On the verge of distributing beer

North Dakota is on the verge of passing a self distribution law that would allow me finally, to sell my beer to people and to pubs. I currently have three pubs interested and I have a ton of questions about equipment.

I currently have 28 five gallon kegs saved up. They are ball lock. Is this a standard in the industry?


Is it at all common for distributed brewers to use batch sparging on a larger scale?

I am considering using three 120 quart coolers as mash tuns and a series of 20 gallon pots to make 6 half barrell batches out of a single mash. Different hops, yeast, etc..etc....etc.... out of the same mash/wort.

I am not sure how to scale my process up effectively.

Does anybody have any suggestions?

I've never seen a bar that uses ball lock cornies for beer. Typically they're built for sanke kegs. Cornies are a staple in the homebrew industry only because large numbers of them became available cheaply when the soda pop industry switched its distribution mechanisms.

Fermentation is likely going to be your limiting factor, not mash and boil equipment. Even a one barrel brewhouse can put out huge quantities of beer if it can find a way to ferment and clear it all.

Good luck!

I'll echo what MalFet said. You'll likely need to look into sanke kegs unless you can convince the local pubs to invest in dispensing equipment for ball lock kegs. They'll likely not go for that since you're talking about only 5-gals per keg. I know it's a PITA, but have you considered bottles if the law allows it?

Also, you may want to look to upgrade your equipment to produce larger batches. Fermentation is going to be your limiting factor here as MalFet has said. If you can obtain at least a few 1 - 3 BBL fermenters you'll be in better shape. I suspect you'll have way more demand than you can supply especially with three pubs interested.

Congrats though! That is a tremendous change in the laws and I wish NC would consider something similar - it would be a great stepping stone to a nano-brewery. I would imagine it would be much easier to obtain funding and loans if you can show the banks the demand and orders lined up.

Freedoms like this would allow for the local character to return to beers rather than being dominated by macro breweries and big distributors. I hope this is a growiing trend! Write your member of Congress!

Dont confuse the state allowing self distribution from the more onerous Federal alcohol laws. You will still need to be licensed with the TTB http://www.ttb.gov/beer/qualify.shtml

If you are already past those steps, then yes removing the three tier system is a great thing and allows for a more free market.

You would be fine with the corney's if you have the disconnects that are threaded. Just unthread the sanke fitting and put your gas and liquid on, similar to giving the bar a tap handle. Easy peasy.

Good Luck!

I'm not sure that you're understanding the law correctly. You likely still have to be a licensed brewery, and as pointed out above, you certainly need federal licensing. Self-distribution refers to the state allowing licensed breweries to distribute without having to contract out the service to a 3rd party distributor.

Airborneguy said:

I'm not sure that you're understanding the law correctly. You likely still have to be a licensed brewery, and as pointed out above, you certainly need federal licensing. Self-distribution refers to the state allowing licensed breweries to distribute without having to contract out the service to a 3rd party distributor.

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Yes, you still need the federal license, but if you are under 25000 barrels in ND you no longer have to use a distributer. The is bill is currently going through a committee for review, but it has the support of our three distributers, so it is likely to pass since they have all the power.

I know there is lots of red tape and unanswered questions but it looks like ND is taking a step in the right direction.

It sounds like you'd still be a liscensed brewery in ND, not just a homebrewer then? I'd suggest you ask questions on the pro brew talk forum - I don't remember the link sorry. This certianly would reduce an obstical to becoming a brewery.

One big obstacle you seem to have not mentioned is having a commercial kitchen space. I don't know how the law reads, but from what I have seen/read, its not likely you will be able to crank out batches from your garage.

causeimthesquid said:

One big obstacle you seem to have not mentioned is having a commercial kitchen space. I don't know how the law reads, but from what I have seen/read, its not likely you will be able to crank out batches from your garage.

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Our law mentions nothing of that but I have no idea. There are so many unanswered questions.

For the federal liscences and permits you have to have a commercial space, it can't be produced in a residential dwelling.

If you have to ask if a cornie keg is an industry standard, I imagine that you are not a brewery and are no where near being "on the verge" of distributing your beer.

We have a self distribution law in Illinois and it DOES NOT pertain to home brewers, it pertains to small breweries that produce less than x amount of beer per year so they can avoid the cost of the middleman and remain competitive.

