Who REALLY wants to sell their homebrew.

I was thinking about a business idea and thought I'd run it past the brewers here.

There are a lot of great threads from the HBTer's who have gone nano-commercial. I was wondering how many of the brewers here would actually put up the money to make a beer if they were responsible for really selling it?

In California there is an exemption to the three tier distribution system for breweries and wineries. Which means, the brewer can directly sell to the public and distribute to retailers.

So, a small brewery could set up a program where you, the homebrewer could use their equipment to brew your own recipe and design a label. The brewery would submit your label to TTB and be responsible for the excise on the volume you brew (of course, this would be covered in the fee you pay for the service.) Then, when your beer is finished you are responsible for selling it to friends, neighbors, the beer store down the street or the local bar.

The brewery would get some assistance in paying their overhead, they'd have to run your receivables and then, since you've paid your fees for brewing, labels, taxes etc. up front they'd pass on 90% commission or whatever the rate would be. On their books you'd look just like a contract salesman and a volunteer brewer.

Essentially, you'd be running your own virtual brewery on a pico-scale with the brewery interfacing with the gov't, paying the taxes etc.

There are obviously some details to be worked out like keg deposits, cost structure etc. but I believe there are a number of winery private labels or incubators that do something like this already.

So, are there people here who would be interested?

I like the idea very much, and actually, I recently had a conversation with an acquaintance in which we discussed a very similar idea. Rather than discussing the packaging brewery aspect of it, however, we got into the concept of how it would function as some sort of brewpub/foodcourt... Like an indoor beer garden with different sections of the garden that were specific to each "nanobrewery."

I'm sure there would be people on HBT who would be interested in pursuing something like this in California. I however, live in Washington, and spend so much money on my hobby that I don't have any extra to invest in furthering this virtual brewery concept!

Cheers and good luck!

It sounds like an ideal situation to overhead the capital needed to open your own brewery to see if you could really sell your beer.

So the owner of the business would be taking on just about all of the liability. I think there has to be a legal partnership established between the brewery and the 3rd party. If the exemption says the brewery can sell, why would that include some other party? It's almost like that other party is acting as your distributor.

there are a few breweries out there that already do something like this. some breweries dont brew their own beer (so i guess they arent breweries...) and just contract the actual brewing out to an actual brewery. others obviously do the contract brewing for those companies.

some people dont consider the beer to really be theirs since they dont actually brew it themselves. a recipe is just a recipe. a lot more goes into the beer than just that. granted, if you were simply using their space/equipment, then sure, but i havent seen any companies that do that.

i do agree that if you wanted to test the waters, it wouldnt be a half bad idea. ive considered doing it once my bar got underway and proved stable or not.

Sounds somewhat like a contract brewery.

I've dreamed about a brewpub or good beer restaurant and if I went the restaurant way I'd definitely get a few recipes contract brewed.

However, notice that all the establishments that use contract brewing to get the product call themselves "brewpubs" or at least have their own liquor license. I'm trying to figure out exactly what you'd call someone who brews their beer at a brewery but then sells it to a drinking establishment. They're not contract brewers nor the customer of contract brewing. They are distributors.

I think you'd have to join the main company as a partner in an LLP.

Bobby_M said:

I think you'd have to join the main company as a partner in an LLP.

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No, they are salesmen, the retailers would all be paying the brewery directly for the beer, not the person who paid to be brewer for a day. There is no reason a salesman for a business has to be an LLP or hold any other ownership role. Think of it like the pro-am brew competitions, the amateur brewers aren't paid to brew and the beer is sold by the brewery/brewpub right? So there should be no problem for the amateur brewer to also be a commission-only salesman.

ETA: Sorry Bobby, I thought you were referring to my idea didn't realize the thread had gotten a bit off topic.

mmb said:

Sounds somewhat like a contract brewery.

I've dreamed about a brewpub or good beer restaurant and if I went the restaurant way I'd definitely get a few recipes contract brewed.

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If you open a brewpub a contract brewery would be one way though personally I'd really want to be the brewer too. This, however is not a contract brewery as you would have to use a label that the brewery owned and you wouldn't be responsible for accounts receivable etc. It's more like a vanity print in the publication world.

dasBuhbuh said:

granted, if you were simply using their space/equipment, then sure, but i havent seen any companies that do that.

