Business Idea Question

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rono73

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Joined
Jan 4, 2005
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Connecticut
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.
 
Where are you located? It's all going to be based on your local laws and what you need to do to get licensed. I suspect that the answer in 99 out of 100 jurisdications is that there is no way for it to be profitable at such a small scale, but it may be worth checking into. No way of giving a generic answer, though.
 
I'm in Connecticut. I figured the answer would be based on local laws, but I was just wondering if anyone has done the research. (So I won't have to!)

As far as profitability goes, I think there's definitely a possibility. Think about it: You could use your current equipment (no cost), and the cost of ingredients, bottles, labels would be passed on to the consumer. Then add the labor charge to cover overhead (electricity, delivery, etc.), and profit. On top of that, it's a "small-batch craft brew," so you could charge a premium.

Thanks though. I just would love to quit my job and make brewing into a career.
 
I didn't mean to be discouraging, either, I just think you're probably best-off either searching for whatever information is available on the state's website, or calling up whatever department it is that handles these issues. They should be able to say, "yeah, you can do that, but you need this license which costs $xxx per year and we're going to inspect you," or whatever the right answer is for CT.
 
rono73 said:
Thanks though. I just would love to quit my job and make brewing into a career.

If you brewed a batch every day (could you even FIND that many customers?) and you made $100 profit per batch (that's some expensive beer!), you would rake in only $36k a year (before taxes, and taxes would be hefty since there is alcohol involved).

I wish you the best if you choose to give it a go, but "profitable" and "I make my living this way" are quite different things.

-walker
 
rono73 said:
I'm in Connecticut.

There is your answer on profitabilty! I am sure the regulatory permits and such would be unbelivable just based on all the "blue laws" in CT.

You can't buy any alcohol on Sundays right? Or after 8 pm? Seems like everytime I am there I am not able to buy any beer for one reason or another...

Maybe you should move first. :D
 
What's competition like in your area? Could it handle one more producer? Do you know any bar owners that would feature your product? How much would you have to provide them with to keep them stocked?

What you need to do is find one or two bars that will sell your product. From there, build demand. If they like it, keep upping your production until you need to find another bar to distribute. Then look for bars that sell packaged beer and see how well it does. Once you have a guaranteed successful product, approach liquor stores and grocery stores about getting some shelf space. You'll probably only be able to afford a spot on the warm shelf so you'll need to up your marketing expenses.

You can do it, but you need far more than a good product to execute successfully. You need a great promotions team and good investor backing.
 
Boy, it sounds like I hit on an interesting topic. I appreciate the tips. Getting my beer into a bar or a liquor store isn't the goal, at least initially. I think it's a simple business plan, based on owning the brewing equipment. That means no investment necessary for startup.

What I'm envisioning: Someone is getting is married. Instead of spending $500 of bags of Jordan Almonds to give to their guests, they call me and say, "My fiance and I met when she rear-ended my car, can you brew us a beer and call it 'Cupid's Crack-up' so we can give a bottle to each of our guests as a gift." Or whatever people want to do to make their party/wedding/funeral more interesting.

I offer them a few choices (IPA,Porter,etc.) with the option to adjust flavors if they want. If they met in a pumpkin patch and they want pumpkin in their beer, who am I to judge? You can easily brew a 5 gallon batch for less than a dollar a beer. A decent printer and some negligible talent, and you can make custom labels. Bingo, you can make 20 gallons worth of beer, around 200 12-oz bottles, and sell it for $500 to the happy couple, and make $300 in profit, just doing something you like to do anyway.

Doesn't that beat a bag of Jordan Almonds or a mini bottle of Sutter Home wine? Anyone who's been to a wedding knows that most of the stuff you get from a wedding is crap. I also know I woul dhave preferred to give my guests beer.

I agree that there is some initial investment for marketing and advertising, but owning the brewing equipment is the big investment here, and we all already own it. The biggest problem would be a liquor liscense, which makes this cost prohibitive. If it would only require a caterer's liscence, that might make it feasible. I'm going to check with my city. Since we're really only "cooking" ingredients that will end up as beer, does that count as alcohol. I know at my HBS, I'm not charged tax for malt and grain, since they're technically food, not alcohol.

