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General Category => General Homebrew Discussion => Topic started by: In The Sand on December 28, 2012, 06:21:45 PM

Title: Growth of Homebrewing/Microbreweries
Post by: In The Sand on December 28, 2012, 06:21:45 PM
I'm new to homebrewing.  I've done about 8 five-gallon batches since June of this year.  My first was an extract recipe and then I went straight into all-grain.  I joined AHA back around September I think.  I've always enjoyed drinking craft beer over macrobrews and finally got tired of the limited selection of craft brews in the Florida Panhandle.  Since I've started brewing my own, I've noticed a gradual increase in the selection here, and particularly at places you wouldn't expect to see them (e.g. gas stations). 

I know it's not attributable to me, and maybe I'm now just more aware, but I'm curious to know what others have seen growth-wise in the microbrewery industry.  In particular (AHA moderators weigh in please) has there been a noticeable increase in AHA membership over the past few months or years?

I've also noticed the homebrew supply companies seem to be selling out of a lot of items or have started having longer shipping times.  Again, this is my first year so it may be related to the holiday season.  What do you all think?
Title: Re: Growth of Homebrewing/Microbreweries
Post by: denny on December 28, 2012, 06:34:02 PM
I don't have the exact numbers at hand, but there has been huge growth in the AHA the last few years.  More than tripled in size, IIRC.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: snowtiger87 on December 28, 2012, 07:31:29 PM
It has all exploded. Attendance at the NHC, GABF, and just about all other local beer festivals I attend has gone through the roof. I am really glad I don't have to search 20 stores for a craft beer anymore but I lament those quaint little festivals with no lines for beer and lots of elbow room.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: a10t2 on December 28, 2012, 08:20:06 PM
I'll just leave this here... http://www.brewersassociation.org/pages/business-tools/craft-brewing-statistics/facts
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on December 28, 2012, 09:56:53 PM
The AHA has been on a growth curve for some years now. I don't have the exact figures, but it is around 30k+.

http://www.homebrewersassociation.org/pages/government-affairs/talking-points

The NHC has reflected the growth. You can see the numbers at the conference in the next link. 2012 is to be around 2500, 2014 is 3500. Hotel and conference centers are sometimes the limit on the number.


http://www.ahaconference.org/conference-information/past-conferences/
Title: Re: Growth of Homebrewing/Microbreweries
Post by: alcaponejunior on December 28, 2012, 11:10:40 PM
Despite rumblings of distributors and BMC trying to block craft beer from taking a market share, I see craft beer more and more often, in more places, and in greater selections, than ever before.

In addition, homebrewers are getting to be more common, even homebrew stores are too.  The one near me that just opened is doing just fine (I know, anecdata, n=1, S=0, but c'mon man, work with me here, I'm on board!). :D
Title: Growth of Homebrewing/Microbreweries
Post by: In The Sand on December 30, 2012, 11:55:41 PM
So apparently I'm not just more aware. There has been significant industry growth. Thanks for the comments all.
Title: Growth of Homebrewing/Microbreweries
Post by: majorvices on December 31, 2012, 04:59:06 PM
It's pretty amazing how many homebrewers on this forum have opened a brewery or turned pro since the forum opened. I was in the process of opening my brewery when this forum went live and I can think of at least 4 people on this forum who have opened (or in the process of opening) a brewery and a few others who are brewing professionally.

Likewise, here in north Alabama, when I planned to open this brewery there was one local brewery (making pretty bad beer) and by the time I opened two other breweries beat me to open and several more across the state have opened since. The former, making bad beer, closed it's doors a year after I opened.

There is a very real possibility of a bust happening in the next year or two. While we don't have any signs of slowing as of yet tap space is starting to get really crowded and while the demand for my beer is still high other much larger craft breweries like Bells and Sweet Water are taking over taps with much lower priced products. The bigger you grow, the scarier it gets!
Title: Re: Growth of Homebrewing/Microbreweries
Post by: duboman on December 31, 2012, 05:12:15 PM
I know in the Chicago area we have seen a major increase in the number of craft brewers opening shop and distributing their wares with a lot more set to open this coming year!

The biggest issue we are currently seeing is the demand for more shelf space and the distributors are having a problem trying to find a place for all the new beers on the market! Those that don't bottle are competing as well with the available taps in the bars.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on December 31, 2012, 05:32:10 PM
There is a very real possibility of a bust happening in the next year or two. While we don't have any signs of slowing as of yet tap space is starting to get really crowded and while the demand for my beer is still high other much larger craft breweries like Bells and Sweet Water are taking over taps with much lower priced products. The bigger you grow, the scarier it gets!

