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General Category => Going Pro => Topic started by: micsager on October 27, 2011, 02:31:43 PM

Title: I just want to be able to sell my beer
Post by: micsager on October 27, 2011, 02:31:43 PM
Not looking to give up my day job, or open any type of brewery, brewpub, or tasting room.  Just want to be able sell beer from time to time. 

Can this be done, while still brewing at home?
Title: Re: I just want to be able to sell my beer
Post by: Jimmy K on October 27, 2011, 02:34:11 PM
There may be some exceptions, but pretty much no. Among other reasons because I don't think you can get a Federal license for residential zoned space. Perhaps if you lived on a farm or had dual-zoned property.
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on October 27, 2011, 02:39:44 PM
From what I have gathered the answer to that question is largly dependant on your local and state ordinances. However the TTB (Feds) require that the brewery be in a standalone structure. so, as far as the feds are concerned you can sell your beer as long as your brewery is in a detached garage or shed or other out building or other standalone structure. You still have to fill out a brewers notice and provide a $1000.00 bond against the excise tax that you will have to pay.

Local regs, on the other hand, can be fairly restrictive. you have to deal with local zoning for what ever structure you intend to build or modify into your brewery, and town or county health codes relating to manufacture of foodstuffs, business licences, distribution/sales permits etcetera.

I was reading about a guy in Mariposa CA that managed all this for around 3k before learning that he needed a different location for a tasting room due to local health codes. However since that happened california has loosened restrictions on nano/micro breweries and tasting rooms to make the rules conform more or less with those for small wine producers who enjoy quite a few liberties here in cali.

so yeah, you can do it with a bit of leg work and some considerable hoop jumping. Seems like the real key is connecting with zoning and health inspectors who are willing to support you in your endevour.

can you tell what I have been thinking about doing?
Title: Re: I just want to be able to sell my beer
Post by: micsager on October 27, 2011, 02:51:23 PM
There may be some exceptions, but pretty much no. Among other reasons because I don't think you can get a Federal license for residential zoned space. Perhaps if you lived on a farm or had dual-zoned property.

My home is in a place zoned rural-farm, and home based businesses are allowed.  I wonder if that means a bar coulde open next door???   hmmm.  Where to start?  Years ago I got a business license "Dungeness Brewing Co." Mostly just for kicks, but to also give me some protection of that name.  I wonder if I amended that license to include brewery operations, if that would start the ball rolling, and I would see what walls present themselves......
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on October 27, 2011, 02:56:27 PM
There may be some exceptions, but pretty much no. Among other reasons because I don't think you can get a Federal license for residential zoned space. Perhaps if you lived on a farm or had dual-zoned property.

My home is in a place zoned rural-farm, and home based businesses are allowed.  I wonder if that means a bar coulde open next door???   hmmm.  Where to start?  Years ago I got a business license "Dungeness Brewing Co." Mostly just for kicks, but to also give me some protection of that name.  I wonder if I amended that license to include brewery operations, if that would start the ball rolling, and I would see what walls present themselves......

Call the TTB, they are there to help! the more beer being sold the more taxes and fees they collect so they really are on your side and the more you keep that in mind the more on your side they will be. Everything I have read so far seems to indicate that the real problem areas are the state/county/local authorities who might well need some education on the subject. good luck!

By the by, the feds don't really care what your area is zoned for. that is only of concern to the local authorities. All the feds care about is if the structure is attached to a home. I have even read where people simply blocked the enterance from the garage to the house and the Feds accepted that as 'detached'
Title: Re: I just want to be able to sell my beer
Post by: phunhog on October 27, 2011, 05:04:43 PM
Not looking to give up my day job, or open any type of brewery, brewpub, or tasting room.  Just want to be able sell beer from time to time. 

