Author Topic: realistically, what does it take?  (Read 2688 times)

Offline mripa

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Re: realistically, what does it take?
« Reply #45 on: August 20, 2012, 07:14:02 PM »
Great posts.. I suggest keep home brewing and look for a part time job or volunteer at a small brewery.  At least you can see what is involved.

Offline dcdwort

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Re: realistically, what does it take?
« Reply #46 on: September 14, 2012, 03:14:07 PM »
I have truly enjoyed all of the posts on this topic.  Here in Colorado Springs we have several different sized microbreweries from the big Bristol brewery done to Great Storm Brewing which is a nano that is very good.  Now I will keep digging on this site for  more info as I have my brother-in-law enticed to start something in the future.  Thanks for all the advice.
Don
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Offline boulderbrewer

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Re: realistically, what does it take?
« Reply #47 on: September 18, 2012, 08:12:57 PM »
Don't forget the "small" things these costs that add up. Like tap handles, regulators to control the CO2 for force carbonation, got the CO2? the coupler to fill the kegs and coupler to keg the kegs etc...
These little things add up and up. Don't give up you can do it, it is best to do it right.
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Offline topher.bartos

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Re: realistically, what does it take?
« Reply #48 on: December 26, 2012, 12:58:28 PM »
If it turns out that you end up losing money over time, will you still continue to do it? Sounds like you have very little overhead, which is a boon, but when you consider how much your time is actually worth it doesn't seem possible to even break even on a 10 gallon system. OTOH if you are doing it to prove a concept and get someone on board who wants to fund a real brewery then it could be totally worth it. Just my .02. Not trying to discourage anyone from their passions.
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As I've always said, I like to hear everyone's point of view.  I live in a town of about 30,000. the next bigger town is about 75 miles away.  I'm not in this to really make a money.  But, I will say that my business (that is working out so far) shows that my partner and I will net, about $120 for a full day in the brewery?  The math works out to be about $6/hr.  I know of know other hobby that I love so much that will aactually pay me $6 to do.  Can I quite my day job?  NOT EVEN CLOSE.  And it may be that after a couple years of this, we decide it's not worth it.  But I can tell you that a day in the brewery with the woman I love, making darn good beer, is a very enjoyable activity.  We met because of homebrew two years ago.  And, we're getting married on the 18th. 

But, I know our model does not work for most folks when they think about "going pro."  I post my story and experience to show it is actually quite simple to go legit, and sell one's beer.

What is your usual daily schedule when you say that you haven't quit your day job? What is the like?
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Offline micsager

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Re: realistically, what does it take?
« Reply #49 on: December 26, 2012, 01:38:08 PM »
My day job is 7-5, M-F.  Sometimes we brew at night, or on the weekends.  We are upgrading our system to 1bbl next month.  But, we will probably just brew less often, and keep our two current accounts happy......


Offline tomsawyer

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Re: realistically, what does it take?
« Reply #50 on: January 04, 2013, 01:52:15 PM »
Interesting thread.

I was recently approached to help set up a small brewpub in my home town.  The guy asked about equipment and costs as well as styles of beer etc.  As a homebrewer my experience is limited to 15gal batches so I gave him advice based on setting up a nanobrewery adequate to brew around a barrel per month each of maybe five or six beer styles.  My thought was to use cornies or possibly small tanks that we could use as bright tanks, and to brew two days a week (weekends).  I figured I could do this with about $10K in equipment although that would be a barebones setup and nothing fancy to look at.

I already have a comrade who volunteered to help.  I'm not being asked to invest but I got the distinct impression that I was being approached to provide sweat equity.  I don't really have a problem with helping them get set up since I would love to be a regular customer, I don't relish giving up all my weekends though and I'm five years from retirement (actually four years and four months but whos counting).

As far as the amount of beer that would be required, I have no real sense of what demand might be.  There are no brewpubs in this little town of 18K, and just one in the larger town 20 miles away.  I'd hate to be the victom of success right off the bat and I can think of nothing worse than being a brewpub with no product to offer.

So I guess my question is, what the hell should I do?  I love brewing, and I want there to be a brewpub in town.  The people who are contemplating this business know nothing about brewing and I know nothing about brewing on any kind of commercial scale.  I don't think they have the funds to invest in a real brewery, nano scale seems doable.
Lennie
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Offline micsager

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Re: realistically, what does it take?
« Reply #51 on: January 04, 2013, 02:32:24 PM »
Well, if you are saying for a town of 18k, I would think 5 bbls a month would be a good starting point.  (how big is the seating area?)

And I wouldn't be so hard on yourself about not knowing commercial scale.  Sure, you not gonna walk in to Firestone Walker and run their system.  But, at five bbls a month, you could easily go with blichmann equipment.  John is now selling 2bbls systems.  And you know how to brew (I'll assume) good beer. 

