Homebrewers Association | AHA Forum

General Category => Going Pro => Topic started by: alaingomez on August 05, 2012, 07:47:32 PM

Title: realistically, what does it take?
Post by: alaingomez on August 05, 2012, 07:47:32 PM
Hey, I'm new to this forum and just got into homebrewing a few months ago.

Before anyone makes the comment: I realize that it's going to take me a few years to figure all this stuff out.  I've been playing the violin for over twenty years so I completely understand/value patience :)

I'm just curious what it would realistically take to eventually start selling your brew.  I'm from San Diego and microbreweries are popping up everywhere.  What does it take to start one of those?  Also, is it possible to not have a storefront?  Maybe just have your beer bottled and sold in stores?
Title: Re: realistically, what does it take?
Post by: denny on August 05, 2012, 08:24:03 PM
First, you need lots of money and a lawyer....
Title: Re: realistically, what does it take?
Post by: nateo on August 05, 2012, 08:25:37 PM
Being well-capitalized makes a world of difference. I'm in retail, but I'd assume manufacturing is even worse. Being able to pay cash to my wholesalers saves me a bunch of money because I can squeeze better deals and discounts out of them. On credit, a lot of them let me do net 30. A few guys let me do net 120. But if you run out of cash, it's game over. If you don't have cash on-hand to buy grain, you can't make beer and you're SOL.

I've run the numbers for different sized operations, and if you're going to start small you have to sell consumer direct. The margin is so low on selling to liquor stores or grocery stores you'll need to make a lot of beer to make any reasonable amount of profit. The smallest size brewhouse I thought was reasonable (if you want to be able to pay yourself or any employees) was 7bbl, though 5bbl might be feasible.

Anything smaller than that and you'd need to be selling pints in a taproom, and maybe kegs to restaurants. The cost of glassware is pretty big, and from my estimates selling kegs was about as profitable, per liter, as selling 6-packs of 12oz bottles. 22oz bottles are a much better way to go, but you're talking about a bottling machine (mucho $$$) or hand-bottling (mucho time).

Also, i wouldn't plan on being able to pay yourself a salary and pay yourself back for your initial investment in fewer than 5 years.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 05, 2012, 08:31:40 PM
First, you need lots of money and a lawyer....

Lol.  Well, that's a given.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 05, 2012, 08:33:23 PM
Is it possible to just sell kegs?  Say to local bars?

I've noticed that a few of the taprooms around me have teamed up.  Like they share the same facility and sell both of their beers in the taproom.
Title: realistically, what does it take?
Post by: denny on August 05, 2012, 08:51:03 PM
Is it possible to just sell kegs?  Say to local bars?

I've noticed that a few of the taprooms around me have teamed up.  Like they share the same facility and sell both of their beers in the taproom.

There are resources out there for what you want to know, but I'm not in a position to get to them at the moment.  If nobody posts more info by tomorrow, I'll try to get you some links.  But one of the first things is for you to decide exactly how you want to approach it.


Sent from my iPad using Tapatalk HD
Title: Re: realistically, what does it take?
Post by: a10t2 on August 05, 2012, 08:53:12 PM
Join the BA (a small/"thinking about it" brewery membership is very inexpensive), and get a copy of Starting Your Own Brewery (http://www.brewersassociation.org/pages/business-tools/publications/guide-to-starting-your-own-brewery).

As you probably know, California is one of the most difficult places to open a brewery. However, there are also a lot of people who have done it, so the BA has a lot of knowledge to draw from in the CA market.

Is it possible to just sell kegs?  Say to local bars?

As in, brew at home and sell it? Almost certainly not. You'll face zoning restrictions (can you run a commercial business in your home?), health codes (do you have floor drains? stainless sinks? tile walls?), and practical considerations (loading dock? doors big enough to get tanks in? sufficient electric power?). Again, California tends to be fairly restrictive on these issues.

Unless you happen to come across another home brewer in your city/county/state who has looked into it, the AHA isn't going to be a great place to ask questions. Start with your local city hall and learn what the legal issues will be.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 05, 2012, 11:44:38 PM
Join the BA (a small/"thinking about it" brewery membership is very inexpensive), and get a copy of Starting Your Own Brewery (http://www.brewersassociation.org/pages/business-tools/publications/guide-to-starting-your-own-brewery).

As you probably know, California is one of the most difficult places to open a brewery. However, there are also a lot of people who have done it, so the BA has a lot of knowledge to draw from in the CA market.

Is it possible to just sell kegs?  Say to local bars?

I meant more like sending all the ingredients/recipe to a manufacturer.  But I get what you're saying.  I'll check that book out.

Again, I have no immediate plans.  I'm still figuring out how not to ruin wort.  I was just curious if it is something I could even consider doing down the road.

As in, brew at home and sell it? Almost certainly not. You'll face zoning restrictions (can you run a commercial business in your home?), health codes (do you have floor drains? stainless sinks? tile walls?), and practical considerations (loading dock? doors big enough to get tanks in? sufficient electric power?). Again, California tends to be fairly restrictive on these issues.

Unless you happen to come across another home brewer in your city/county/state who has looked into it, the AHA isn't going to be a great place to ask questions. Start with your local city hall and learn what the legal issues will be.
Title: Re: realistically, what does it take?
Post by: majorvices on August 06, 2012, 12:11:03 AM
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

It can certainly be done and it can be done on a budget but to really make anything worthwhile you are going to need to spend over 100K, and reality much mroe than that. The point of opening a brewery is to open a sucessful business. You establish a brand and produce a product that people consume. It's hell of a lot of work, but it is also awesome and has great rewards.

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.
Title: Re: realistically, what does it take?
Post by: a10t2 on August 06, 2012, 12:47:45 AM
I meant more like sending all the ingredients/recipe to a manufacturer.

That's called contract brewing (more or less - in contract brewing, the licensed brewer must purchase the ingredients). Yes, it's legal, and there's a good deal of information about what's required in the FAQs and circulars on the TTB site. Bear in mind that, like nateo said, there really aren't any production breweries smaller than about 7 bbl. By introducing a middleman (yourself), you're bumping up the minimum capacity to turn a profit into the 15-30 bbl range, most likely.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 03:14:20 AM

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why?

To establish a client base.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 03:15:15 AM
I meant more like sending all the ingredients/recipe to a manufacturer.

That's called contract brewing (more or less - in contract brewing, the licensed brewer must purchase the ingredients). Yes, it's legal, and there's a good deal of information about what's required in the FAQs and circulars on the TTB site. Bear in mind that, like nateo said, there really aren't any production breweries smaller than about 7 bbl. By introducing a middleman (yourself), you're bumping up the minimum capacity to turn a profit into the 15-30 bbl range, most likely.

Wait.... I need someone to tell me what bbl means and then I'll reply to this lol.
Title: Re: realistically, what does it take?
Post by: majorvices on August 06, 2012, 04:01:20 AM

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why?

To establish a client base.

So, when I first opened this brewery I approached it with that intent in mind (basically a 45 gallon batch) and from day one we realized our problem suddenly was not the quality or the customer base but the volume. Even now, at a 10 bbl level, I just feel this is ludicrous. The money is all in the numbers and volume is the key. If you don't produce enough volume of beer you will be spending money to provide beer to people.

Also, you need a rather large volume of beer to really eastablish a customer base. We sell every drop we make and it boggles my mind how many people have not heard of us. 310 gallons of beer is reaslly such a small amount, after all.
Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 04:17:36 AM
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

It can certainly be done and it can be done on a budget but to really make anything worthwhile you are going to need to spend over 100K, and reality much mroe than that. The point of opening a brewery is to open a sucessful business. You establish a brand and produce a product that people consume. It's hell of a lot of work, but it is also awesome and has great rewards.

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.

