Author Topic: North East Bulk ingredient Co-op opportunity?  (Read 2687 times)

Offline jerseybrewer

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North East Bulk ingredient Co-op opportunity?
« on: August 22, 2010, 06:41:39 AM »
There is another thread out there speaking to NCM's decision to stop selling to homebrewers (http://www.homebrewersassociation.org/forum/index.php?topic=3359.0),  I've started this new topic to discuss the possibility of starting a bulk ingredient co-op in the North East (centered around Philadelphia)...

My friends and I put together an order for 1400#'s early spring and was very, very pleased with NCM and their service/help (  Although my wife wasn't too happy with the huge stack of malt sacks taking up half of our garage).  However, with the flat shipping rate combined with the near wholesale prices, we found the experience extremely economical (to say the least).  

As I was organizing the effort it dawned on me that this could constitute an excellent co-op.  If we could find enough interest to make mass purchases on at least quarterly basis it could benefit everyone (especially for purchasing spec grains).  I think that the key ingredients to the success would include:

    > Setting up a traditional co-op and obtaining a tax-id.  I'm glad that NCM has agreed to continue working with homebrew clubs that have done business with them in the past, I wouldn't want to bet the farm on it continuing.  In addition, with a business license the co-op could consider other wholesalers.
    > Shipping costs is one of the major elements of most of our bulk purchases and we should avoid adding additional shipping to get it to folks home.  Ability and willingness to pickup is key to this.
    > Volunteers - typically a co-op is an organization where the participants share the costs equally (or almost) and the effort.  I can tell you from experience that organizing the purchase, locating a drop point, breaking down the pallet, making and tracking financial arrangements, breaking down the grain etc... takes a lot of work.   The co-op should include a strong volunteer base to keep it moving and keep the costs low.
    > Enough interest to sustain at least 4 bulk orders per year.  This should be enough to get the wholesalers interested and willing to work with us.

I'm located 10 minutes from Philadelphia in NJ.  

    > What kind of interest is there (locally) in helping me set this up and run it?
    > Does anyone out there have experience setting up a co-op?  How difficult was it?  What should we look out for?
    > What did I miss?  Any other key ingredients in getting this going?

Advice and criticism gladly accepted.

-Steve
« Last Edit: August 22, 2010, 06:45:01 AM by jerseybrewer »

Offline dzlater

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #1 on: August 22, 2010, 02:13:36 PM »
I don't know anything about setting up a co-op.
But I would definitely be interested in joining one.
I am inn Mt. Laurel

Dan S
Dan S. from NJ

Offline jerseybrewer

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #2 on: August 22, 2010, 02:18:22 PM »
Excellent...  I was starting to think that I was crazy.

Well, there's one.  others.  Whats the interest level for just joining a co-op (not setting it up or running it, just being a member)?

Offline MrNate

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #3 on: August 22, 2010, 02:57:23 PM »
I'd kind of be up for it, but it would depend on when NCM actually shuts us down, and what the co-op pricing would actually look like. Philly would be a 1 1/2 hour drive for me.
“If one's actions are honest, one does not need the predated confidence of others, only their rational perception.”

Offline k4df4l

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #4 on: August 23, 2010, 03:38:33 AM »
I guess the need to make this more complicated/legally organized is somewhat lost on me....unless the big picture is to lay the groundwork for a co-op LHBS, why go to this level of expense and trouble for quarterly bulk grain & hop orders?  What are the other products you expect to order from other wholesalers? 


Offline MrNate

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #5 on: August 23, 2010, 06:02:34 AM »
I guess the need to make this more complicated/legally organized is somewhat lost on me....unless the big picture is to lay the groundwork for a co-op LHBS, why go to this level of expense and trouble for quarterly bulk grain & hop orders?  What are the other products you expect to order from other wholesalers? 

I think the point is that with enough people involved the cost pencils out pretty well for bulk ingredients. My friend's father-in-law is hooked up with a group in the Philly/SJ area that does group buys of grapes once a year. They go to the yards and load them right off the box cars. Seems to work out pretty well. Of course, these are the crazy old Sicilian guys that make 200 gallons at a time, so they're ordering a LOT of grapes.
“If one's actions are honest, one does not need the predated confidence of others, only their rational perception.”

Offline mrcceo

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #6 on: August 23, 2010, 10:07:08 AM »
I'd be interested. 

Since it amounts to an occasional online purchase for a limited amount of people, and would be a nonprofit situation, I wouldn't set it up as a business.  Your just asking for complications and problems. If sales tax becomes an issue just pay it at the point of purchase and keep the paperwork.

Offline k4df4l

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #7 on: August 23, 2010, 10:17:15 AM »
I guess the need to make this more complicated/legally organized is somewhat lost on me....unless the big picture is to lay the groundwork for a co-op LHBS, why go to this level of expense and trouble for quarterly bulk grain & hop orders?  What are the other products you expect to order from other wholesalers? 

