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Old 04-09-2007, 08:24 PM   #21
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IMHO, you'd need to run a brewpub w/ a kitchen... or do larger scale brewing to make money at it. Selling beer is one thing....paying uncle sam to let you sell it is another. You're going to be looking at other heavy monthly expenses such as rent, electric, gas, insurance, consumables.... its a full time job!!! Not trying to take air out of your sail, but there's HUGE amounts of research and business planning that needs to be done if you are at all serious about this.

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Old 04-09-2007, 08:32 PM   #22
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Quote:
Originally Posted by rono73
Has anyone looked into what it takes to sell your homebrew? I had an idea to set up a small business based on brewing small-batch specialty beers, for special occasions. It would be like wedding favors, or milestone birthday parties, where they wanted something unique to serve. It would probably be harder to make the labels than to brew the beer.

I thought this might be more like a catering business, but since alcohol is involved, I'm not sure if this would be worth the trouble. I figured I'd look into it if it meant getting to brew more often. Thanks.
To answer your question, you could probably go ahead and start doing this for some friends. If your business takes off, look at getting the required permits to go legit. If you're good at making labels and have some people looking for some beers, steam ahead and best of luck.
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Old 04-09-2007, 09:38 PM   #23
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You might look into the "Brew on Premise" concept. I know at least one person who is making that work, even though the people (who in theory are doing the brewing using his gear) only show up to order and cart it off. Ain't strictly legal, but it works. In some states, you would still need a license, but avoid most of the alcohol control board type hassles.

[He has his entire basement full of carboys & you practically need an O2 mask to go there.]

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Old 04-09-2007, 10:58 PM   #24
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The biggest problem is that you cannot sell homebrew from your house no matter what. You need a place of business even with a BOP.

I have brewed beer for friends weddings, they paid for the ingredients and I brewed the beer. There was no profit but I got a lot of praise on the beer and they offered me the full keg of Coors Light that nobody touched...

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Old 04-09-2007, 11:11 PM   #25
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The licenses and insurance policies mentioned earlier are all required and are good info.

First off, you need a state license. They are usually set at a standard price for the first year, then reflect your production (in barrels) the following years. You are also required to pay taxes on your production. You can find out the information from your state and figure out what it would cost you to charge each client.

All states (as far as I know) require liablility insurance. This can get pricey, and can also get tricky in situations.

Don't forget you need to be registered with the ATF and yes you do need to have a license through them.

You will be producing a beverage so don't forget you will need to be registered with the board of health and get ready for regular inspections. You can't just do this in your kitchen or out of your garage. If you can't afford to build your own sanitary kitchen (think stainless backsplashes, tile floors, stainless countertops), you will need to rent kitchen time. You can usually rent kitchen time at local colleges with culinary arts programs or some production facilities that close on weekends (even better idea is if you know or belong to a church or other organization with a certified kitchen that will allow you to use it free or cheap).

You mentioned you have all of the equipment. Remember that you might recieve orders for pretty high volume at once, or multiple orders at once. Would you say 250 people to receive gifts would be rational for a wedding? Assuming one 12 ounce bottle of beer per person, 250 ppl X 12 oz = 3000 Fl oz / 128 fl ounce per gal = 23 gals for one wedding. Will you have the ability to boil that much wort, ferment that much beer, and bottle it all with your current setup? Can you double, triple, or quadruple that if you have multiple orders at once? Talk to current wedding companies and see how the busy seasons go. Lead times and storage space will also need to be thought of.

As for bottles you will need to purchase bottles on a regular basis also. Is there somewhere nearby you might be able to purchase returnable bottles from? If not what costs are going to be necessary to purchase that volume and have it freight shipped (at that quantity your looking at pallets)? Since you will be selling the beer to the client in bottles you will need labels for the bottles, which leads to the next consideration.

Deposit. Any container leaving the facility will need to have a deposit collected. Even brewpubs are required to collect deposit on growlers, although they usually don't tell you and just add that into the 5 or 10 dollars per fill. And since you have labels for an alcoholic beverage don't forget the labels need federal and state apporoval. There are legal requirements for warnings, font size restrictions, and they also need to be recognizable by the state (up until recently the state of michigan did not recognize scotch ale as a beer, hence a scotch ale had to be sold as a pale ale from scotland or something to that effect). There is also nomenclature designated for ABV (i.e. light, strong, malt liquor). I would contact the personal label companies dealing with wine that currently exist and see how they deal with the acoholic label restrictions (maybe a stock label, and the couple can pick two things a picture and the name).

And no, you can't just sell 10 cases of beer to your client for the wedding because they are simply buying it at your 'brewery'. As far as I know most states (if not all) don't allow this. Yes, most states allow sales on premise for places like brewpubs. "But I can buy a growler or a six pack at 'Eddie's Brewhaus' and take it home, isn't that the same thing?" Not entirely. Most states do allow small amounts of sales to customers at brewpubs for home consumption, but that's exactly it... small amounts. The primary function for the company is sales at the bar.

