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audger said:
to all of those people brewing in used stainless barrels commercially (not just private home brew)- how are you getting around the fact that reconditioned/used barrels are NOT FDA approved for food use?

is there a recertification process of some sort? or do inspectors just not check for this? or...?

i ask because my friends have been talking about starting a nano, and i was looking at using these barrels up until i noticed they arent approved for food use. CT state health department confirmed that used barrels are no good to brew in (commercially).
Click to expand...

I'm interested in this too as I'm looking to start collecting equipment for a nano.
 
audger said:
to all of those people brewing in used stainless barrels commercially (not just private home brew)- how are you getting around the fact that reconditioned/used barrels are NOT FDA approved for food use?

is there a recertification process of some sort? or do inspectors just not check for this? or...?

i ask because my friends have been talking about starting a nano, and i was looking at using these barrels up until i noticed they arent approved for food use. CT state health department confirmed that used barrels are no good to brew in (commercially).
Click to expand...

The answer is ..... it depends. It gets complicated.

Somebody called BS that you can't use refurbished kegs. OK, in theory you can, BUT you have to jump through hoops to do it legally. Try all you want, you can't easily call BS on an FDA or state health inspector, even if he is technically WRONG. They usually win, I KNOW from experience.

The BIG concern with reman/refurb drums is what was in them previously.

FDA Food Sanitation Rule (PDF here) states:
7-203.11 Poisonous or Toxic Material Containers.*
A container previously used to store poisonous or toxic materials may not be used to store, transport, or dispense food.

How do you know what was stored in these refurb. containers in a former life? Maybe a drum contained a carcinogenic chemical, or a beer keg was used as a gas tank on a dune buggy!!This is just one reason why the refurb/recond companies make the disclaimer that they are not FDA approved. If they could prove content documentation, then the refurb company needs to follow an ANSI certification program:

4-205.10 Food Equipment, Certification and Classification.
Food equipment that is certified or classified for sanitation by an American National Standards Institute (ANSI)-accredited
certification program will be deemed to comply with Parts 4-1 and 4-2 of this chapter.

A couple of other sections specifically pertinent to brewing:

This is why tri-clamp fittings are used in commercial operations:
4-202.13 "V" Threads, Use Limitation.
Except for hot oil cooking or filtering equipment, "V" type threads may not be used on food-contact surfaces.

Copper:
4-101.14 Copper, Use Limitation.*
(A) Except as specified in ¶ (B) of this section, copper and copper alloys such as brass may not be used in contact with a food
that has a pH below 6 such as vinegar, fruit juice, or wine or for a fitting or tubing installed between a backflow prevention
device and a carbonator.
(B) Copper and copper alloys may be used in contact with beer brewing ingredients that have a pH below 6 in the
prefermentation and fermentation steps of a beer brewing operation such as a brewpub or microbrewery.


Can you work around all of this to use refurb stuff? MAYBE - it depends on:
1) Your skill in navigating the applicable codes
2) Your credibility with an FDA inspector (i.e. your industry experience, you know what you are talking about)
3) Your ability to write and execute a HAACP (Hazard Analysis And Critical Control Points) Plan

If you can do the above then you can file for a waiver to use unapproved material, or do ANYTHING you want to IF you can get them to sign off (Note item C below specifically). You could brew in toilets and ferment in used septic tanks if they sign off!!!:

8-103.10 Modifications and Waivers.
(A) The Department may grant a variance from requirements of this Code as follows:
(1) Where it is demonstrated to the satisfaction of the Department that strict compliance with the rule would be highly
burdensome or impractical due to special condition or cause;
(2) Where the public or private interest in the granting of the variance is found by the Department to clearly outweigh
the interest of the application of uniform rules; and
(3) Where such alternative measures are provided which in the opinion of the Department will provide adequate public
health and safety protection.
(B) Such variance authority is not conferred upon any Local Public Health Authority notwithstanding contractual authority in
administration and enforcement of the food service statutes and rules;
(C) The applicant must include all necessary information to support the variance request, which may include, but is not
limited to, required testing, challenge data and research results;

Unfortunately, different inspectors will allow different things, based on their knowledge, expertise, workload, how much they like you, and whether they got laid in the past week. It's somewhat subjective, not always cut and dry technical facts. In the end, it's usually cheaper to buy approved equipment unless you have a unique, one of a kind process.