As you scale recipes, I would use your favorite software to make sure gravity, SRM, and all that are what you expect.  (you can't just double or triple ingridients)

And only you can decide about what to do with your weekends, but it sounds like a neat opportunity, with no cash outlay, but you learn much.  One good tool for the federal paperwork required is a "compliance training" document prepared by TTB, here's a link: (it's from 2007, but I confirmed with a TTB investigator it is the most current)

http://www.ttb.gov/pdf/brewery_industry_compliance_training.pdf



 

Online nateo

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Re: realistically, what does it take?
« Reply #52 on: January 04, 2013, 03:42:00 PM »
The people who are contemplating this business know nothing about brewing

That is a huge red flag for me. I wouldn't waste my time.
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Offline reverseapachemaster

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Re: realistically, what does it take?
« Reply #53 on: January 04, 2013, 10:31:23 PM »
The people who are contemplating this business know nothing about brewing

That is a huge red flag for me. I wouldn't waste my time.

Me too.

I couldn't see any reason to go into business with somebody who doesn't understand their product or industry. It's pretty much just asking for failure. Even though you might have a good time or learn a lot about brewing commercially there's going to be an inevitably long term headache when they are mad that X beer isn't selling or profits aren't high enough or whatever and they blame you and decide to start selling BMC clones. They likely will not have the stomach to watch you drain pour bad batches/test batches. There's a good chance they will end up doing something that puts their permits in jeopardy.

It sounds like they aren't interested in hiring you as a consultant or brewer. That's another big problem if they are looking for serious assistance from you. If they are going to offer you equity that sounds like a terrible deal for the reason stated above. You should be paid as an employee or independent consultant. Either way, you should get cash in hand for the work you do. There's no reason to put yourself on the line and give them so much free labor and let them walk away with salaries and/or profits and blame you for everything that goes wrong.
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Offline tomsawyer

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Re: realistically, what does it take?
« Reply #54 on: January 05, 2013, 07:17:04 AM »
Interesting comments and I did read a little more of the stickies at the top that had good info.  I haven't determined what the seating will be like, the space in the bulding is generous and there is an opportunity for roof seating at certain times of the year.  The place is located in the tourist area so could be busy for three months in the summer.  Rest of the year, I'd anticipate modest sales.

Their business model is multi-faceted and includes a small grocery, an antique furniture showroom and this brewpub with some food sales.  So the brewpub doesn't have to pay 100% of the building loan payment.  This makes things more complicated though and I'm still skeptical myself that this is going to work, but itd be interesting to try.  I'd like to cook and brew and have the say on menus for both.  But I'm bot going to quit my day job so this isn't possible at first.  I don't know if I can help them overcome the lack of knowledge about the workings of a brewpub.  When I was doing the math about how much beer you'd have to sell, it seemed like a very large amount and is hard to envision this amount going out of the establishment.  I could be underestimating the demand though.  I could see making some money with a nice restaurant although the investment for that would be significant since this place wasn't a restaurant before so lacks the infrastructure.

I'll look into something in the range of 3-5bbl, of course based on the sticky above that sounds like a recipe for failure but I suppose if some bottled beer and a significant amount of food are included then this is one of the many ways to make a little money and I'm good with that.
Lennie
Hannibal, MO

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Re: realistically, what does it take?
« Reply #55 on: January 05, 2013, 07:20:47 AM »
There's no reason to put yourself on the line and give them so much free labor and let them walk away with salaries and/or profits and blame you for everything that goes wrong.

If you're providing sweat equity, get a contract in writing. I cannot stress that enough.

I was working 80-100 hours a week at my job, with the promise of profit-sharing and owners' equity. After a year of record profits (and blaming me for everything that went wrong) the owners changed their mind, and didn't think I "deserved" profit sharing, and thought my salary was "enough." I now work about 40 hours a week for the same salary, and they're paying for my MBA, so it sort of worked out, but it was really ugly getting to this point.
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Offline yso191

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Re: realistically, what does it take?
« Reply #56 on: January 05, 2013, 10:28:48 AM »
One of the things I never hear talked about in these conversations is charging more.  It's like in a debate accepting the premise of the opposing side and arguing from there - not a recipe for winning.

Now I realize the limitations of my point here, but I think it should be on the table nonetheless.  So, The big breweries have the economy of scale on their side.  Their strength is also their weakness.  Ask what am I selling?  If it is just good beer, you've accepted their premise and you lose / can't make a living at it.

But look at it a different way: What do people want to buy, what are they willing to pay for, when they purchase a pint of good beer and what is it worth to them?  Where is it written in stone that beer can only be sold for $5 a pint? 

