Very small micro brew feasible to expand?

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Ciderguy

Ciderguy

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OK! I haven't even searched this topic, I just want feedback. I have been brewing for about 3 years now and have experience with extract brewing. I have that down to a T. I have done enough reading about all grain brewing and after a few batches I'm sure Ill be able to handle it. I have the 2 kegs im converting into a tun and keggle sitting next to me. I am looking to potentially sell a product in farmers markets and maybe other local events, I can go further if im enjoying it. My family has 80 acres prime location for growing hops, and berries, apples, and grapes in western washington (only and acre or two for really growing on). grapes, apples are already growing. I would have to purchase my grain. I will potentially have 40K to invest in one year... but thats money that I won't want to put into it unless I'm sure it will come back eventually. On the short term i want to spend a couple thousand, get me license to produce few personal recipes and sell them. I would start growing hops as soon as possible, am I capable of any kind of profit? Bottles are probably the most expensive thing at this point. Im also getting experience in distilling and with all of my space on family property with the apples and grapes already growing could potentialy get a personal business going and expand into other markets?
P.S. I'm tempted to start infesting in some good size conical fermenters for all my hobbies.
 
You can't sell homebrew in any way. Obtaining licenses to sell it, the cheapest way possible, is difficult and expensive. There are MANY, MANY threads about this. No, you can't sell homebrew at a Farmer's Market.

Distilling requires a much more expensive license (Except where a Brewery adds a micro-distillers license to their already expensive brewer's license).

If I were in your shoes, I'd start investing in All Grain and getting more experience, possibly growing hops as a side project. Then try to jump into an already established (Licensed) pub and see if they want to offer your line of personal recipe beer.

FYI - Your brewing location has to be located where the license facility is. Meaning you have to brew at the bar where it's served.
 
There's nothing we can really help you with. This is a homebrewing site, and it's illegal to sell or barter homebrew. If you are really serious about going pro...here's where you need to start.

http://www.ttb.gov/beer/qualify.shtml

And here.... http://probrewer.com/

Take some of that 40 g's and hire a lawyer, you're gonna need one to wade through the TTB, State and local laws.

Good luck. :mug:
 
Ciderguy said:
OK! I haven't even searched this topic, I just want feedback. I have been brewing for about 3 years now and have experience with extract brewing. I have that down to a T. I have done enough reading about all grain brewing and after a few batches I'm sure Ill be able to handle it. I have the 2 kegs im converting into a tun and keggle sitting next to me. I am looking to potentially sell a product in farmers markets and maybe other local events, I can go further if im enjoying it. My family has 80 acres prime location for growing hops, and berries, apples, and grapes in western washington (only and acre or two for really growing on). grapes, apples are already growing. I would have to purchase my grain. I will potentially have 40K to invest in one year... but thats money that I won't want to put into it unless I'm sure it will come back eventually. On the short term i want to spend a couple thousand, get me license to produce few personal recipes and sell them. I would start growing hops as soon as possible, am I capable of any kind of profit? Bottles are probably the most expensive thing at this point. Im also getting experience in distilling and with all of my space on family property with the apples and grapes already growing could potentialy get a personal business going and expand into other markets?
P.S. I'm tempted to start infesting in some good size conical fermenters for all my hobbies.
Click to expand...

There are plenty of ways you can take that asset of yours (i.e. land in Western Washington) and make a profitable business out it, without the regulations that come with selling alcohol. Why do you want to kill yourself trying to make a buck and kill your love of the hobby in the process (most likely?)

I'm not saying "Don't do it" but looking at it from a regulation vs. potential profit standpoint....there has got to be an easier way to go.

My 0.02
 
In addition to the legal issues -- which will require you to produce much larger quantities of beer than what you might sell at a farmer's market -- there are general concerns with your business plan. It is unlikely that 40k will get you all the equipment, a brewery location, all the necessary ingredients and pay all the administrative expenses to the point that you start turning profit. That is especially true if you plan on brewing with no additional income source. It is typical for new businesses to not break even until about three years out.
 
You might be better off starting a hop farm and trying to contract with breweries for sales. Once you have a solid financial structure and some knowledge of what it takes to brew on that large of a scale you can branch out into a brewery or brewpub.
 
I'd take a look at the legal work, do more research of how much permits cost and how long its going to take. Then go over your business plan get in touch with a distributors (ones you buy from and the other that would sell your beer). If all else fails look for more investors who would be willing to help with the money aspects.

