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General Category => Going Pro => Topic started by: micsager on November 05, 2012, 09:29:53 PM

Title: Is this a good deal?
Post by: micsager on November 05, 2012, 09:29:53 PM
hmmmmm.   

http://seattle.craigslist.org/skc/for/3387581635.html

Title: Re: Is this a good deal?
Post by: majorvices on November 05, 2012, 10:21:52 PM
Pretty good deal. Especially considering you don't have to wait.
Title: Re: Is this a good deal?
Post by: euge on November 05, 2012, 11:24:00 PM
Sounds like a good deal for new-unused. The expansion bug catching ya?

Worry about the non-jacketed fermenters though. I guess that isn't needed in your neck of the woods?
Title: Re: Is this a good deal?
Post by: garc_mall on November 06, 2012, 01:05:28 AM
If I had $18,000 lying about, I would totally buy it.

Then again, I also have nowhere to put it.
Title: Re: Is this a good deal?
Post by: nateo on November 06, 2012, 02:10:36 AM
Sounds a bit like a white elephant.
Title: Re: Is this a good deal?
Post by: scorpiusllc on November 06, 2012, 02:30:01 AM
That is a pretty good price. I was just visiting a 3BBL brewery in Northern AZ using Stout Tanks (Granite Mountain Brewing in Prescott) and he has non-jacketed fermenters, not even in a walk in. He has not had any issues to date, but he said he runs the AC and will even wrap them in wet towels if they start going crazy. I guess you can get away with that with only 3BBLs. Glacier Tanks has some pricing similar to Stout on the 3BBL size, but not sure what the wait time is.
Title: Re: Is this a good deal?
Post by: majorvices on November 06, 2012, 12:33:22 PM
I had unjacketed 3bbl tanks when we first started (plastic tanks at that) and we kept them in the cold room wrapped with heat wraps and insulation and we could keep the temp at whatever we needed.

Just remember, you'll need another 15-20 grand to build out your brewery (walk-in, build wet  area, run gas/plumbing/electric, etc.).

Then you'll need at least 10K in kegs to have enough cooperage to actually run a 3bbl brewery.
Title: Re: Is this a good deal?
Post by: euge on November 06, 2012, 03:52:40 PM
Instead of the cooperage how about a small canning or bottling line? Not that I have any practical experience at all but from listening to JZ on BS it seems to me that a packaging brewery is the way to go and much more profitable. Then you have no kegs to clean or to worry about keeping track of.
Title: Re: Is this a good deal?
Post by: nateo on November 06, 2012, 03:57:47 PM
Instead of the cooperage how about a small canning or bottling line? Not that I have any practical experience at all but from listening to JZ on BS it seems to me that a packaging brewery is the way to go and much more profitable. Then you have no kegs to clean or to worry about keeping track of.

If you're bottling, your per unit margin goes down pretty significantly. Glass is expensive, I imagine cans are cheaper, but you'd have to amortize the cost of the machinery, and I think canning lines are more expensive than bottling lines. So a packaging brewery would make sense if you can produce a large number of units. But if there's no slack in your production capacity, it doesn't make sense to divert production from a high margin product (beer on draft) toward a low margin product (bottles/cans).
Title: Re: Is this a good deal?
Post by: euge on November 06, 2012, 04:03:45 PM
JZ calculated 1 cent profit per oz in the keg and 6 cents per oz in bottles.
Title: Is this a good deal?
Post by: majorvices on November 06, 2012, 05:14:00 PM
Our margins on bottled beer is significantly higher than on draft, but I can't imagine the labor involved on a part time operation if you had to bottle all of your beers.

You can get a semi manual set up (4 head filler, pneumatic capper, labeler) for about 15K. Bottles have a significant price break in bulk, as do labels.
Title: Re: Is this a good deal?
Post by: nateo on November 06, 2012, 07:48:00 PM
Euge - are you talking about selling kegs wholesale to bars, or selling beer on draft in your taproom? I have a hard time believing JZ is making $4.32 profit on a six pack, and a hard time believing he's not making more than $20 profit per keg. But I have no idea how he's amortizing his expenses, or if he's only talking about variable costs, or which fixed costs he's including.

$0.06 * 72oz = $4.32 profit per 6-pack
$0.01 * 1984oz = $19.84 profit per keg

Keith - are you talking about selling in your own tap room, or wholesale kegs?
Title: Re: Is this a good deal?
Post by: euge on November 06, 2012, 08:18:52 PM
I don't know nat- just what he said. I'm assuming it is net profit after deducting everything else.
Title: Re: Is this a good deal?
Post by: majorvices on November 06, 2012, 09:25:54 PM
I don't have a tap room. All retail sales. Since we are technically not permitted to talk price on the forum I will refrain from giving the run down but profit on bottles is about twice as good as retail keg sales.
Title: Re: Is this a good deal?
Post by: micsager on November 06, 2012, 09:48:26 PM
Sounds like a good deal for new-unused. The expansion bug catching ya?

