Georgia Gueuzerie

[BullFrog]

So I wanted to bounce an idea off of the HBT community to get your feedback. I am more concerned with collecting objections/problems with this concept than I am about the nuts and bolts of starting a brewery. Over the last several years I have read about those hurdles and with enough capital, I believe that most of them can be overcome… even in prohibition clinging Georgia.

The idea is essentially a Gueuzerie. I will call it a Gueuzerie as the primary focus is going to be on propagating yeast cultures and blending beers. That said, we will probably brew our own beer (though if law allows, I might consider contract brewing and transporting to our warehouse). Products would be sours… Lambic, Faro, Framboise, Gueuze, Flanders Red/Brown, Berliner Wiese… etc. We would primarily do barrels (warehouse full) with other fermentation options more appropriate for certain products.

There it is, I do not want to go crazy into the details, but rather hear from you guys regarding the concept.

Concerns:

• Risk, risk, risk – this will be partially mitigated by focusing on blended beers as a primary offering, but 1-3 years is a long time to wait to see how 50 barrels of sour beer turn out
• Blending expertise – Sour beer lover and home brewer for 6 years, but would need expertise (not exactly a lot of guys with that on their resume)
• Restaurants turning against sour options due to fear of contamination etc.
• Premium price – would the market pay a premium for these beers (short conversation if no)

Any feedback would be greatly appreciated!!!

 

[levifunk]

This is essentially what I am starting. "Funk Factory Geuzeria"

Initially I had the same idea. Get a warehouse, contract brew with breweries, transport wort to a warehouse for fermentation, aging, fruiting, blending and bottling. However, with lambic, if you want to do it right, you have to carry costs for at least 2.5 years before you have your first product (fruited lambic) out. ~3.5 years before any Geuze would be available for sale.

The start up cost for doing this at a profitable scale is in the hundreds of thousands of dollars. One of the biggest killers is warehouse space. You need a space that is capable of eventually holding a couple hundred barrels, as well as space for blending/fruiting/bottling. You need it to be somewhat temp controlled (especially in Georgia). So you are paying a lot of money on a monthly basis, without any income...all on the hope that that first batch you did turns out to be a good product. Not to mention the cost of oak, racks, tanks, pumps, etc...

What I have done, and would recommend, is to find a brewery that is willing to work with you (you need to do this to source wort anyway). I teamed up with O'so Brewing. I pay for the barrels, racks, yeast (for the 1st batch, we are moving to spontaneous and I plan to build a coolship this fall). They brew the wort and provide the storage space. That is the arrangement we came to, but there are any number of agreements that would work.

We have done 2 batches yielding ~30 filled wine barrels. This winter we will do another batch, so there will be ~45 barrels there. Next summer I'll start fruiting some of the barrels. The following summer I'll finally be able to start blending geuze.

Assuming all goes well, Fall 2014 I should finally have an annual income stream. That money would be reinvested directly into renting a warehouse and building up a stock of lambic barrels.

Its still not cheap, but its a fraction of the cost. Unless you have a lot of money burning a hole in your pocket, I can't imagine doing the kind of start up initially outlined. The more debt you take on, the riskier this gets, and the more expensive your product has to be.

Lambic is a patient man's game.

 

[moti_mo]

You list "Premium Price" as a concern, but even before that is just understanding what the actual market demand is for sour beers in your area. It would be smart to talk to some bottle shops, restaurants, etc. to get some concrete numbers on how well the sour products they carry sell, even before trying to figure out what price point you'll need to come in at. Does your area have any annual sour festivals or anything like that? HBT folks are pretty adventurous and not necessarily representative of your typical south-eastern beer drinker, so its important to understand what the real demand will be for your product in that area.

I'm from NC, but have lived in CO for 15 years now. As far as I can tell, when I go back to NC, the market for sour beers is not that big, definitely not as big as it is in CO. That doesn't mean it won't get there, with enough breweries/bottle shops/etc. educating the public, but it also could be tough in the beginning. On one hand, that spells opportunity for some of the first breweries in a region focusing primarily on that new style that undergoes rapid popularity increase, but on the other hand, if that rapid popularity increase never really materializes, then it could be a tough market.

Just my 2 cents.

 

[MidTNJasonF]

... and not necessarily representative of your typical south-eastern beer drinker, so its important to understand what the real demand will be for your product in that area.

I'm from NC, but have lived in CO for 15 years now. As far as I can tell, when I go back to NC, the market for sour beers is not that big, definitely not as big as it is in CO.

While I do certainly agree that he needs to know his market inside and out I think you may have been gone to long from the South East. We are clamoring for sour beer around here. One of the more popular blogs on Sour and Funky beer was created by a local Nashville Tennessee brewer who has gone pro starting a barrel and sour program with a local brewery. We had one of the our first sour and funky beer festivals in the state recently. It was a sell out and a huge success by all accounts. Florida has a good solid sour scene with a couple years of festivals under their belt and more breweries producing sour and wood aged beers.