Federal law still requires that you are legally a commercial brewery and all that is required-you definitely need to do more research! In these cases Federal law still trumps State law

Lols. No.

I don't really want to come off as a dick here bust as other people said, you must be a licensed brewery first and foremost. This law will still not allow you to make beer in your garage and then sell it to people.

http://www.probrewer.com

Read, read, read, read some more, then realize you can do it if you are willing to lose money or work your buns off and make a tiny profit. I'd love to have a small nano but the cost is prohibitive.

So, in reality, you are not on the verge of anything.

permo said:

Yes, you still need the federal license, but if you are under 25000 barrels in ND you no longer have to use a distributer. The is bill is currently going through a committee for review, but it has the support of our three distributers, so it is likely to pass since they have all the power.

I know there is lots of red tape and unanswered questions but it looks like ND is taking a step in the right direction.

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permo said:

Our law mentions nothing of that but I have no idea. There are so many unanswered questions.

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You just said a few post before that you do need a federal licence, that is where all the requirements are set out in regards to equipment/premise/etc.

Also I am very suprised that the distrubutors are supporting this. It does not benifit them and actually is a bad thing for them, i.e. it takes away profits from them for beer that does not have to pass through their doors. Have you got any sources on this support?

mattd2 said:

Also I am very suprised that the distrubutors are supporting this. It does not benifit them and actually is a bad thing for them, i.e. it takes away profits from them for beer that does not have to pass through their doors. Have you got any sources on this support?

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It is a little surprising- but maybe there are upsides for them too? The law is already easy to circumvent, but by legalizing self distribution, distributors may have more room on trucks for their bigger (read more profitable) accounts and not have a hundred little guys taking up space that could be (in their opinion) better given to other accounts. No idea though- I haven't followed this at all.

daksin said:

It is a little surprising- but maybe there are upsides for them too? The law is already easy to circumvent, but by legalizing self distribution, distributors may have more room on trucks for their bigger (read more profitable) accounts and not have a hundred little guys taking up space that could be (in their opinion) better given to other accounts. No idea though- I haven't followed this at all.

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But that was the problem with the three tier system as I understand. The big accounts were getting the same treatment (i.e. all the sapce they wanted) and the little guys just got what was left over. I don't see this affecting the big guys much at all, except now they might have to fight for more space since the craft brewers can go straight to the retailers.
What I am saying is the distributors don't have to take on the smaller accounts, but currently if they don't it is no skin off their back since that beer should not make it onto the selves (how do they circumvent the regs?). Now it does affect them because a retailler can redcue their sales by replacing a distrubtors product with a self distrubuted one.

mattd2 said:

But that was the problem with the three tier system as I understand [etc etc etc]

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I understand it the same way, but I don't follow ND politics. Maybe the distributors aren't supporting as much as they don't see much need to fight it. ND probably isn't the biggest market in the country and the big distributors probably want to focus their money elsewhere? I have no idea.

Self distribution is possible in many places now. There really is no 'three tier system'.

Thanks for all the input and yes i am very green in these regards. My homebrew is quite popular and now that ND is passing self dist legislation, i am getting peppered with requests to put my beer on draft by businesz owners. Maybe "on the verge" wasnt correct. My apologies.

If they are wanting to get your beer on tap, tell them to expand into brewpub and hire you!

You will still need to get a brewers license and brew your beer in a commercial business location. Then it won't be homebrew anymore. It is simply illegal to brew beer in your home and sell it in any fashion.

Homercidal said:

You will still need to get a brewers license and brew your beer in a commercial business location. Then it won't be homebrew anymore. It is simply illegal to brew beer in your home and sell it in any fashion.

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Yes sir, thank you.

It sounds like your best bet might be to try contract brewing.

There are several success stories here in Massachusetts where small brewers have rented time at a small commercial brewery, say, once every few weeks at off times (plus fermentation and storage, of course). I know that Slumbrew and Notch both still operate this way, and they've actually gotten to a decent size.

It's a win-win because the commercial brewery gets to monetize its downtime (maybe they are in the process of expanding their market but aren't there yet) and you get to use their legal equipment without taking on the massive financial risk yourself.