Can this be done, while still brewing at home?
I had similar ideas so I was looking at the nanobrewery route.  I have a detached garage so the Feds and state were OK with it but my local city wouldn't allow me to use my garage for any type of commerical business.  Like you I just wanted to sell a little bit of my beer to a local bar/restaurant, I wasn't looking for a career change.  Anyways I think you have to examine your goals. Do you really want to sell your beer or are just looking for people to drink and appreciate your beer? I was the latter..just wanted to get my beer into the people's hands.  I call my little operation Two Trees Brewing Co. and say it is a "non commercial nanobrewery".  I do not and cannot legally sell beer to anyone. However I pour at beer festivals, have friends come over for growler fills, and most importantly sell brewery merchandise.  Selling brewery t-shirts has paid for pretty much all of my beer related expenses for the past six months. The best part though is I still get other people to drink my beer without all the hassles/expense of being a licensed brewery.
Title: Re: I just want to be able to sell my beer
Post by: tschmidlin on October 27, 2011, 07:21:28 PM
Mic, talk to the guys at 192 Brewing, Aldregrove Brewing, and any other Washington nanos you can find.  Those two are both on the owners property as far as I know, and they may be able to tell you some of the things they had to do to get going.  The rules they had to follow may have come from their county/city, but they may have come from the state so that could be helpful.

And as mentioned above, TTB will be a good resource for you.
Title: Re: I just want to be able to sell my beer
Post by: Jimmy K on October 27, 2011, 08:25:16 PM
Call the TTB...

Most government inspectors are human, and they'll be happy that someone is being proactive about compliance instead of building and getting frustrated about changes after inspection. You'll also get a feel for the attitude of the person who might be doing your inspections.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on October 28, 2011, 12:10:32 AM
Consider this: Our annual ABC license that allows us to sell beer is $1,000. Your local regulations may be different, I dunno, but you are going to really have to work hard to make any kind of profit on a 5-10 gallon system.
Title: Re: I just want to be able to sell my beer
Post by: bo on October 28, 2011, 01:26:01 AM
Consider this: Our annual ABC license that allows us to sell beer is $1,000. Your local regulations may be different, I dunno, but you are going to really have to work hard to make any kind of profit on a 5-10 gallon system.

He never said that he was limiting his brewing to 5-10 gallons.
Title: Re: I just want to be able to sell my beer
Post by: The Professor on October 28, 2011, 01:29:48 AM
Consider this: Our annual ABC license that allows us to sell beer is $1,000. Your local regulations may be different, I dunno, but you are going to really have to work hard to make any kind of profit on a 5-10 gallon system.

Sounds right to me.
Making good beer is the easy part (as evidenced by the incredible number of new breweries that have started up in recent years). 
Getting the legal clearances and requirements out of the way (Federal, State, and Local) and developing a customer base is another story.  When all is said and done I think Keith is pretty much spot on in the assessment that you shouldn't expect to make very much money in such a venture on the scale you seem to be contemplating. 
Then again, if it's something you can afford to do for kicks (as a kind of a hobby and not concerned about profitability)  while you make a real living at something else, then go for it!
Title: Re: I just want to be able to sell my beer
Post by: tschmidlin on October 28, 2011, 02:04:14 AM
Consider this: Our annual ABC license that allows us to sell beer is $1,000. Your local regulations may be different, I dunno, but you are going to really have to work hard to make any kind of profit on a 5-10 gallon system.
Yeah, but WA is a pretty brewery friendly state . . .

RCW 66.24.244
Microbrewery's license — Fee.

(1) There shall be a license for microbreweries; fee to be one hundred dollars for production of less than sixty thousand barrels of malt liquor, including strong beer, per year.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on October 28, 2011, 02:29:15 AM
Consider this: Our annual ABC license that allows us to sell beer is $1,000. Your local regulations may be different, I dunno, but you are going to really have to work hard to make any kind of profit on a 5-10 gallon system.
Yeah, but WA is a pretty brewery friendly state . . .

RCW 66.24.244
Microbrewery's license — Fee.

(1) There shall be a license for microbreweries; fee to be one hundred dollars for production of less than sixty thousand barrels of malt liquor, including strong beer, per year.

Well, that's just plum reasonable!

My main concern when people start to take homebrew to the masses is still the fact that it is an awful lot of work for such a small return. If you are brewing on a 5 - 10 gal system you will end up brewing more for bars and pubs than for yourself and you still won't be making any money and you will end up working basically for free. The most important part about homebrewing for me was having good, fresh beer on tap all the time - for ME! If you start brewing for local establishments you will not have very much beer around the house. What is worse, you will most likely have to pay to drink your own beer.

Another think to consider: pubs and restaurants start to get pissed when you can't keep up with demand. Especially if you are taking up tap space. If you can;t keep a keg on that tap most places are going to bump you for someone more reliable. An empty tap costs an establishment money.