Worry about the non-jacketed fermenters though. I guess that isn't needed in your neck of the woods?

There's no doubt we need a bigger system.  We're brewing 2-3 times a week, and saying no to new accounts.  I've got a line on some pots to triple our capacity for under a grand, so soon we'll be getting that.  And temperature control is important here.  Yearly temps range from 30-80 in the brewery.  And while that's very mild for most humans, not so much for those wonderful yeasties.
Title: Re: Is this a good deal?
Post by: nateo on November 06, 2012, 10:09:34 PM
I'm trying to wrap my head around those figures.

bottle profit = $0.06 = bottle revenue (B) - beer cost (c) - bottling cost (bc)
keg profit = $0.01 = keg revenue (k) - c - keg cost (kc)
so
0.01 = k - c - kc
0.06 = b - c - bc
c = k - kc - 0.01
0.06 = b - k + kc + 0.01 - bc
0.05 = b - k + kc - bc

Assuming a keg sells for between $80-$120, with a 15% margin, and selling direct to bars/liquor stores
$120/1.15>(k*1984)>$80/1.15 = 0.053>k>0.035
$10>(b*72)>$8 = 0.12>b>0.096

So for direct to retail
-0.017 < kc - bc < -0.011

So, kegging is cheaper for JZ than bottling.

Assuming the same as above, and that he's selling to a wholesaler who also gets a 15% cut
($120/1.15)/1.15>(k*1984)>($80/1.15)/1.15 = 0.046>k>0.030
$10>(b*72)>$8 = 0.105>b>0.084

For wholesale
-0.009 < kc - bc < -0.004
Kegging is still cheaper for JZ than bottling.

I guess that was a waste of time, since I think we all knew kegging would be cheaper, but it doesn't appear to be a huge price difference, per ounce. C would be a constant regardless of whether you bottle or keg.

I now believe Keith that bottling is about twice as profitable, per ounce.
Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 07, 2012, 02:04:45 AM
Instead of the cooperage how about a small canning or bottling line? Not that I have any practical experience at all but from listening to JZ on BS it seems to me that a packaging brewery is the way to go and much more profitable. Then you have no kegs to clean or to worry about keeping track of.

If you're bottling, your per unit margin goes down pretty significantly. Glass is expensive, I imagine cans are cheaper, but you'd have to amortize the cost of the machinery, and I think canning lines are more expensive than bottling lines. So a packaging brewery would make sense if you can produce a large number of units. But if there's no slack in your production capacity, it doesn't make sense to divert production from a high margin product (beer on draft) toward a low margin product (bottles/cans).

Yes the bottle/can market has a better margin then keg market. But you want to be in both. Keg market is your advertising that you have arrived and people can have your beer when they go out to the bar or restaurant. You make bulk of the money in bottle market because there is more people who want to have beer at home then go to the bar/restaurant. If you are in bottle market you need to be carefully to pick the package that fits to you.

It is great the 22 oz has high profit margin but if you sell only a case a month then it is not working. Brewing is still a number game after all.  Bottle filler line + labeler cost about the same as a canning line.
Title: Re: Is this a good deal?
Post by: tschmidlin on November 07, 2012, 09:09:21 AM
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.
Title: Re: Is this a good deal?
Post by: hopfenundmalz on November 07, 2012, 12:54:28 PM
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.

Tom, I heard about a portable canning line in a truck when visiting friends in Bend. Might be the same guy?






Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 08, 2012, 04:16:26 AM
but it's cheaper than buying your own canning/bottling line.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.
Title: Re: Is this a good deal?
Post by: tschmidlin on November 08, 2012, 09:01:00 AM
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.

Tom, I heard about a portable canning line in a truck when visiting friends in Bend. Might be the same guy?
If it's Owen who used to work at Wyeast, then yes :)

but it's cheaper than buying your own canning/bottling line.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.
That's for sure!  Congratulations, I'm excited (and just a little scared) for you.
Title: Re: Is this a good deal?
Post by: a10t2 on November 08, 2012, 02:49:31 PM
Our margins on bottled beer is significantly higher than on draft, but I can't imagine the labor involved on a part time operation if you had to bottle all of your beers.