 
+1..!!!!
As someone who seriously wanted to go the nano route I am so glad to hear people with some experience give advice like this!  The real reason I wanted to open a brewery is for the personal satisfaction of people enjoying my beer.  You are right it IS far easier to do on the homebrew level and with a lot less headaches.
Obviously I can't sell my beer....but that doesn't mean I don't have a brewery!!  We have a website, FB page, sell t-shirts and stickers, pour at beer festivals and private events, etc....I often wonder how many people think we are a commercial brewery ;D  In fact somebody the other day said it is an "underground brewery" which is cool...though I was quick to point out that we don't sell our beer.  We get everything out of it that a nanobrewery would ( personal satisfaction, name recognition, etc...) but without all or most of the headaches ( fees/permits, licensing/zoning, negative cashflow, expectations). 
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 05:01:47 AM
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

It can certainly be done and it can be done on a budget but to really make anything worthwhile you are going to need to spend over 100K, and reality much mroe than that. The point of opening a brewery is to open a sucessful business. You establish a brand and produce a product that people consume. It's hell of a lot of work, but it is also awesome and has great rewards.

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.

 
+1..!!!!
As someone who seriously wanted to go the nano route I am so glad to hear people with some experience give advice like this!  The real reason I wanted to open a brewery is for the personal satisfaction of people enjoying my beer.  You are right it IS far easier to do on the homebrew level and with a lot less headaches.
Obviously I can't sell my beer....but that doesn't mean I don't have a brewery!!  We have a website, FB page, sell t-shirts and stickers, pour at beer festivals and private events, etc....I often wonder how many people think we are a commercial brewery ;D  In fact somebody the other day said it is an "underground brewery" which is cool...though I was quick to point out that we don't sell our beer.  We get everything out of it that a nanobrewery would ( personal satisfaction, name recognition, etc...) but without all or most of the headaches ( fees/permits, licensing/zoning, negative cashflow, expectations).

Ok this really intrigues me!  I thought you had to be a "beer company" in order to pour at beer festivals.  Is it possible to sell your beer at a festival?
Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 05:27:39 AM
Absolutely not!! I can't legally sell beer, the beer was given away.  At the beer festival though I did sell brewery t-shirts. The sales of the shirts covered all my beer costs, paid for my jockey box, and I think we had 50 bucks left over. Again....certainly not making any real money.
Title: Re: realistically, what does it take?
Post by: boulderbrewer on August 06, 2012, 05:54:01 AM
I have "given" beer for 6 years at beer fests, Now I consider it as market research. Look for a local homebrew club. That is the first place I would start for the local market info.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 07:47:23 AM
Absolutely not!! I can't legally sell beer, the beer was given away.  At the beer festival though I did sell brewery t-shirts. The sales of the shirts covered all my beer costs, paid for my jockey box, and I think we had 50 bucks left over. Again....certainly not making any real money.

That's a great idea!  I'm the same as you, actually.  It would just be really fun to share my beer with people.  Have you tried making/selling glassware? 
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 07:51:11 AM
I have "given" beer for 6 years at beer fests, Now I consider it as market research. Look for a local homebrew club. That is the first place I would start for the local market info.

I'll check that out.  I know there's a plethora around San Diego.  I'll ask the guys at the homebrew supply stores.  We're like beer country here.  Unlike Santa Barbara and their posh wine  :P
Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 01:57:03 PM


That's a great idea!  I'm the same as you, actually.  It would just be really fun to share my beer with people.  Have you tried making/selling glassware?
[/quote]

Yes!! A friends daughter hand etched a couple dozen glasses with a close resemblance of my logo. People loved them because they obviously weren't mass produced and no two were exactly alike.
Title: realistically, what does it take?
Post by: majorvices on August 06, 2012, 02:11:02 PM
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

It can certainly be done and it can be done on a budget but to really make anything worthwhile you are going to need to spend over 100K, and reality much mroe than that. The point of opening a brewery is to open a sucessful business. You establish a brand and produce a product that people consume. It's hell of a lot of work, but it is also awesome and has great rewards.

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.

 
+1..!!!!
As someone who seriously wanted to go the nano route I am so glad to hear people with some experience give advice like this!  The real reason I wanted to open a brewery is for the personal satisfaction of people enjoying my beer.  You are right it IS far easier to do on the homebrew level and with a lot less headaches.
Obviously I can't sell my beer....but that doesn't mean I don't have a brewery!!  We have a website, FB page, sell t-shirts and stickers, pour at beer festivals and private events, etc....I often wonder how many people think we are a commercial brewery ;D  In fact somebody the other day said it is an "underground brewery" which is cool...though I was quick to point out that we don't sell our beer.  We get everything out of it that a nanobrewery would ( personal satisfaction, name recognition, etc...) but without all or most of the headaches ( fees/permits, licensing/zoning, negative cashflow, expectations).

Ok this really intrigues me!  I thought you had to be a "beer company" in order to pour at beer festivals.  Is it possible to sell your beer at a festival?

It's gonna depend on the laws of your state. Some can. Some can't.
Title: Re: realistically, what does it take?
Post by: nateo on August 06, 2012, 02:40:06 PM
Owning a business sucks. Be sure to include your opportunity cost in any analysis you do. Do you like spending time with friends or family? Do you like to do anything besides work? If you'd value your leisure time at anything over about $0.10/hour you'd likely come out in the red if you own your own business.
Title: Re: realistically, what does it take?
Post by: denny on August 06, 2012, 03:38:05 PM
Owning a business sucks. Be sure to include your opportunity cost in any analysis you do. Do you like spending time with friends or family? Do you like to do anything besides work? If you'd value your leisure time at anything over about $0.10/hour you'd likely come out in the red if you own your own business.

That was exactly the point I came to after owning my own business for close to 30 years.  For the first few years, it was exciting and the work was fun.  After about 10 years, it became just a job I went to every day.
Title: Re: realistically, what does it take?
Post by: violaleebrews on August 06, 2012, 04:39:18 PM
god bless the sage nuggets of wisdom people post here.  i've been half-heartedly doing some research into starting something up and it's daunting - to say the least.  deadends and almost every path i take.  i won't be too disappointed if nothing ever materializes from my research, but i do know that people go pro all the time.  and for those people, i have a great respect.  much perserverence, research and money is needed to take it pro.  so far the best thing to do (from what i've read) is work for someone else for a few years to learn the ropes.
Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 04:52:46 PM
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

It can certainly be done and it can be done on a budget but to really make anything worthwhile you are going to need to spend over 100K, and reality much mroe than that. The point of opening a brewery is to open a sucessful business. You establish a brand and produce a product that people consume. It's hell of a lot of work, but it is also awesome and has great rewards.

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.

 
+1..!!!!
As someone who seriously wanted to go the nano route I am so glad to hear people with some experience give advice like this!  The real reason I wanted to open a brewery is for the personal satisfaction of people enjoying my beer.  You are right it IS far easier to do on the homebrew level and with a lot less headaches.
Obviously I can't sell my beer....but that doesn't mean I don't have a brewery!!  We have a website, FB page, sell t-shirts and stickers, pour at beer festivals and private events, etc....I often wonder how many people think we are a commercial brewery ;D  In fact somebody the other day said it is an "underground brewery" which is cool...though I was quick to point out that we don't sell our beer.  We get everything out of it that a nanobrewery would ( personal satisfaction, name recognition, etc...) but without all or most of the headaches ( fees/permits, licensing/zoning, negative cashflow, expectations).

Ok this really intrigues me!  I thought you had to be a "beer company" in order to pour at beer festivals.  Is it possible to sell your beer at a festival?

It's gonna depend on the laws of your state. Some can. Some can't.
Sadly it's also on who "interpets" the laws of your state.  I know some brewers/clubs have done so without any problems. Other brewers/clubs in the same state have asked the ABC and have been told no.  As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission". 
Title: Re: realistically, what does it take?
Post by: a10t2 on August 06, 2012, 04:55:55 PM
It's gonna depend on the laws of your state. Some can. Some can't.

