How much does it cost to brew at the 3bbl level?

Well, I've reached that point in a young girl's life when she starts daydreaming about opening her own brewery...

I'm sitting here looking at 3bbl systems on the web, and wondering what the costs would be in brewing a 3bbl batch. I currently spend about $30 to brew 5 gallons AG.

About how much grain would you need for 3 barrels? How many hops? And does the cost of cleaning and sanitizing get pretty high at that point?

Just fun to think about....

Well

scale everything up by a factor 18.6 and you will know how much of everything you will need.

Most people will tell you that a three barrel system is too small to bother with on a commercial scale.

One thing to consider to is the legal requirements for your locality. I was surprised to find that in California to get a license to run a brew pub, you have to have a minimum 7bbl system and have to brew a minimum of 100bl/year and a can not exceed some thing like 15,000bl/year.

Not that I run or plan on running a brewery, but I like to day dream too.

Bsquared said:

One thing to consider to is the legal requirements for your locality. I was surprised to find that in California to get a license to run a brew pub, you have to have a minimum 7bbl system and have to brew a minimum of 100bl/year and a can not exceed some thing like 15,000bl/year.

Not that I run or plan on running a brewery, but I like to day dream too.

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where'd that minimum come from? I think there's a place in town that plans on installing a 2-3 bbl system. He knows his stuff, too, so I can't imaginw that he'd be wrong...

Ouch, a minimum quantitiy would suck! And yeah, I'm sure it doesn't make sense to brew 3bbl's commercially, unless you charge a lot... I wouldn't want to be a "commercial" brewery, though. I envision something more like a neighborhood bakery, where I brew whatever the heck I feel like making, without worrying too much about making each batch exactly the same each time, and people who are interested in unusual beer can stop by and pick up a few bottles. Very low-key. I wouldn't want to *lose* money on each bottle, though, so I'm curious how much I'd have to charge to cover the cost of the consumables and packaging and still make a little profit.

Search "nanobrewery" or "nanobrewing". You might find a few threads on the subject.

carnevoodoo said:

where'd that minimum come from? I think there's a place in town that plans on installing a 2-3 bbl system. He knows his stuff, too, so I can't imaginw that he'd be wrong...

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I'm sure could be wrong, and any one who is in the process of actually opening a brew pub, must have better idea then me about this stuff. I was doing a quick search to see what requirements in California where and came across this, but the current laws might be different and from where I found this was not the ABC, but i could not find much there. I think if I where going to open a brew pub the first thing I would do is find a lawyer that works for beer.

:

(a) A brewpub-restaurant license is an on-sale retail
license which may be issued to a bona fide public eating place, as
defined in Section 23038. The licensed premises shall have a minimum
seven-barrel brewing capacity, and the licensee shall produce not
less than 100 barrels nor more than 5,000 barrels of beer annually on
the licensed premises. The license authorizes the sale of beer,
wine, and distilled spirits for consumption on the premises, and the
sale of beer produced by the brewpub-restaurant licensee for
consumption on the premises. The license also authorizes the sale of
beer produced by the licensed brewpub-restaurant licensee to a
licensed beer and wine wholesaler, subject to the requirements of
Chapter 12 (commencing with Section 25000). A brewpub-restaurant
license does not authorize the sale, furnishing, or exchange of any
alcoholic beverages with any other brewpub-restaurant licensee or any
retail licensee in California.
(b) A brewpub-restaurant licensee shall purchase all beer, wine,
or distilled spirits for sale on the licensed premises from a
licensed wholesaler or winegrower, except for the beer produced by
the brewpub-restaurant licensee on the licensed premises.
(c) A brewpub-restaurant licensee shall offer for sale on the
licensed premises canned, bottled, or draft beer commercially
available from licensed wholesalers.
(d) The fee for an original brewpub-restaurant license shall be
the same as that specified in Section 23954.5 for an original on-sale
general license.
(e) The annual license fee for a brewpub-restaurant license shall
be the same as that for an on-sale general license.
(f) The limitations provided in Section 23816 on the number of
licensed premises shall not apply to a brewpub-restaurant licensee.

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Hey there. I'm a lawyer with my own licensed and bonded brewery in my garage with a 1bbl brewhouse. I've been legal and selling as a nanobrewer for over a year and a half. There's no legal minimum amount or minimum sized equipment.

