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tolren

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First of all, let me explain.
I'm 24, currently unemployed (again) and live in Croatia. For the past two years or so, I've been brewing beer at home. Got myself 50 l stainless steel kettles and a mash tun, built a 15m long wort chiller that is absolutely amazing for this sort of brewing and all that jazz.

Recently, I've been researching local laws and turns out that the taxes for small breweries have been cut by 50%. Putting all this business, tax and law stuff aside, I need some help on getting the equipment.

Unfortunately (or fortunately, depends on how you look at it), homemade kettles can't cut it here, because the inspectors are very strict about food and beverage safety.

Because of that, I have to go with a premade microbrewery system, and boy let me tell you, they are expensive.

If you guys have any advice for a guy who is getting ready to enter a fresh market with not that many players, it would be appreciated.

And, if somebody could take a look at this and tell me your thoughts on this product, it would be very appreciated.
http://www.letina.com/micro-brewery-en.pdf
 
The ability to brew good beer - while mandatory - is the least important skill in opening a brewery.

You need to be familiar with financing, budgeting, accounting, building codes, fire codes, liquor laws, salesmanship, customer service, plumbing, taxes, managing employees, marketing, electrical, and more. Do you have any prior experience running a business at all? Do you have a business plan? Do you even know how to make a business plan? Where will you get financing? When do you expect to be bringing in enough revenue to begin paying back your loans, and how are your sales projections realistic? How many bad batches can you afford to dump while you dial in your system?

I would go talk to someone who already owns an established, successful brewery and pick their brain.
 
I do not have any prior experience running a business, but a person who is interested in investing does have, so I have at least a part of that covered. I also have an accountant and a safety inspector that are willing to help with any information I need from them.

Working on a business plan, currently calculating sales in order to pay minimum salaries for 2 people, plus taxes and materials. Currently, I would need to sell around 2500-3000 litres (660 - 790 gallons) a month, after about 3 or 4 months. Initial sales expected are low, but the product would be used in marketing and advertising (basically giving it away for free to a few selected places to get things going.)

For a simple pale ale, the expected cost of producing a 0,5l (around 17oz) bottle is 2 HRK (production cost+0,5l glass bottle+cap) which is around 0,30 USD, or 30 cents. I don't know how much it costs to brew in the US, but this is my calculated cost, including cleaning, energy, water, grain, hops and water additives.

I have two sources of financing, both of which are family and friends, so there would be no bank loans. One half of the financing I do not have to pay back, which is really good for my situation (basically, my partner has a generous family member).

I am also working on getting EU funding for small businesses and an additional 15-20% of my financing could come from that and would mainly be used for early expansion, since I would have to have a small operation running to get approved and the money can only be used on equipment and operational costs, not materials used for production (I am not counting on that, but could be a great relief for starting out.)

I am writing this both as a way to get informed, but to inform others who seek the same information. As I am gathering everything I can, I will be updating the first post with useful stuff.


Also, I am considering volunteering at a brewery for a month or so. (small breweries here aren't really close to me, so an extended period isn't possible)
 
Starting a brewery is something that became VERY popular in the US, so I think you came to the right place for information. Unfortunately, selling the used brewing equipment from failed breweries has become almost as popular lately.

The Brewing Network has talked on that topic many times, if you haven't dug into their archives I would point you there to start. They have made a point to invite many new, or recently successful self-employed brewers on to talk about their process. It's a great listen.

http://www.thebrewingnetwork.com/


Kombat's point that a brewery is probably only 10% good beer and 90% good management is very accurate. Be sure to explore all of the options to monetize your space (food options, entertainment, etc).

I'd expect that volunteering at a brewery would be a great start.
 
Actually already going through everything on thebrewingnetwork.com.

One of my ideas was to find other parties interested in brewing and renting the brewing equipment and space to them. Because the usage of the equipment wouldn't be constant (the full brewing capacity for a day would be in the 1200 l range, or probably more), other parties could use it for a fee of course, and not worry about investment, and I could be able to get the return on my ivestment sooner. By law, several smaller independent breweries can operate in the single space if their total brew volume doesn't pass above 125 000 hl a year, and be considered a single business entity.

This also means that the brewery could become a joint venture, by other partners investing in the fermenting equipment and expanding the brewery.

The only used equipment I found here is too expensive and would not suit the small scale operations. If I would do so well as to need that kind of capacity (I'm talking 2000 liters in one go), I wouldn't have a problem getting that kind of equipment anyway. I'd probably even find someone to custom make it for my needs.
 
