Author Topic: realistically, what does it take?  (Read 2676 times)

Offline alaingomez

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realistically, what does it take?
« on: August 05, 2012, 12:47:32 PM »
Hey, I'm new to this forum and just got into homebrewing a few months ago.

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

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

Offline denny

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Re: realistically, what does it take?
« Reply #1 on: August 05, 2012, 01:24:03 PM »
First, you need lots of money and a lawyer....
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Offline nateo

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Re: realistically, what does it take?
« Reply #2 on: August 05, 2012, 01:25:37 PM »
Being well-capitalized makes a world of difference. I'm in retail, but I'd assume manufacturing is even worse. Being able to pay cash to my wholesalers saves me a bunch of money because I can squeeze better deals and discounts out of them. On credit, a lot of them let me do net 30. A few guys let me do net 120. But if you run out of cash, it's game over. If you don't have cash on-hand to buy grain, you can't make beer and you're SOL.

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

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

Also, i wouldn't plan on being able to pay yourself a salary and pay yourself back for your initial investment in fewer than 5 years.
« Last Edit: August 05, 2012, 01:27:13 PM by nateo »
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Offline alaingomez

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Re: realistically, what does it take?
« Reply #3 on: August 05, 2012, 01:31:40 PM »
First, you need lots of money and a lawyer....

Lol.  Well, that's a given.

Offline alaingomez

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Re: realistically, what does it take?
« Reply #4 on: August 05, 2012, 01:33:23 PM »
Is it possible to just sell kegs?  Say to local bars?

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

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realistically, what does it take?
« Reply #5 on: August 05, 2012, 01:51:03 PM »
Is it possible to just sell kegs?  Say to local bars?

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

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


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Offline a10t2

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Re: realistically, what does it take?
« Reply #6 on: August 05, 2012, 01:53:12 PM »
Join the BA (a small/"thinking about it" brewery membership is very inexpensive), and get a copy of Starting Your Own Brewery.

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

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

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

Unless you happen to come across another home brewer in your city/county/state who has looked into it, the AHA isn't going to be a great place to ask questions. Start with your local city hall and learn what the legal issues will be.
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Offline alaingomez

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Re: realistically, what does it take?
« Reply #7 on: August 05, 2012, 04:44:38 PM »
Join the BA (a small/"thinking about it" brewery membership is very inexpensive), and get a copy of Starting Your Own Brewery.

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

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

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

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

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

Unless you happen to come across another home brewer in your city/county/state who has looked into it, the AHA isn't going to be a great place to ask questions. Start with your local city hall and learn what the legal issues will be.

Offline majorvices

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Re: realistically, what does it take?
« Reply #8 on: August 05, 2012, 05:11:03 PM »
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

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

As far as "selling a few kegs", aside from the legality issues and license expense (I think we pay the ABC $1000 per year for the priviledge to sell beer) my only question is .... why? You will not ever be monetarilly compensated on a 10 gallon system and in the end if you are brewing for 6-8 hours to sell a couple kegs you will basically be paying to sell your own beer. Doesn;t make sense to me one bit. If it is just about the gratification of people enjoying your beer you can do that far easier on the homebrew level.
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Offline a10t2

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Re: realistically, what does it take?
« Reply #9 on: August 05, 2012, 05:47:45 PM »
I meant more like sending all the ingredients/recipe to a manufacturer.

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

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Re: realistically, what does it take?
« Reply #10 on: August 05, 2012, 08:14:20 PM »

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

To establish a client base.

Offline alaingomez

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Re: realistically, what does it take?
« Reply #11 on: August 05, 2012, 08:15:15 PM »
I meant more like sending all the ingredients/recipe to a manufacturer.

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

Wait.... I need someone to tell me what bbl means and then I'll reply to this lol.

Offline majorvices

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Re: realistically, what does it take?
« Reply #12 on: August 05, 2012, 09:01:20 PM »

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

To establish a client base.

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

Also, you need a rather large volume of beer to really eastablish a customer base. We sell every drop we make and it boggles my mind how many people have not heard of us. 310 gallons of beer is reaslly such a small amount, after all.
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Offline phunhog

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Re: realistically, what does it take?
« Reply #13 on: August 05, 2012, 09:17:36 PM »
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

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

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

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

Offline alaingomez

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Re: realistically, what does it take?
« Reply #14 on: August 05, 2012, 10:01:47 PM »
I own a 10 bbl brewery (www.yellowhammerbrewery.com) and what it takes is a lot of time and money. Architecs, lawyers, graphoc designers, blood sweat and tears. And kegs. YUou need a lot of those.

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

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

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

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