It is looking like the 90s again, everyone who has brewed a couple batches of beer wants to open a brewery. The quick buck people are getting into it. At the same time, all of the established breweries here in Michigan are expanding. Bells has their 200 bbl system on line, and has 250k barrels as the target this year, and the capacity (with more tanks added) is said to be in the 800k range.

If the sales slow down, and the big breweries are set to increase, that will be trouble for the ones that have quality or financial issues. Just like the 90s.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: Alewyfe on December 31, 2012, 06:03:59 PM
I miss being able to go to the local scrap yard and pick up Sankes and Cornies for 25 cents a pound, or
loading the back of a pickup with garbage cans and driving down to Minnesota Malting and filling up with 2 row for 10 cents a pound.

I welcome that beer is once again taking on more of a local flavor where each neighborhood/region will have it's beer/gathering places that offer local tastes and a window into the community. Where every Thursday at 4:00 you see Norm on that second stool from the corner....

I've always liked beer, but the English pub culture that I experienced in the 70's is what really made me fall in love with beer. The funky little nanos/micros opening up are kind of rekindling that experience.

Here's to beer and how it brings us all together!
Title: Re: Growth of Homebrewing/Microbreweries
Post by: gsandel on December 31, 2012, 07:30:09 PM
Quote
I welcome that beer is once again taking on more of a local flavor where each neighborhood/region will have it's beer/gathering places that offer local tastes and a window into the community. Where every Thursday at 4:00 you see Norm on that second stool from the corner....

I've always liked beer, but the English pub culture that I experienced in the 70's is what really made me fall in love with beer. The funky little nanos/micros opening up are kind of rekindling that experience.


+1 to that.

I like to go to certain breweries when I have a taste for something specific, or my local one(s) when just want to hang out or see what's new.  Restaurants' and bars' (non brew pub/specialty beer bar) tap and cooler space  are still driven by demand of the general customer and distribution deals (one dark, one IPA, a few BMC types or  maybe a big craft (Sam Adams or SN or NB) and this is in Denver.  Often you will count the selections on the beer menu and they are a good 40-60% or more "Pilsners" or "Pales" and are weighted toward craft lagers as well.  Craft/local plus variety still has a ways to go.
For the most part, I don't expect to see Double Imperial anything at Buffalo Wild Wings, but I am still disappointed by selection at most (even local) establishements more often than not.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: tschmidlin on January 01, 2013, 01:49:14 AM
There is a very real possibility of a bust happening in the next year or two. While we don't have any signs of slowing as of yet tap space is starting to get really crowded and while the demand for my beer is still high other much larger craft breweries like Bells and Sweet Water are taking over taps with much lower priced products. The bigger you grow, the scarier it gets!

It is looking like the 90s again, everyone who has brewed a couple batches of beer wants to open a brewery. The quick buck people are getting into it. At the same time, all of the established breweries here in Michigan are expanding. Bells has their 200 bbl system on line, and has 250k barrels as the target this year, and the capacity (with more tanks added) is said to be in the 800k range.

If the sales slow down, and the big breweries are set to increase, that will be trouble for the ones that have quality or financial issues. Just like the 90s.
I see the same thing happening here - I'm wondering when the slide will come.  I hope never, but that seems unlikely. :(
Title: Re: Growth of Homebrewing/Microbreweries
Post by: a10t2 on January 01, 2013, 02:06:18 AM
I see the same thing happening here - I'm wondering when the slide will come.  I hope never, but that seems unlikely. :(

I think a contraction is inevitable, but I'm not sure it will be as bad as the statistics make it seem. The number of new breweries opening in the past couple years is enormous, but it seems to me that relative to previous years, a lot of them are nanos. A lot of the dollar growth is coming from already-large breweries getting larger.

At least, for my own sake I hope so. ???
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on January 01, 2013, 04:34:35 AM
I see the same thing happening here - I'm wondering when the slide will come.  I hope never, but that seems unlikely. :(

I think a contraction is inevitable, but I'm not sure it will be as bad as the statistics make it seem. The number of new breweries opening in the past couple years is enormous, but it seems to me that relative to previous years, a lot of them are nanos. A lot of the dollar growth is coming from already-large breweries getting larger.

At least, for my own sake I hope so. ???

If you have a niche in your area, and make quality beer, you will be OK. That fits your situation, no? Hope to visit in a few years.

The ones that will fold are the mid sized ones that have poor quality, or bad financial situations. A couple of those went under in MI last year. There will be more. Then again, more are opening than closing.

