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Patrick Rue started homebrewing in 2003 during his first year of law school, which ignited a passion for great beer and the creative process of brewing. He followed his passion and founded The Bruery, which began production in 2008. Celebrating its third year in business, Patrick's role at The Bruery has changed from doing just about everything to managing a company of 35 talented individuals. Recent accomplishments include opening The Bruery Provisions, a craft beer, wine and cheese store/tasting room in Old Towne Orange. The Bruery is distributed in 21 states and four countries. The Bruery strives to be a leading creative force in the craft brewing world.

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Dan asks:
I am wondering what it takes to open a small brewery. First, what size system is considered small or how many barrels would be small? I would rather do smaller batches so I could have more varieties to choose from, but not so small that there is no profit. Also, how easy would it be to expand if need be? Second, what is a rough estimate on start up costs (equipment and permits)?

Thanks,
Dan

Patrick answers:
The term "small brewery" has many meanings these days. Nanobreweries are becoming more common, and the startup microbrewery is also quite small.

Nano brewers are typically under 100 BBL per year and brew on a system of, let's say, 4 BBL, and often times 1 BBL or less. Nanobreweries are proving that they can be a start to a viable business by building a reputation with minimal investment, but in most cases nanobrewers aren't able to quit their day jobs as the revenue often doesn't leave enough cash to pay themselves at the end of the day. To start a nanobrewery, I've heard $50,000 - $150,000 in startup funds is sufficient as long as you're doing most of the construction yourself, and you still have a "day job". In my opinion, the best nanobrewery model is to sell everything in-house through a tasting room so the revenue is based on retail dollars, not sales to the distributor (or self-distributed). Of course some homework is involved to make sure the state / county / city you're in will allow this.

A microbrewery is brewery producing under 15,000 BBL per year, and most microbreweries are much smaller than this. The typical system size for a microbrewery will be 7-15 BBL, and well funded startups might have a 30 BBL system. A modest startup would be in the $500,000 range, and a well capitalized startup would be in the $1,500,000 range. The difference between these ranges is whether you're starting out with new or used equipment, the size of the system, whether you're able to do your own construction, whether you have a "day job" or not, how many employees you plan to have, how expensive your rent will be, and ultimately how much beer you intend to sell in the early years.

The more beer you can produce, the greater the scale of economy, the faster you can get to profitability, and the faster you can grow the business. On the other end, if you're not interested in fast growth but more of a lifestyle business, your business model should be getting profitable making the least amount of beer with the least amount of startup funds. It's easier to raise money in the first scenario than the second, though.

Hope this helps!

Cheers,
Patrick Rue
The Bruery

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Graham asks:
Thanks for the opportunity to gain insight from someone who has done what many of us probably dream of. My question is about how you determined if there was room in your target market for another brewery? I dream of opening a brew pub/craft brewery in the next 2-3 years (after that I think I'll be getting too old...) but I really don't know how to go about ascertaining the market potential in my area. There are a few craft breweries that distribute in this area although the large breweries still dominate the bulk of the market. Did you just jump in blindly or did you do any sort of analysis to determine that there was room for another brewery? Or, did you decide that it didn't matter because your product was differentiated enough that you weren't in direct competition with anyone anyway?

Thanks,
Graham

Patrick answers:
I find that most markets still have room for more craft breweries. More than ever, beer bars and craft beer retailers want more variety and the trend towards buying local continues to strengthen.

The Bruery is located in Orange County, CA which had about 21 breweries when we opened in 2008. Most of those were brewpubs, and the production breweries didn't have much of a presence on tap handles at the local beer bars. I didn't do a great amount of research on what the market will bear because our initial focus wasn't so much on just Orange County. When we opened, we started selling in San Diego, Orange County, Los Angeles, Riverside, and San Bernardino counties, and within the first year we were distributed in several states. Our goal was to be at maximum capacity from the start, so we had to expand into new markets rather than focus all of our attention at home. Since our goal is to brew very distinctive beers, this approach has worked for us. If we only brewed more basic styles, our ability to enter markets outside of our local market would have been limited.