I think the point is that with enough people involved the cost pencils out pretty well for bulk ingredients. My friend's father-in-law is hooked up with a group in the Philly/SJ area that does group buys of grapes once a year. They go to the yards and load them right off the box cars. Seems to work out pretty well. Of course, these are the crazy old Sicilian guys that make 200 gallons at a time, so they're ordering a LOT of grapes.

I'm down with the group buy aspect...I've participated in a few NC Malt pallet purchases and I'm always on the look out for local opportunities to throw in on another. ~27 bucks a sack of CMC two row w/ your share of shipping it a tremendous savings over $50 for a sack of Briess @ the LHBS.  Throw in bags of pilsner or MO and it's seriously awesome.

I'm a bit foggy on the desire to complicate it with a formal co-op approach, business licenses, governmental registration & compliance, etc.   

Offline hokerer

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #8 on: August 23, 2010, 10:58:59 AM »
I guess the need to make this more complicated/legally organized is somewhat lost on me....unless the big picture is to lay the groundwork for a co-op LHBS, why go to this level of expense and trouble for quarterly bulk grain & hop orders?  What are the other products you expect to order from other wholesalers? 

I think the point is that with enough people involved the cost pencils out pretty well for bulk ingredients. My friend's father-in-law is hooked up with a group in the Philly/SJ area that does group buys of grapes once a year. They go to the yards and load them right off the box cars. Seems to work out pretty well. Of course, these are the crazy old Sicilian guys that make 200 gallons at a time, so they're ordering a LOT of grapes.

I'm down with the group buy aspect...I've participated in a few NC Malt pallet purchases and I'm always on the look out for local opportunities to throw in on another. ~27 bucks a sack of CMC two row w/ your share of shipping it a tremendous savings over $50 for a sack of Briess @ the LHBS.  Throw in bags of pilsner or MO and it's seriously awesome.

I'm a bit foggy on the desire to complicate it with a formal co-op approach, business licenses, governmental registration & compliance, etc.   

The way I read the original post was that he was afraid North Country would eventually migrate to selling only to licensed businesses hence his desire to incorporate, etc.
Joe

Offline jalynn2

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #9 on: August 23, 2010, 05:02:40 PM »
As you do this keep in mind your LHBS, if you have one. You can definitely save money buying at wholesale, but there are a lot of ingredients that don't make sense to wholesale: yeast, many specialty malts, etc. Just consider whether that money is worth the loss of convenience where you now have to drive a long way or mail-order those other ingredients.

I'm not trying to judge you here; I've done this in the past with some other club members when we had no LBHS closer than an hour away. But since a new shop opened close by in the past year, I'm happy to pay his prices for the convenience of being able to pick up ingredients on a whim.

Just some food for thought...

Offline MrNate

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #10 on: August 23, 2010, 09:55:35 PM »
If I had one, I'd definitely keep that in mind.
“If one's actions are honest, one does not need the predated confidence of others, only their rational perception.”

Offline k4df4l

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #11 on: August 24, 2010, 05:55:26 AM »
As you do this keep in mind your LHBS, if you have one. You can definitely save money buying at wholesale, but there are a lot of ingredients that don't make sense to wholesale: yeast, many specialty malts, etc. Just consider whether that money is worth the loss of convenience where you now have to drive a long way or mail-order those other ingredients.

I'm not trying to judge you here; I've done this in the past with some other club members when we had no LBHS closer than an hour away. But since a new shop opened close by in the past year, I'm happy to pay his prices for the convenience of being able to pick up ingredients on a whim.

Just some food for thought...

I patronize my LHBS when it is practical (and in many cases pay more than I could obtain the same items cheaper via web).....however when this support comes at a substantial premium, it's much harder to justify.

Group buy:
55# Pils
55# MO
10# Munich
Total - 91 bucks including shipping share

LHBS:
55# MO - 66.95
55# Pils - 67.95
10# Munich - 16.50
Total: $151.40

Savings: 60 bucks

Offline dcrawlins

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #12 on: August 24, 2010, 09:55:05 AM »
My homebrew club recently purchased a 42 sack order and save a ton.  North Country will still sell bulk orders but will only deliver to locations with a dock.  So if anyone in your club has a dock at work that can be used for delivery there should be no problem.  Heck many brew pubs only order 42 sacks at a time due to space.

Offline The Professor

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #13 on: August 26, 2010, 10:34:06 AM »
I'd be interested in this.  South Jersey/Philly area is an easy ride for me.
Keep us posted as to the possibility of it happening!
AL
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Offline bluesman

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Re: North East Bulk ingredient Co-op opportunity?
« Reply #14 on: August 26, 2010, 11:06:27 AM »
I'd be interested in this.  South Jersey/Philly area is an easy ride for me.
Keep us posted as to the possibility of it happening!

+1

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