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The fact that no one does this is the reason for the thread. I am trying to see what people who have REALLY good recipes think of this as a service they might use.

From how I've seen "contract" brewing done in Michigan, a distributor still has to buy and sell the beer to the restaurant.

Of course, distribution rules are different in every state...

mmb said:

From how I've seen "contract" brewing done in Michigan, a distributor still has to buy and sell the beer to the restaurant.

Of course, distribution rules are different in every state...

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Exactly. THIS IS NOT A CONTRACT BREW BUSINESS. Sorry for yelling, I hope that was clear.

I was replying to a previous post... Untwist thy nickers...

If you could get the "customer" on as a contract salesman working for commission for specific brands/labels then the process *might* clear regulatory hurdles in CA. Unfortunately, that gets into the whole employee vs. contractor issue for employment taxes and things of that nature. I know there are lawyers that only deal with alcohol regulations... might want to sound one out if your serous about it.

Could be fun.

mmb said:

I was replying to a previous post... Untwist thy nickers...

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I apologize. To which post were you replying so that I may follow your line of reasoning?

I think your biggest obstacles would be making good beer from untested recipes and the market of a one-off type of beer without any sort of promotion or hype. A good brewery does well for themselves based on reputation, marketing, and distribution. These beers would be made and nobody would know if it was good and nobody would be clamoring to pick it up and you'd have some guy come in with a recipe that is just average, and you end up sitting on case upon case of crappy beer.

I know from experience that most homebrewed beer and recipes are just average and you'd likely have quite a few duds. You'd have to have a careful selection process to make it work, and even then I think it is still a giant risk.

carnevoodoo said:

I think your biggest obstacles would be making good beer from untested recipes and the market of a one-off type of beer without any sort of promotion or hype. A good brewery does well for themselves based on reputation, marketing, and distribution. These beers would be made and nobody would know if it was good and nobody would be clamoring to pick it up and you'd have some guy come in with a recipe that is just average, and you end up sitting on case upon case of crappy beer.

I know from experience that most homebrewed beer and recipes are just average and you'd likely have quite a few duds. You'd have to have a careful selection process to make it work, and even then I think it is still a giant risk.

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I agree that the biggest obstacle to the brewer would be creating a market. However; as the brewer is taking all the risk in buying ingredients and selling the beer I don't think the brewery would be taking a risk at all. Certainly for the brewer it would be less of a risk than buying a commercial brewing setup, getting a liquor license, leasing a location, getting business licenses, putting up a bond, and then getting health department approval. These are all the things the "incubator brewery" could do as a service.

I also think you're just arguing semantics on a contract brewery. But that's just how I see it.

If you're really intersted in what it would take you may want to contract Brian Boak, he started as a homebrewer in NJ , now has gone commercial. I believe he has his beer brewed at a local brewery. It's very good beer...
http://www.boaksbeer.com/index.php#...ls you where it's brewed...High Point Brewery

It's an interesting concept and I now understand that you're not talking about a traditional contract brewing situation. If you ran the facility and took on the full legal/licensing obligation, those customer/salespeople would be marketing your beer, not theirs. If there's a quality problem/recall, it's on you, the legal entity. Is there some kind of loophole?

I agree with reaching out to Brian Boak, though it's not 100% clear what the arrangement is: http://hbd.org/mbas/pdf/oct08.pdf

I would be very interested in using this type of service. Does anyone know if it is available in California at this time?

dantodd said:

The fact that no one does this is the reason for the thread. I am trying to see what people who have REALLY good recipes think of this as a service they might use.

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I think that's the problem right there. Many homebrewers can make great beer. Once. Can you repeat all of the variables over and over and over again to make a consistent product? I know I can't.

The recipe is the smallest of the variables - it's all about mash temps, pitch counts, fermentation temps, etc. etc.

And at our scale (5-10 gallons at a time) it's hard to achieve really consistent results.

We can still make great beer. Yes. Can we repeat that at our scale? Maybe, maybe not.