I've written way too much...
 
rono73 said:
What I'm envisioning: Someone is getting is married. Instead of spending $500 of bags of Jordan Almonds to give to their guests, they call me and say, "My fiance and I met when she rear-ended my car, can you brew us a beer and call it 'Cupid's Crack-up' so we can give a bottle to each of our guests as a gift." Or whatever people want to do to make their party/wedding/funeral more interesting.

If you're specifically looking to get into the wedding scene, expect HUGE barriers to entry in the form of high costs to get into catalogs or on websites. And don't negate the effect that the negative stereotype will play on your business. It sounds like a great idea, until you think about Uncle Al, the Alcoholic. Is it appropriate to give booze as a gift considering that your uncle is a recovering alcoholic? A lot of women wouldn't be interested in giving away something as masculine as beer at their wedding.

Here's a great piece of advice: if you're going to start a business, find something where you already have an "in" (someone who will definitely partner with you.) Maybe you know people in the wedding industry who are interested in your idea, or maybe you have a friend who manages a bar and will give you a shot. It makes it a lot easier than trying to build relationships and a product at the same time.
 
I think it's an interesting idea that could be fun to do on the side, without trying to make it into a full-time gig. With that said, I would be shocked if the costs of getting licensed to do this legally were not far too high to make this practical.

Regarding the issue of wives disapproving of the concept; if this REALLY took off, you might want to also offer wine and/or mead. You might need to build up some "inventory" of the latter, but since you're like us, you probably would have a lot fermenting anyway ;)

As to the alcoholic uncle; OK, you might not sell to every couple, but that doesn't mean it's a bad idea.
 
I think the alcohol sales is going to be the killer as others mentioned. Don't know about CT but a lot of states will require you to have some kind of license to sell the brew on premises and I don't know if they'd let you do that from your home either. The permit could be anywhere from a few hundred to well over a thousand depending on how puritanical your state alcohol laws are.
 
First, I have received booze as a gift at a wedding. It's not that uncommon. Given that its a wedding, Uncle Al wouldn't have any problem getting a drink from the open bar, let alone the 1 bottle he's getting as a gift.

Second, maybe the wedding example was a bad one to start with, but when it comes to wedding favors, the bride and groom are always looking for 2 things: cheap and unique. This idea is both, and would taste good too.

The possibilities are endless. Anniversary parties, graduations, Birthday parties (30th, 40th, 50th, etc.)

Also, this is not a on- or off-premise sale. It's a private sale from brewer (caterer) to consumer. The consumer can dispense freely, but cannot re-sell. And again, I'm not sure the product would qualify as alcohol, based on the size of the operation, and the raw materials.

I really do appreciate the responses. I guess I'm surprised at how many responses are not in favor of the idea. Am I the only one who wishes I was the next Pete's Wicked or Sam Adams?
 
If the barriers to entry are as low as you imagine, then prepared to be crushed by someone else or at the very least have your profits marginalized.

My guess is that the licensing body has some production threshold that you will be taxed against and this will be an amount that will make easing into this impossible. They just won't have the mechanisims to tax people on this unless there is some volume production. And no, I doubt there is a small volume exemption.

I hope I'm wrong. Good luck.
 
I don't think any of us are wishing ill will towards you, we're all just pessimistic based on our (limited) knowledge of the booze-production laws.

Drop a dime and call City Hall; at the very least, they should be able to tell you who to call at the state.
 
We have three tier laws here, so if the government won't get you, the industry will. In effect you cannot sell directly to the customer, you must go through a distributor.
 
olllllo said:
We have three tier laws here, so if the government won't get you, the industry will. In effect you cannot sell directly to the customer, you must go through a distributor.
Those bastards....

WRT the original idea, I think it's a great one and join the others in wishing you well. Perhapse instead of marketing your beer as a party favor, you should offer to "cater" the open bar. As you've mentioned, you've just sold your beer to the couple who then offers it at an open bar. You could probably sell way more beer that way rather than giving a single bottle to each guest. You could still have a "theme" and a cute custom nickname like you talked about, but you'd only need a single sign vs lables on each bottle. I'm doing this for my little sister's wedding except that I'm providing all the beer myself as my gift to them and am not selling any of it.

This may increase your profit margain and actually make the cost of the license feasable.

Let us know what you come up with.

Focus
 
My idiot friends are constantly saying we should go pro, just to shut them up I looked up the laws involved. Note this is in New Hampshire, not one of the friendliest states to new brewers. And also note that I am going from memory, I looked it up to quiet my friends and didn't bother righting it down.