Title: Growth of Homebrewing/Microbreweries
Post by: majorvices on January 01, 2013, 03:59:44 PM
I think a lot of nanos and picos will fold when people realize how much work it is for little to no return on investment. These teeny breweries are responsible for a lot of the growth in the industry.

Don't get me wrong, I want them to succeed . But after running a "barely" 3 bbl brewery for most of a year (and a 1.5 bbl brewery before that) I can't see how brewers can stay in business at that size without growing regardless of the quality they produce.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: gymrat on January 01, 2013, 04:41:46 PM
I thought I read once that to make a brewing business worthwhile a person needs a minimum of a 7 barrel system.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: nateo on January 01, 2013, 08:14:30 PM
I thought I read once that to make a brewing business worthwhile a person needs a minimum of a 7 barrel system.

Generally, that's true, but I think 3bbl is the absolute minimum. I can't think of any situation where anything smaller ever makes sense. There is a cafe in Michigan that does like 1bbl extract brews, in addition to selling other beer and coffee, but I think most nanos are vanity projects more than viable businesses.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: a10t2 on January 01, 2013, 08:38:56 PM
I tried really hard to make the numbers work for a 1.5 bbl system and just couldn't figure out a way to pay myself a living wage. A lot of that has to do with locality though: rent/mortgage, utilities, taxes, compliance costs for health codes, etc. If your location is on the low side as far as costs, then 3 bbl is probably workable. In a place like Southern California it would probably be a struggle to break even at 15 bbl.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on January 01, 2013, 08:49:01 PM
I thought I read once that to make a brewing business worthwhile a person needs a minimum of a 7 barrel system.

Generally, that's true, but I think 3bbl is the absolute minimum. I can't think of any situation where anything smaller ever makes sense. There is a cafe in Michigan that does like 1bbl extract brews, in addition to selling other beer and coffee, but I think most nanos are vanity projects more than viable businesses.

You must be thinking of Sue's Coffee House/Bella Casa di Vino.

There is also Patchwork in Decatur MI that brews on a half barrel set up. A Bravo! restaurant in Kalamazoo brews on a small system maybe 1/2 barrel to 1 barrel. Paw Paw started off with a half barrel system, now has a 7 bbl. Odd Sides started at 1 bbl, but now has 7 barrel tanks, not sure on brewhouse size now. There are many in the 3 to 5 range in MI. Witches Hat in South Lyon started at 4, and he can't keep up with demand - his beers are usually good - and he is looking to expand.

It is a way to get started, but soon you will need a bigger system. Just so you know, Larry Bell started with a 15 gallon soup pot, and now will be in the 250,000 barrel/year range for 2012.



Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on January 01, 2013, 08:56:53 PM
I tried really hard to make the numbers work for a 1.5 bbl system and just couldn't figure out a way to pay myself a living wage. A lot of that has to do with locality though: rent/mortgage, utilities, taxes, compliance costs for health codes, etc. If your location is on the low side as far as costs, then 3 bbl is probably workable. In a place like Southern California it would probably be a struggle to break even at 15 bbl.

There are a couple of 3 barrel breweries in the UP, the rent is pretty low in Calumet on the Keweenaw Peninsula, or in Sault Ste Marie.

There is a 1 barrel place in Marquette named Blackrocks that has a good reputation for good beer, but they are only open Thurs-Sat, and sell all the beer they have ready on those days. 
Title: Re: Growth of Homebrewing/Microbreweries
Post by: Thirsty_Monk on January 01, 2013, 11:54:09 PM
I will not tell any secret if I say that money is in the dispensing of beer. If you can sell all the beer you make on 3 BBL in your tap room than that is a pretty penny. 3 BBL brewhouse can make a lot of beers. Double brew or triple brew once a week and you make 28-40 BBL a month.
Title: Growth of Homebrewing/Microbreweries
Post by: majorvices on January 02, 2013, 12:56:20 AM
Yeah, talking about a tap room or a pub I think you can make it work on a much smaller system. I don't have experience with that yet (though we plan on opening a new facility in 12-18 months and it will definitely have a tasting room - and hopefully a biergarten :) ). But from a pure production standpoint with low overhead I have seen profit making possibilities at the 10-15 bbl capacity level., At the 30 bbl level we could make some decent money. Problem is we start running out of space and next step up means larger overhead. But the tap room should take care of that.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: a10t2 on January 02, 2013, 01:44:30 AM
I know there are plenty of breweries that do it, but I feel like you have to get pretty lucky to really do well with a tap room-only nano. One person can pretty easily brew 500 bbl/year on a 3 bbl system, but to actually move that much beer you have to sell 300+ pints a day, every day of the year. Tall order for a bar with maybe 20-30 seats and no food.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on January 02, 2013, 02:18:50 AM
Witches Hat was started by a young couple that had been laid off the same week when things were going down the tubes here, so they said what can we do to earn a living. Start a Brewery! They said the day they opened, they wondered if anyone would come. When they unlocked the door at noon there were over 50 people in line. IIRC, they exceeded their business plan projections very quickly and had to find more fermentation capacity in a hurry. They are in a strip mall and are landlocked on each side, so they have to move sometime to expand. The place has maybe 40 +/- seats, and is usually packed. They also distribute what they can. Most sales are from the tasting room. They limit growler sales on some beers to keep them on.