Not trying to rain on any parades, just trying to point out a few facts folks may not have thought of. Brewing beer is a lot of work, for sure.
Title: Re: I just want to be able to sell my beer
Post by: tschmidlin on October 28, 2011, 05:34:28 AM
I see your point, but think of it this way Keith - if you are brewing 5 gallons at a shot you are going to have to brew so much to keep your accounts fulfilled that you won't have time to drink anyway ::)

I think if you are just trying to keep one place in beer, just for the fun of it, it's not a big deal.  But if I was going to actually try to make a business out of it I would start with 7 bbls at a minimum, only doing less than that if it was more of a bar and I planned to have guest taps.

Mic, also check out Foggy Noggin, I have heard they are helpful.  You can also talk to Nate McLaughlin, he is in the process of setting up a nano brewery right now.
Title: Re: I just want to be able to sell my beer
Post by: Jimmy K on October 28, 2011, 01:11:47 PM
I don't know what the trend in established nano breweries is, but I would think that nano brewing and kegging are not good friends economically. This is simply because your 10 gal might be worth 150 in a keg (retail), but packaged in bombers at $10 each, that same batch is worth $400.  $400 - costs and labor is not much to live on, but it is substantially better than $150 - costs and labor which is probably an imaginary number.
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on October 28, 2011, 02:58:24 PM
[My main concern when people start to take homebrew to the masses is still the fact that it is an awful lot of work for such a small return. If you are brewing on a 5 - 10 gal system you will end up brewing more for bars and pubs than for yourself and you still won't be making any money and you will end up working basically for free. The most important part about homebrewing for me was having good, fresh beer on tap all the time - for ME! If you start brewing for local establishments you will not have very much beer around the house. What is worse, you will most likely have to pay to drink your own beer.

Another think to consider: pubs and restaurants start to get pissed when you can't keep up with demand. Especially if you are taking up tap space. If you can;t keep a keg on that tap most places are going to bump you for someone more reliable. An empty tap costs an establishment money.

Not trying to rain on any parades, just trying to point out a few facts folks may not have thought of. Brewing beer is a lot of work, for sure.

I wouild agree that a 5-10 gallon system is probably a little to small, although as a way to start out and get some beer in the hands of local pub owners, sommeliers and bottle store buyers it might be sifficient. but a 1 BBL system is not alot bigger that a 10 gallon system and if you are only selling to a couple of accounts would be good enough to be starting out with.

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on October 28, 2011, 03:33:24 PM

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.

I totally agree and have been in the exact same boat. Some get irritated if the beer is not available. Others make it a marketing tactic. We just try to keep as much beer in the hands of people as possible.

Also agree with a 1 bbl system. But like I have said here and elsewhere: just be aware it becomes a full time job working for free whether on a 5 gl system or a 1 bbl system.
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on October 28, 2011, 03:35:50 PM

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.

I totally agree and have been in the exact same boat. Some get irritated if the beer is not available. Others make it a marketing tactic. We just try to keep as much beer in the hands of people as possible.

Also agree with a 1 bbl system. But like I have said here and elsewhere: just be aware it becomes a full time job working for free whether on a 5 gl system or a 1 bbl system.

no doubt it is a labor of love. But hey at least you can blast the polka while you work for free right? ;D
Title: Re: I just want to be able to sell my beer
Post by: majorvices on October 28, 2011, 05:25:25 PM
A lack of polka would be a deal breaker for me.
Title: Re: I just want to be able to sell my beer
Post by: jeffy on October 28, 2011, 10:03:31 PM
I don't know what the trend in established nano breweries is, but I would think that nano brewing and kegging are not good friends economically. This is simply because your 10 gal might be worth 150 in a keg (retail), but packaged in bombers at $10 each, that same batch is worth $400.  $400 - costs and labor is not much to live on, but it is substantially better than $150 - costs and labor which is probably an imaginary number.
Actually this is the reason our local brewer of Belgian style beers bottles in 750's.  He can get more money per ounce that way.  Plus it looks cool with corks and cages.
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on October 28, 2011, 10:46:01 PM
I don't know what the trend in established nano breweries is, but I would think that nano brewing and kegging are not good friends economically. This is simply because your 10 gal might be worth 150 in a keg (retail), but packaged in bombers at $10 each, that same batch is worth $400.  $400 - costs and labor is not much to live on, but it is substantially better than $150 - costs and labor which is probably an imaginary number.
Actually this is the reason our local brewer of Belgian style beers bottles in 750's.  He can get more money per ounce that way.  Plus it looks cool with corks and cages.