This. One person can (barely) operate a small brewhouse, but packaging that production on a small bottling/canning line would be a full-time job for two people.
Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 08, 2012, 03:02:18 PM
Our margins on bottled beer is significantly higher than on draft, but I can't imagine the labor involved on a part time operation if you had to bottle all of your beers.

This. One person can (barely) operate a small brewhouse, but packaging that production on a small bottling/canning line would be a full-time job for two people.

Juggling that by myself. We also operate a tap room and i self distribute. I have a part time help from my wife. Wish that week would have 8 days. 
Title: Re: Is this a good deal?
Post by: jeffy on November 08, 2012, 03:42:32 PM
My friend at St. Somewhere gets people to volunteer for bottling day and seems to have no trouble getting people to help.  He gives them lunch and two bottles of beer (750's) to take home.  In four hours or so six people can bottle, cork, cage and label 10 bbls.
Title: Re: Is this a good deal?
Post by: nateo on November 08, 2012, 04:14:46 PM
How dangerous is bottling machinery to operate? I'd guess you'd want an insurance policy to cover volunteers, and you'd probably want them covered under worker's comp if you can, since that's an exclusive remedy in most states.
Title: Re: Is this a good deal?
Post by: majorvices on November 08, 2012, 04:52:32 PM
Mine is pretty fool proof. There are plexi-glass covers that protect you if a glass breaks on both the bottler and capper (and you will get one or two breaks every bottling session) and it takes two hands to operate the capper. That said, we make everyone wear eye protection. With those protections the danger is minimum. Way more opportunities to injure yourself around an active brewing session.
Title: Re: Is this a good deal?
Post by: kylekohlmorgen on November 08, 2012, 05:37:16 PM
How dangerous is bottling machinery to operate? I'd guess you'd want an insurance policy to cover volunteers, and you'd probably want them covered under worker's comp if you can, since that's an exclusive remedy in most states.

Depends somewhat on the equipment.

Depends mostly on the volunteers.
Title: Re: Is this a good deal?
Post by: bluesman on November 08, 2012, 05:43:17 PM
hmmmmm.   

http://seattle.craigslist.org/skc/for/3387581635.html

Looks like a sweet deal to me. :)

but it's cheaper than buying your own canning/bottling line.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.

Congrats on the equipment upgrade.  If you don't mind me asking, what make or type/capacity and cost of canning system have you purchased?

Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 09, 2012, 05:18:20 AM
but it's cheaper than buying your own canning/bottling line.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.

Congrats on the equipment upgrade.  If you don't mind me asking, what make or type/capacity and cost of canning system have you purchased?

I got Wild Goose Engineering MC-50:
http://www.wildgoosecanning.com/main/mc-50/

Manual line that has an upgrade path to automatic line.
Star up cost is not just cost of the line.
You also need to buy supply (cans, ends), artwork, compressor...
Lead time is 16 to 18 weeks so I have some time before I will see it.

Ohh... the cost. Nothing is cheap in the brewing. When all is settled and done I think you will be able to buy two nice cars for it.
Title: Is this a good deal?
Post by: majorvices on November 09, 2012, 02:26:12 PM
we got quotes on automated Meheen that started at 52K for 4 head filler. That includes training at the facility (but you gotta pay to fly out there). Bottler, not canner, but there you go.
Title: Re: Is this a good deal?
Post by: Joe Sr. on November 09, 2012, 05:39:59 PM
but it's cheaper than buying your own canning/bottling line.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.

I look forward to getting your beer in cans.  Probably won't be up your way until the spring, but I'll definitely grab a case when I'm there.

Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 10, 2012, 01:08:24 AM
we got quotes on automated Meheen that started at 52K for 4 head filler. That includes training at the facility (but you gotta pay to fly out there). Bottler, not canner, but there you go.
About the same but our cans will be printed and we do not need labeler.
Title: Re: Is this a good deal?
Post by: Thirsty_Monk on November 10, 2012, 01:13:54 AM
I look forward to getting your beer in cans.  Probably won't be up your way until the spring, but I'll definitely grab a case when I'm there.

Sounds like a plan.
If you are in Milwaukee area stop by
Bernie's Tap Room & Restaurant
351 Main Street
Waukesha, WI 53186
http://berniestaproom.com/

They just stop by this week and got 4 1/2 BBL kegs.
Bohemian Pilsner and Baltic Porter.

That is just a little bit closer to you.
Title: Re: Is this a good deal?
Post by: boulderbrewer on November 11, 2012, 04:03:00 AM
I say look for bigger you will only be plugging a hole with a 3 bbl system.You have enough experience here that can get you into a 10 bbl (ghetto) system at that price. If you are pressed for time,money and size, Iwill help and the others will help you also.