BTW, I wasn't trying to discourage you - the more breweries, the better! I just wanted to make sure you're considering the bigger picture, to help ensure you have a better chance of success. Good luck, keep us posted on the progress if you follow through on this!
 
Best advice i can give you is double your projected start up costs. Idk enough about the red tape over there to say to double your timetable to opening day but thats the rule of thumb here in the states. If you're wrong and it takes less time and money than you estimated then that's not a bad situation to be in. Good luck man!
 
The next big challenge for me is actually finding out how much beer I can sell to local pubs. There aren't that many here, and Zagreb (Croatia's capital) is a 2 and a half hour drive from here. How would I go about distributing the beer to different cities? Do you have any tips on approaching pub owners and distributors? How much of my beer should I give away?
 
at this point if you don't have beer that is commercially available you're kinda stuck. you can talk to as many pub owners as you want but you need beer to offer. once you have that, fill a few bottles and take it to whoever will try it. you're pretty much door knocking at this point. and I assume you will be kegging to start? a bottling line gets your product more readily available but dam are they expensive!
 
I will subscribe to this thread :)

Two and a half hour drive isn't that big. After you shake hand with a pub owner you can simply send the beer by courier on a pallet or cardboard boxes. It won't be too expensive.
I think that any succesfull pub owner need to open to new beers in the menu, so just talking with him and give him some free samples should be enough to make him order some beers from you. After that, the customers (beer drinkers ;) ) will "tell" him if he should order some more beer from you.

What about the taxes in Croatia? How much do you need to start the busyness, beside the equipment? And what inspections will you have?
In UK i know a guy from Youtube that has a micro-brewery with equipment made by him. Are the laws more flexible in UK that in Croatia? I live in Romania, and i can't find anything about brewing, i need to search for inspectors and ask them, simply there is no information online... I was also thinking about making myself the equipment and brewing as a nano-brewery.
 
I'm from Russia, and I'm currently facing just the same situation here - 50l kettle, homebrewing a lot and with some success, big plans and some deeds to make next step to brew ~3000l a month. And I happen to look into the exact equipment company (Letina, here in Russia they have an official distributor, http://samodelkin.com), so that is really a fine chain of coincidences :D

However, I really don't want to only manage it, I want to operate it all by myself with a little unqualified help sometimes (carry this, do that), so I scaled it down for less batch sizes, but more brewdays. I want to make 2x130L brews 3 times a week, a day for bottling and a day for full cleanup. So, I'm not exactly in your league :tank:

But I want to tell you that AFAIK Letina does well for their price (some mates here already using their conicals). I really wonder, how much does it cost where it's made? For example, this one (230L conical with built-in cooling jacket and 20 PSI capacity) costs €928 here...
 
I will subscribe to this thread :)
What about the taxes in Croatia? How much do you need to start the busyness, beside the equipment? And what inspections will you have?

VAT is 25%, and another type of tax exist for beer, let's call it beer duty.
It is paid by ABV, so the more your beer has, the more you pay. It starts with 5% ABV and then raises for each percentage. Luckily it has been cut in half this summer for small breweries.

Anyway, my price ratios for 0,5l bottle are as follows:
Beer production cost: 1
Beer duty: 0,5
Glass Bottle: 1
Added value for profit: 3
VAT: 2

So the final price that I'm selling to pub owners will be 7,5 HRK. They typically sell these kinds of beers from 16-20 HRK. I'll have to see for how much the other microbrewers are selling their bottles and adjust accordingly.

Here you have to pass two sanitary inspections, a job safety inspection, and you have to pass the Minimal Technical Conditions for your workspace (height, type of floors, tiles or latex paint on the walls where you brew).

The biggest concern are the brew kettle, mash tun and thermally regulated fermentors. If I'm going for a 200l brew kettle, I'd need 4 fermentors twice the capacity. Cost really varies by region, I didn't get a response from letina yet. The rest goes into getting the workspace ready (industrial floor and latex paint), grain storage (plastic containers), glass bottles, caps, brewing materials.

The plan is to mainly bottle the beer.


st1l3tto, I'd recommend that you get bigger fermentors. If you brew let's say 100l two times a day, you should get fermentors with twice the capacity, so 200l for liquid and ~25-30l to spare, I don't know the ratios by heart.


How much does your base malt cost. Here it's 5 HRK / kg straight from the factory, which is around 0,65€.
 
st1l3tto, I'd recommend that you get bigger fermentors. If you brew let's say 100l two times a day, you should get fermentors with twice the capacity, so 200l for liquid and ~25-30l to spare, I don't know the ratios by heart.