And on the festival. Some require the breweries to carry their own liability insurance.
Title: Re: realistically, what does it take?
Post by: a10t2 on August 06, 2012, 05:26:54 PM
As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission".

I guess as a home brewer you can get away with that (though I would have ethical issues), but if you're going pro the only thing worse than an alcohol-related conviction on your record is a tax-related conviction.
Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 05:51:14 PM
As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission".

I guess as a home brewer you can get away with that (though I would have ethical issues), but if you're going pro the only thing worse than an alcohol-related conviction on your record is a tax-related conviction.

Well I know in my case the law is a bit of a gray area. http://www.homebrewersassociation.org/pages/government-affairs/statutes/california
Homebrew can be removed for competition and the festival that I poured at has a Best Beer and People's Choice competition.   My HBC has poured at the festival since it began.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 06, 2012, 07:43:56 PM
Quote
Sadly it's also on who "interpets" the laws of your state.  I know some brewers/clubs have done so without any problems. Other brewers/clubs in the same state have asked the ABC and have been told no.  As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission".

Are you referring to selling beer at festivals or just giving it away?
Title: Re: realistically, what does it take?
Post by: anthony on August 06, 2012, 07:49:16 PM
Quote
Sadly it's also on who "interpets" the laws of your state.  I know some brewers/clubs have done so without any problems. Other brewers/clubs in the same state have asked the ABC and have been told no.  As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission".

Are you referring to selling beer at festivals or just giving it away?

Both. For instance, this just came down the pipe in Illinois: http://goo.gl/Bb5xU

Title: Re: realistically, what does it take?
Post by: micsager on August 06, 2012, 08:09:41 PM
Hey, I'm new to this forum and just got into homebrewing a few months ago.

Before anyone makes the comment: I realize that it's going to take me a few years to figure all this stuff out.  I've been playing the violin for over twenty years so I completely understand/value patience :)

I'm just curious what it would realistically take to eventually start selling your brew.  I'm from San Diego and microbreweries are popping up everywhere.  What does it take to start one of those?  Also, is it possible to not have a storefront?  Maybe just have your beer bottled and sold in stores?

Well, I must say my experience is much different than what folks are talking about here.  I just wanted to sell a few kegs (and corny ones at that) to the local bars in my small town.  I just got another homebrew system, set it up in fiance's shop, applied to TTB and my state LCB, and I'm legal.  I can still homebrew on my previous system in the garage.  It's a bit of a pain keeping the ingridients seperate and all that.  But, that's fine.  I've got the first 10 gallons on the commercial side carbonating right now, and will be sold on the 18th. 

TTB cost $100 for the brewers bond  (and every year thereafter)
State was additional $100 one time cost
Product liability inurance through USAA is $420 per year.

So, I can sell kegs to local bars and growlers to the public for offsite consumption.



Title: Re: realistically, what does it take?
Post by: phunhog on August 06, 2012, 11:42:39 PM
Quote
Sadly it's also on who "interpets" the laws of your state.  I know some brewers/clubs have done so without any problems. Other brewers/clubs in the same state have asked the ABC and have been told no.  As a homebrewer I think this is a case of "it's better to beg forgiveness, than ask permission".

Are you referring to selling beer at festivals or just giving it away?

Both. For instance, this just came down the pipe in Illinois: http://goo.gl/Bb5xU

In my case I was just referring to giving away homebrew at festivals in small taster glasses.  Interesting to see what happens in Illinois. It is a bummer that they are locked out of the festivals right now but maybe people will see how ridiculous that is and get it changed.
Title: Re: realistically, what does it take?
Post by: alaingomez on August 07, 2012, 06:13:21 AM
Quote

Well, I must say my experience is much different than what folks are talking about here.  I just wanted to sell a few kegs (and corny ones at that) to the local bars in my small town.  I just got another homebrew system, set it up in fiance's shop, applied to TTB and my state LCB, and I'm legal.  I can still homebrew on my previous system in the garage.  It's a bit of a pain keeping the ingridients seperate and all that.  But, that's fine.  I've got the first 10 gallons on the commercial side carbonating right now, and will be sold on the 18th. 

TTB cost $100 for the brewers bond  (and every year thereafter)
State was additional $100 one time cost
Product liability inurance through USAA is $420 per year.

So, I can sell kegs to local bars and growlers to the public for offsite consumption.

But your fiance's shop had to be up to local commercial code though, correct?
Title: Re: realistically, what does it take?
Post by: nateo on August 07, 2012, 11:48:05 AM
What's the point of making beer to sell to strangers, if you're not trying to make a reasonable profit on it? My 5/10gal batches are so precious to me, I'm only willing to share them with my friends. The thought of selling them in a bar to a bunch of strangers who won't appreciate it is terrible.

Now, if I were making 10bbl to make a living, it'd be a different matter.
Title: Re: realistically, what does it take?
Post by: a10t2 on August 07, 2012, 03:03:23 PM
Well I know in my case the law is a bit of a gray area.

I guess I misunderstood your original post, because I don't see any ambiguity there:

Quote
Any beer manufactured pursuant to this section may be removed from the premises where manufactured for use in competition at organized affairs, exhibitions or competitions, including homemakers' contests, tastings, or judgings.

It's explicitly legal to serve your homebrew at a "tasting" (festival), and if someone at the ABC says otherwise, they're wrong.
Title: Re: realistically, what does it take?
Post by: nateo on August 07, 2012, 03:39:47 PM
Quote
Any beer manufactured pursuant to this section may be removed from the premises where manufactured for use in competition at organized affairs, exhibitions or competitions, including homemakers' contests, tastings, or judgings.

It's explicitly legal to serve your homebrew at a "tasting" (festival), and if someone at the ABC says otherwise, they're wrong.

Well, I don't think so. It explicitly says you can take your beer to an organized affair, exhibition, or competition to be used for competition. This includes homemaker's contests, tastings, or judgings. So a homebrewer's fair, tasting, festival, whatever is OK if it's a competition. It doesn't explicitly state that it's OK to serve homemade beer at a commercial exhibition or festival, or to serve at a festival that's not a homebrew contest.

Cops write bad tickets all the time. It doesn't really matter if the ABC guy is wrong, he can still jam you up. You might get out of punishment in the end, but in the meantime you'll have to deal with whatever fine/citation/whatever he feels like giving you.
Title: Re: realistically, what does it take?
Post by: micsager on August 07, 2012, 03:57:27 PM
What's the point of making beer to sell to strangers, if you're not trying to make a reasonable profit on it? My 5/10gal batches are so precious to me, I'm only willing to share them with my friends. The thought of selling them in a bar to a bunch of strangers who won't appreciate it is terrible.

Now, if I were making 10bbl to make a living, it'd be a different matter.

What's the point?  Interesting question, that each of us must answer for ourselves.  For me, it is the pleasure of watching someone put down their hard earned cash for something I created.  I enjoy that feeling.  Especially when they buy the second one.  Friends almost always tell me my beer is "great" "good" and "wow."  But nothing says I've done a good job as when someone pays $5 for a pint.  And in my town, it's not so much "strangers" as friends I havn't met yet.

Yesterday, as I was at the local bar modifying one of his Sankey for ball locks, I wore my brewery t-shirt to create a buzz, and boy did it.  The customers were very excited to see another local brewery supplying them beer.  Our first keg will be delivered Friday, and more than one said they'll be back to try. 
Title: Re: realistically, what does it take?
Post by: majorvices on August 07, 2012, 04:24:14 PM
What's the point of making beer to sell to strangers, if you're not trying to make a reasonable profit on it? My 5/10gal batches are so precious to me, I'm only willing to share them with my friends. The thought of selling them in a bar to a bunch of strangers who won't appreciate it is terrible.

Now, if I were making 10bbl to make a living, it'd be a different matter.

