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Old 10-18-2012, 02:31 PM   #1
LarsonLE
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Default Brew-On-Premise (BOP) Business?

So the past few days I've been thinking about the possibiltiy of opening a BOP. I've read a lot of stories on the internet of these businesses shutting down, as well as there being a handful of ones that are successful. Has anyone been to a BOP, and do you think this business could do well in an area where there are none with a decent sized population?



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Old 10-18-2012, 02:35 PM   #2
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I have been to and happily used two different BOPs here in Chicago. However, sadly niether one is still in business. The second one was opened by two (I think) fellows who had experience in the food business. They also made private label stuff for local restaurants in addition to the BOP function. Based on the fact that they did not stay in business for long, I think it's a very difficult business model...



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Old 10-18-2012, 02:44 PM   #3
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Quote:
Originally Posted by SteveCourtright View Post
I have been to and happily used two different BOPs here in Chicago. However, sadly niether one is still in business. The second one was opened by two (I think) fellows who had experience in the food business. They also made private label stuff for local restaurants in addition to the BOP function. Based on the fact that they did not stay in business for long, I think it's a very difficult business model...
Yeah... unfortunately that's the case. It just seems like a great, fun idea.

Do you remember the names of those businesses? Also how was the beer you made at the BOP's?
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Old 10-18-2012, 02:55 PM   #4
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If you are talking of a place where new homebrewers brew their own beer using your equipment there are problems.

Within a given area there are only so many potential customers. If a customer finds that he/she really likes brewing they are going to invest in their own equipment and brew at home. Thus, they are no longer a customer. If someone brews and does not really take a shine to it, they are no longer a customer.

Repeat customers are the basis of a good business. This is also what makes BOP a hard business. Maybe the best route would be to make it a sideline of a homebrew supply store.

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Old 10-18-2012, 03:03 PM   #5
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I agree with Kh. I think the best way to do a BOP would be to foster a homebrew culture within the establishment. An example would be to not only have BOP capabilities but to also have a homebrew shop and maybe even a bar or really nice tasting room so that if customers do move on to the next level they can still be apart of the overall culture you provide.

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Old 10-18-2012, 03:46 PM   #6
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We had one in St. Louis many years ago. It didn't last long although it might do better in the current beer scene. But for most people, it's a one shot deal, been there, done that. I think a lot of their business came from people giving it as gifts. That probably doesn't build repeat business.

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Old 10-18-2012, 04:04 PM   #7
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I've not used a BOP but there is one in Alexandria VA (I forget the name and worse a quick google fails to find it!). Anyhow, it was also a micro brewery/brewpub along with BOP.

There is some sense to trying to make it a 2 or 3 focus location instead of just one - ie LHBS +BOP, but this also means you get all the downsides. Some of these thing vary by state. In VA, there is a sperate liscencing for being a LHBS and a BOP and a Brewery (last time I look at this sort of idea). You might be appealing to widely different customer bases. In terms of the BOP, doing extract makes the most sense, because kettle time (one of the things being sold) is longer for AG brewing. In a large portion of the store will be taken up by warehousing fermentors. Which goes to rent of the space. What to do if a beer goes unclaimed, etc.

I was in contact with one of the distributers, and they had a number of the population who homebrewed, and who make wine at home (why be choosy? as a business person your product is little green peices of paper, not beer or wine) Anyhow their back of the envelope numbers were you needed an area population of about 200K with little to no competion for a LHBS to make it and then it would only be about breaking even. Granted this was based on the numbers of people on average who brew or vint at home, and that number may have changed. It also was based on an average amount spent per person (I think $100).

And now I should delete this rather than post since I'm not sure I've addressed the OP's question, but just rambled.

I think a BOP can be done, but it is hard. In the US, Beer is something we buy, or make at home. There isn't a great amount of us who make it outside the house. Same with those kitchens you see where you go there and cook 10 or meals and bring them all home.

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Old 10-18-2012, 04:15 PM   #8
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Here's a link to a good article about Deja Brew here in Mass. There is some good info for those thinking about it for themselves.

http://www.collaborativegrowthnetwork.com/Blog/bid/4937/The-Story-of-Starting-a-Brew-On-Premises-Business

Here's Deja Brew's site:

http://www.deja-brew.com/

I have never been but I have friends that have and was a positive experience for them. My friends that went don't have room for their own equipment.

Andy

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Old 10-18-2012, 05:30 PM   #9
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I would be worried about the profit margin unless you run it along with a LHBS. That and if it isn't much cheaper than commercial beer I wouldn't see much incentive.

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Old 10-18-2012, 08:23 PM   #10
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I have a different take on BOP establishments after talking with CA ABC and some reading on the TTB site. Here is what the TTB says...http://www.ttb.gov/beer/beer-faqs.shtml#b1 The rules regarding BOP though are NOT federal regulations, thus not federal law. I believe what they are instead are TTB "guidelines", which have no legal standing? So if someone was to pay you to do everything brewing related EXCEPT pitching the yeast it would appeart that technically that would be legal. It is usually stated that whoever pitches the yeast brews the beer. I even contacted my state (CA) ABC and they told me that there are no regulations/licenses regarding BOP...they consider it "remote location homebrewing" (their words).



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