It is a combination of good beer, friendly owners and staff, nice atmosphere, all in an area that has the population, but few breweries within a 20-30 minute drive. I have been really happy to see them be successful. They smile a lot when you see them these days.

It it is not without risk but it can be done.

Title: Re: Growth of Homebrewing/Microbreweries
Post by: nateo on January 02, 2013, 03:31:40 AM
Drydock in Aurora started in a strip mall, with just a couple taps sticking out of the wall. They've got a proper tap room now, and make some really nice beer. It took luck and skill to make that work. I wouldn't plan on being lucky, though.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: gsandel on January 02, 2013, 04:30:09 AM
Quote
Drydock in Aurora started in a strip mall
in 2005...won small brewer of the year at GABF in 2009...

....and this weekend opened their production facility with 30,000 bbl/yr capacity.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hubie on January 02, 2013, 05:45:49 AM

It is a combination of good beer, friendly owners and staff, nice atmosphere, all in an area that has the population, but few breweries within a 20-30 minute drive.


Don't forget that you also need to set up in a region with beer-friendly laws.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: swampale on January 02, 2013, 11:11:08 AM
Homebrewing has exploded in Canada the last year or so. Finally, people are fed up with paying too much for beer. I wonder what took them so long. There seems to be an increase of nano breweries opening up too. That is great, and I welcome more to take the plunge and start a small brewery also.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: hopfenundmalz on January 02, 2013, 01:40:22 PM

It is a combination of good beer, friendly owners and staff, nice atmosphere, all in an area that has the population, but few breweries within a 20-30 minute drive.


Don't forget that you also need to set up in a region with beer-friendly laws.

Michigan is friendly to the craft brewers, but it also is a 3 tier state. One of the things that new brewer stress on is which distributor to sign up with. As in life, it is easy to get wed to a distributor, but harder to get divoreced
Title: Re: Growth of Homebrewing/Microbreweries
Post by: Jimmy K on January 02, 2013, 02:28:20 PM
The key is definately maximizing profit/pint.  A taproom would give the highest return, though you have to pay for the space, furnish it, and probably pay someone to sell your beer too (assuming you'll be too busy brewing). Seems many nano's bottle in bombers, which bring the highest price/oz.
 
The successful ones probably have unique situations that make it work, such as already owning the building the brewery is in and/or buying equipment with disposable income (or already owning a massive homebrew system) rather than financing and truly incorporating those costs into the business.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: a10t2 on January 02, 2013, 04:18:01 PM
The successful ones probably have unique situations that make it work, such as already owning the building the brewery is in and/or buying equipment with disposable income (or already owning a massive homebrew system) rather than financing and truly incorporating those costs into the business.

Keeping your day job also seems to be a common theme. ;)
Title: Re: Growth of Homebrewing/Microbreweries
Post by: nateo on January 02, 2013, 04:20:51 PM
The successful ones probably have unique situations that make it work, such as already owning the building the brewery is in and/or buying equipment with disposable income (or already owning a massive homebrew system) rather than financing and truly incorporating those costs into the business.

That's a dumb way to do business. If you want it to be a proper business, and not a vanity project, you need to factor in every input (capital + your time). Vanity projects are fine, but I think for most people it'd be cheaper to buy all the fancy toys and just give the beer away to their friends, rather than go through the hassle of selling it.
Title: Re: Growth of Homebrewing/Microbreweries
Post by: Jimmy K on January 02, 2013, 05:06:54 PM
That's a dumb way to do business.
I didn't say it was smart. Maybe you can get going as a nano this way, but you're screwed if you want to expand. It's bad if part of your business model is "Don't grow".
Title: Growth of Homebrewing/Microbreweries
Post by: majorvices on January 02, 2013, 05:31:50 PM
We started off super small but the intention was always to grow. even so, it would have been smarter for us to start off on a 7 bbl system, in hind sight. Learned a lot about what not to do when you open a brewery, that's for sure. ;)