While this may be true to get a truer picture one has to compare the costs of bottles v. cooperage. Granted you need a fair number of kegs, I think I have heard 3 kegs for every 1 you are sending out (1 still out, 1 ready to be cleaned and 1 filled) but, at least with pubs/bars etc you can expect to get those back. With bottles even though they may only be .50$ each you never see that money again.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on October 29, 2011, 03:16:49 AM
But you include the price of the bottle in the beer price - you don't "really" do that with cooperage. You can make a lot more money by packaging in bottles than serving draft. You need both though to be relevant. And often times draft beer tastes better.
Title: Re: I just want to be able to sell my beer
Post by: Thirsty_Monk on October 29, 2011, 04:02:08 AM
Hey make your bottles returnable.
This has been working quit nicely for me.

While talking bout permits. You need to have a bond and that is minimum cost or $100 for state and $100 for federal per year.

And yes this commercial brewing is cutting into my drinking habits.
Title: Re: I just want to be able to sell my beer
Post by: Jimmy K on November 03, 2011, 06:33:48 PM
You need both though to be relevant.

Good point. With bottles you're relying of a different sort of sales than draft. We have a love for draft beer and I'd say for most craft beer drinkers (not the super beer geeks) the draft list at a bar is the only list.
Title: Re: I just want to be able to sell my beer
Post by: micsager on November 04, 2011, 04:45:24 PM
thanks everyone, I apprecaite all the information.  My GF knows some folks at our county planning department and has started talking with them.  I paid the $100 to my state for the microbreweries license, and that seems to get the ball rolling.  At least I'll find out where the barriers are. 

And just FYI, I'm now looking to really make a profit per se.  But, as I live in a fairly rural area, and one of just a few homebrewers, I get requests to purchase my beer, or even brewing a special beer for things like Real Estate office Christmas gifts and such.  And if I were to choose to do that (hehehehe), I'd like to be legal.
Title: Re: I just want to be able to sell my beer
Post by: morticaixavier on November 04, 2011, 05:06:25 PM
thanks everyone, I apprecaite all the information.  My GF knows some folks at our county planning department and has started talking with them.  I paid the $100 to my state for the microbreweries license, and that seems to get the ball rolling.  At least I'll find out where the barriers are. 

And just FYI, I'm now looking to really make a profit per se.  But, as I live in a fairly rural area, and one of just a few homebrewers, I get requests to purchase my beer, or even brewing a special beer for things like Real Estate office Christmas gifts and such.  And if I were to choose to do that (hehehehe), I'd like to be legal.

rockin! keep us up to date. This is very much the scall of operation I imagine trying to do someday. Not a real money maker but a way to get my beer out there.
Title: Re: I just want to be able to sell my beer
Post by: boulderbrewer on November 06, 2011, 03:53:44 AM
Cool! you go micsager. The hardest part is finding the equipment that you can afford. Trust me, but we will help you out!
Title: Re: I just want to be able to sell my beer
Post by: boulderbrewer on November 06, 2011, 04:04:54 AM
There is a guy who sells repourposed equipment in MI I forget his first name but his last name is O'Brien, he sells brewery equipment, many that have been repuorposed.
Title: Re: I just want to be able to sell my beer
Post by: Teal on November 06, 2011, 04:47:43 PM
I'm curious - those that are already pro, maybe you can answer - Why not form your "brewing company" and simply either lease capacity from a local/large/established brewery or have it contract brewed?

Would obviously depend on having that capacity close and all but skimming most of the threads here relating to cash needed, start up costs etc - would seem to me, and my lay approach, that I might want to search out someone with extra capacity or the ability to squeeze me in between their schedule and while I believe my cost per brew would be higher - is it higher than also having to purchase the equipment outright?

I believe Jamil Z. is doing something similar (not EXACTLY that but leasing excess space/capacity from EJ Phair Brewing) to get started with Heretic.

I'm sure I'll be corrected on all points but if I was really set on being a commercial brewer - it's something I'd look into more. Not having to buy all the equipment but allowing me to generate some cash flow (hopefully) before having to come up with the large cash reserves needed to buy EVERYTHING.
Title: Re: I just want to be able to sell my beer
Post by: a10t2 on November 06, 2011, 05:09:01 PM
while I believe my cost per brew would be higher - is it higher than also having to purchase the equipment outright?

