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General Category => Going Pro => Topic started by: IMperry9 on June 26, 2018, 11:28:30 PM

Title: Common(or Uncommon) mistakes that new breweries make
Post by: IMperry9 on June 26, 2018, 11:28:30 PM
Hey guys been a while since I have been active on here but I hope all is well. Just as the title says I am just looking for some insight into mistakes that you have come across or heard of for newer breweries.

Thanks in advanced and happy brewing!
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: majorvices on June 27, 2018, 02:05:25 AM
Starting a brewery is the mistake most starting breweries make. ;)
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: JT on June 27, 2018, 06:47:20 AM
What is the BA doing or capable of doing to help shift this perception?  I have no doubt the feedback is both candid and tongue in cheek - but I have a feeling it is mostly candid... yikes!  I think the OP's question remains unanswered, even if the answer of "DON'T!" is genuine - why is that the case?  And more importantly how can it be mitigated/corrected?  Long hours, bureaucratic red tape, impossible deadlines, razor thin margins (if there are positive margins).  Not cool!  What is the solution?
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: brewinhard on June 27, 2018, 12:23:30 PM
My biggest beef is new breweries that simply are not making good beer. They might do well at first because the locals really don't know good beer from a hole in the wall, but it seems to be more the norm than not.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: majorvices on June 27, 2018, 12:44:54 PM
What is the BA doing or capable of doing to help shift this perception?  I have no doubt the feedback is both candid and tongue in cheek - but I have a feeling it is mostly candid... yikes!  I think the OP's question remains unanswered, even if the answer of "DON'T!" is genuine - why is that the case?  And more importantly how can it be mitigated/corrected?  Long hours, bureaucratic red tape, impossible deadlines, razor thin margins (if there are positive margins).  Not cool!  What is the solution?

Oh God, RELAX already.  ::)

#1 mistake is opening a brewery to begin with! Most places are already saturated with breweries with few exceptions. You will need a VERY active tap room to survive because most breweries can not subsist on production and distribution alone, and shelf space in grocery stores are extremely competitive. You have no idea how hard it is to get on a corporate grocery store shelf. Most likely that ain't happenin' until you have been in business for a while.

So ask yourself why you want to open a brewery? Is it to create a viable business or just a vanity project? Which is directly related to the next mistake....

#2 is expecting to make any money doing this. I worked 5 years before I made a semi decent paycheck. Lucky to have had a supportive wife who made good money. Margins are razor thin in this business and equipment is super expensive and you never have enough equipment when you are starting out.

#3 Is not starting with enough funding. I'm 8.5 years in and I still need more money to expand. If you plan on being a small tasting room only you can probably subsist on a 3 bbl brew house but you better have a fantastic business plan and charge accordingly. As an aside I brew 3 barrel tasting room only batches that can be gone completely over a busy weekend. So make sure you have enough tanks and have enough beer.

#4 Mistake is not really understanding commercial brewing processes and all the hurdles that go with it. Too many think opening a brewery is just like homebrewing only on a larger scale you are going to seriously struggle. You need to be a chemist, a microbiologist, an engineer, a marketer, a graphic designer, a production manager, a safety engineer ... if you plan to have a tasting room then a bar manager, a bartender ... and a brewer. And janitor. Or be prepared to hire folks that do all that (and lets not forget plumber, electrician, welder, HVAC.)

#5 Mistake is not having a genuine business mind. The business part is every bit as hard as the brewing part ... maybe harder. A genuine business minded person can succeed in this business but in most cases that job is way too complex to be both the brewer and the business manager. The two are full time jobs and you can't have a brewery without both. So if you are opening a brewery and plan on being the brewer you are going to need the business manager there as well.

I could go on but that's enough to start with.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: JT on June 27, 2018, 01:00:05 PM

Good feedback.  Personally, I could not get around number 2 and unfortunately, I've heard the same from others.  That's just terrible!
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: The Beerery on June 27, 2018, 02:05:57 PM
What is the BA doing or capable of doing to help shift this perception?  I have no doubt the feedback is both candid and tongue in cheek - but I have a feeling it is mostly candid... yikes!  I think the OP's question remains unanswered, even if the answer of "DON'T!" is genuine - why is that the case?  And more importantly how can it be mitigated/corrected?  Long hours, bureaucratic red tape, impossible deadlines, razor thin margins (if there are positive margins).  Not cool!  What is the solution?

Oh God, RELAX already.  ::)

#1 mistake is opening a brewery to begin with! Most places are already saturated with breweries with few exceptions. You will need a VERY active tap room to survive because most breweries can not subsist on production and distribution alone, and shelf space in grocery stores are extremely competitive. You have no idea how hard it is to get on a corporate grocery store shelf. Most likely that ain't happenin' until you have been in business for a while.

