[morticaixavier]

[My main concern when people start to take homebrew to the masses is still the fact that it is an awful lot of work for such a small return. If you are brewing on a 5 - 10 gal system you will end up brewing more for bars and pubs than for yourself and you still won't be making any money and you will end up working basically for free. The most important part about homebrewing for me was having good, fresh beer on tap all the time - for ME! If you start brewing for local establishments you will not have very much beer around the house. What is worse, you will most likely have to pay to drink your own beer.

Another think to consider: pubs and restaurants start to get pissed when you can't keep up with demand. Especially if you are taking up tap space. If you can;t keep a keg on that tap most places are going to bump you for someone more reliable. An empty tap costs an establishment money.

Not trying to rain on any parades, just trying to point out a few facts folks may not have thought of. Brewing beer is a lot of work, for sure.

I wouild agree that a 5-10 gallon system is probably a little to small, although as a way to start out and get some beer in the hands of local pub owners, sommeliers and bottle store buyers it might be sifficient. but a 1 BBL system is not alot bigger that a 10 gallon system and if you are only selling to a couple of accounts would be good enough to be starting out with.

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.

[majorvices]

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.

I totally agree and have been in the exact same boat. Some get irritated if the beer is not available. Others make it a marketing tactic. We just try to keep as much beer in the hands of people as possible.

Also agree with a 1 bbl system. But like I have said here and elsewhere: just be aware it becomes a full time job working for free whether on a 5 gl system or a 1 bbl system.

[morticaixavier]

On the aspect of keeping a tap full at all times Kevin McGee at healdsburg beer company stresses the importance of being totaly up front with your customers about the likelyhood of that tap going empty on occasion. He points out that limiting availability, at least in some markets, can be a great sales tactic. Sort of a 'you have to try this beer... if you can get it' attitude develops that allows a pub owner (and therefore the brewer) to command a premium price for the product. This may not be the case everywhere but in all the major west coast cities it would probably work well.

I totally agree and have been in the exact same boat. Some get irritated if the beer is not available. Others make it a marketing tactic. We just try to keep as much beer in the hands of people as possible.

Also agree with a 1 bbl system. But like I have said here and elsewhere: just be aware it becomes a full time job working for free whether on a 5 gl system or a 1 bbl system.

no doubt it is a labor of love. But hey at least you can blast the polka while you work for free right?

[majorvices]

A lack of polka would be a deal breaker for me.

[jeffy]

I don't know what the trend in established nano breweries is, but I would think that nano brewing and kegging are not good friends economically. This is simply because your 10 gal might be worth 150 in a keg (retail), but packaged in bombers at $10 each, that same batch is worth $400.  $400 - costs and labor is not much to live on, but it is substantially better than $150 - costs and labor which is probably an imaginary number.

Actually this is the reason our local brewer of Belgian style beers bottles in 750's.  He can get more money per ounce that way.  Plus it looks cool with corks and cages.

[morticaixavier]

I don't know what the trend in established nano breweries is, but I would think that nano brewing and kegging are not good friends economically. This is simply because your 10 gal might be worth 150 in a keg (retail), but packaged in bombers at $10 each, that same batch is worth $400.  $400 - costs and labor is not much to live on, but it is substantially better than $150 - costs and labor which is probably an imaginary number.

Actually this is the reason our local brewer of Belgian style beers bottles in 750's.  He can get more money per ounce that way.  Plus it looks cool with corks and cages.

While this may be true to get a truer picture one has to compare the costs of bottles v. cooperage. Granted you need a fair number of kegs, I think I have heard 3 kegs for every 1 you are sending out (1 still out, 1 ready to be cleaned and 1 filled) but, at least with pubs/bars etc you can expect to get those back. With bottles even though they may only be .50$ each you never see that money again.

[majorvices]

But you include the price of the bottle in the beer price - you don't "really" do that with cooperage. You can make a lot more money by packaging in bottles than serving draft. You need both though to be relevant. And often times draft beer tastes better.

[Thirsty_Monk]

Hey make your bottles returnable.
This has been working quit nicely for me.

While talking bout permits. You need to have a bond and that is minimum cost or $100 for state and $100 for federal per year.

And yes this commercial brewing is cutting into my drinking habits.

[Jimmy K]

You need both though to be relevant.

Good point. With bottles you're relying of a different sort of sales than draft. We have a love for draft beer and I'd say for most craft beer drinkers (not the super beer geeks) the draft list at a bar is the only list.

[micsager]

thanks everyone, I apprecaite all the information.  My GF knows some folks at our county planning department and has started talking with them.  I paid the $100 to my state for the microbreweries license, and that seems to get the ball rolling.  At least I'll find out where the barriers are. 

And just FYI, I'm now looking to really make a profit per se.  But, as I live in a fairly rural area, and one of just a few homebrewers, I get requests to purchase my beer, or even brewing a special beer for things like Real Estate office Christmas gifts and such.  And if I were to choose to do that (hehehehe), I'd like to be legal.

[morticaixavier]

thanks everyone, I apprecaite all the information.  My GF knows some folks at our county planning department and has started talking with them.  I paid the $100 to my state for the microbreweries license, and that seems to get the ball rolling.  At least I'll find out where the barriers are. 

And just FYI, I'm now looking to really make a profit per se.  But, as I live in a fairly rural area, and one of just a few homebrewers, I get requests to purchase my beer, or even brewing a special beer for things like Real Estate office Christmas gifts and such.  And if I were to choose to do that (hehehehe), I'd like to be legal.

rockin! keep us up to date. This is very much the scall of operation I imagine trying to do someday. Not a real money maker but a way to get my beer out there.

[boulderbrewer]

Cool! you go micsager. The hardest part is finding the equipment that you can afford. Trust me, but we will help you out!

[boulderbrewer]

There is a guy who sells repourposed equipment in MI I forget his first name but his last name is O'Brien, he sells brewery equipment, many that have been repuorposed.

[Teal]

I'm curious - those that are already pro, maybe you can answer - Why not form your "brewing company" and simply either lease capacity from a local/large/established brewery or have it contract brewed?

Would obviously depend on having that capacity close and all but skimming most of the threads here relating to cash needed, start up costs etc - would seem to me, and my lay approach, that I might want to search out someone with extra capacity or the ability to squeeze me in between their schedule and while I believe my cost per brew would be higher - is it higher than also having to purchase the equipment outright?

I believe Jamil Z. is doing something similar (not EXACTLY that but leasing excess space/capacity from EJ Phair Brewing) to get started with Heretic.

I'm sure I'll be corrected on all points but if I was really set on being a commercial brewer - it's something I'd look into more. Not having to buy all the equipment but allowing me to generate some cash flow (hopefully) before having to come up with the large cash reserves needed to buy EVERYTHING.

[a10t2]

while I believe my cost per brew would be higher - is it higher than also having to purchase the equipment outright?

The problem is that starting out as an alternating proprietorship dilutes your profit margin, so the threshold volume you need to produce/sell in order to break even is larger. For contract brewing, the margin is even smaller. So yes, it does reduce your startup costs, but it may or may not be more profitable over a given timeframe and/or production volume. It's impossible to know without considering many factors that are unique to each business.