In terms of cost of a 3 bbl batch of beer, wholesale grain prices are around $0.70 a pound and hops are $14.20 a pound. A hypothetical respectful 3 bbl batch would have a grain bill of about 150 lbs of grain and roughly 3 lbs of hops. That's $147.60 in materials. Then figure in the cost of running the system (utilities, etc.) and the brewer's time and whatnot. A slightly high estimate would be that you could produce 3 bbl of beer for about $200 - $250.

Awesome, thanks Gordie! I was reading your thread earlier today, awesome stuff! And thanks for the numbers, this'll give me something to play with when I'm daydreaming.

wholesale grain prices are around $0.70 a pound and hops are $14.20 a pound

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Guh? I can get both cheaper than that and I don't pay wholesale. My LHBS will sell me a 50# bag for $38, and if I'm willing to drive another 10-15 minutes farther, I can get one for $35. I know some guys who have a local brewery here and they say they pay a bit over $27 for a 50# bag shipped which comes out to around $0.55/pound by my calculations.

weirdboy said:

Guh? I can get both cheaper than that and I don't pay wholesale. My LHBS will sell me a 50# bag for $38, and if I'm willing to drive another 10-15 minutes farther, I can get one for $35. I know some guys who have a local brewery here and they say they pay a bit over $27 for a 50# bag shipped which comes out to around $0.55/pound by my calculations.

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For base malt that is true. Specialty grain costs more.

Gordie, How does your small brewery do as far as sales go?

Gordie said:

Hey there. I'm a lawyer with my own licensed and bonded brewery in my garage with a 1bbl brewhouse. I've been legal and selling as a nanobrewer for over a year and a half. There's no legal minimum amount or minimum sized equipment.

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Thanks for the Info, Is there a difference between a Brew pub, and a small brew house? I see there is a license difference. Are there different requirements?

jajabee said:

Well, I've reached that point in a young girl's life when she starts daydreaming about opening her own brewery...

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You made my day.

Bsquared said:

Thanks for the Info, Is there a difference between a Brew pub, and a small brew house? I see there is a license difference. Are there different requirements?

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Brewpubs serve food.

Bsquared said:

The license authorizes the sale of beer,
wine, and distilled spirits for consumption on the premises, and the
sale of beer produced by the brewpub-restaurant licensee for
consumption on the premises.

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A brewpub's beer must be consumed on the premises. A brewery would be able to distribute the beer it produces.

ReeseAllen said:

Brewpubs serve food.

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I mean the legal differences.

Hey there. Yeah, $0.70 a lb for grain is kind of a blended average. The Pilsner malt I use is $0.63 and the Maris Otter is $0.72. Some Breiss stuff is less and the suppliers vary. Go to http://brewerssupplygroup.com/ and call the most local distribution center and ask them to send you a price list.

Bsquared - In California the license you would need for a small brewery, brew pub or taproom is the same. A Type 23 license lets you brew up to 80,000 bbl, and operate a tap room or brewpub on the premises. There's more licensing and regulations and whatnot if you're going to be serving food and everything but the alcohol license is the same.

Hey Skins Brew. Sales are good. In fact, all my beer has been sold or allocated before I've released it. I'm thinking about raising prices. I don't have an inventory and because of my size and the fact that I'm personally selling, delivering and whatnot, everyone has been cool with cash on delivery. My biggest problem is I don't have the time (and fermentor space) to make more beer... and I also run into the issue of "well, should I tap that for something to drink in-house or should I sell it..." and I've been running out of beer at home. I'm thinking I'm going to keep a keg on tap and maybe fill growlers or something for the neighbors.

Ultimately, breweries have been around since the dawn of civilization and brewpubs since someone at the dawn of civilization got the munchies at a brewery. Its a solid business concept. The problems happen when the plan formation and execution goes off the rails. There's no one way to build and run a business, but before starting its essential to understand - comprehensively - what you want out of the business and where you're going with it.

I'm happily doing my 1 bbl thing and its working for me for the time being. The program I'm running wouldn't work for most people. It will never allow me to quit my day job but it isn't intended to. I'm cash-positive and running a small business out of my garage is better for my soul than spending that time playing World of Warcraft (been there... had an intervention and had to go...). You can't drink World of Warcraft. I'm running a specific game plan and I've avoided getting ahead of myself, spending to much or basically diverting from what I thought originally was a good idea. I'm going to run this plan for at least another year and then think of what other options are out there. In the meantime, I'm making a profit, hanging out with some truly great folks in the beer business and learning a lot about being an entrepreneur while still being able to spend a lot of time at home with my family. For the time being, that works for me - its actually what I intended to do when I started thinking about all this. If you're going to travel down this road - think about where you want to end up when the pieces are in place and you're doing the day to day after building the program that you want to run. Then walk it all backwards and figure out how you should start. You can absolutely make it work, it just takes time, sweat, and proper planning.