There are several angles to be taken here to be able to charge more.  The hardest is clever marketing.  This takes creativity that few have, but maybe you are one.  Can you, through marketing demand a premium for your beer?  A lot of breweries do.  It can be just a clever name (Arrogant Bastard), or if the stars really line up you can create a cult following (3 Floyds).

But I think somethings are in the reach of most brewers.  Think about yourself.  Do you/would you value a relationship with a Brewer?  If you could have the sense that you are an 'insider' in a brewery, what kind of loyalty would that inspire?  And then if you can create a micro-culture from this, the sky is the limit.

What about appealing to people's natural curiosity?  Teach and educate people on beer.  Engage their brains - that's worth more than what Bud, et al., or even Russian River is doing.  They can't put a brewer in front of the customer.

I could go on and on.  The point is that the beer experience can be so much more than buying a pint of something that tastes good and gives a buzz.  Sell the other things and people will love you and pay more for your beer, which equals profit.

Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Steve
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Re: realistically, what does it take?
« Reply #57 on: January 05, 2013, 12:06:09 PM »
Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Breweries already do that. Avery already does all of those things, in addition to making kick-ass beer. I've talked to Avery's brewers at their tap room, and emailed their head brewer and gotten responses from Adam Avery himself. They love talking about beer, helping people make better beer. They give out homebrew recipes for their beer. And, they're selling their beer for $5 a pint.

You can create an atmosphere, but there's a limit to how far your BS can carry you if your beer isn't amazing. Unfortunately, due to math, not every beer can be "above average." So you need to be realistic about how much your beer is actually worth. If you charge $10 a pint and your beer kinda sucks, be prepared to go out of business very quickly, regardless of how hard you market it.
« Last Edit: January 05, 2013, 12:08:30 PM by nateo »
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Offline yso191

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Re: realistically, what does it take?
« Reply #58 on: January 05, 2013, 01:01:25 PM »
Key words: relationship, information, experience, identity.  Sell those for more than $5 per pint.

Breweries already do that. Avery already does all of those things, in addition to making kick-ass beer. I've talked to Avery's brewers at their tap room, and emailed their head brewer and gotten responses from Adam Avery himself. They love talking about beer, helping people make better beer. They give out homebrew recipes for their beer. And, they're selling their beer for $5 a pint.

You can create an atmosphere, but there's a limit to how far your BS can carry you if your beer isn't amazing. Unfortunately, due to math, not every beer can be "above average." So you need to be realistic about how much your beer is actually worth. If you charge $10 a pint and your beer kinda sucks, be prepared to go out of business very quickly, regardless of how hard you market it.

I knew I would get pushback, and specifically in these areas.  What you say is true, but doesn't mitigate my points.  There is no way I can have the relationship with the brewer at Avery that I do with the brewer at Yakima Craft.  Unless you are local to the area, there is no way there is even remotely the chance of establishing a micro-culture around your brewery.  I could go on, but I'll just reiterate one of my main points: size is an advantage and a weakness, so do the things that a big brewery can't.  Know who you are and know who you aren't.  Major on your majors - not your minors.

I also think your example of $10 pints is hyperbole.  The key is to find where your profit tipping point is, and hit it.  And yes, clearly it is not always possible, but if someone is just making $5.00 an hour owning a nano, what would it take to make a reasonable wage? $6.00 pints?  7.00?  I guarantee that if your customers see value in the product they will buy it.  My only point is to open the discussion to different types of value.

How much does a bomber of Dark Lord go for anyway?  Is it really that much different than other really good beers that are available market-wide for a fraction of the cost?  No.  Marketing my friend.  Creating value.  Not fake, smoke and mirrors, used-car-salesman value, but What The Customer Really Wants.  That is what I'm talking about, and there will always be room in every market for those that can see a way to provide value to the customer. 

Obviously if you your beer is 'meh' That is your main problem.  All of this is based on the assumption that someone going into business making beer makes good beer.  And BTW, I'm never advocated selling 'BS'.  That is not "relationship, information, experience, identity". 

Steve
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Re: realistically, what does it take?
« Reply #59 on: January 05, 2013, 01:12:39 PM »
Marketing = BS = everything that's not in the glass. I agree that BS important. Plenty of crappy micropubs are very profitable, and some breweries make very good beer but go out of business anyway. I agree you need to give customers what they really want. I think too many brewers make what they want to brew, not what people want to buy. How many more nanos making IPAs do we really need?

My point was mostly that 'craft beer' has been having this discussion of "value" as long as there has been 'craft beer.' Only now the discussion is between big micro breweries and little micro breweries, whereas before it was just macro vs micro.
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