How much does your base malt cost. Here it's 5 HRK / kg straight from the factory, which is around 0,65€.

Sorry, I mistyped, it will be 110l batches with blowoff, so dont really need that extra space.

I decided at start that no local grain will be used, due to poor quality and stability. So, I'm all in Castle Malting (Belgium) and Weyermann (Germany).
Weyermann's Pale costs 1,085€ per kg, Castle's Pale 1,054€ per kg, with Weyermann having better quality and Castle having reduced shipping costs.
 
What kind of a brewing system do you guys plan to use? What kind of mash tuns?

I was also considering this:
[ame]https://www.youtube.com/watch?v=a3GDhqCbOns[/ame]

It's a really good system for a nanobrewery, but costs around 12 000€. Is it worth it?
 
The next big challenge for me is actually finding out how much beer I can sell to local pubs. There aren't that many here, and Zagreb (Croatia's capital) is a 2 and a half hour drive from here. How would I go about distributing the beer to different cities? Do you have any tips on approaching pub owners and distributors? How much of my beer should I give away?

I ran my own business for 10+ years ( not beer) but the recession in 2008 put me under and I'm back to having a job now. So here's my perspective:
BE REALISTIC
While getting investors and loans may sound good, if you don't pay your investors and pay your loans you will go out of business. This fact will put a lot of pressure on you. You have no (commercial) brewery and no business experience. Try to get a paid position in a brewery and see how its done. Move to another country if there are no breweries there, get an entry level job and live as cheap as possible to learn as much as you can if you can do that. That will give you some experience. Maybe you can save some money to help get your start up rolling. You seem to be able to communicate in English, can you get a work visa for England and go there?
They have lots of breweries and pubs.
Employees are a pain in the ass, unreliable and costly. Most people have no experience being a boss, don't know how to hire and fire and just can't manage employees.
Downsize your operation so you can run it with no employees. If you are successful you can expand and hire people.
AGAIN, BE REALISTIC:
You aren't going to be able to go from homebrewing to running a regional distribution brewery (selling beer 100+ miles away). It just isn't going to work. Do you have any experience running a bottling line? Do you know how to take samples of your beer as its being bottled and make petri dish slants to see if there is a bacteria infection? If you are going into region distribution you need a big pile of cash (or credit line) to finance all the inventory you'll have to have on hand and to finance your account receivables.
I looked up your city and you have over 125,000 people there. That's big enough to support many nano breweries. Work in your local market first, then look to expand. Can you open your own pub and sell your beer by the glass? That is how the Nano Brewery model works here in the US. If you are brewing on a small scale and only selling kegs your overhead will consume all your income and you may be able to eke out an existence, but the margin on that type of model is very thin.
If you can open a pub you can also sell food. You can start with something easy and inexpensive to make, like pizza or panini sandwiches.
The idea is to start small and make a profit, not start larger and make no profit and hope that you can expand.
A good location where drinkers can easily find you will make or break a small brewery. Are rents reasonable? Or totally out of control expensive? One of the reason there aren't many breweries in New York City, which is a huge market, is that getting a business location is very expensive and its difficult to make the numbers work in a business plan.

Don't give any beer away. Except maybe 2 oz taste samples at your pub. Does the grocery store give food away as a promotion? Or any other business? If you make a good product and do some advertising, and get all the free publicity you can get, word will get around and the drinkers will come to you.
The US model that has been repeated several times is that a small garage type space is rented. The brew rig is 1/2 barrel, 3 vessel system made with converted kegs. They Brew like crazy to get started, selling growler fills and if regulations allow, sell pints 2-3 nights a week. The business either catches on and is expanded or doesn't do all that well and eventually closes.
If the beer sucks, your going to close pretty quickly. If you are making something innovative, interesting, that tastes good and drinkers can get at reasonable price, you can be successful if you combine hard work with business skills and some luck. So good Luck to you! :mug:
 
What kind of a brewing system do you guys plan to use? What kind of mash tuns?

I was also considering this:
:fro:

It's a really good system for a nanobrewery, but costs around 12 000€. Is it worth it?

As for what I'm going to use, I'm building one myself based on this design. I'm writing about it here, at least I'm gonna to when more parts arrive ;) Currently it cost me €4.5k and will cost 500-600€ more to put all together (this includes all the supporting stuff - Thermapen, digital refractometer & ph meter, some extra clamps for peace of mind, etc). It is only 200L now, but it can be scaled to 2x-3x size if needed by just adding some heating elements and electrics for them, or by simply adding a 2nd pot.