A brewing license for less than 5000 barrels a year is about $1,250/year. Getting the license is difficult.

Liability insurance is required, another $50,000/year.

Each barrel produced is taxed $30.

That's what I can remember for just producing, New Hampshire allows you to sell without a distributor, but you have to apply for the right. I would love to open a brewpub, but I would have to be either independently wealthy or have a real good friend who was.

Wine makers apparently have a much easier time, they can sell without a license or insurance at farmer's markets, though I imagine most get the insurance anyway.

As for selling for the wedding/special occasion crowds, it's not a bad idea if it's legal. I know some photographers that start out just hitting the wedding expositions, booth space is much cheaper than buying advertising.
 
olllllo said:
We have three tier laws here, so if the government won't get you, the industry will. In effect you cannot sell directly to the customer, you must go through a distributor.

Same in TX which is what I based my response on... breweries cannot sell directly to consumers here. I think if you are small enough you can bypass the three-tier but still you must sell to resellers directly not consumers. Only brewpubs can and they must sell on premises (which usually means they are a restaurant also).

More to the point - investigate your laws and see how difficult your state makes it for you. If you can sell directly to consumers without hassles then you should go for it. :)
 
I should add that, in AZ, you can get a license to sell your beer at your location that is much more reasonable. Chimone posted on that awhile ago.

The operative thing here is "sell at your location". Has nothing to do with any other production licencing or oversite.

EDIT: Same as above.
 
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.
 
rono73 said:
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.
 
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.]
 
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...
 
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 :cross: ? 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!!!!! :rockin: I'm sure you will never regret it.

Just remember it is a business. The beer is just a bonus.
 
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.
 
And by all means, he should (not) read the Brew Pastor's four part series about going pro.
 
the_bird said:
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 :cross: . 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!

david_42 said:
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.

olllllo said:
^^^^

Wiki worthy

^^^^

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! :tank:
 
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...
 
Having been here a while and knowing many of the posters, I can assure you no one meant to "pee" on your dreams.

I think the problem is that many of us would have gone this route if we could, but there are many regulatory and government barriers that effectively bar us from doing something as simple as sell our homebrew legally.

I've known plenty of people who cook for friends and sell their food to them for parties, etc. You could always go the less legal route.:mug:
 
"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 can't find this...anyone got a link to it?
 
The real problem is that alcohol is so highly regulated and those who don't drink have a real problem with those who do. It's a hot button topic almost as nuts as the legalization of mary jane debate.

I personally tried getting into running homebrewing seminars both privately and in community adult school and it's unbelievable how many people think it's illegal and immoral. A lot of the adult schools around here use board of ed facilities and I always get the same response, "we can't have anything alcohol related on school property".
 
Bobby_M said:
I personally tried getting into running homebrewing seminars both privately and in community adult school and it's unbelievable how many people think it's illegal and immoral. A lot of the adult schools around here use board of ed facilities and I always get the same response, "we can't have anything alcohol related on school property".

I run into that issue when I'm working with small non-profit agencies who work with kids. They'll be running a fundraising dinner, but won't serve wine, as they don't want to "set a bad example for the kids"

WTF? :confused: RESPONSIBLE drinking is setting a bad example?
 
the_bird said:
I run into that issue when I'm working with small non-profit agencies who work with kids. They'll be running a fundraising dinner, but won't serve wine, as they don't want to "set a bad example for the kids"

WTF? :confused: RESPONSIBLE drinking is setting a bad example?

This is def :off: but...

You got something right...

Resposiblility is a bad example lately. Never teach people (Especially kids) responsibility. This seems to be the ever growing theme.

Just keep things Hush Hush and control control control!!!!
 
Ok so I spoke too soon, by about a day. I just got contacted by a local adult school and they're interested in running a beginners homebrew class. I'm pretty psyched about it because most of my friends don't want to learn. It's not going to replace my day job, but it's so cool to make a little extra cash doing something you enjoy.
 
Bobby_M said:
Ok so I spoke too soon, by about a day. I just got contacted by a local adult school and they're interested in running a beginners homebrew class. I'm pretty psyched about it because most of my friends don't want to learn. It's not going to replace my day job, but it's so cool to make a little extra cash doing something you enjoy.

Very nice.

You can just show your movies and yell at people for chewing gum.:D
 
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