Cheers,
Patrick Rue
The Bruery

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Matt asks:
Hi Patrick, I have been working on a business plan, marketing plan, financial plan, etc. to start a brewpub for the past three years. Before starting my own company I would like to work or even volunteer somewhere else to truly know what to expect. Do you have any advice on how to go about getting this experience or what kind of place would be best? Luckily, I am moving to Austin this fall, so my options will greatly expand from New Orleans. Also, I am somewhat familiar with The Bruery and its beers, what sort of places did you work beforehand? How long was the planning stage?

Thank you!
"LeprekaunBrewer"
Matt

Patrick answers:
I think the best approach would be to volunteer / intern for several breweries. If you get a paying job for a brewery and don't have any professional brewing experience, you'll likely start at the bottom washing kegs or on the packaging line, and it may take some time before you get an opportunity to learn what you wanted to learn. I'd also recommend you spend some time working at a restaurant and perhaps helping out in the back of the house operations of a restaurant (payroll, bookkeeping, financial projections, marketing, etc.).

I graduated from law school in 2006, worked for my family's business for a few months while I was writing my business plan, and I spent a few days at local breweries and brewpubs learning their approach to brewing. Most of my experience came from homebrewing, which is very different than brewing on a larger system and trying to maintain excellent quality standards. After my limited experience, I decided it was a great idea to hire someone who had worked for several years as a brewer, so Tyler (our Head Brewer) came on as the first employee a few months before we opened (in May of 2008). It took roughly one year of planning (not full time), and one year of construction / bureaucracy maneuvering to get The Bruery open.

Cheers,
Patrick Rue
The Bruery

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Andy asks:
I like anything on the grill and have been grilling with fruits lately - oranges, lemons, pineapple. I love how the caramelized sugars sweeten the fruit. I would like to add these flavors to a beer - something Belgian inspired. My questions are:

• How to prepare the fruit - grill, freeze and smash?
• Where to add - mash, primary fermentation, secondary?
• How much to use on a per gallon basis?

Thanks for your support of the homebrewing community.

Cheers,
Andy

Patrick answers:
There are a lot of options when it comes to fruit, but I'll try to keep it brief.

Fresh fruit will often have wild yeast on the skins, and will likely have some bacteria that could potentially spoil a non-funky beer. If you're going for a clean beer, then adding fresh fruit at the end of the boil, or adding an aseptic fruit puree in secondary are the best approaches. If you are adding it to a funky beer (brettanomyces / bacteria influenced), then well washed fresh fruit added to secondary could add an additional layer of complexity. Aseptic purees are often of great quality and make the process of adding the fruit very easy.

Whether to smash the fruit or not will depend on how long the fruit will be in contact with the beer. If you're looking for a quick infusion (if adding to the boil, or in the secondary just a few days before racking), then blending the fruit before adding will help get the most out of the fruit. If it's for a funky beer that will have fruit contact for several months, then adding whole will probably do the trick as the yeast and bacteria will break the fruit down.

Dried fruit (unsulfured, no sugar added, no oil added) can also work well when there's going to be extended contact with the fruit.

Frozen fruit can sometimes lend that "freezer burn" taste, so make sure the fruit tastes good before you add it. One advantage of frozen versus fresh fruit is that freezing will burst the cell walls of the fruit, making it mix with the beer a bit quicker than fresh fruit would.

As far as how much to use, it all depends on how much fruit flavor you want! I've found that I need to add more fruit than I thought to get the flavor I'm going for, but I like a lot of fruit flavor.

Be careful with citrus fruits though, the pith (white skin between the peel and the fruit) can contribute astringency.

Hope this helps!

Cheers,
Patrick Rue
The Bruery

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James asks:
Your love of Belgian Candi Sugar is well documented. How do you make your candi sugar, how much do you use, and what do you use it for?