What's the point?  Interesting question, that each of us must answer for ourselves.  For me, it is the pleasure of watching someone put down their hard earned cash for something I created.  I enjoy that feeling.  Especially when they buy the second one.  Friends almost always tell me my beer is "great" "good" and "wow."  But nothing says I've done a good job as when someone pays $5 for a pint.  And in my town, it's not so much "strangers" as friends I havn't met yet.

Yesterday, as I was at the local bar modifying one of his Sankey for ball locks, I wore my brewery t-shirt to create a buzz, and boy did it.  The customers were very excited to see another local brewery supplying them beer.  Our first keg will be delivered Friday, and more than one said they'll be back to try.

If it turns out that you end up losing money over time, will you still continue to do it? Sounds like you have very little overhead, which is a boon, but when you consider how much your time is actually worth it doesn't seem possible to even break even on a 10 gallon system. OTOH if you are doing it to prove a concept and get someone on board who wants to fund a real brewery then it could be totally worth it. Just my .02. Not trying to discourage anyone from their passions.
Title: Re: realistically, what does it take?
Post by: morticaixavier on August 07, 2012, 04:29:43 PM
What's the point of making beer to sell to strangers, if you're not trying to make a reasonable profit on it? My 5/10gal batches are so precious to me, I'm only willing to share them with my friends. The thought of selling them in a bar to a bunch of strangers who won't appreciate it is terrible.

Now, if I were making 10bbl to make a living, it'd be a different matter.

What's the point?  Interesting question, that each of us must answer for ourselves.  For me, it is the pleasure of watching someone put down their hard earned cash for something I created.  I enjoy that feeling.  Especially when they buy the second one.  Friends almost always tell me my beer is "great" "good" and "wow."  But nothing says I've done a good job as when someone pays $5 for a pint.  And in my town, it's not so much "strangers" as friends I havn't met yet.

Yesterday, as I was at the local bar modifying one of his Sankey for ball locks, I wore my brewery t-shirt to create a buzz, and boy did it.  The customers were very excited to see another local brewery supplying them beer.  Our first keg will be delivered Friday, and more than one said they'll be back to try.

If it turns out that you end up losing money over time, will you still continue to do it? Sounds like you have very little overhead, which is a boon, but when you consider how much your time is actually worth it doesn't seem possible to even break even on a 10 gallon system. OTOH if you are doing it to prove a concept and get someone on board who wants to fund a real brewery then it could be totally worth it. Just my .02. Not trying to discourage anyone from their passions.

I have been an actor my whole life. Never made more than a couple grand at a pop, certainly never paid my bills with it but everytime I drive for 1.5 hours for a 5 minute audition I think 'What If this time...' and everytime i DO get a check for doing this thing that I love it makes it all worth it. sure $400 bucks for 3 weeks of nights and weekends doesn't make good economic sense but that $400 is like $1 million in my soul. I totally understand the desire to go pro even on a tiny system. Heck, at risk of stretching the analogy to the breaking point, I actually prefer the $400 dollar stage gig that only 200 people see to the $2000 commercial gig that 100k+ people see because that stage gig is all me and I get to interact with my audience. similary, If I ever get there being able to interact with the people that are enjoying my beer will be worth way more soul money than 10k bbls sold to strangers I will never meet or speak to.

but to each their own. I totally understand wanting to actually make a living at it to.
Title: Re: realistically, what does it take?
Post by: phunhog on August 07, 2012, 06:05:22 PM
Well I know in my case the law is a bit of a gray area.

I guess I misunderstood your original post, because I don't see any ambiguity there:

Quote
Any beer manufactured pursuant to this section may be removed from the premises where manufactured for use in competition at organized affairs, exhibitions or competitions, including homemakers' contests, tastings, or judgings.

It's explicitly legal to serve your homebrew at a "tasting" (festival), and if someone at the ABC says otherwise, they're wrong.

That's what I mean..I know of some clubs who have asked ABC to pour at beer festivals and they have been denied. Other clubs have just gone ahead and did it without any problems. Unfortunately from working in the government for 20+ years I know the easiest answer to give a member of the public is NO, especially when dealing with an issue that can be interpreted in different ways. It's not right but it happens all the time. That's where my " better to beg forgiveness than ask permission" statement came from.
Title: Re: realistically, what does it take?
Post by: micsager on August 07, 2012, 06:45:15 PM
 
[/quote]

If it turns out that you end up losing money over time, will you still continue to do it? Sounds like you have very little overhead, which is a boon, but when you consider how much your time is actually worth it doesn't seem possible to even break even on a 10 gallon system. OTOH if you are doing it to prove a concept and get someone on board who wants to fund a real brewery then it could be totally worth it. Just my .02. Not trying to discourage anyone from their passions.
[/quote]

As I've always said, I like to hear everyone's point of view.  I live in a town of about 30,000. the next bigger town is about 75 miles away.  I'm not in this to really make a money.  But, I will say that my business (that is working out so far) shows that my partner and I will net, about $120 for a full day in the brewery?  The math works out to be about $6/hr.  I know of know other hobby that I love so much that will aactually pay me $6 to do.  Can I quite my day job?  NOT EVEN CLOSE.  And it may be that after a couple years of this, we decide it's not worth it.  But I can tell you that a day in the brewery with the woman I love, making darn good beer, is a very enjoyable activity.  We met because of homebrew two years ago.  And, we're getting married on the 18th. 

But, I know our model does not work for most folks when they think about "going pro."  I post my story and experience to show it is actually quite simple to go legit, and sell one's beer.
Title: Re: realistically, what does it take?
Post by: micsager on August 07, 2012, 06:51:09 PM
Quote

Well, I must say my experience is much different than what folks are talking about here.  I just wanted to sell a few kegs (and corny ones at that) to the local bars in my small town.  I just got another homebrew system, set it up in fiance's shop, applied to TTB and my state LCB, and I'm legal.  I can still homebrew on my previous system in the garage.  It's a bit of a pain keeping the ingridients seperate and all that.  But, that's fine.  I've got the first 10 gallons on the commercial side carbonating right now, and will be sold on the 18th. 

TTB cost $100 for the brewers bond  (and every year thereafter)
State was additional $100 one time cost
Product liability inurance through USAA is $420 per year.

So, I can sell kegs to local bars and growlers to the public for offsite consumption.

But your fiance's shop had to be up to local commercial code though, correct?

Nope.  The county building department had no involvement.  It passed inspection when built many years ago as a pole building.  Her place is quite rural, and zoned to include "home enterprise" which in my county means any business that does not permanently store equipment or matarials outside.  The TTB, nor state LCB ever set foot on her property.  Although we did have to send pictures to the LCB. We'll be filing our first tax payments this week.  a whole 2/3 barrel.  LOL  It will be about $8.00.

Title: Re: realistically, what does it take?
Post by: alaingomez on August 08, 2012, 08:15:20 AM
Quote

As I've always said, I like to hear everyone's point of view.  I live in a town of about 30,000. the next bigger town is about 75 miles away.  I'm not in this to really make a money.  But, I will say that my business (that is working out so far) shows that my partner and I will net, about $120 for a full day in the brewery?  The math works out to be about $6/hr.  I know of know other hobby that I love so much that will aactually pay me $6 to do.  Can I quite my day job?  NOT EVEN CLOSE.  And it may be that after a couple years of this, we decide it's not worth it.  But I can tell you that a day in the brewery with the woman I love, making darn good beer, is a very enjoyable activity.  We met because of homebrew two years ago.  And, we're getting married on the 18th. 

But, I know our model does not work for most folks when they think about "going pro."  I post my story and experience to show it is actually quite simple to go legit, and sell one's beer.