Disclaimer - I have 20 years experience in dealing with the FDA in Dairy processing equipment and systems. For Dairy, there is a document called the Pasteurized Milk Ordinance which tries to spell out extremely detailed requirements, but still leaves room for interpretation. Brewing is not nearly as regulated as dairy, but I have never worked with the FDA in brewing. It's certainly NOT a priority for FDA to audit breweries - beer does not encourage pathogen growth the way milk does, 90% of FDA's concerns.
 
In the barrel (drum) industry there isn't anyone that I know of that rectifies drums for food use. Many people selling barrels make statements like: "304 food grade stainless" A true statement, but one I try to stay away from.

90% of the used stainless drums on the market are closed head. It's impossible to be certain that a closed head drum is clean. Open head drums are pretty easy to get clean, but they are much more rare because the companies that buy them typically use them forever. The open heads I have were made in the late 80s and early 90s.

That being said I don't think the typical inspector would know if the drums were used or not. Who is to say where that scratch came from.
 
Bubbasbarrels said:
That being said I don't think the typical inspector would know if the drums were used or not. Who is to say where that scratch came from.
Click to expand...

I completely agree. Most inspectors look at the big picture, who you are, what you know, do you appear to have your act together,and sign off without digging. But there's a small percentage (usually the ones who DON'T understand the industry, or are just plain an*l) that dig, dig, dig and nitpick until they find *something* wrong, saying "it's my JOB to find something wrong." In this case, demanding "brewing system FDA/ANSI certification" documentation.

These are the ones that will shut you down for using unapproved equipment. Only the person building and operating the system can decide if it's worth that risk....
 
Zoid said:
I completely agree. Most inspectors look at the big picture, who you are, what you know, do you appear to have your act together,and sign off without digging. But there's a small percentage (usually the ones who DON'T understand the industry, or are just plain an*l) that dig, dig, dig and nitpick until they find *something* wrong, saying "it's my JOB to find something wrong." In this case, demanding "brewing system FDA/ANSI certification" documentation.

These are the ones that will shut you down for using unapproved equipment. Only the person building and operating the system can decide if it's worth that risk....
Click to expand...


I'm pretty sure I've said this but if I haven't....

I'm a mechanical engineer in the food industry. I have been for about 8 years now. I 100% agree with the information that others have been bringing forward. I could technically get shut down by the FDA if they wanted to, much like every other food manufacturer in the US. I will not be in this system long ( I hope.... target is 6-9 months). There have been many others that have done the same thing in CO. I think that's all I'm going to say....
 
Ok I'm gonna talk about the elephant in the room. You say that you are only gonna be in this system for the short term. I'm in a similar situation. Can u make enough money at a 1.5 bbl
to get you into a bigger system? Right now I'm trying to decide if I want to go nano with the knowledge that I'll go bigger in the near future, or do I save the money on a small system, brew on my home rig and use that system to lure investors to dive all in with a 10 a 20 bbl system.

The more
I think about it, the more I'm having trouble justifying spending the money on a system that I'll outgrow in short time. Have you thought about the same?
 
geniz said:
Ok I'm gonna talk about the elephant in the room. You say that you are only gonna be in this system for the short term. I'm in a similar situation. Can u make enough money at a 1.5 bbl
to get you into a bigger system? Right now I'm trying to decide if I want to go nano with the knowledge that I'll go bigger in the near future, or do I save the money on a small system, brew on my home rig and use that system to lure investors to dive all in with a 10 a 20 bbl system.

The more
I think about it, the more I'm having trouble justifying spending the money on a system that I'll outgrow in short time. Have you thought about the same?
Click to expand...

I have an excel spreadsheet that shows income and cost blah blah. You can DEFINITELY make enough money. It depends on loans you need and rent for sure, so you need to work it out for your situation, but lets just say that at half capacity (20 kegs/month) minus all my costs, I'm making close to what I started at coming out of college as a Mech E .... After income taxes.

EDIT: 8 kegs/month .. I break even. I talked to another super small guy in Denver in a horrible spot and he said he was selling 10-12 BBLs a month. JFYI.

I repeat!!! It depends on your situation. I'm a one man show, going into what is considered a VERY small commercial space and taking out very little in loans. I'm making this happen on close to nothing. Watching some of these micros open up in Denver is mind boggling. They must have spent upwards of $300k (if not a **** load more) and their loan payment makes me cringe....

I say start small and grow slowly. The beer/micro market in denver is booming, and when the ball drops (think housing market), the little guy with the kick ass P&L is gonna be the guy that survives..

Dogfish is a great example of someone that grew too fast and realized it.