I’ve brewed about 200 batches of homebrew, but never any sour ales. How do you suggest jumping into the world of brewing lambics, wild ales, and oud bruins?

- James

Patrick answers:
For your first question about candy sugar, we typically use cane sugar and water to make candi sugar. This is brought to a boil, and when it starts darkening to an amber color, heat is reduced. The sugar mixture is boiled slowly until the desired color / flavor is reached, and sometimes water needs to be added to avoid burning. It's pretty simple, but it is tricky to get the rummy dark flavors rather than just a burnt sugar flavor. Also, make sure you wear gloves and proper eye wear when dealing with this stuff, it's basically sugar napalm. The Dark Candi brand sugars are awesome, and are a lot safer! http://www.darkcandi.com/

For getting started with sour beers, I'd suggest getting another few buckets or carboys as your equipment will be tied up for a long time! I'd suggest reading Wild Brews by Jeff Sparrow to get some recipe development ideas, and getting started with an off the shelf yeast / bacteria blend like Wyeast Roselare, which is awesome. Temperature control is important-- try to keep in the 55-70 F range if possible. My final recommend is to be very patient! These beers will tell you when they're ready-- you can't dictate how long they'll take if you want it to be good.

Cheers,
Patrick Rue
The Bruery

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Sean asks:
Hello, I'm an aspiring brewer, and I had a few questions about the whole process.

1) I'm trying to flush out a lot of ideas and recipes, and looking into starting a brewpub in maybe a year or so with plans for an eventual larger brewery. What exactly should I aim for in terms of production size for a brewpub, and the minimum for an actual brewery?

2) I've been looking around a lot of sites and I'm currently knee deep in several books on brewing, but there's really not a lot of information as to what equipment I would need starting out for a larger scale brewing operation. Whenever I see the equipment lines I have no idea what a majority of it is or its function. What are the basics, and what kind of initial investments do I need to look at? I've heard estimates from $50,000 - $2,000,000, so I'd like to know from someone who's done it.

3) Once I've gotten my beer recipes tweaked just right, should I submit them in a lot of festivals and contests before trying to go forward with any business plans? Although I know it's smart to 
have a gauge on what I would need to improve or focus on, I'm not quite sure to the extent that I need to go in order to do that.

4) When choosing a staff, where does one normally look to find a brewmaster/head brewer for a start up? As things should (rightfully) be a bit uncertain and shaky at the beginning, how do you draw talent in that kind of an environment?

5) What are, in your opinion, the biggest hurdles you need to overcome in order to get your brewery off the ground?

Thanks very much for your time,
Sean

Patrick answers:
I'll go in order of the questions asked:

#1: For a brewpub, the range seems to be 200 BBL - 1500 BBL (some even higher), with about 600 BBL annual production being around the average for a thriving brewpub selling everything over the bar. If you're distributing some of your beer outside of the brewpub, I'd suggest having excess capacity. Perhaps it would be wise to see what volume local beer bars and other local brewpubs are going through in order to project what your brewpub could do volume-wise. It'll also depend on what you need to sell in order to be profitable-- if you have a huge space and high rent, you need to sell a lot more beer than if you had a smaller place with lower rent. If you aimed for 600 BBL annual production, that's an average of 1.64 BBL per day, or 407 pints before loss. If your average pint price is $5, that's $1240 in revenue per BBL before accounting for loss. I use 10% as an average loss number, but this can be higher if you're filling a lot of growlers, which tend to foam over quite a bit. Also keep in mind your average growler price is going to be lower per oz. than the pint price. In short, the level of production should be based on what you need to sell to get the return on investment you need, and this is balanced against what sales are possible for your business. The level of sales should be estimated by the size of the establishment (how many seats you have), your location (next to a baseball stadium or in the middle of nowhere), and how well you attract customers to your brewery.