So ask yourself why you want to open a brewery? Is it to create a viable business or just a vanity project? Which is directly related to the next mistake....

#2 is expecting to make any money doing this. I worked 5 years before I made a semi decent paycheck. Lucky to have had a supportive wife who made good money. Margins are razor thin in this business and equipment is super expensive and you never have enough equipment when you are starting out.

#3 Is not starting with enough funding. I'm 8.5 years in and I still need more money to expand. If you plan on being a small tasting room only you can probably subsist on a 3 bbl brew house but you better have a fantastic business plan and charge accordingly. As an aside I brew 3 barrel tasting room only batches that can be gone completely over a busy weekend. So make sure you have enough tanks and have enough beer.

#4 Mistake is not really understanding commercial brewing processes and all the hurdles that go with it. Too many think opening a brewery is just like homebrewing only on a larger scale you are going to seriously struggle. You need to be a chemist, a microbiologist, an engineer, a marketer, a graphic designer, a production manager, a safety engineer ... if you plan to have a tasting room then a bar manager, a bartender ... and a brewer. And janitor. Or be prepared to hire folks that do all that (and lets not forget plumber, electrician, welder, HVAC.)

#5 Mistake is not having a genuine business mind. The business part is every bit as hard as the brewing part ... maybe harder. A genuine business minded person can succeed in this business but in most cases that job is way too complex to be both the brewer and the business manager. The two are full time jobs and you can't have a brewery without both. So if you are opening a brewery and plan on being the brewer you are going to need the business manager there as well.

I could go on but that's enough to start with.

Very solid list.

I just want to touch on the bold part because I am happy you put that. This all falls under the title "brewmaster"( as you know) in school they teach you that to be a brewmaster you HAVE to know/understand/master every item you list, and MORE!

Crappy breweries are opening up around here and are a dime a dozen.  Most of them that are opening don't even have a brewer, and they are trying to find any warm body to stand in and be a "brewmaster". Going to be plenty of cheap SS around here in a short while.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: majorvices on June 27, 2018, 03:05:30 PM

Good feedback.  Personally, I could not get around number 2 and unfortunately, I've heard the same from others.  That's just terrible!

OTOH a lot of businesses are that way not just brewing.

And yes, lots of crappy breweries opening up all over. It's amazing how much of  astep you need to take to go from homebrewer to legit commercial brewer. It is no small feat. For instance: If you plan on distributing you better have a lab set up and you better know the right tests to run or you will be running blind. There are so more many place and ways things can go wrong in a commercial set up as opposed to a homebrewery.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Slowbrew on June 27, 2018, 03:59:10 PM
Keith's first post made chuckle.  It brings to mind an old saying: "If want to make a small fortune in brewing, start with a big fortune."  It holds true for most kinds of business, especially if you don't really understand the business before you start one up.

Paul
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: IMperry9 on June 27, 2018, 05:28:16 PM
What is the BA doing or capable of doing to help shift this perception?  I have no doubt the feedback is both candid and tongue in cheek - but I have a feeling it is mostly candid... yikes!  I think the OP's question remains unanswered, even if the answer of "DON'T!" is genuine - why is that the case?  And more importantly how can it be mitigated/corrected?  Long hours, bureaucratic red tape, impossible deadlines, razor thin margins (if there are positive margins).  Not cool!  What is the solution?

Oh God, RELAX already.  ::)

#1 mistake is opening a brewery to begin with!

Thanks everyone for the feedback! I appreciate the words of wisdom but as JT said this isn't exactly what I was hoping to uncover with my question. I feel as if your five points can be wrapped up into saying the biggest mistake you can make is not understanding that you are starting a business. I do agree that there is an over-saturation of breweries stemming from vanity projects but I don't agree that giving advice not to open a brewery is the answer. Might as well not get married because it will lead to divorce ;). Thank you for the input though!
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Robert on June 27, 2018, 06:49:21 PM
Define vanity project, and give a counterexample, that is, a sound approach or reason to open a brewery, please.  (Sorry if that sounds like a school essay question.)
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: 69franx on June 27, 2018, 07:01:12 PM
From a consumer standpoint I see several consistent issues at new breweries:
Poor quality
Poor consistency of product
Too varied of offerings
Too narrow of a scope for offerings(think 7 different pale ales or IPAs as the only choices
Getting too crazy and off the beaten path with recipes before showing proper brewing skills
Limited availability
Limited operating hours
As Keith mentioned though, these are not just brewery specific, you can see these same issues in rookie businesses the world over.
His plan seems to have worked well, he is not just the brewer, but he is the brewer and a partner. His partners run the business and he has the freedom to brew and manage brewhouse operations.
Even the local to me 10bbl taproom has a whole family working there: dad brews, son cooks, wife seems to run the business.
All in all, you need to know that operating a successful brewery takes a team of dedicated pieces.
Hoping any of that helps a bit, consumer viewpoint only

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Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: IMperry9 on June 27, 2018, 08:09:46 PM
Frank, thank you those are some good points as far as making sure everyone on board is dedicated and it ties in with Major's point about having knowledgeable people at each operation of the business.