Good luck man!
 
Good point. Great thread
I'm still too early in the game and I'm still learning.
I've made business plans and projections and ive learned that you can drive yourself crazy with the minutia

Georgia is clearly different than Colorado and I am envious of your situation.
I'm gonna continue to follow your story and learn what I can. Thx
 
Ok thanks for this. It looks like you can make a profit with your situation.

Here is mine.

First startup costs:


Brewery Start Up Costs


Tankless Water heater 1,500.00
Installation: 1,000.00

Walk In Cooler 4,000.00
Installation: 1,000.00

Fermentation Room 1,000.00
AC Unit 500.00

Vent Hood 3,000.00
Intallation 1,000.00

Trench drains 2,000.00

Brew stand 500.00
MT 900.00
BK 900.00
Pump 200.00
Therminator 175.00
Grain Mill 400.00
Scale 200.00

Fermentor X 4 1,600.00
Brite Tank X3 800.00

CO2 system 1,000.00
O2 system 1,000.00

Kegs 5,000.00
Misc Hardware 1,000.00


Ingredients 1,000.00

Insurance 1,500.00
Licensing/Legal/Acct 2,000.00
6 mths rent 9,000.00



Total: 42,175.00
 
Next cost of production and profit on a per sixtel basis with GA distribution system for two base beers:

Blonde Ale 40 gallons
Total: $152.45
Cost/sixer: $19.06

Pale Ale 40 gallons
Total: $171.12
Cost/sixer: $21.39

Wholesale cost of 1/6 barrel $60.00
30% gross distributor fee: $18.00

Net to Brewery $42.00

Net Profit Pale Ale $20.61
Net Profit Blonde Ale $22.94
 
geniz said:
Next cost of production and profit on a per sixtel basis with GA distribution system for two base beers:

Blonde Ale 40 gallons
Total: $152.45
Cost/sixer: $19.06

Pale Ale 40 gallons
Total: $171.12
Cost/sixer: $21.39

Wholesale cost of 1/6 barrel $60.00
30% gross distributor fee: $18.00

Net to Brewery $42.00

Net Profit Pale Ale $20.61
Net Profit Blonde Ale $22.94
Click to expand...

This right here is why its soooo much easier for the little guy to sell his own beer in a tasting room rather than to try to sell it to bars. If I were trying to sell kegs to customers instead of having my own tasting room.... I would NOT be going the 1.5 BBL route, that is for sure.
 
Lets round this profit down to $20/sixer net profit

At full capacity of 128 sixers per month, that is a gross profit of $2560/month before expenses.

Having to go thru a distributor kills all the profit compared to your business model
 
geniz said:
Lets round this profit down to $20/sixer net profit

At full capacity of 128 sixers per month, that is a gross profit of $2560/month before expenses.

Having to go thru a distributor kills all the profit compared to your business model
Click to expand...

Yeah, self distribution in CO is a HUGE benefit for sure. $2560/month is still more than the average american. Can't ***** too much :p
 
BTW, my cost estimates are very conservative. I am able to get warehouse space for much less than projected, and the landlord remodels restaurants so that coolers can be had at next to nothing etc, but still its hard to justify without being able to have direct sales or self distribution.
 
If i'm missing something, please let me know. BTW Cruelkix, I didn't mean to hijack the your thread. You really are helping me figure this out
 
Cruelkix - I was just looking at your costs and was wondering if you had considered the items below. I know you had the Miscellaneous 500 so maybe its covered there...

What will you serve your beer in? If glass you will need to clean them, if plastic you will need to purchase cups. Factor in that glassware will be broken and maybe stolen.

Are you the only employee? What if you're unable to work at times? Will you have a bartender? A janitor to clean the facilities? Floors, windows, wipe tables, clean bathrooms? What happens when someone spills?

Are you going to have TVs? Do you need to pay cable/satellite service?

Will you do growler fills? Those will need to be billed at a separate rate.

How often do you think you'll lose a batch?

If you change the price of your beer will your demand/volume change? Will you have a happy hour or any other promotions?
 
The only thing on that spread sheet i can prob see that might be an issue is the fact is ur still going to be brewing the beer so if u went from a 20 keg month to a 8 keg month. Then cost of supplies and such would still be there. But hey id think about the paycut to do it if i could.
 
:off: Kinda

All you guys that started with 55 gallon drum systems or the 1.5 BBl systems.

If you did it all over again would you go bigger if you could have? Do you wish you held off, stacked a few more bucks away and went for the 2 or 3 BBL?