Are there any microbreweries within a reasonable distance? I realize that in ND that will be the constraint. If you can find one that might seem like a good fit, try to get something like a letter of intent from the bars that you are talking about. Nothing binding, of course, but just to show them that you are serious and that it's plausible for you at whatever scale you propose. If they don't do contract brewing today they will probably want a decent idea that you won't do it for one month and then run out of money; it wouldn't be worth the effort for them. If they do contract brewing already, then your job will be easier. Either way, a business plan would help if not be required.

I don't know much more about it, but I do know that Ipswich Brewing Co. is one of the ones that supports this in Mass. If you can't find someone near you who already will allow for contract brewing on their site, I would bet that someone at Ipswich would be willing to give you 10 minutes on the phone for you to learn a bit more about what it would take on your part to convince someone. Just say please

Long day today. We are now looking at partnering with an existing winery that dabbles in homebrew supply. The make and sell wine , have the commerical space and are willing to work with us. Many more unknowns to discover, but this is a step in the right direction. THe best part is that they have a big three tiered system they ordered a year ago that hasn't sold. 15 gallon capacity.......may have to put that baby to work full time.

Airborneguy said:

Self distribution is possible in many places now. There really is no 'three tier system'.

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There sure is in Virginia.

Lots of people will tell you, opening ANY business, that it can't be done. Theres too much work, not enough profit, no way to compete with others. I submitt that the only people you should take advice from are people that have actually done it. No one else is qualified to offer ANY advice whatsoever, period! I do not run a brewery but have started a business. Do the research read everything you can, talk to bar owners, and MOST IMPORTANTLY other Nano owners. Make sure you know your industry by rote. Then decide for your self what'll work what won't. After all its your neck.

One last thing to consider is if everyone listened to common WISDOM, no one would ever start anything. You have a dream, you go out and see if it's poss.


Although having everyone piss on your parade can have a very galvanizing effect

permo said:

Thanks for all the input and yes i am very green in these regards. My homebrew is quite popular and now that ND is passing self dist legislation, i am getting peppered with requests to put my beer on draft by businesz owners. Maybe "on the verge" wasnt correct. My apologies.

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The regulation sounds like a hassle but as consumers we all benefit from the protections. The local homebrew shop guy says the 'moonshiners' show on cable has brought him lots of business and he is afraid he is going to start reading about some of these guys in the paper. Can you imagine someone watching this show and thinking they can now make shine and start selling it to bars? The industry was pretty dirty at one point and all sorts of things found their way into beer. So, yeah. Ya gotta prove some level of proficiency to distribute the stuff. Just the way it is.

Piratwolf said:

There sure is in Virginia.

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Yup - Florida too. Very intrenched here. Hell, we just got the ability to have unrestricted bottle sizes within the last ten years. And growlers here are 32 oz or 1 gallon only. GRRRRR.......

Biohazard said:

If you are already past those steps, then yes removing the three tier system is a great thing and allows for a more free market.

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Until BMC owns all your local pubs and liquor stores, and craft beer is no where to be found.

permo said:

THe best part is that they have a big three tiered system they ordered a year ago that hasn't sold. 15 gallon capacity.......may have to put that baby to work full time.

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There are threads on here about starting a nano. They have all said "I wish I would have gone bigger from day 1." With a 15 gallon capacity, you will likely be brewing a lot more often then you want. Most people recommend a 7-10 bbl system to START with.

bknifefight is correct. Based on the information given out by people that have started breweries and brew-pubs you need a 5bbl system for a brew pub and sell at least 500bbls a year, and for a package you need a 10bbl and sell 3000bbls a year to truly succeed. Basically the time to make a 10bbl batch on a sized system is minimally longer than a 15 gallon batch on that three tier system. You spend all your money on man hours working the brew system and not on selling your brew and getting it out there. Plus the profit on a half barrel keg is around 30 bucks give or take. So if you have to pay overhead for electricity, water, and rent you have to make several of those a day, have room to ferment all of that, and be able to sell all of it rather quickly. On Probrewer they do mention using cornies as a way to get started but you basically will be providing the connections and tubing and helping troubleshoot if the people swapping kegs have issues since they are not familiar with them. For just starting it would be easier to spend 1200 bucks and buy 10 1/6th barrel sanke kegs.