That's really cute  :)

I hope you serve amazing beer at your wedding and invite us all  :P

What kind of schedule to keep for your brewhouse?  Do you just do weekends?  In order to keep your day job...?
Title: Re: realistically, what does it take?
Post by: micsager on August 08, 2012, 02:27:04 PM
Quote

As I've always said, I like to hear everyone's point of view.  I live in a town of about 30,000. the next bigger town is about 75 miles away.  I'm not in this to really make a money.  But, I will say that my business (that is working out so far) shows that my partner and I will net, about $120 for a full day in the brewery?  The math works out to be about $6/hr.  I know of know other hobby that I love so much that will aactually pay me $6 to do.  Can I quite my day job?  NOT EVEN CLOSE.  And it may be that after a couple years of this, we decide it's not worth it.  But I can tell you that a day in the brewery with the woman I love, making darn good beer, is a very enjoyable activity.  We met because of homebrew two years ago.  And, we're getting married on the 18th. 

But, I know our model does not work for most folks when they think about "going pro."  I post my story and experience to show it is actually quite simple to go legit, and sell one's beer.

That's really cute  :)

I hope you serve amazing beer at your wedding and invite us all  :P

What kind of schedule to keep for your brewhouse?  Do you just do weekends?  In order to keep your day job...?

So far, we brew on weekends, and do two batches in about 8 hours.  I only have one tap to keep supplied at one bar, so we'll see how it sells. 

For the wedding is some homebrewed IPA, and Jalapeno IPA.  Plus, a member of our local club is brewing a clone of Avery's Maharaja for us.  He's probably the best brewer in our club, so I'm sure it will be a very good clone. 
Title: Re: realistically, what does it take?
Post by: alaingomez on August 11, 2012, 07:26:40 AM

Quote

So far, we brew on weekends, and do two batches in about 8 hours.  I only have one tap to keep supplied at one bar, so we'll see how it sells. 

For the wedding is some homebrewed IPA, and Jalapeno IPA.  Plus, a member of our local club is brewing a clone of Avery's Maharaja for us.  He's probably the best brewer in our club, so I'm sure it will be a very good clone.

Mmm... I'm a huge fan of Avery.  Have you tried their Beast beer?  It's up there in my top 10 favorites.  My boyfriend and I want to make a Colorado brewery pilgrimage because of them lol.
Title: Re: realistically, what does it take?
Post by: mripa on August 21, 2012, 02:14:02 AM
Great posts.. I suggest keep home brewing and look for a part time job or volunteer at a small brewery.  At least you can see what is involved.
Title: Re: realistically, what does it take?
Post by: dcdwort on September 14, 2012, 10:14:07 PM
I have truly enjoyed all of the posts on this topic.  Here in Colorado Springs we have several different sized microbreweries from the big Bristol brewery done to Great Storm Brewing which is a nano that is very good.  Now I will keep digging on this site for  more info as I have my brother-in-law enticed to start something in the future.  Thanks for all the advice.
Title: Re: realistically, what does it take?
Post by: boulderbrewer on September 19, 2012, 03:12:57 AM
Don't forget the "small" things these costs that add up. Like tap handles, regulators to control the CO2 for force carbonation, got the CO2? the coupler to fill the kegs and coupler to keg the kegs etc...
These little things add up and up. Don't give up you can do it, it is best to do it right.
Title: Re: realistically, what does it take?
Post by: topher.bartos on December 26, 2012, 07:58:28 PM
If it turns out that you end up losing money over time, will you still continue to do it? Sounds like you have very little overhead, which is a boon, but when you consider how much your time is actually worth it doesn't seem possible to even break even on a 10 gallon system. OTOH if you are doing it to prove a concept and get someone on board who wants to fund a real brewery then it could be totally worth it. Just my .02. Not trying to discourage anyone from their passions.
Quote
As I've always said, I like to hear everyone's point of view.  I live in a town of about 30,000. the next bigger town is about 75 miles away.  I'm not in this to really make a money.  But, I will say that my business (that is working out so far) shows that my partner and I will net, about $120 for a full day in the brewery?  The math works out to be about $6/hr.  I know of know other hobby that I love so much that will aactually pay me $6 to do.  Can I quite my day job?  NOT EVEN CLOSE.  And it may be that after a couple years of this, we decide it's not worth it.  But I can tell you that a day in the brewery with the woman I love, making darn good beer, is a very enjoyable activity.  We met because of homebrew two years ago.  And, we're getting married on the 18th. 

But, I know our model does not work for most folks when they think about "going pro."  I post my story and experience to show it is actually quite simple to go legit, and sell one's beer.

What is your usual daily schedule when you say that you haven't quit your day job? What is the like?
Title: Re: realistically, what does it take?
Post by: micsager on December 26, 2012, 08:38:08 PM
My day job is 7-5, M-F.  Sometimes we brew at night, or on the weekends.  We are upgrading our system to 1bbl next month.  But, we will probably just brew less often, and keep our two current accounts happy......

Title: Re: realistically, what does it take?
Post by: tomsawyer on January 04, 2013, 08:52:15 PM
Interesting thread.

I was recently approached to help set up a small brewpub in my home town.  The guy asked about equipment and costs as well as styles of beer etc.  As a homebrewer my experience is limited to 15gal batches so I gave him advice based on setting up a nanobrewery adequate to brew around a barrel per month each of maybe five or six beer styles.  My thought was to use cornies or possibly small tanks that we could use as bright tanks, and to brew two days a week (weekends).  I figured I could do this with about $10K in equipment although that would be a barebones setup and nothing fancy to look at.

I already have a comrade who volunteered to help.  I'm not being asked to invest but I got the distinct impression that I was being approached to provide sweat equity.  I don't really have a problem with helping them get set up since I would love to be a regular customer, I don't relish giving up all my weekends though and I'm five years from retirement (actually four years and four months but whos counting).

As far as the amount of beer that would be required, I have no real sense of what demand might be.  There are no brewpubs in this little town of 18K, and just one in the larger town 20 miles away.  I'd hate to be the victom of success right off the bat and I can think of nothing worse than being a brewpub with no product to offer.

So I guess my question is, what the hell should I do?  I love brewing, and I want there to be a brewpub in town.  The people who are contemplating this business know nothing about brewing and I know nothing about brewing on any kind of commercial scale.  I don't think they have the funds to invest in a real brewery, nano scale seems doable.
Title: Re: realistically, what does it take?
Post by: micsager on January 04, 2013, 09:32:24 PM
Well, if you are saying for a town of 18k, I would think 5 bbls a month would be a good starting point.  (how big is the seating area?)

And I wouldn't be so hard on yourself about not knowing commercial scale.  Sure, you not gonna walk in to Firestone Walker and run their system.  But, at five bbls a month, you could easily go with blichmann equipment.  John is now selling 2bbls systems.  And you know how to brew (I'll assume) good beer. 

As you scale recipes, I would use your favorite software to make sure gravity, SRM, and all that are what you expect.  (you can't just double or triple ingridients)

And only you can decide about what to do with your weekends, but it sounds like a neat opportunity, with no cash outlay, but you learn much.  One good tool for the federal paperwork required is a "compliance training" document prepared by TTB, here's a link: (it's from 2007, but I confirmed with a TTB investigator it is the most current)

http://www.ttb.gov/pdf/brewery_industry_compliance_training.pdf



 
Title: Re: realistically, what does it take?
Post by: nateo on January 04, 2013, 10:42:00 PM
The people who are contemplating this business know nothing about brewing

That is a huge red flag for me. I wouldn't waste my time.
Title: Re: realistically, what does it take?
Post by: reverseapachemaster on January 05, 2013, 05:31:23 AM
The people who are contemplating this business know nothing about brewing

That is a huge red flag for me. I wouldn't waste my time.

Me too.

I couldn't see any reason to go into business with somebody who doesn't understand their product or industry. It's pretty much just asking for failure. Even though you might have a good time or learn a lot about brewing commercially there's going to be an inevitably long term headache when they are mad that X beer isn't selling or profits aren't high enough or whatever and they blame you and decide to start selling BMC clones. They likely will not have the stomach to watch you drain pour bad batches/test batches. There's a good chance they will end up doing something that puts their permits in jeopardy.