As for this shiny one on video, if my calculations is correct, we are talking about 160L batch (with 24 brix gravity and 69kg of malt at the high limit of 80% efficiency). I think it's design is rather good, however, with some disadvantages like hot aeration while whirpooling (on 2:29 on video); or too much boil off due to big diameter of pot; or cooling not included (at least on the video) which mean it's gonna cost even more; or threaded connections instead of tri-clamps which make the cleaning inside the valves or pipes MUCH harder.

But as for price, I think it is overpriced A LOT, for example, here in Russia we have one decent manufacturer, who offer a rig 1.5x the size (~250L batch) for 1\2 the cost (€5,4k) with pretty much same technology. I drank some beer from the guys who are using it for commerce last month, and it was good. It also has all the government papers (I think they even suit your officials as well) and I'm pretty sure that you can ship it to Croatia for the rest €6,6k, and get like 100L of Vodka included as a gift :rockin::mug:

The 100gal from Cobrew costs 5900$, which leaves the same amount to travel to USA, order it to ship, and still come to Russia for your 100L of vodka :tank:

As for @madscientist451's advice, I find it reasonable as well. My city is 10x bigger than yours, it's got some bars and shops for craft beer and not a single craft brewery, and I'm still concerned if I can manage to sell 3 ton while I'm noname. You should really think about it if you want to go all-1200L shiny at start.

Sorry for my walls of text in your thread :ban:
 
Walls of text are encouraged here :)

That brewiks system has cooling, I've seen it in person (they looked at me funny when I drooled all over it). It's really solid, good quality steel, and a really polished product overall.

Also I'm definitely not going for large batches, 250l is the most I'd go for, the brewing volume isn't an issue, whatever I can get I can manage with it. It's just that my current 50l converted keg system can't cut it inspection-wise.

I'll take a look at the examples you gave me because, frankly, I'm not so sure about my machining skills. Even though I can do a basic weld, and I did a fair bit of plumbing in my own house since I was a kid, this is something else.

Also, if I would even go do the boiling kettle on my own, the problem would be the bottom. I couldn't get it oval shaped, and 90° corners aren't good for a kettle. I'd rather pay more for a professional's work, but god damn, the prices here are just too much.

As for the distribution problem, there is a system here that I could potentially abuse. A business firm doesn't have to have any employees! It only needs a director, and the only thing that you need is to pay the pension fund and tax part of it. That could buy me a couple of months of time to get production going and try to distribute the product. Are there any kind of similar laws there?
 
My system will be so limited in size because I have the total rent-free place with all neccesary documents, but it only can provide 25-30kW peak, and making it a 30-40kW (it also will be used for cooling fermenters, cooling finished beer etc) will cost me quite a lot - ~200$ per 1kW. I decided that I'd better work hard on this size to become more popular and if hype goes on, build a larger one later.

As for welding and all, I'm only expierenced enough to weld two pieces of junk together, and all the precise work (clamps, pot, etc) will be done by professionals. It is gonna cost, but it still will be much cheaper than any pre-made system available.

As for other legal issues, Russia seems to be much more "lawless" comparing to US or EU. We have the 1000€\month tax limit for foreign purchases, which allows me to import all the hardware with only the shipping to pay, using 3 of my friends to recieve the shipments :mug: The excise duty for beer is 0,25$\L for 0-8% gravity and 0,37$\L for 8-20% gravity. You have to pay taxes for employee, but I'm gonna be the only one, at least on start, and I'll make my salary to be the minimum allowed, because I'll get profits as the owner\founder, and it is much less taxes to pay.
 
So, I made some progress and got the info I need regarding workspace requirements and even talked to some distributors.

I also contacted some of the local brewers (some of which weren't really happy or helpful).

The main problem I'm facing now is the brewing equipment itself. My limit is 200 liter volume, partly because of control and partly because of the cost.

Because of the restrictions of te workspace that I can get, I can go gas or electrical. Do you guys have any info on boiling ~200l of liquid, gas vs electicity? The time it takes, energy spent etc. Also, how to solve the problem with carbon monoxide building up? I have 2 possible working spaces, and one is in the basement with limited ventilation, which terrifies me a bit.
 
There is an excel sheet for calculating the time it take to boil a certain volume of water with a certain power rate. I entered 200l and 14kw. It seems that it will take 53 minutes to heat from 20°C to 71°C and another 37 min from 65°C to boil.
I don't know the cost of electricity in Croatia, neither the gas cost, but i think that all the breweries use electric or steam heating (wich i believe is also made with electricity) because gas is more expensive and it needs special attention regarding the monoxide exhausting system that it will need, if you want to pass the safety inspection :D

electric.JPG
 
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