Define vanity project, and give a counterexample, that is, a sound approach or reason to open a brewery, please.  (Sorry if that sounds like a school essay question.)

Rob, I guess defining a vanity project would be an individual (or group of individuals) that don't consider the feasibility to starting a business venture. The mindset of "All of my family like my homebrew so I could run an awesome brewery etc.) vs "I see an opportunity to start a successful business doing something I enjoy." As for a counter example I am in the very early talks of potentially starting a brewery because I believe there is an untapped market in my area. I have a background in Finance/accounting with a few years of sales experience and have been involved with a few start ups. My (potential) partner is an engineer and combined we 10+ years of brewing experience. We also understand that after doing our homework it might not be feasible and won't pursue it. That is the difference in my eyes between a vanity project and the real deal.

I hope that answered your essay question ;)
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: RC on June 27, 2018, 09:04:55 PM
I've been at a startup brewery for a year now and one mistake I see (among the many) is that the owners didn't consider that they'd be leaders of people. For any business with employees, an owner/partner must must must realize that they will be leaders. Employees will be looking to you to make decisions, set examples, provide performance feedback, etc. You must must must realize that "President of Human Resources" will be among your many job titles. If you don't manage your people well--if you don't lead them, in the truest sense of the word, all you'll be doing it tying one hand behind your back.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: majorvices on June 28, 2018, 12:13:16 PM


Thanks everyone for the feedback! I appreciate the words of wisdom but as JT said this isn't exactly what I was hoping to uncover with my question. I feel as if your five points can be wrapped up into saying the biggest mistake you can make is not understanding that you are starting a business. I do agree that there is an over-saturation of breweries stemming from vanity projects but I don't agree that giving advice not to open a brewery is the answer. Might as well not get married because it will lead to divorce ;). Thank you for the input though!

OK since you didn't like my first five I'll give you a few more.

1) Not starting with enough funding.

2) Not starting with a lab or understanding the basic principals of operating a brewery lab (The "Yeast" book by White and Jamil can give you a good basic understanding of the test you need to be running)

3) starting way too small (see #1) or starting way too big. (I think 10-15 bbl is a good starting point. Start with 10-15 bbl fermentors then you can add 20-30 and double batch then you can add larger and triple or quad batch.)

4) Not having a good marketing plan which includes a talented graphic designer.

5) Not having a good business plan or a good business minded person on the team. I restate this because it is so important and can't be done by the head brewer and is a full time job. Wait till you see how many hours it takes to fill out your TTB and local ABC report.... LOL the look on your face please take a selfie. ;)

As far as vanity project what I mean is the idea of a brewery whose goal is to open a place to simply give the brewer a chance to offer his product as a source of pride (which is part of the reason we all homebrew - we love to offer our beer to our friends and have them say "wow!") as opposed to doing the same but framing it around a viable business plan that creates jobs and income not only for you and your partners but for the community. You can start on a 5 gallon system as long as you understand the path needed to get out of that model. If you start with a 5 gallon just because you have a dream of serving your beer you are in it for the wrong reasons. You can do that as a homebrewer (and have weekends off ;) )

Also, 69franx mentioned something about me being the "brewer" and, technically I am the "brewmaster" or "headbrewer" and while I still write recipes and help a lot with the labor I have 2 "leadbrewers" who actually do most of the labor of actual brewing (they come up with recipes too for tatsing room). In fact, yesterday was the first day I totally brewed a batch of beer in a long time. So that could be another mistake, thinking that you will be a "brewer" and brewing every day. Your job will become way, way, WAY too big for that. Essentially I am a Production Manager. Hell most days I don't even want to brew, I want to run the production it is much more challenging and fun job than turning valves and creating wort.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: BrewBama on June 28, 2018, 03:10:11 PM
I've been at a startup brewery for a year now and one mistake I see (among the many) is that the owners didn't consider that they'd be leaders of people. For any business with employees, an owner/partner must must must realize that they will be leaders. Employees will be looking to you to make decisions, set examples, provide performance feedback, etc. You must must must realize that "President of Human Resources" will be among your many job titles. If you don't manage your people well--if you don't lead them, in the truest sense of the word, all you'll be doing it tying one hand behind your back.