It sounds like they aren't interested in hiring you as a consultant or brewer. That's another big problem if they are looking for serious assistance from you. If they are going to offer you equity that sounds like a terrible deal for the reason stated above. You should be paid as an employee or independent consultant. Either way, you should get cash in hand for the work you do. There's no reason to put yourself on the line and give them so much free labor and let them walk away with salaries and/or profits and blame you for everything that goes wrong.
Title: Re: realistically, what does it take?
Post by: tomsawyer on January 05, 2013, 02:17:04 PM
Interesting comments and I did read a little more of the stickies at the top that had good info.  I haven't determined what the seating will be like, the space in the bulding is generous and there is an opportunity for roof seating at certain times of the year.  The place is located in the tourist area so could be busy for three months in the summer.  Rest of the year, I'd anticipate modest sales.

Their business model is multi-faceted and includes a small grocery, an antique furniture showroom and this brewpub with some food sales.  So the brewpub doesn't have to pay 100% of the building loan payment.  This makes things more complicated though and I'm still skeptical myself that this is going to work, but itd be interesting to try.  I'd like to cook and brew and have the say on menus for both.  But I'm bot going to quit my day job so this isn't possible at first.  I don't know if I can help them overcome the lack of knowledge about the workings of a brewpub.  When I was doing the math about how much beer you'd have to sell, it seemed like a very large amount and is hard to envision this amount going out of the establishment.  I could be underestimating the demand though.  I could see making some money with a nice restaurant although the investment for that would be significant since this place wasn't a restaurant before so lacks the infrastructure.

I'll look into something in the range of 3-5bbl, of course based on the sticky above that sounds like a recipe for failure but I suppose if some bottled beer and a significant amount of food are included then this is one of the many ways to make a little money and I'm good with that.
Title: Re: realistically, what does it take?
Post by: nateo on January 05, 2013, 02:20:47 PM
There's no reason to put yourself on the line and give them so much free labor and let them walk away with salaries and/or profits and blame you for everything that goes wrong.

If you're providing sweat equity, get a contract in writing. I cannot stress that enough.

I was working 80-100 hours a week at my job, with the promise of profit-sharing and owners' equity. After a year of record profits (and blaming me for everything that went wrong) the owners changed their mind, and didn't think I "deserved" profit sharing, and thought my salary was "enough." I now work about 40 hours a week for the same salary, and they're paying for my MBA, so it sort of worked out, but it was really ugly getting to this point.
Title: Re: realistically, what does it take?
Post by: yso191 on January 05, 2013, 05:28:48 PM
One of the things I never hear talked about in these conversations is charging more.  It's like in a debate accepting the premise of the opposing side and arguing from there - not a recipe for winning.

Now I realize the limitations of my point here, but I think it should be on the table nonetheless.  So, The big breweries have the economy of scale on their side.  Their strength is also their weakness.  Ask what am I selling?  If it is just good beer, you've accepted their premise and you lose / can't make a living at it.

But look at it a different way: What do people want to buy, what are they willing to pay for, when they purchase a pint of good beer and what is it worth to them?  Where is it written in stone that beer can only be sold for $5 a pint? 

There are several angles to be taken here to be able to charge more.  The hardest is clever marketing.  This takes creativity that few have, but maybe you are one.  Can you, through marketing demand a premium for your beer?  A lot of breweries do.  It can be just a clever name (Arrogant Bastard), or if the stars really line up you can create a cult following (3 Floyds).

But I think somethings are in the reach of most brewers.  Think about yourself.  Do you/would you value a relationship with a Brewer?  If you could have the sense that you are an 'insider' in a brewery, what kind of loyalty would that inspire?  And then if you can create a micro-culture from this, the sky is the limit.

What about appealing to people's natural curiosity?  Teach and educate people on beer.  Engage their brains - that's worth more than what Bud, et al., or even Russian River is doing.  They can't put a brewer in front of the customer.

I could go on and on.  The point is that the beer experience can be so much more than buying a pint of something that tastes good and gives a buzz.  Sell the other things and people will love you and pay more for your beer, which equals profit.

Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Steve
Title: Re: realistically, what does it take?
Post by: nateo on January 05, 2013, 07:06:09 PM
Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Breweries already do that. Avery already does all of those things, in addition to making kick-ass beer. I've talked to Avery's brewers at their tap room, and emailed their head brewer and gotten responses from Adam Avery himself. They love talking about beer, helping people make better beer. They give out homebrew recipes for their beer. And, they're selling their beer for $5 a pint.

You can create an atmosphere, but there's a limit to how far your BS can carry you if your beer isn't amazing. Unfortunately, due to math, not every beer can be "above average." So you need to be realistic about how much your beer is actually worth. If you charge $10 a pint and your beer kinda sucks, be prepared to go out of business very quickly, regardless of how hard you market it.
Title: Re: realistically, what does it take?
Post by: yso191 on January 05, 2013, 08:01:25 PM
Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Breweries already do that. Avery already does all of those things, in addition to making kick-ass beer. I've talked to Avery's brewers at their tap room, and emailed their head brewer and gotten responses from Adam Avery himself. They love talking about beer, helping people make better beer. They give out homebrew recipes for their beer. And, they're selling their beer for $5 a pint.

You can create an atmosphere, but there's a limit to how far your BS can carry you if your beer isn't amazing. Unfortunately, due to math, not every beer can be "above average." So you need to be realistic about how much your beer is actually worth. If you charge $10 a pint and your beer kinda sucks, be prepared to go out of business very quickly, regardless of how hard you market it.

I knew I would get pushback, and specifically in these areas.  What you say is true, but doesn't mitigate my points.  There is no way I can have the relationship with the brewer at Avery that I do with the brewer at Yakima Craft.  Unless you are local to the area, there is no way there is even remotely the chance of establishing a micro-culture around your brewery.  I could go on, but I'll just reiterate one of my main points: size is an advantage and a weakness, so do the things that a big brewery can't.  Know who you are and know who you aren't.  Major on your majors - not your minors.

I also think your example of $10 pints is hyperbole.  The key is to find where your profit tipping point is, and hit it.  And yes, clearly it is not always possible, but if someone is just making $5.00 an hour owning a nano, what would it take to make a reasonable wage? $6.00 pints?  7.00?  I guarantee that if your customers see value in the product they will buy it.  My only point is to open the discussion to different types of value.

How much does a bomber of Dark Lord go for anyway?  Is it really that much different than other really good beers that are available market-wide for a fraction of the cost?  No.  Marketing my friend.  Creating value.  Not fake, smoke and mirrors, used-car-salesman value, but What The Customer Really Wants.  That is what I'm talking about, and there will always be room in every market for those that can see a way to provide value to the customer. 

Obviously if you your beer is 'meh' That is your main problem.  All of this is based on the assumption that someone going into business making beer makes good beer.  And BTW, I'm never advocated selling 'BS'.  That is not "relationship, information, experience, identity". 

Steve
Title: Re: realistically, what does it take?
Post by: nateo on January 05, 2013, 08:12:39 PM
Marketing = BS = everything that's not in the glass. I agree that BS important. Plenty of crappy micropubs are very profitable, and some breweries make very good beer but go out of business anyway. I agree you need to give customers what they really want. I think too many brewers make what they want to brew, not what people want to buy. How many more nanos making IPAs do we really need?

My point was mostly that 'craft beer' has been having this discussion of "value" as long as there has been 'craft beer.' Only now the discussion is between big micro breweries and little micro breweries, whereas before it was just macro vs micro.
Title: Re: realistically, what does it take?
Post by: yso191 on January 05, 2013, 08:29:37 PM
Marketing = BS = everything that's not in the glass. I agree that BS important. Plenty of crappy micropubs are very profitable, and some breweries make very good beer but go out of business anyway. I agree you need to give customers what they really want. I think too many brewers make what they want to brew, not what people want to buy. How many more nanos making IPAs do we really need?