All in all it is a very difficult business to get in if you are small. On average you will make .02 cents per oz in a keg and .01 cents per ounce in a bottle. Use that to determine about how much beer you need to make and sell per month just to stay afloat and see if that is do able in your space. And then decide if you need to be paid for your time and labor.

Good luck!

Keep your chin up, pal. Lots of learning and work to do but you can get there. Good luck!

Two partners and I just opened a nano and are holding our initial release parties in about two weeks at two different bars... so... I just went through this.

You're going to need to file for and obtain a Brewer's Notice through the TTB. Part of that application process includes documenting the commercial space you've OBTAINED (not "are looking at"... they want a copy of either the deed to the property or the executed lease agreement with the landlord.) They'll also want proof of insurance (the landlord will want that too), six months of financial records, evidence of where the funding for the brewery is coming from... among other things. We were able to get all of that paperwork filled out and submitted in about two weeks. We got approval in about 45 days after that (which was lightning fast from what other breweries have told us).

Once you have your Brewer's Notice, then you have to get your state license... the state is typically dependant on getting the TTB license first. State licenses vary dramatically from state to state in terms of rights to self-distribute, tasting rooms, ABV limits, fees, etc. I can't really help you there other than to say that I can't fathom the state not having a detailed process for all of that. That process here in Mass took us another 75 days or so.

(all the while paying rent on the commercial space we had to take)

While you are going through the licensing process, you get the pleasure of dealing with local/town building/fire/electrical/plumbing inspectors as well as the Board of Health. YAYYYYYYY!!!

They're going to want to take a look at every single nut and bolt of the brewing operation. We were originally going to use banjo burners.... NOPE... "not UL or any other industry safety commission certified. Sorry". (trust me, I know how ridiculous that sentence is). We had to replace our stand, our burners, everything but the pots. "oh...well... the natural gas line in this building isn't rated for the volume of gas you need so you need to run new gas line"... $2,600 to run black pipe across an entire building.

And it just keeps on coming. ADA-compliant bathrooms... "sorry, you need a new toilet, sink and this door isn't wide enough". CO monitors and automatic gas shutoffs. Water backflow preventers so you don't backflow into the town water supple (again... ridiculous but we had to do it). Make sure the septic tank is rated appropriately. If it is sewer, make sure the town is Ok with "brewing chemicals" being dumped into the sewer. Occupancy permits, business permits, LLC registration... don't forget you ge the pleasure of now filing corp. taxes too as well as your state and federal excise tax pre-payments!!

I am really skeptical on the corny route but ya never know.

We're on a 1.5 bbl system and while we ABSOLUTELY knew this going in, at that scale, it is impossible to make any money. We can work around the clock if we want and sell every drop and at the end of the year, each one of us would make a couple grand. If you are brewing on a 15 gallon rig, take that tiny profit and erase it completely.

Start to finish... it took us about 14-15 months to get from "let's find some space and do this" to "Our beers are going on tap in two weeks!"

Oh, I did want to mention that the TTB will allow you to setup a brewery in a detached building on a residential property. But you will have to get that past the local zoning commission before going to the TTB. That is pretty much the only way I see a 15 gallon brewery working and even then you will have tiny profits.

Although having everyone piss on your parade can have a very galvanizing effect

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I really don't think anyone here is trying to piss on his parade, it just appeared that the OP's understanding of the proposed law was a little off and needed some clarification

It would be awesome if "self distribution" meant that home brewers could peddle their beers for sale and profit without actually having to become federally licensed but unfortunately that is just not the case

I am not remotely trying to piss on any parades... I am simply trying to illustrate what this whole process really looks like. Hey, I had no idea what was actually going to be required and, to be honest, I'm not 100% sure I would have done it if I had.

Obviously it is the dream that 98.7% of us let ourselves think about at some point and, trust me, I would LOVE to see every one of us open up and be a huge success... but at the same time, there are threads on HBT all the time about "I'm going pro" and they don't realize the massive amount of work that is required in doing so.

I'm not remotely trying to scare anyone out of it or saying they can't achieve it... I'm trying to make sure folks are educated about what they are likely going to face so they don't make the same mistakes we made (having to replace all sorts of equip, etc).

(ps. I don't think anyone was specifically accusing me of being a parade-pisser)