This is great to read, Gordie. It's not easy finding someone with actual experience doing the nanobrewing thing.

So I crunched some imaginary numbers last night, and figured that a 3bbl batch, bottled, would cost about $500 in consumables (including bottles, and yes, I know bottles are a PITA). At a whopping $10 per six pack, and about 130 six packs, that'd mean I'd sell the 3bbls for about $1200 (after I took a few cases for myself, of course! ). That's not much of a "profit" (in quotes because of course that's not really a profit at all, with equipment costs and labor).

However, if I sold the same 3bbls in 22oz bombers... I've seen plenty of bomber-only breweries charging $8-$10 a bottle. I'm sure we all have, right? And this would be very unique, small-batch stuff I'd be brewing, exactly the kind of thing beer snobs are always hunting for.

So yeah, if I'm doing the math right, the same 3bbls in bombers would be 500 bottles (again keeping some for myself), which at $8 a bottle would be $4000! Which would be a very healthy profit off $500 in consumables (which might be even less with half the number of bottles, caps, and labels needed).

Am I right? Cause that sounds pretty darn sweet!

where in LA do you get a 50# bag for $38 and $35?

jajabee....WILL YOU MARRY ME?????

Just a curious question....

Haha, I don't think my husband would approve, he wants to keep me around for all the free beer!

So yeah, what do you guys think.... 3bbl batches for about $500 in consumables, resulting in about 500 22oz bombers, sold at $8 each... meaning $3500 profit each batch? Am I missing something there? Cause that makes it sound like I could recoup my rent and equipment costs pretty quick.

jajabee said:

This is great to read, Gordie. It's not easy finding someone with actual experience doing the nanobrewing thing.

So I crunched some imaginary numbers last night, and figured that a 3bbl batch, bottled, would cost about $500 in consumables (including bottles, and yes, I know bottles are a PITA). At a whopping $10 per six pack, and about 130 six packs, that'd mean I'd sell the 3bbls for about $1200 (after I took a few cases for myself, of course! ). That's not much of a "profit" (in quotes because of course that's not really a profit at all, with equipment costs and labor).

However, if I sold the same 3bbls in 22oz bombers... I've seen plenty of bomber-only breweries charging $8-$10 a bottle. I'm sure we all have, right? And this would be very unique, small-batch stuff I'd be brewing, exactly the kind of thing beer snobs are always hunting for.

So yeah, if I'm doing the math right, the same 3bbls in bombers would be 500 bottles (again keeping some for myself), which at $8 a bottle would be $4000! Which would be a very healthy profit off $500 in consumables (which might be even less with half the number of bottles, caps, and labels needed).

Am I right? Cause that sounds pretty darn sweet!

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Oh I don't know if you could sell your beer for that much initially unless people knew you had a good product. Also remember that bottling is probably not a good way to go from the start. If your going to do it by hand it will take a lot of time and your quality will suffer. If your going to buy a bottling machine figure a minimum of $15K for a used machine. Nanobrewery is a cool idea just remember that you wont be able to do it as your day job for some time.

EDIT: I did find some table top bottlers that are fairly cheap, but again for most Kegging is the easiest and the cheapest initially. If you are really going to make a go at this i would find a niche market like lagers or something, do something that most breweries aren't doing.

So yeah, what do you guys think.... 3bbl batches for about $500 in consumables, resulting in about 500 22oz bombers, sold at $8 each... meaning $3500 profit each batch? Am I missing something there? Cause that makes it sound like I could recoup my rent and equipment costs pretty quick.

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If you live in a three tier system state like I do (TX) take a look at the hole sale price pro brewers get from the distributor.

http://www.probrewer.com/vbulletin/showthread.php?t=12962
Don't give up

Cheers,
ClaudiusB

Don't forget taxes (fedreal, state, local), your time, utility bills, if bottling the bottles, if kegging the kegs, etc etc etc.

And licensing costs, and inspections, etc.

jajabee said:

Haha, I don't think my husband would approve, he wants to keep me around for all the free beer!

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Damn. He beat me to it. Well, just make sure that your husband knows how lucky he is.

I agree with the above post that it will be tough to sell a 22 oz growler for $8. I wouldn't buy it for that much unless someone had told me that it was awesome. I agree that you should start off a little cheaper until you get the word out. But like someone above me said, don't give up!!!