My point was mostly that 'craft beer' has been having this discussion of "value" as long as there has been 'craft beer.' Only now the discussion is between big micro breweries and little micro breweries, whereas before it was just macro vs micro.

And it is a good discussion.  Again I agree - well with everything except the BS part.  To me BS is worthless, which is not what good marketing is about.

There are a million examples, but here is one that is near to me:  I own/ride a 2008 Harley Super Glide.  Is it a good bike?  Yes.  Is it the best bike? No.  I ride it because it is good, and it is a connection to culture and it is American made - among other reasons & values.  And I pay a premium price for these values.  It is what I want.

People want good/great beer, but they also want more.  Provide the more, and you'll be able to make a living is all I am saying (a general statement that is true but not in each and every circumstance).

There is a bookstore a few blocks from me, owned by a local family that sells real, paper (not digital) books that is still in business after Borders closed up and left town.  This bookstore is offering something Borders couldn't, AND what a digital book can't.  Again, examples abound...

Steve
Title: Re: realistically, what does it take?
Post by: phunhog on January 05, 2013, 08:39:33 PM
I think Steve is right on the money!! With more and more breweries making really good beer it takes something "more".  I love that phrase "relationship, information, experience, identity". !! Beer drinkers want to identify with the brewery/brewer on a personal level.  In most cases that can only be done in small breweries. Sure you might get an email from a big brewer....but what about a personal tour?  My brother own a very small boutique winery that makes incredible wine. He gives personal tours and barrel tasting to his customers. They then identify with him and the winery and they buy lots of wine.  Otherwise he is just another great winery in a sea of great wineries. 
Someday I hope to own a small brewery but I have already begun to build relationships with potential customers.  I have poured at charity beer festivals, donated homebrewing lessons, and invited complete strangers over to see the "brewery" and have a beer.  I even have Facebook page with over 650 people following my brewing/progress.   I can only assume because at some level I have contributed to their "relationship, information, experience, identity" of craft beer. 

Title: Re: realistically, what does it take?
Post by: nateo on January 05, 2013, 08:44:23 PM
My point is craft breweries are already doing all of those things, so you won't really have a competitive advantage.
Title: Re: realistically, what does it take?
Post by: yso191 on January 05, 2013, 09:19:33 PM
Just one more tongue-in-cheek response to your question about how many more breweries do we need making one more IPA...  In my very serious quest for the perfect IPA, apparently at least one more.  I love them but haven't found a consistent beer nirvana yet. Hop Stoopid delivered once...

Steve
Title: Re: realistically, what does it take?
Post by: Thirsty_Monk on January 06, 2013, 07:20:20 PM
I am not making IPA. I do make Czech and German beers.
If you go above the price point in your market you need to tell your value proposition why your product is more expensive and better then rest of the pack. You would do it thru Customer education. Most customer education is done thu advertising. How much resources do you have for this? What are your channels for it?

If you think that customers are going to be rushing to buy your product whithout this, you are mistaken.

As someone said "We are not in the business of making beer. We are in the business of selling beer". Beer is just what you are selling.
Title: Re: realistically, what does it take?
Post by: micsager on January 07, 2013, 03:57:17 AM
The people who are contemplating this business know nothing about brewing

That is a huge red flag for me. I wouldn't waste my time.

I understand what you guys are saying.  But, I was thinking that just helping a guy get started, and have a locally brewed beer available.  Now, if one ever feels like what they are providing has $$$ value, then they should charge for that.  But helping a guy get started, is both COOL and FUN.
Title: Re: realistically, what does it take?
Post by: nateo on January 07, 2013, 04:09:06 AM
I understand what you guys are saying.  But, I was thinking that just helping a guy get started, and have a locally brewed beer available.  Now, if one ever feels like what they are providing has $$$ value, then they should charge for that.  But helping a guy get started, is both COOL and FUN.

I don't anymore, but I used volunteer for non-profits all the time. But, I have a huge philosophical problem volunteering for a "for-profit" enterprise. Other people may not have the same objections.
Title: Re: realistically, what does it take?
Post by: tomsawyer on January 07, 2013, 01:18:56 PM
Just an update on the situation.  After talking with the guy again at the last brewclub meeting he's come a long way.  They are looking at a 7bbl system, and talking with some brewers in a nearby town about them brewing for him.  Which means I'll just be helping if I want.  I told him that sounded like an excellent idea.
Title: Re: realistically, what does it take?
Post by: micsager on January 07, 2013, 03:43:01 PM
I understand what you guys are saying.  But, I was thinking that just helping a guy get started, and have a locally brewed beer available.  Now, if one ever feels like what they are providing has $$$ value, then they should charge for that.  But helping a guy get started, is both COOL and FUN.

I don't anymore, but I used volunteer for non-profits all the time. But, I have a huge philosophical problem volunteering for a "for-profit" enterprise. Other people may not have the same objections.

I get that.  And it makes sense.  I guess I want more breweries in my my town.  And, I'm willing to offer my help to make that happen.  I think the line where one would want to be paid, rather than volunteering is much different for a for-profit, than a non-profit. 

Title: Re: realistically, what does it take?
Post by: Thirsty_Monk on January 08, 2013, 03:04:34 AM
I don't anymore, but I used volunteer for non-profits all the time. But, I have a huge philosophical problem volunteering for a "for-profit" enterprise. Other people may not have the same objections.
Now let me think about this.
Hospitals are non profit.
So it is O.K. to volunteer there even thou they have more then enough money to pay.

Start up for profit (No tax exampt).
It is not O.K. to volunteer there. Owner works there 60 hours a week and can not pay himself.

Do I understand it right?
Am I missing something?
Title: Re: realistically, what does it take?
Post by: nateo on January 08, 2013, 05:02:07 AM
Do I understand it right?
Am I missing something?

Yes, that's exactly right. I would never ask someone to work for free at my tackle store. I would pay them.

Sure, owning a small business sucks and all that, but that's a choice you make as an owner, and if/when it pays off, it pays off for the owners, and no one else.

One of the non-profits I volunteered at provided counseling services and support for torture survivors. That's a hell of a lot more meaningful than selling beer.
Title: Re: realistically, what does it take?
Post by: tomsawyer on January 08, 2013, 01:00:45 PM
To help a friend with a startup I could see it.  I would also do it for the experience of brewing on a commercial apparatus.  But that wouldn't take more than some months.  If you can't afford to pay the help you need to operate long term though, indicates that you need to adjust your business model.
Title: Re: realistically, what does it take?
Post by: reverseapachemaster on January 08, 2013, 02:46:43 PM
I don't anymore, but I used volunteer for non-profits all the time. But, I have a huge philosophical problem volunteering for a "for-profit" enterprise. Other people may not have the same objections.
Now let me think about this.
Hospitals are non profit.
So it is O.K. to volunteer there even thou they have more then enough money to pay.

Start up for profit (No tax exampt).
It is not O.K. to volunteer there. Owner works there 60 hours a week and can not pay himself.

Do I understand it right?
Am I missing something?

The Fair Labor Standards Act clearly delineates one is permitted and one is (mostly) prohibited. There's a couple pretty clear reasons for this. First, the FLSA prohibits people from being put into situations where the business owner is volunteering the worker for free labor when the worker isn't freely volunteering the work. Protecting the general public is a higher value than an individual, unprofitable business owner, at least under the FLSA. Second, there's an intrinsic problem in having people giving free labor to a for-profit institution in which the owner is obtaining a financial benefit (not having to pay for the work or do it herself) but the worker is obtaining no financial benefit. If the employment relationship relies on at least some contractual premises then you have to have both sides obtaining a tangible benefit. If the worker is volunteering labor there is only a tangible benefit to one side of the relationship. The worker is entitled to compensation in exchange for labor. The distinction with volunteer work for a non-profit is the equivalent of gifting one's labor to a charitable organization. However, there can be situations where a volunteer at a non-profit has become an employee entitled to compensation.
Title: Re: realistically, what does it take?
Post by: micsager on January 08, 2013, 03:44:15 PM
To help a friend with a startup I could see it.  I would also do it for the experience of brewing on a commercial apparatus.  But that wouldn't take more than some months.  If you can't afford to pay the help you need to operate long term though, indicates that you need to adjust your business model.

