Advice to sell home brew??

[DeathBrewer]

I've wondered about this. Isn't your production volume limited by your fermentation/brighting capacity? Especially if you plan to not filter or pasteurize. And would states require pasteurization because if so, then there goes the specialness of most homebrews.

I mean in my house right now I could brew 30 gallons in one day and get them into a fermenter. But then I would not be able to brew for a few weeks if I wanted to age my beer properly.

So my question is, how do breweries get around this limitation? Do they have 21 sets of fermentation tanks?

No, they brew on a larger scale. We've lately been fermenting in my conical and sanke kegs. Generally about 12-20 gallon batches.

Shorten your time of fermentation with a high pitching rate, plenty of nutrients, low alcohol beer, etc.

You can use finings to clear the beer and dumping the yeast in the conical is key. Pasteurization is not required...the only reason a lot of breweries do this is to kill their yeast. If you are bottling, you do not bottle condition. You condition and carbonete in a keg or bright tank and then transfer to kegs through a filter.

Generally smaller breweries do 1-2 batches a day. Figure you are brewing 5 days a week and you've got yourself about 8 different beers every week, which would require 16 fermenters if they went through 2 weeks of fermentation.

But you are right that you would need to buy more equipment. Good thing sanke kegs are fairly easy to come by if you have the right connections (and no, i'm not talking illegal.)

You cannot really make any money (especially considering your time) if you are brewing 5 gallon batches.

 

[McKBrew]

But you'll never ever make much at all. Be lucky to break even and be even more lucky to be in business in 3 years. Financially it's ****ing stupid. I've looked in to it. Came up with round figures, and unless you want no life and to make jack **** for take home, it doesn't work.

I mean you can make more working 40hrs a week minimum wage than 80 hours a week in a pico brewery.

Not going to disagree there. Realistically though, most commercial brewers work far more than 40 hours a week. Between work at the brewery and attending trade conferences, seminars, and other events they put in some hours. The only reason you do something like that is because you love it, not because you plan on getting rich.

 

[DeathBrewer]

The only reason you do something like that is because you love it, not because you plan on getting rich.

That's pretty much the idea with me. I'm going to do it anyway, whether I make money or not. Might as well make it a livelihood, or at least start as an additional income.

 

[Couevas]

Check this site out. I used to hang out there when I was spending a lot of time planning my Brewpub (which is still a goal, just a little far off). It has a lot of great info, especially on buying brewing equipment (new or used) and also has a forum where you can ask the pros who have done it before.

ProBrewer.com: An Online Resource Serving The Beer Industry

*The site is a little cumbersome to use at first, but after a while you will get the hang of navigating it*

 

[dontman]

No, . . .

Generally smaller breweries do 1-2 batches a day. Figure you are brewing 5 days a week and you've got yourself about 8 different beers every week, which would require 16 fermenters if they went through 2 weeks of fermentation.

I am not the OP and I am not planning to go commercial.

You answer no but the other line says "yes"

My question was whether commercial brewers have many different fermenters and you confirm my suspicion by saying that they would have 16.

So if you are a brewer working with a 1 bbl system you would need in the neighborhood of 16 1 bbl fermenters. That was kind of the point of my post. What garage could ever house 16 1 bbl fermenters plus kegs plus brewing equipment plus all of the other ancillary equipment. Or even 16 Sanke fermenters.

I think a lot of dreamers imagine being able to take their 5 or 10 gallon batches down to the local pub for resale. Those pubs are paying what? between $60 and $100 for their kegs filled with BMC or even commercial craft beer? I actually don't know what they are paying but I do know that as a manufacturer you never want the cost of your raw materials to exceed 20% of your selling price. Let's say they would be willing to pay you $200 for that filled keg. In that case you would need to be able to fill that keg for maybe $50. That is really hard to do unless you are filling 20 of them at once and enjoying major economies of scale.

Your competitors are, since they are filling 50 or a 100 or 10000 at a time. And there is no way to sell you beer for $10 a glass alongside the Sierra Nevada that is selling for $4.50

The real money in this is for the retailer filling the glass.