Not to mention, do you have a beer style in mind? Do you have a working working recipe that not only your friends and family likes but some complete stranger would like? What is you brew schedule look like? How much do plan on making? *insert 100 more common questions*

Either way I hope you do succeed but it sounds like you need to think about this a little bit more...
 
Don't let us totally discourage you...but all the above responses are dead on. Its not easy, quick, or cheap to start up ANY form of commercial brewery.

And brewer's brew for the love of beer, not to get rich. It'll probably take quite some time to recoup your investment...remember the craft market is well saturated with good competition.

Good luck, whatever your decision!
 
malkore said:
Don't let us totally discourage you...but all the above responses are dead on. Its not easy, quick, or cheap to start up ANY form of commercial brewery.
Click to expand...

Yes! If it were that easy and/cheap to start we'd ALL be down @ the farmer's market selling it....You ever actually SEE anyone at the farmer's market selling their beer? Do you think it's because you are the FIRST person to contemplate it? You're not the first who has posted a thread with that idea THIS MONTH. ;)

It's just a lot of hurdles to go through.....I've been brewing for years, and I love it too much as a hobby to ever want to work that hard to try to go through all the licensing hurdles alone, let alone try to turn out a consistent product batch to batch.
 
The mods here do not like talk of stills. I'm sure they would love that part of your post to be edited out or replaced with generic words.
There is a pretty good demand for hops, I would give that a shot.
 
I would denifatly make this a long term goal, but start small, do the hops farm and maybe see if your area needs someone to sell semi bulk grain. You could buy in bulk and sell that a little more expensive and make a few bucks to put toward all the licensings and brew equipment, and lawyers.
 
Not to mention that the smallest part of starting/running a brewery is brewing or beer.

It is marketing, paperwork, accounting, building, planning, reading code, working with inspectors, working with contractors, filing permits, writing business plans.

Man, that sounds like a lot of work. I am going to go brew now! :mug:

and yes, all your friends say your beer is great and the one that owns a restaurant says he would sell it. welcome to the world of brewing. the beer is the easy part.
 
chefmike said:
It is marketing, paperwork, accounting, building, planning, reading code, working with inspectors, working with contractors, filing permits, writing business plans..
Click to expand...

Just reading on the ttb's website all you have to do just to get a single label approved by them is enough to give you a blinding headache bigger than drinking a case of barleywines at one sitting. You need a level of commitment, and passion, that I think even most of us die-hard homebrewers/beer geeks don't necessarily possess, I know I don't.
 
Ok.... A few weeks ago, I already collected all of the paperwork. I don't expect to throw a business together in a year and expect profits. I am sorry for talking about distilling but It would all be 100% legal and a side venture. Either way I will be starting by growing hops and continuing to brew on my own. I have a friend back home who just started his own brew pub. I think he bought used equipment and put around 40k into it (I would have to verify that). I have my uncles help, who started G Raden and Son's. For a while he was responsible for import 90% of liquor, beer, and wine sold in Washington state. He also started Black Dog ales which won many international awards (I believe it went under because his partner screwed him in G raden and son's. At this point I will continue collecting and slowly fabricating a business plan, start growing hops and ingredients. As far as the permits go they didn't look like they are too expensive at all (as long as local ingredients are used and the beer is sold off the location its brewed). Now I'm sure there are many hidden fee's and charges that will come up. I appreciate the feedback.. I'll just continue collecting permits and perfecting my home brew, and continue to research the cost of equipment, profit margin on the product.
 
Having gone to business school, not making me an expert of course, and having worked on several business plans in the real world with clients/colleagues, some advice: When you want to put together a business like you are talking about - you really should just do the business plan AFTER you are ready to start selling good beer. That means get your $&%T together first, sounds like you need to get your brewing down and develop your recipes and prove they might actually sell. Once you might conceivably have a market for your product (and you understand what it will take to make that same exact beer consistently), and you got the money in the bank, do the business plan. You cannot start 'planning' to sell widgets before actually knowing how to make the same widget twice in a row.

