Author Topic: Growth of Homebrewing/Microbreweries  (Read 6052 times)

Offline majorvices

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Growth of Homebrewing/Microbreweries
« Reply #15 on: January 01, 2013, 08:59:44 AM »
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.
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Offline gymrat

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Re: Growth of Homebrewing/Microbreweries
« Reply #16 on: January 01, 2013, 09:41:46 AM »
I thought I read once that to make a brewing business worthwhile a person needs a minimum of a 7 barrel system.
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Offline nateo

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Re: Growth of Homebrewing/Microbreweries
« Reply #17 on: January 01, 2013, 01:14:30 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.
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Re: Growth of Homebrewing/Microbreweries
« Reply #18 on: January 01, 2013, 01:38:56 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.
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Offline hopfenundmalz

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Re: Growth of Homebrewing/Microbreweries
« Reply #19 on: January 01, 2013, 01:49:01 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.



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Offline hopfenundmalz

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Re: Growth of Homebrewing/Microbreweries
« Reply #20 on: January 01, 2013, 01:56:53 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. 
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Offline Thirsty_Monk

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Re: Growth of Homebrewing/Microbreweries
« Reply #21 on: January 01, 2013, 04:54:09 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.
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Offline majorvices

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Growth of Homebrewing/Microbreweries
« Reply #22 on: January 01, 2013, 05:56:20 PM »
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.
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Re: Growth of Homebrewing/Microbreweries
« Reply #23 on: January 01, 2013, 06:44:30 PM »
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.
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Offline hopfenundmalz

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Re: Growth of Homebrewing/Microbreweries
« Reply #24 on: January 01, 2013, 07:18:50 PM »
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.

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Offline nateo

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Re: Growth of Homebrewing/Microbreweries
« Reply #25 on: January 01, 2013, 08:31:40 PM »
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.
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Offline gsandel

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Re: Growth of Homebrewing/Microbreweries
« Reply #26 on: January 01, 2013, 09:30:09 PM »
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.
You wouldn't believe the things I've seen...

Offline hubie

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Re: Growth of Homebrewing/Microbreweries
« Reply #27 on: January 01, 2013, 10:45:49 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.

Offline swampale

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Re: Growth of Homebrewing/Microbreweries
« Reply #28 on: January 02, 2013, 04:11:08 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.

Offline hopfenundmalz

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Re: Growth of Homebrewing/Microbreweries
« Reply #29 on: January 02, 2013, 06:40:22 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.

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
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