For a production brewery, the same considerations are necessary, except your margins are going to be much less ($250-500 per BBL in most cases), the rent will be a lot cheaper, and your beer can reach many more people. Volume is much more important, but again your production should be based on what you and your investors need as a return on their investment. I'd recommend reading the Brewers Association's Guide to Starting Your Own Brewery: http://www.amazon.com/Brewers-Associations-Guide-Starting-Brewery/dp/0937381896

#2: There is a similar question from Dan above-- take a look at this.

#3: Homebrew competitions are a great way of having your beer blindly tasted and getting honest feedback. Keep in mind that judges are reviewing against style, so just because a beer hits the style perfectly does not mean it'll generate great sales in the marketplace.

#4: I'd recommend finding good people early on-- it's tough doing it all yourself, and it opens your business to a lot more risk than if you spread out the talent. It does require raising more money to cover salaries, but it should result in profitability coming sooner. People are attracted to startups as they have the ability to take on as much responsibility as they can handle. In established companies, people have to work their way up, but in a startup, there's a lot of opportunities to gain experience quickly. You will attract a younger crowd, as you probably won't be able to afford someone with a lot of experience in the field.

#5: The biggest struggle was trying to stop the bleeding of cash. I started my brewery with the assumption that everything I made would be sold within 60 days, and I'd get the cash within 90 days. Sales start out well when the pipeline is getting filled, but you'll likely peak early on and have to wait for your accounts to sell their last bottles before you see re-orders. The Bruery started with a fairly high overhead from day 1, so losing a few tens of thousands each month for the first year was something I should have anticipated but was too optimistic to deal with. As we continue to grow, the cost of operating also increases, so as small businesses it's very common to chase profitability while the business is growing.

Best of luck!

Cheers,
Patrick Rue
The Bruery

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James asks:
In today's brewing landscape can a new brewery thrive simply brewing the staples or does a brewer need to identify a niche? It seems that Double IPA's were the past big trend and now sours are becoming the "it" beers. Any ideas on where the next wave will go?

- James

Patrick answers:
Interesting question that I don't think I have an answer to! I think there's many different business models that currently work well in the craft brewing industry as our beer is very much in demand. The breweries creating staples are growing quickly and I think there's less opportunity there as volume is very important and there are quite a few of well established players. Smaller breweries focusing on specialty beers are also very much in demand, but as the shelves fill up with specialty beers (now being made by small craft brewers and larger craft brewers), there may be limited opportunities there as well. 

Sour beers certainly have a lot of growth potential, but given the resources needed to make authentic sour beers and the price point needed for a good return, this is a style that I think will grow slowly. Interesting session beers I think have a lot of potential, with Berliner Weisse and "mini IPA's" being some of the better low alcohol options.

Overall, there's still a lot of opportunity for staple-focused breweries in local markets, and niche-focused breweries in a regional, national, or international market. I don't think there's a lot of potential in being the next Sierra Nevada or New Belgium-- although what do I know!

Cheers,
Patrick Rue
The Bruery

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Bob asks:
What problems might arise using brett? I've heard a lot about contamination of plastic? Do I really need to have a separate set of hoses and other equipment? I would like to make a farmhouse beer but not if it funks up my equipment. I clean with PBW and starsan would that kill it?

Thank You,
Bob

Patrick answers:
Brettanomyces is well known for its resilience, being able to survive in porous containers like wood barrels (where it has a natural food source), and also in plastic, where it can harbor in scratches. It would be best to have a separate set of equipment if you're using plastic materials. If you are using stainless steel or glass equipment, a good cleaning regimen will eliminate the brett. Scrubbing with PBW and Starsan for a sanitizing rinse should do the trick, but having separate plastic equipment for your funky beers is inexpensive and will help you sleep better at night.

Cheers,
Patrick Rue
The Bruery

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Robert Asks:
I’ve been using an Igloo 3 Gal Water Cooler as a Mash Tun for a while now. Only long enough to see that it works & that I need a bigger Cooler if I want to go to all grain.

I started looking for a 10 Gal Cooler & located an Igloo 10 Gal which I’ve seen in Pictures of peoples’ Systems. Yellow with Red Lid & Trim. 