As I read this thread and get caught up in it. I wonder if just stepping up to that next level would be a better option. If it was feasible....Just pondering.....

Cheers
Jay
 
I am not a professional brewer. I am not an expert by any means. However, I am close friends with and converse with several professional brewers and every one of them have imparted the advice to me that you want to start on at least a 3-5 bbl scale for a tasting room/brewpub scale. 7/20 bbl scale for a standalone kegging/bottling facility. The reasoning behind these specific numbers is that if your business catches on, you will have time enough to plan your next expansion as your business grows. If your business does not catch on, you are not invested so far in over your head you will not be selling blood & semen until your 70th birthday to pay off your negative loans. Again, this isn't my advice, just what has been passed onto me.
 
Jaybird said:
:off: Kinda

All you guys that started with 55 gallon drum systems or the 1.5 BBl systems.

If you did it all over again would you go bigger if you could have? Do you wish you held off, stacked a few more bucks away and went for the 2 or 3 BBL?

As I read this thread and get caught up in it. I wonder if just stepping up to that next level would be a better option. If it was feasible....Just pondering.....

Cheers
Jay
Click to expand...

I'll let you know when I know haha. But my thinking is that this gets me into the business with VERY little up front cash. If you look a the number of people I will need to get into the place every night at my max capacity of 40 kegs per month, for a 1300 sq ft place, its a ton of people. Even if I open up 7 days a week. If I'm selling out of beer I will have plenty of money to upgrade to the 7 BBL system I am planning for.

Just my 2 cents..
 
foodplusbeer said:
Cruelkix - I was just looking at your costs and was wondering if you had considered the items below. I know you had the Miscellaneous 500 so maybe its covered there...

What will you serve your beer in? If glass you will need to clean them, if plastic you will need to purchase cups. Factor in that glassware will be broken and maybe stolen.

Yeah, there is definitely a little bit of cost associated with this, but the majority of it is in upfront costs for glassware and sinks and such, which I have capture in start up costs. Replacement of broken glass and cleaning solutions will be the continued cost and should be relatively minor, but good catch

Are you the only employee? What if you're unable to work at times? Will you have a bartender? A janitor to clean the facilities? Floors, windows, wipe tables, clean bathrooms? What happens when someone spills?

I will initially be the only employee. My first hire will be a bartender, followed VERY shortly after by a cleaning crew, then long term a head brewmaster. Anybody spills and its my problem. State law makes you have a mop sink.

Are you going to have TVs? Do you need to pay cable/satellite service?

Initially I wasn't going to start with TV's, however, the place I'm looking at right now is very close to the football stadium, so that may change very quickly. I have some money in the RENT/Utilities for internet/cable. Internet is a must have of course.

Will you do growler fills? Those will need to be billed at a separate rate.

Good call on this one. I will be filling growlers, and yes they will be at a discounted rate ( a little, but not much). I'll have to think about how to incorporate this considering I have no idea how many it will be. I could do a percentage of pint sales I suppose.

How often do you think you'll lose a batch?

This is a good question. I have been very lucky in my brewing *knocksonwood* and hopefully I will lose maybe 1 or 2 a year, however, considering how many experimental beers I am making there is a good chance some will be straight up horrible and I'll have to dump it. Not sure on this one.Another good catch.

If you change the price of your beer will your demand/volume change? Will you have a happy hour or any other promotions?

No happy hour to start. Most people coming into a small micro brewery are not there for cheap beer. I don't think $4 vs $5 vs $6 will make to much of a difference. Dry Dock is packed with people all day everyday and a lot of there pints are like $6-$8 for high ABV stuff/special stuff.
Click to expand...

Answers in blue above. Great suggestions to think about. Thanks!
 
It seems to me that your input costs are quickly going to change. I would build those into your cost assumptions to see where you will ultimately end up. Operating as a one man show (Brewing, Serving, Cleaning, Ordering, Bookkeeping/other administrative tasks) is unsustainable.

I forgot to mention it before, but you may need a bookkeeper/tax accountant to help you out. Especially since alcohol is involved, you will need good records to determine your Tax Liability in case the IRS chooses to audit you. Also, although it may be minor with your limited equipment, you will be able to depreciate your brewing system, and many other things to save you tax dollars! Save your receipts!
 
While working in MI. for a number of months in 2010/2011 I got to experience a start up brewery get off the ground.