The local craft beer nerd groups regularly organize mule runs to other states to bring back sour and wood aged offerings we cannot find here. Currently there is a member who is bringing an entire van load or stuff from the Pacific Northwest back to our area to distribute to all of those of us that chipped in on the gas money and put our orders in. While there are some West Coast IPA's in the mix much of it is sour and wood aged beer from the likes of Cascade and others. Most of the tastings and special events I have been to in the last year or two have been very focused on sour beers. The dead soldiers table at the volunteer area for one of our biggest craft beer festivals looked like a who's who in the world of sour beer. The local Homebrew club brought Chad from Crooked Stave out to be the key note speaker at their annual competition. He gave a talk on Brett that was outstanding and inspired even more brewers to get creative with brett and wild fermentation.

Long story short the market is changing around here. While it is not ever going to supplant Bud Light around here there is a much bigger market emerging than you might think.

 

[moti_mo]

That's awesome. I'm not back in NC all that much, so purely anecdotal and not based on a big sampling size whatsoever. Its good to know that the scene is looking promising for sour and funky beers in the south. Hopefully the trends you're seeing in TN and FL are representative of GA as well, but I was just trying to point out to the OP that before jumping in with both feet, it would be good to have a very good feel for the market he (or she) is dealing with. Just because states are close in proximity doesn't necessarily mean their beer markets are well-matched.

Regardless, it sounds like a fun concept and I wish you all the luck in the world if you choose to pursue the dream.

 

[BullFrog]

What I have done, and would recommend, is to find a brewery that is willing to work with you (you need to do this to source wort anyway).

Thank you for the detailed reply Levifunk - this is exactly what I was looking for.

I had considered working with a brewery, but assumed that there would be an aversion to having souring organisms in close proximity to their product. Did you encounter these concerns – if so, how were they overcome?

I might have assumed that this might be a bigger issue than it is (maybe it is not), but I had also considered white labeling sour production for breweries.

Thanks again for the reply - it is encouraging to see others making sours more available.

 

[BullFrog]

I was just trying to point out to the OP that before jumping in with both feet, it would be good to have a very good feel for the market he (or she) is dealing with.

I agree - thanks for the feedback. Having good data on the market is a critical lesson I have learned after spending five years as head of marketing for my firm. I am at the earliest stages of developing a business plan and am only just now attempting to identify issues/concerns with the concept. I will be in contact with many if I see a real business opportunity emerge.

Thank you again for the feedback.

 

[BullFrog]

This area has seen a lot of growth in demand for craft beer/breweries. One of the reasons that I am exploring this idea is due to the fact that so many new breweries have opened in the Atlanta area. More importantly, they are seemingly all doing well.

The local craft beer nerd groups regularly organize mule runs to other states to bring back sour and wood aged offerings ...

I am looking at space along the downtown connector for the warehouse/taproom. There are already a number of breweries who appear to have had the same idea: Georgia Tech (College Kids + Nerds) = Craft beer market.

 

[Xpertskir]

IMO in the US , sour beer is a rapidly expanding and generally under-served market. Look at the demand for quality products in the space..Russian River, Jolly Pumpkin, Cascade, The Bruery, ect. and the premiums people are willing to pay.

My two biggest concerns would be as previously stated, expertise in blending practice(the heart of any lambic operation) and lack of cash flow.

As to the first point If it were me I would either be finding a way to work at a place in Belgium for a year or two, or be hiring someone with that direct experience. You would probably have better luck(and more cost effective) poaching someone from the aforementioned domestic breweries.


The second point is much more important(yeah, I'm a finance guy). The lack of cash flow is problematic not just in waiting for a ROI on your first batches, but it's also problematic because you wont have cash flow to expand operations.

IMO its an absolute necessity to have some "quick" turn around beers to generate a more level cash flow and help fund incremental production expansion to meet future demand increases. By the time you are releasing your lambic's you should have double or more production behind it to be ready in the next year. This would not be possible without some cash flow.

There is a lack of good lacto beers like Gose and BW's on the market. All brett beers are also gaining a lot of momentum and you could turn both of those styles around in the 1-6 month range. This would also help to establish your brand leading up to your lambic releases.

 

[cjalderman]

I think this is a great idea, we need more breweries here in Georgia and one with a souring program would be fantastic to have local.

 

[levifunk]

Thank you for the detailed reply Levifunk - this is exactly what I was looking for.

I had considered working with a brewery, but assumed that there would be an aversion to having souring organisms in close proximity to their product. Did you encounter these concerns – if so, how were they overcome?

I might have assumed that this might be a bigger issue than it is (maybe it is not), but I had also considered white labeling sour production for breweries.

Thanks again for the reply - it is encouraging to see others making sours more available.

It is a concern many breweries have, and you will just have to find a brewer that is willing to look into it with you. My stuff doesn't touch O'so Brewing's regular stuff.

If the brewery doesn't do anything wild/sour, you may want to offer buying separate hoses, a different pump, and your own blending tank, bottling equipment. Ideally you would find a brewery who already dabbles in sours. If nothing touching their normal operations that touches the lambic beer (post yeast), then there is no additional risk. Some may think that you are bringing these wild bugs into their brewery, but just politely point out that they are silly to think that it isn't already in there. Its in the air and growing behind that panel in the dark corners of every brewery.

As Xpertskir said, cash flow is a huge hurdle with lambic production. If you do get a place of your own right from the start, you are going to NEED to create some "quick" sours and a lot of it. Berliner Weisse, American Wild Ales, Sour Browns, Saisons, Gose, anything that doesn't take 2.5+ years to come to market. If you do that, I wouldn't call yourself "Georgia Geuzeria".