Great point.  Keith won't tell you this, but his brewery was voted one of the best places to work in Huntsville AL.  Remember, there are multiple breweries in Huntsville and he's the only one I saw on the nomination list.  http://hsvchamber.org/2018-best-places-work-see-contenders/ 
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: el_capitan on June 28, 2018, 09:10:59 PM
 The  main problem with my local brewery is that they rush the beers and release them too soon. Nobody wants a cloudy undercarbed beer. It's really bad. So having enough space to adequately condition a beer before serving is key.

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Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: tommymorris on June 29, 2018, 12:34:39 AM
My pet peeve is selling obviously bad beer; diacetyl bomb, infected beer, etc. I won’t even give away my bad batches. 


- formerly alestateyall.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: majorvices on June 30, 2018, 02:50:36 PM
I've been at a startup brewery for a year now and one mistake I see (among the many) is that the owners didn't consider that they'd be leaders of people. For any business with employees, an owner/partner must must must realize that they will be leaders. Employees will be looking to you to make decisions, set examples, provide performance feedback, etc. You must must must realize that "President of Human Resources" will be among your many job titles. If you don't manage your people well--if you don't lead them, in the truest sense of the word, all you'll be doing it tying one hand behind your back.

Great point.  Keith won't tell you this, but his brewery was voted one of the best places to work in Huntsville AL.  Remember, there are multiple breweries in Huntsville and he's the only one I saw on the nomination list.  http://hsvchamber.org/2018-best-places-work-see-contenders/

Thanks for the shout out Dwayne! Yes, agree with the sentiment that business owners are leaders or people. Goes back to my point that most homebrewers who open a brewery aren't getting into it for the right reasons. They think they will be brewing as a job when in actuality they will be running a business. And if your vision is so narrow that you see yourself as being a brewer you either aren't going to have a successful brewery or you haven't opened your eyes to reality. What you end up doing is managing a brewery which is far more interesting than actually brewing.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: hopfenundmalz on July 01, 2018, 03:03:44 PM


Thanks everyone for the feedback! I appreciate the words of wisdom but as JT said this isn't exactly what I was hoping to uncover with my question. I feel as if your five points can be wrapped up into saying the biggest mistake you can make is not understanding that you are starting a business. I do agree that there is an over-saturation of breweries stemming from vanity projects but I don't agree that giving advice not to open a brewery is the answer. Might as well not get married because it will lead to divorce ;). Thank you for the input though!

OK since you didn't like my first five I'll give you a few more.

1) Not starting with enough funding.

2) Not starting with a lab or understanding the basic principals of operating a brewery lab (The "Yeast" book by White and Jamil can give you a good basic understanding of the test you need to be running)

3) starting way too small (see #1) or starting way too big. (I think 10-15 bbl is a good starting point. Start with 10-15 bbl fermentors then you can add 20-30 and double batch then you can add larger and triple or quad batch.)

4) Not having a good marketing plan which includes a talented graphic designer.

5) Not having a good business plan or a good business minded person on the team. I restate this because it is so important and can't be done by the head brewer and is a full time job. Wait till you see how many hours it takes to fill out your TTB and local ABC report.... LOL the look on your face please take a selfie. ;)

As far as vanity project what I mean is the idea of a brewery whose goal is to open a place to simply give the brewer a chance to offer his product as a source of pride (which is part of the reason we all homebrew - we love to offer our beer to our friends and have them say "wow!") as opposed to doing the same but framing it around a viable business plan that creates jobs and income not only for you and your partners but for the community. You can start on a 5 gallon system as long as you understand the path needed to get out of that model. If you start with a 5 gallon just because you have a dream of serving your beer you are in it for the wrong reasons. You can do that as a homebrewer (and have weekends off ;) )

Also, 69franx mentioned something about me being the "brewer" and, technically I am the "brewmaster" or "headbrewer" and while I still write recipes and help a lot with the labor I have 2 "leadbrewers" who actually do most of the labor of actual brewing (they come up with recipes too for tatsing room). In fact, yesterday was the first day I totally brewed a batch of beer in a long time. So that could be another mistake, thinking that you will be a "brewer" and brewing every day. Your job will become way, way, WAY too big for that. Essentially I am a Production Manager. Hell most days I don't even want to brew, I want to run the production it is much more challenging and fun job than turning valves and creating wort.

When Ken Grossman’s talk from Homebrewcon gets put up, you will be inspired while shaking your head. It was a different time.