Hard to disagree with that one. 
Title: Re: realistically, what does it take?
Post by: micsager on January 08, 2013, 03:48:18 PM
I don't anymore, but I used volunteer for non-profits all the time. But, I have a huge philosophical problem volunteering for a "for-profit" enterprise. Other people may not have the same objections.
Now let me think about this.
Hospitals are non profit.
So it is O.K. to volunteer there even thou they have more then enough money to pay.

Start up for profit (No tax exampt).
It is not O.K. to volunteer there. Owner works there 60 hours a week and can not pay himself.

Do I understand it right?
Am I missing something?

The Fair Labor Standards Act clearly delineates one is permitted and one is (mostly) prohibited. There's a couple pretty clear reasons for this. First, the FLSA prohibits people from being put into situations where the business owner is volunteering the worker for free labor when the worker isn't freely volunteering the work. Protecting the general public is a higher value than an individual, unprofitable business owner, at least under the FLSA. Second, there's an intrinsic problem in having people giving free labor to a for-profit institution in which the owner is obtaining a financial benefit (not having to pay for the work or do it herself) but the worker is obtaining no financial benefit. If the employment relationship relies on at least some contractual premises then you have to have both sides obtaining a tangible benefit. If the worker is volunteering labor there is only a tangible benefit to one side of the relationship. The worker is entitled to compensation in exchange for labor. The distinction with volunteer work for a non-profit is the equivalent of gifting one's labor to a charitable organization. However, there can be situations where a volunteer at a non-profit has become an employee entitled to compensation.

OK, that's the legal answer.  So it sounds like if I help my neighbor set up for a garage sale, he has to pay me.  The key word here is volunteer.  No one is REQUIRED to charge for their services. 
Title: Re: realistically, what does it take?
Post by: phunhog on January 08, 2013, 07:38:02 PM
Fine.....just call it an internship ;)  When my wife was going through her Master's program she had to do an internship. Here's the kicker...she had to PAY THEM so she could "work" and get her hours. I think a brewery could do the same. How many inspring homebrewers would love a chance to "work" at a professional brewery?
Title: Re: realistically, what does it take?
Post by: reverseapachemaster on January 09, 2013, 12:17:46 AM
Fine.....just call it an internship ;)  When my wife was going through her Master's program she had to do an internship. Here's the kicker...she had to PAY THEM so she could "work" and get her hours. I think a brewery could do the same. How many inspring homebrewers would love a chance to "work" at a professional brewery?

OK, that's the legal answer.  So it sounds like if I help my neighbor set up for a garage sale, he has to pay me.  The key word here is volunteer.  No one is REQUIRED to charge for their services.

That's not correct. The onus to pay for labor is on the employer, not the employee. The employer must pay for the services, unless it falls into one of very limited exceptions to the FLSA. Calling one a volunteer or intern does not avoid liability under FLSA for an unpaid employee. Both a volunteer and intern carry specific requirements to provide uncompensated labor.

In the case of an unpaid internship, it must be part of an academic program for academic credit in which the work performed is primarily of an educational value and related to the academic program, not offsetting the work otherwise performed by an employee. So, for example, a brewery could likely take on an unpaid intern who is receiving college credit in a brewing program as an assistant brewer but not as a keg washer or some other entry level position in the brewery.

In the garage sale example it turns on the several factors but most notably one can volunteer for a for-profit venture if the work is not of the kind the venture operator would otherwise pay somebody for. So for example if your neighbor's garage sale is so large without your help he would have to hire help then he would probably have to pay you for your help. If you are gratuitously helping him but he would have been able to do the work on his own, then probably not.

A more related example would be somebody who decides he wants to tell the world how great brewery XYZ is. He tells the brewery he is going to blog every day about the beer and they tell him to have fun and thanks. He blogs away on his own accord. He is volunteering his labor (blogging) to the brewery because the brewery otherwise would not pay for some guy to sit and blog on his personal blog about the beer. However, if they had him blogging on the brewery's website, it's probably employment and no longer volunteering because if the brewery wanted a blogger they would otherwise have to hire somebody to do it or use internal staff (which is already paid or the owner).
Title: Re: realistically, what does it take?
Post by: micsager on January 09, 2013, 03:13:20 PM
Fine.....just call it an internship ;)  When my wife was going through her Master's program she had to do an internship. Here's the kicker...she had to PAY THEM so she could "work" and get her hours. I think a brewery could do the same. How many inspring homebrewers would love a chance to "work" at a professional brewery?

OK, that's the legal answer.  So it sounds like if I help my neighbor set up for a garage sale, he has to pay me.  The key word here is volunteer.  No one is REQUIRED to charge for their services.

That's not correct. The onus to pay for labor is on the employer, not the employee. The employer must pay for the services, unless it falls into one of very limited exceptions to the FLSA. Calling one a volunteer or intern does not avoid liability under FLSA for an unpaid employee. Both a volunteer and intern carry specific requirements to provide uncompensated labor.

In the case of an unpaid internship, it must be part of an academic program for academic credit in which the work performed is primarily of an educational value and related to the academic program, not offsetting the work otherwise performed by an employee. So, for example, a brewery could likely take on an unpaid intern who is receiving college credit in a brewing program as an assistant brewer but not as a keg washer or some other entry level position in the brewery.

In the garage sale example it turns on the several factors but most notably one can volunteer for a for-profit venture if the work is not of the kind the venture operator would otherwise pay somebody for. So for example if your neighbor's garage sale is so large without your help he would have to hire help then he would probably have to pay you for your help. If you are gratuitously helping him but he would have been able to do the work on his own, then probably not.

A more related example would be somebody who decides he wants to tell the world how great brewery XYZ is. He tells the brewery he is going to blog every day about the beer and they tell him to have fun and thanks. He blogs away on his own accord. He is volunteering his labor (blogging) to the brewery because the brewery otherwise would not pay for some guy to sit and blog on his personal blog about the beer. However, if they had him blogging on the brewery's website, it's probably employment and no longer volunteering because if the brewery wanted a blogger they would otherwise have to hire somebody to do it or use internal staff (which is already paid or the owner).

Interesting analysis.  I can tell you have given this some thought.  An easy way to handle this is just agree to a salary of $1 dollar a year.  Steve Jobs at Apple did that for a few years before his death, and he certainly provided valuable to work to that company.  And I would guess that Apple has quite a few attornies drafting these agreements.   
Title: Re: realistically, what does it take?
Post by: tomsawyer on January 09, 2013, 06:51:00 PM
I suppose I could work for beer, but that would probably have its own legal ramifications.

I heard rumor last night that the deal fell through, so the whole thing is moot for me now.
Title: Re: realistically, what does it take?
Post by: beersk on January 18, 2013, 06:38:31 PM
Owning a business sucks. Be sure to include your opportunity cost in any analysis you do. Do you like spending time with friends or family? Do you like to do anything besides work? If you'd value your leisure time at anything over about $0.10/hour you'd likely come out in the red if you own your own business.

That was exactly the point I came to after owning my own business for close to 30 years.  For the first few years, it was exciting and the work was fun.  After about 10 years, it became just a job I went to every day.
I'd say it depends on how good you are with money. I have a friend who owns a bike shop, small operation with an additional employee during the summer months, and he saves up all year to be able to stay open in the winter. He's EXTREMELY good with money, don't know how he does it, but it's possible and he loves it. He's been doing it since 2003.
So, you basically have to be a homebody.