    117
    Quote Originally Posted by HeavyHands View Post
    Hello,
    I am the brewer at a new 2bbl brewery in my area. I won't bore you with all of the details unless warranted but the main issue is this; We have been open for three months now and while we are typically busy on friday and saturday nights, tuesday through thursday has been typically very slow....like sometimes 3 patrons slow. The owner is pushing to have more of our beer pushed out to accounts, while I suggest we focus on getting butts in seats in the taproom. Even though I pointed out that taproom beer sales provide way more profit per keg than a wholesale sale, he still wants to focus on local distribution saying "it gets our name out there and will bring people in", even though we really don't have the capacity (keg constraints and that's another story) for much more distribution than we already do (3 accounts so far).

    Am I wrong for wanting to get the taproom going reasonably well before pushing more beer out to local bars? I am only able to brew part time as I have a separate full time job (and he can't afford to pay me as a full time brewer) and it has been working to keep up with demand ...so far. I also do all of the cleaning; FV's,brites, kettles, kegs etc.
    I don't think distribution should be your focus at all with 2bbl. Definitely get people in your tap room. We are only open 3 days a week (Thursday-Friday-Saturday). We try to have events once a week. Food trucks in the summer help a ton. I think you are open too many days. Use those off days to do production since you are so small like us.

  3. #3
    Join Date
    Nov 2014
    Location
    Montana
    Posts
    46
    We started as a 4 bbl, we are now a 7 bbl, and distribution makes no sense for us. As you have already noted, margins on taproom sales are significantly better than wholesale. If you want to do a little distribution, 3 to 5 accounts, to get you name out there, that can possibly pencil out as advertising. But don't think that you will make any money wholesaling kegs as a 2 bbl setup. Just get more people in the taproom. Or do more events to get people in the tap room on slow days. Or only be open the few days you are busy.

    If you have a small tap room, and you either lose a little money or break even on slow days, there is the opportunity to slowly build a clientele over time. If you already have a tap room, you are just losing some money on wages for 1 bartender. In the big scheme that isn't much, and you can get more people in over time. You aren't making money on slow days, but you aren't selling your product at half price the way you do at wholesale. On a 2 bbl system, wholesale loses you so much money.

    I apologize that my comments are rambling and repetitive, but I need to stress what a bad idea distribution is for nano breweries.

    Good luck.

  4. #4
    Join Date
    Nov 2002
    Location
    Mobile, Alabama, USA
    Posts
    215
    There is no economy of scale for a nano to bother with distribution unless you can do limited self distribution to a few preferred venues.

    Focus on the tap room. Growler sales if possible. Work on regular events to attract a following. Hope to brew that home run beer that fits your area.

    If wanting to go the route of distribution, contract brewing would be the way to go. Find another local brewery that is operating a 30 bbl brewhouse that has extra capacity to push out a draft and package product. Depending on your license, you may also be able to bring some of it in to the tap room and sell there - package too.
    Todd G Hicks
    BeerDenizen Brewing Services

  5. #5
    Join Date
    Mar 2011
    Location
    The South
    Posts
    188

    Retail, weekends only at 2bbl

    100% do not distribute at a 2bbl size....unless the owner is independently wealthy, does not need to turn a profit and is just doing this brewery as a “passion project”.

    I agree that at your size you should probably just be open for retail sales on the weekends.

    Side note but related, I am seeing more and more breweries go out of business now. Maybe the owner could pick up a 10bbl system on the cheap and you could do both retail with minimal distribution.

  6. #6
    Join Date
    Dec 2018
    Location
    Youngstown, Ohio, USA
    Posts
    15
    I definitely appreciate all the feedback. With this ammunition, I will most likely be able to convince him to cap our accounts at 5 and focus more on events to bring people in on off days. We also have a liquor license so we do wine and whiskeys, bourbons and scotch. So, he is looking at doing 10% off growler fills one day, a half off wine pours day and a percentage off whiskey day on the 3 non busy days.

  7. #7
    Join Date
    May 2009
    Location
    Phoenix, AZ
    Posts
    246
    Distribution at that scale is delaying the inevitable.

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