They took a page or two from Sam's book "Brewing Up Business". Their model seemed very similar and they started on a Sabco system brewing three brews a day 6 days a week. Now that is dedication in my book.

In the last year and a half they have made three expansions, both in the brewery and the tasting room/bar. A coworker who lives in the area and now frequents the brewery informed me they are looking for space for a production facility.

I have a suggestion in addition to a "happy hour" or growler fills that worked well for the brewery above. A mug/glass club where the club member pays say $25-$50 for their own beer vessel. What they get in return is up to you, reduced cost of a pint, members only happy hour, invitations to members only new release party's. You get the idea. This will get you some regulars who can produce a repeating monthly revenue that helps you plan for you future investments while also providing you with a group for marketing studies.

I have seen this model produce favorable results in a number of establishments. Good luck.
 
bad67z said:
While working in MI. for a number of months in 2010/2011 I got to experience a start up brewery get off the ground.

They took a page or two from Sam's book "Brewing Up Business". Their model seemed very similar and they started on a Sabco system brewing three brews a day 6 days a week. Now that is dedication in my book.

In the last year and a half they have made three expansions, both in the brewery and the tasting room/bar. A coworker who lives in the area and now frequents the brewery informed me they are looking for space for a production facility.

I have a suggestion in addition to a "happy hour" or growler fills that worked well for the brewery above. A mug/glass club where the club member pays say $25-$50 for their own beer vessel. What they get in return is up to you, reduced cost of a pint, members only happy hour, invitations to members only new release party's. You get the idea. This will get you some regulars who can produce a repeating monthly revenue that helps you plan for you future investments while also providing you with a group for marketing studies.

I have seen this model produce favorable results in a number of establishments. Good luck.
Click to expand...

Funny...
I have sold 9 $100 memberships to my brewery. Yes the one that is not built yet. I know funny right! I too am building a small system 200L with 160L and 320L fermenters and bright tanks. I figure I sell memberships to get some build capital. I will stop selling memberships when I have enough capital. I am guessing 250 for the brewery and beer bar and 250 for the winery and wine bar. Thus giving me almost $50,000 (members get 2 engraved pint glasses 1 goes home with them) in build out capital and operating capital.
I have already located the brewery tanks and fermentation and am in the final stages of securing it. Small details.....

Hay I have to say its threads like this that really helps people, like all of us who have visions of grandeur. It’s great to see such a large group of people with real life input!
Thanks for taking the time (once you open we will never see you again ....Uhhh Naked City ring a bell) to give such great detail....I will be using some of it for sure.
Cheers
Jay
 
You put 100% of the hop matter into the fermenter?


cruelkix said:
I seem to recall hearing something to the 10-15% range. Its not hard in CO to evaporate quickly if need be. :D

I'm not sure the heating elements will be on tri clover. But they will have easy disconnects from the panel. I've only seen one person that makes a tri clover to 1" pipe thread and thats Derrin and they are $70 a piece. With 6 elements ...... no thanks. I'll probably just punch holes in teh sides of the kettles like I did on my current rig. Use the gasket and a 1" SS nut. I'd rather CIP it if I can.

For chilling I think I will need a plate chiller or a CFC. I currently no chill. So it will be a switch for me. No chill will not be possible with Plastic fermenters and 35 gallons per batch. It will take days to get down to temp. If I go Plate, hops will be an issue to resolve. CFC might be the better route.

I dont seperate the hops from the wort currently. I just try my best to keep as much as possible out of the fermenter, but I don't think that will be a big deal when I get the conicals. It will settle out and I can just dump the trub. I'll get it figured out. I was thinking of using whole leaf and a big ass hop spider? Or using pellet and dealing with it being in my fermenter like I do now. My Brewery is called "High Gravity Brewing, Inc.". Hops aren't usually a problem and I've never detected any off flavors in my big bold ales.

But its stuff like this that makes test batches a necessity. I'll have 3 months of beer I can't sell....... I'm going to have to have lots of parties.
Click to expand...
 
Scottkb said:
You put 100% of the hop matter into the fermenter?
Click to expand...

I wouldn't say 100%, but a good portion of it. Never had any off flavors .... I did start using a Heat exchanger for cooling, so I've stopped letting all the hop matter leave the boil kettle so as not to clog it.
 
cruelkix said:
Dude that is pretty awesome. You should jump on that!!! I actually may have found a place last night. I was at the city getting permits for the property this morning. So far zoning is good with it .... I have a long way to go.
Click to expand...

aww what part of town? ps i'm way too lazy to be a pro brewer.
 

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