The problem is that starting out as an alternating proprietorship dilutes your profit margin, so the threshold volume you need to produce/sell in order to break even is larger. For contract brewing, the margin is even smaller. So yes, it does reduce your startup costs, but it may or may not be more profitable over a given timeframe and/or production volume. It's impossible to know without considering many factors that are unique to each business.
Title: Re: I just want to be able to sell my beer
Post by: Teal on November 06, 2011, 05:23:45 PM
That's what I'm thinking tho. I guess it depends on your individual comfort level. Are you comfortable putting 6 figures or so on the line with equipment purchases, quitting your job, benefits etc to buy your own gear and giving it a swing or are you more comfortable with risking SOME of your money to either enter an AP or contract brew to see how it goes.
You return less to your pocket perhaps but some is better than none?

With a lot of things I've been involved with for every 15 people who say "Dude, I'd totally buy/payfor/attend/support XYZ" = plan on 1 actually doing it which means those sales that you're counting on are vaporware more than anything.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on November 06, 2011, 06:49:30 PM
Speaking to a local contract brewery recently, the guy out right told me there is no way to make money contract brewing. The actual brewer is the one who makes the profit. They ended up securing finances and are now in the process of building a brewery.

I'll add, brewing is a craft and as a brewer I take pride in my own craftmanship. All contract brewers have is a recipe and the rest is all marketing. That's not brewing. It becomes more about selling t-shirts than about brewing.
Title: Re: I just want to be able to sell my beer
Post by: a10t2 on November 06, 2011, 07:10:49 PM
All contract brewers have is a recipe and the rest is all marketing.

*If* you find a contractor who will let you dictate recipes, which is not a given.
Title: Re: I just want to be able to sell my beer
Post by: Thirsty_Monk on November 06, 2011, 09:26:16 PM
I would also agree that contract brewing looks great on spreadsheet.
Reality is different.
I do not have experience with alternating proprietorship.
Not too many breweries want to do that in my area.
 
Title: Re: I just want to be able to sell my beer
Post by: bo on November 07, 2011, 02:04:45 AM
I know a guy that has a small brewery and when he gets behind, he contracts it to others. He has told me on several occasions that he wonders why he brews himself, because he makes about the same having someone else do it for him and he doesn't work as hard. I think he just loves brewing and that's why he doesn't contract everything.
Title: Re: I just want to be able to sell my beer
Post by: majorvices on November 07, 2011, 12:43:16 PM
I'm in no way saying your friend is wrong, but that is totally contrary to what other people have told me.
Title: Re: I just want to be able to sell my beer
Post by: bo on November 07, 2011, 01:46:34 PM
I'm in no way saying your friend is wrong, but that is totally contrary to what other people have told me.

I'm sure he has studied it in detail. He has a business degree and is one hell of a sharp guy and a good brewer as well. It's the brewing part of him and that will never allow him to be completely hands off.
Title: Re: I just want to be able to sell my beer
Post by: Thirsty_Monk on November 07, 2011, 02:29:07 PM
I'm in no way saying your friend is wrong, but that is totally contrary to what other people have told me.

I'm sure he has studied it in detail. He has a business degree and is one hell of a sharp guy and a good brewer as well. It's the brewing part of him and that will never allow him to be completely hands off.
If I could, I would post a pricing what you can buy case for and what you can sell it for when contract brewing.
My pricing is wholesale to retail outfits.
If your friend contract brew and sell this beer on premise then it could work.
Good for him.
Title: Re: I just want to be able to sell my beer
Post by: bo on November 07, 2011, 02:34:01 PM
I don't think he's allowed to sell on premise. He is very good at negotiating, so I wouldn't doubt that he getting a better than normal deal. This is one of those guys that truly could sell ice to Eskimos.
Title: Re: I just want to be able to sell my beer
Post by: a10t2 on November 07, 2011, 02:34:32 PM
I'm in no way saying your friend is wrong, but that is totally contrary to what other people have told me.

Having worked at a brewery that contract brewed to increase production, I'd have to agree. Our margin on the contract beer was perilously thin.

Unless maybe the contractor is brewing several times his volume, and he meant that on a per-batch basis the profit was the same.