They were broke, had rudimentary plans, and tons of determination. Started with a 10 barrel system fabbed from dairy equipment. He showed their simple lab as they had a commitment to quality from the beginning.

I agree with everything you said Keith, but one I could add is “don’t be afraid to dump some batches”. Ken said they dumped a dozen or so before they figured out that the yeast had a high requirement for O2.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Buckeye Hydro on January 31, 2019, 11:09:56 AM
Because we are a water treatment company...

I see many new breweries getting close to opening without giving adequate thought to water treatment.  That yields situations where there is no floorspace available for needed equipment, where there is no money available for adequately sized equipment, where there is little interest in learning how to use needed equipment, etc. 

Russ
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Michael Brown on September 08, 2019, 01:25:49 PM
Old thread but for what its worth I am in the process of helping open a small brewpub in just a month or so as the head brewer and as an investor. Its been quite a two year journey to get to this point.  Just my observations to date:

1.  Decide whether you want to be a brewpub or a brewery.  There can be a big difference in business models and there can be significant differences in what you can do legally depending on what state you are in.  I didn't appreciate enough the difference when we started this process.  Some lessons learned apply to both types of licenses but many apply to one more than the other. 

2.  Understand the legal restrictions in your state and local area.  Don't make any assumptions and hire a good attorney with local beer/alcohol experience. Many don't want the expense, but trust me you will save yourself time and money in the long run. 

3.  Join the Brewers Association (not the AHA) and join your state's brewing guild or association.  Attend as many conferences and seminars as you can.  Attending CBC in Nashville, taking advantage of BA online training and webinars, and regularly attending my state's guild conferences and training has been invaluable.  Again don't shy away because of the expense; it will save you time and money in the long run.  Industry/peer mentoring and assistance from local brewpubs and breweries is invaluable.  Ditto for the Master Brewers Association.  We made and changed decisions based on what we learned from these events and contacts. 

4.  In some ways coming up with the beer recipes and making the beer is the easy part.  You need to spend as much, or more , time thinking about production management, business management, marketing, etc. as you do the beer.  This is arguably the biggest difference between homebrewing and professional brewing.

5.  Create something you can realistically manage from a knowledge and resource perspective.  The initial vision we had was a 20-30 bbl brewpub in a 10k sq/ft space.  No way we could raise that kind of capital and frankly outside our ability to manage at this point in time.  We will be opening a 7bbl brewpub in about 2k sq/ft in a matter of weeks.  It will be a challenge, but we have come a long, long way in the last two years.  In another few years, maybe a 20-30 bbl system in 10K sq/ft space will be very realistic and achievable.

6.  18-24 months of planning/preparation or longer is quite the norm even after you really start to get after it.  Licensing alone can take up to six months depending on your state.  You will likely need to come out of pocket for rent/lease for most, or all, of that time due to licensing requirements. Again check your local state laws. You will need an address that meets state and local zoning requirements just to get your Federal TTB license, which is generally needed to then get your state license.   Make sure you understand the licensing requirements.  Also finding a space that makes business sense and meets state and local zoning requirements can take a while-6 months is not out of the realm of reality. 

I'll update in a few months after we've opened!
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: denny on September 08, 2019, 02:49:22 PM
#4 above is the most important.  All too many people think a brewery or brewpub is about the beer.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: hopfenundmalz on September 08, 2019, 02:58:18 PM
Good list. Glad you got an attorney upfront.

Here in Michigan the business models between brewery and brewpub are distinct. What state are you in, if you care to say?

I know how to make beer. I know very little about selling beer in a production setting. Good luck!
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Kevin on September 09, 2019, 03:48:12 PM
Have a market analysis done before you start. Especially if there are other small brewers in the area. With other brew pubs and craft breweries... even grocery stores with large selections to chose from... your marketplace may already be at or near the saturation point.
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: Michael Brown on September 21, 2019, 12:50:11 PM
Ref above:

Were in Texas.  If anyone is at CBC next year in SATX look us up-were in town.

Marketing:  Good point on analysis but there are essentially three market areas: brewpub/taproom, bars/restaurants (other taps), and store shelves.  Based on being either a brewery or a brewpub and your business plan you need to look each of these.  For example, shelf competition for canned/bottled product might be tight, but there might be more market room at bars/restaurants, and you may have even better market dynamics for your brewpub/taproom.  This is really important for you to narrow your business plan since these three market areas represent very distinct margin tiers. 
Title: Re: Common(or Uncommon) mistakes that new breweries make
Post by: BrewBama on September 21, 2019, 02:09:44 PM
San Antonio is a fun town!


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