There are many good books on how to do a good business plan. Your business plan, if it is any good, should actually answer all the questions you already have. Location, fixed costs, variable costs, suppliers, legal barriers, etc etc blah blah blah. Heck, a good business plan should actually make you feel damn good about doing the business. If it doesn't, do not start the business. If, while making the business plan, you start thinking - "hey, I am not going to actually be able to make money, because of X, Y, Z", please do not go forward. You would be suprised how many people still go into business for themselves even AFTER they know it is a doomed venture. I mean, on one hand you have someone who has such drive they can make a hardly profitbale enterprise a mammoth million dollar corporation, then on the other you have plain denial.

Hope that helps.
 
Great advice... I know I'm still a long ways out.... and i certainly need more experience and some really good recipes
 
Ok, I hope 6 days doesn't count as necroposting. It appears that a few of you are in the know. Ballpark, how much would it cost to set up a small brewpub in say Colorado? Maybe start off with 2 beers at a time with a bunch of guest taps, serve simple good food (my other hobby) and maybe do coffee and baked goods in the morning (you could do some interesting baked goods with brewers yeast). I understand the necessity for a business plan and all, my wife is a psychologist who's currently setting up her own shop. I was just wondering what the smallest amount could be. I've always heard wildly varying numbers, from $40,000 to a million. I'm not sure I ever would, I'm just curious about how low you can go.

Like others on this thread, I'm weary about going into a business that's already a hobby. I spent 5 years as a professional pilot, eventually making captain at an airline. It was pure hell just about the entire time. Now I'm a stay at home dad considering any possible second career option in 5-10 years. Food and beer always pop up as options as they're where my greatest talent lies. Thanks for the replies.
 
Im searching for the same path. Id love to start with a small brewery. starting with beer, moving into BBQ pit. Produce just a couple regular beers with maybe some seasonal brews, specialty Ciders, and grow as much of my own ingredients as possible.
 
So, I know this is getting to be an old post. What would I be facing as far as permits and licensing if I wanted to start at a 1-3.5 bbl system selling kegs to local bars? I expect to pay from 8k for a 1 bbl system to around 30k for a 3.5bbl system. What am I looking at for attaining licensing in this range out of the garage, selling kegs? I would like to invest something and try to sell it. I would like to start as small as possible with a few recipes, try to sell it (basically give it away untill somone will buy it). I have 40k, I would like to start with as small a system as possible, and if somone wants to buy it, I'll jump in with both feet and get a bigger system. People have responeded and say you'll spend as much on licenseing as you will on your equipment which I think is b.s. unless you doing a larger microbrewery. Am I wrong to think this? If I bought a 3.5bbl system am I facing 30k in licensing?
 
I'm not sure on the total legal costs, but you're lucky you're in the NW. New breweries and distilleries are opening all the time. The West Coast is one of the most favorable environments you could hope to start up in.
 
i don't think these docs are all that complicated but i did not read the whole thing - i don't think it would hurt to have a lawyer with brewery experience.

i think the permitting cost is mainly going to depend on your state really beyond the TTB stuff.

if you get through all the legal matter i would sell numbered 22oz bottles and corny kegs to local restaurants, however bottling may put you in some different category than serving at a brew pub or wholesale sales only.

i see 22oz bottles selling out for $11 of great nano breweries, same with $7 pints.

the thought of bottling and selling 12oz bottles as such a low volume seems crazy.

1 barrel = 180 22oz bottles (at best) if you sell them at 5 bucks a pop (wholesale) that is only 900 dollars gross and remember that is going to take you at least (probably) 3 weeks or more to produce.

i have thought vaguely about doing this in my own brewpub setting way down the line.

with regard to where you do this, you are most likely going to need to do it in a commercial kitchen, not a garage (if that is what you meant?).

if you wanted to start as small as possible - 1 bbl for $8k seems pricey. i know blichmann 1 bbl fermenter is $1500, 55gal pots are $600.
 
Ciderguy said:
So, I know this is getting to be an old post. What would I be facing as far as permits and licensing if I wanted to start at a 1-3.5 bbl system selling kegs to local bars? I expect to pay from 8k for a 1 bbl system to around 30k for a 3.5bbl system. What am I looking at for attaining licensing in this range out of the garage, selling kegs? I would like to invest something and try to sell it. I would like to start as small as possible with a few recipes, try to sell it (basically give it away untill somone will buy it). I have 40k, I would like to start with as small a system as possible, and if somone wants to buy it, I'll jump in with both feet and get a bigger system. People have responeded and say you'll spend as much on licenseing as you will on your equipment which I think is b.s. unless you doing a larger microbrewery. Am I wrong to think this? If I bought a 3.5bbl system am I facing 30k in licensing?
Click to expand...