While poking about looking for a good price I noticed the Rubbermaid had a warning that it was not suitable for Hot Liquids. I went to the Igloo Mfgr Site & e-mailed Customer Support to ask about using the Cooler with 160 Deg Liquids.

2 days later, after I had ordered the 10 Gal Igloo, I got a Reply saying that the Cooler was not suitable for high temperature liquids, that the foam would expand & split the Outer Shell or the Inner Lining & that such use would void my 1 year warranty.

I’m not concerned about the Warranty but I’d rather not have the shell or lining split & spoil the Beer or the look of the Brand New Cooler.

What say you?. I’m sure I’ve seen this cooler in use in many System Pictures. Any reason to be concerned?

Thanks for any help.
Robert

Patrick answers:
Any plastic cooler will have a similar risk due to the heat causing expansion of the insulation, which could crack the outer plastic shell. The manufacturer won't make a recommendation for a use that is incompatible with the intended use of the cooler. The interior of the cooler is made from polypropylene, which has a temperature limit of 212 F, and the insulation is polyurethane, which has a similar temperature limit (perhaps a little higher). You'll likely get years of use out of the vessel if you're using it as a mash tun (temperature of 140 - 160 F), so I wouldn't worry too much about it.

Cheers,
Patrick Rue
The Bruery

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Nathan asks:
I recently received a copy of a beer recipe from my great-grandfather. One he used during prohibition, and I'm told he used the first washing machine they owned for mashing grains. I am a little confused on one ingredient.

It calls for "dry roasted barley malt" what exactly does this mean in modern brewing? My local homebrew shop said pale 2-row would work, it's the dry roast part that has me perplexed.

Any insight would be a big help.

Thanks and take care,
Nathan

Patrick answers:
I would guess that "dry roasted barley malt" would be in the range of Munich (lighter end of dry roasted), Brown malt (medium end of dry roasted) to Chocolate / Black Patent / Roasted Barley. I'd exclude any malts that caramelization in the malting of that grain (crystal / cara / caramel malts), as they are "wet roasted". Without any info on what the flavor descriptions were of the beer, or what it looked like, it's hard to determine what type of roasted malt would best match what your great grandfather brewed. If I had to take a guess, I'd go with Roasted Barley as the grain is roasted (rather than just toasted), is unmalted, which may have been easier to source during prohibition, and can be easily made in a home oven.

Cheers,
Patrick Rue
The Bruery

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Stephen asks:
I hope you don't mind answering this question for me. I just brewed my pumpkin brown ale yesterday. I combined three cans of organic pumpkin pie mix w/my wort into my 90 min boil. When I checked my original gravity I made sure everything was mixed very good. My original was 1.082. My question is how can this be accurate? In 10 min I had over two inches of sediment in the bottom of my hydrometer. With the addition of the pumpkin it has no choice but to throw out a high original, right? In the final gravity the trub will be gone, naturally throwing out a lower number. I don't see how this can give an accurate abv. Would it be more accurate to check original after it has settled? I've never read or seen anything telling you to do this. If I'm overthinking this thing (which I tend to do), just tell me. Thanks for your time!

-Stephen

Patrick answers:
The sediment shouldn't have any impact on a gravity reading, unless your hydrometer was sitting directly on top of the sediment, or perhaps if the sediment was floating around, it could have some impact if it was helping to lift the hydrometer. If you're concerned about sediment that is at the bottom of the sample tube, Try putting a half inch of sand or pebbles in a hydrometer tube and fill it up with distilled water. You should get the same reading (1.000 hopefully) as you get without that material in the tube.

Cheers,
Patrick Rue
The Bruery

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Rick asks:
What are the proper procedures for cultivating yeast?

Thanks so much,
Rick

Patrick answers:
Cultivating yeast is a bit more in depth than I can give you in an email. I'd recommend reading Chris White & Jamil Zainasheff's book Yeast for some great and practical info on culturing yeast at home.

Cheers,
Patrick Rue
The Bruery