Yes by no means give up, but do realize that there is a lot more than you have thought of, most likely you'll be lucky if you even make a profit at first but if you have a good product and get the word out you can make it work for you. The brewery in my home town that started a year ago just got to the point where they could pay their brewer, I don't think they are making a profit yet but they are starting to make enough money to pay employees and upgrade equipment. All of the owners still have day jobs, you will most likely have to do the same unless you have a significant other that can bring home the bacon while you are growing. I think you really have to start out small if you can, I'm not saying barrel size per say, but try to buy most of your equipment with cash to start, I see far too many brewers get into huge debt and with the likelihood that it will take a year or more to turn a profit they cant make their payments. Seems that most brewers make it by having a brewpub, I'm not too hot on the idea of running and owning a restaurant as well but if you can find a partner that wants to take on that side it's a good idea.

Cool, yeah, thanks everyone, I'm definitely being super realistic about what I can handle. I'm incredibly lucky to have a significant other who can "bring home the bacon", though. We've taken turns being the sole provider over the last 5 years, and right now it's my turn to slack off. So I don't have a ton of money, but I do have a lot of time.

Right now what sounds like the best for me is trying to do a detached-garage brewery at home, like Gordie. That'd take the pressure off to turn a profit to cover rent every month. Thing is, I have no idea how to find out if that's legal in Oregon, or if the houses we'd be interested in buying are zoned to have a nanobrewery on the land. That'd be a pretty crucial step, I think.

If we do end up in a house where it's legal, I think I can handle the rest, since it's still really similar to homebrewing at that level. I'd need to find bigger versions of everything and add a few pieces like a pump and a plate chiller, and of course deal with much bigger power and water consumption, but putting together the equipment is one of my favorite parts of the process.

And yeah, I'd do some more research on the price... I think if I can use my own residential land as a brewery, I still won't be able to sell the bottles on-site, so I'd need to be able to work with some of the funky local bottle shops or something. I wonder what the laws are on self-distributing in Portland....

This is a ton of fun to think about, if nothing else.

Ah so your in Oregon, that helps. Check these guys out Heater Allen and these guys Seven Brides Brewing I know Jeff at Seven Brides and I bet if you gave him a call he would be more than willing to help you out with any questions you may have. Both of these breweries are small, Heater Allen I believe still works on their own property and Seven Brides did until they expanded, they used to work out of a shed next to their house. You can do it in Oregon, just talk to these guys.

Also call you local zoning board and check with them. To me getting over that local zoning and convincing the town/city that a commercial brewery (regardless of size) is a good thing to have in a residential neighborhood is the biggest hurdle.

Edit:
PS: Like Farm stated, it has been done in Oregon before, so it's possible.

Oh man, thanks, this is good to know!

This is such a fun thread to read compared to all the other start-up threads. Usually they are doom & gloom within the first 3 posts. But I see sunshine and puppy dogs in here!!

well most of us in here are serious about starting a brewery at some point so where trying to be positive, it's hard work but it can be done.

Since we're talking about it, can someone demystify the distribution law in Oregon for me? I thought Oregon had a three tier system but looking at the OLCC law it looks like you can self distribute as a brewery and self distribute as a brewpub as long as your production is under 1000bbl. Am I reading that right, if you where to have a restaurant attached to a brewery could you have them be separate businesses so you could self distribute after 1000bbl?

Hehe, I like this thread too.

So we're looking to buy a house where I can do this sort of thing, and in the meantime I'm going to keep working on my homebrew and start to upgrade my equipment bit by bit. I don't have a pump or a plate chiller yet, and of course I'd need them for the 3bbl setup. What would you guys think about using the standard march pump/therminator type setup on something that big? Should I be looking at bigger pumps/chillers, or are the homebrew level pieces still useful at the 3bbl level?

I would think the smaller plate chiller would be really inefficient. There are bigger ones that aren't name brand plate chillers out there and they are much less expensive. Otherwise, I think you'd be ok. I'd probably get a slightly bigger pump, too, but I think a standard pump could handle it depending on how often you plan on brewing.

Hmm, yeah... I'm thinking maybe one of these: http://www.dudadiesel.com/choose_item.php?id=he30m It looks bigger than the Therminator, but is it too big for the 5gal batches I'm doing now?

For the pumps, I have no idea what's slightly bigger than the usual March pump they sell on the beer sites... my Google-fu is weak when it comes to industrial grade equipment.