You're not looking at everything you have to do. You are NOT going to get licensed to sell kegs away from your garage door. I don't know what the rules are where you live but here is an idea of the licensing you are going to face:

Federal brewing license (I think it runs a few thousand)

State brewing license (similarly, a few thousand)

Depending on your state requirements and what you plan on doing you may have to also obtain a distribution license, retail license, wholesale license.

If you plan on bottling your labels individually will have to be approved by the FDA and individually by every state you intend to sell your beer.

Since you would be manufacturing a product for consumption, there are also many local health and safety requirements you will have to follow. You will have to obtain a brewery location in a commercial or industrial zoned area. You will have to obtain proper fire safety equipment, proper electrical wiring, water hook ups, waste water connections, floor drains, sanitation procedures, food storage procedures, restrooms, etc. All of those different areas can require multiple inspections and certifications that all cost money. You will probably have to have official designs approved and possibly an independent evaluation by an engineer, which isn't cheap.

You will likely have to put up several thousands in bonds against many of those licenses.

You will have to file articles of incorporation for your business (assuming you incorporate).

And during that very long process, you will be burning time and money setting everything up, installing your equipment, obtaining distribution, advertising, test batches, etc.

Once you buy the equipment, ingredients, kegs, obtain a brewery location, get through all the licensing requirements, run test batches on the system, etc. you have EASILY burned through 100k if not twice that much.
 
80 acres is probably too small for a hop farm unless you can grow them organically. Most hop farms are large enough to justify a $500K investment in harvesting equipment alone.

Heater Allen in McMinneville started with a 1 - barrel system, so nanobreweries are possible. He said 90% of the startup effort was legal and health related.
 
Maybe if you do not bottle, you may be skipping some red tape.

My plan (the one that will be stuck in my head for some time) involves a brew pub, no bottling, but selling to local businesses could be the easiest start.

That would let you focus on making beer .

With regard to all of the above things well, it is possible that you get your licenses/permits and rent some commercial kitchen space and then sell B2B. nobody says you need to build out your own space to sell some beer. start small and expand. $40k is not insignifcant. One you have the capacity to do 1 barrel at a time, you can get additional fermenters and brew more for just the cost of additional fermenters (and coolers if necessary). If you can gross $900 each month on every barrel than a $1500 fermenter is not a big investment.

I know here I could rent a small commercial kitchen for $1750 a month and that is RETAIL space and I am 10 miles from NYC. You can't distribute your own beer here, that may or may not be the case where you are.
 
Ciderguy said:
So, I know this is getting to be an old post. What would I be facing as far as permits and licensing if I wanted to start at a 1-3.5 bbl system selling kegs to local bars?
Click to expand...

Talk to Mike Skubic or Mike Hess at Hess Brewing. From start to opening took them a little over a year; most of that time was in permits and inspections.

I have 40k, I would like to start with as small a system as possible
Click to expand...

I think it cost far more than that for Mike. You CANNOT do this in your garage, so you'll have to rent a commercial space for a year while you get the permits. That's $10K right there. Plus power, gas, water etc. (And no, you can't wait until you're licensed to get the space; they will be inspecting it before they give you any permits, and often you need one license to get the next one.)
 
Thankyou everyone. Ill start by getting some equipment, and I'll get used to running at a at least few times at home. I'll give as much as I can away, and once I have a good system I'll look at commercial space and talk to a lawyer about licensing and everything else.
 
For the record, it is POSSIBLE to get approval from TTB for brewing in your garage commercially (one of the local breweries here started that way) but I've talked to them about it and its on a very case-by-case basis and the restrictions are almost as hefty as just getting a commercial space. I've been interested in starting a brewery some day (as many of us dream of too I'm sure) but it's certainly no easy task. Some day I hope to run a brew pub or something, but baby steps is all I can take for now. Certainly don't lose hope though, obviously plenty of other breweries started out tiny and have made it pretty big!
 
Don't forget you're limited in how much home brew you can produce a year. If you get know for giving away a lot of it especially if you're trying to build business relationships etc it could come back to bite you.
 
There are several on HBT who have gone pro... heraldsburg brewery and wolfhills brewing are the first two that come to mind.

Some locations are legally "easier" (permissive may be a better word) than others.

Georgia would be in the others category.
 

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