Easiest way to work around this? Build your three tier system, but that's where your building more and more costs and the red tape gets thicker and thicker. You might be able to talk to a local distributor and see if they will carry your product and have a partner run the 'storefront' to the clients. They might allow it as a side item that you do most of the work for. Maybe you could deliver it to their warehouse, help them put it in a back corner, and pick it back up to tak to the 'storefront' so the distributor only deals with the floor space and paperwork. Or maybe you could have a partner become the distributor if you already know someone in the wedding business? The company in the wedding business would need a liquor license though also.

You might want to figure out what the startup costs would be first. Licensing, registrations, insurance policies, equipment, etc. Then figure out what the production costs would be for each batch(Grain or extract prices, fuel costs, bottles, water, storage and kitchen rent?). And finally figure out what the prices would be per batch just at cost. Look at how long you could delay the costs of startup before you would need to shut down the operation.

Don't forget about disasters. Would the company be able to recover if an entire drum of extract gets infected, if mold or rats destroyed an entire pallet of grain, if a dry spell happens for the better part of a year?

The bottom line also lies in if the company can sustain itself. Is there enough of a market to even cover operational costs, even if it is a side job/hobby gone wrong ? How much promotion would be necessary, and how far can you go with promotional costs if does become absolutely necessary.

If you have read through this entire post and have now placed me into a category that reads in your mind, "Discouraging a**holes" then read again. Nowhere have I said "don't do it". I have simply raised valid questions and given the informaiton I have found thus far for operating a brewery of any kind. If you have researched all the legalities, crunched all the numbers, and you think it can happen then by all means DO IT!!!!! I'm sure you will never regret it.

Just remember it is a business. The beer is just a bonus.

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Old 04-09-2007, 11:23 PM   #26
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^^^^

Wiki worthy

^^^^

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Old 04-10-2007, 12:28 AM   #27
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drouillp, if you don't have anything of substance to contribute...

Great post... probably not what the OP wants to hear, but a lot for him to think about.

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Old 04-10-2007, 12:58 AM   #28
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And by all means, he should (not) read the Brew Pastor's four part series about going pro.

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Old 04-10-2007, 05:42 AM   #29
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Quote:
Originally Posted by the_bird
drouillp, if you don't have anything of substance to contribute...

Great post... probably not what the OP wants to hear, but a lot for him to think about.
Almost all small businesses that fail are because of major faults in the business plan (or almost an entire lack thereof). The last thing I want to see is someone ruin a number of things because of a fun idea. Remember, a small business ends up being your life. Even if you are very succesful and end up "big". If you fail and forget that everyone around you is involved, it can damage everything you know.

The hardest thing is to realize this is not about beer when you decide to "go pro". The beer is like the lunchbreak that you sit on the computer reading hbt forums . If you decide to make a business it is FIRST AND FOREMOST a business.

The good part is if you think of the business first this can be a very succesful and fun career/life!

Quote:
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And by all means, he should (not) read the Brew Pastor's four part series about going pro.
I highly recommend reading BP's posts. They are titled "Don't try this at home". These should actually be referenced in plain sight on this forum with a title like "I WANT TO GO PRO" heh. At least tack them on BP's drop down? Hey tex! Whaddya say?

I also recommend Chimone's "Trying this at home part 1" and definitely consult him on what he is going through.

Listen to the BN's Sunday Show that interviews Pete (Think Pete's Wicked). Very informational and also an inspriational eye opener.

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Originally Posted by olllllo
^^^^

Wiki worthy

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Though long, the previous post was actually pretty brief. There aren't a whole lot of details or numbers thrown around. I guess this could become wiki content eventually. Maybe using that as a start of the "What if I decide to sell my beer" article that branches into details for the U.S., then Federal Regulations, Then State regulations, and even possibilites for business help.

Bottom line? The industry is so d@mn heavily regulated there really is no such thing as the backyard brewer that can catch a buck here and there (and be legit). But that DOES NOT mean that it can't be done! Where there's a will there certainly is a way!

Cheers!
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Old 04-10-2007, 01:13 PM   #30
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Thank you all for your replies, especially drouillp. It is certainly wiki worthy, and you've given me, and maybe everyone, some things to consider.

It sounds like maybe drouillp has looked into this, which was what my original post was asking, and boy howdy, does everyone have an opinion! Message boards and email are tough sometimes, since its hard to read into the subtext, and jokes and sarcasm don't read very well. I don't consider anyone here to be an a$$hole, nor do I ever mean to disrepsect anyone's opinion. I'm kind of glad in a way that I could ask a question that would spark as much response.

It's probably a pipe dream, and an impulsive post based on working in the same office for 11 years, and having a baby on the way. I might have been looking for someone to reply and say they've done it, and that it was rewarding to take the hobby to the next level.

Maybe for my next post, I'll just ask if my beer has been in the primary too long...

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