 

[Brewsmith]

Books on starting a brewery

 

[z987k]

You cannot really make any money (especially considering your time) if you are brewing 5 gallon batches.

You can't make money making 1bbl at a time, let alone 5 gallons.

You might squeak by with 5bbl batches and working your ass off. 7+ would be more ideal starting.

I mean at 1 bbl, you can make roughly 100bbl a year depending on the number of fermenters you have. At that point you would never become profitable as a business.

 

[RayInUT]

Start a brew pub and sell it by the glass and sell food too. That is the only way you can make it work on a small scale. Your markup that way can be 300% rather than 20%. It's a very feasible idea. No different than a coffee shop making money (other than the obvious labor and government regulation). If you can get past all the regualtion you can probably make a decent living.

 

[wedward]

Start a brew pub and sell it by the glass and sell food too. That is the only way you can make it work on a small scale. Your markup that way can be 300% rather than 20%. It's a very feasible idea. No different than a coffee shop making money (other than the obvious labor and government regulation). If you can get past all the regualtion you can probably make a decent living.

True - but the investment is substantially more and the risk is probably even higher. You're taking on two facets of a tough business at once, plus employee issues and working capital for the food and other goods. I've spent more than 15 years dreaming, planning, wishing I could do a restaurant (and at times a BP), but have never built up the $$ to dive in and realize the dream. Too conservative I guess - that's a very tough gig...

 

[TexLaw]

Alright, I won't tell you "don't do it." I'll tell you this, though: Do it right.

Find a microbrewery in your state, and talk to them. Find out what you have to do to make a legal, wholesale brewery in your state. It varies wildly from state to state, so you have to check on it. The guys running the brewery should know, since they've had to go through all that red tape.

Typically, microbrewery guys are very helpful to other brewers. If you find some guys that aren't, move on to the next brewery. Really, you probably ought to check with more than one brewery, anyhow. If you can't find more than one brewery in your state, that ought to tell you something (i.e., be very careful).

If you are in Texas, I will be happy to introduce you do some commercial brewers that can point you in the right direction. If you are in another state, I may be able to, but I don't know until I know your home state.

You can always try to stay under the radar, but that only works until it doesn't.


TL

 

[z987k]

All the advice from people who have made it, tend to say 150-200 thousand dollars is bare minimum(and probably not enough) for a brewpub. Micro... even more.

Remember the #1 killer of a brewery is running out of capital.

 

[Yankeehillbrewer]

You can't make money making 1bbl at a time, let alone 5 gallons.

You might squeak by with 5bbl batches and working your ass off. 7+ would be more ideal starting.

I mean at 1 bbl, you can make roughly 100bbl a year depending on the number of fermenters you have. At that point you would never become profitable as a business.

Do you speak from experience? Or are you just spewing the negativity that you have read on the internet? Your attitude really seems to contradict your sig.

 

[farmbrewernw]

I know of a couple up in the Portland area that sells like a keg a week, they don't do it for the money, more for the fun of it and to get their name out there. I'm pretty sure they do this in there garage or something. It probably doesn't really help the OP as he probably wants to make money but I know it's possible, at least here, to brew at your residence.

 

[TwoHeadsBrewing]

I know that if you really wanted to be rolling in the dough, you'd go get a MBA and a really nice office job. However, if you're willing to make ~20k/year and work your a$$ off I don't see why you can't make this happen. Let's just do some rough figures...some of which I'm pulling out of thin air (or a less pleasant place).

Cost per 11 gallon batch: $25 (this could be less or more depending on your supplier, power bill, or recipe)
Cost per gallon: $2.27
Cost per 6-pack: $1.28
Cost per 12oz. bottle: $0.2136 + cost of bottles (help here for cost)
Cost per 5g cylinder: $11.36 + cleaning/sanitizing (help here for cost)
Maximum batches per 10 hour day: 4 (5 hours per double batch from setup->cleanup)
Average batches per day: 2 (different recipes, back to back)

Price to customer
6-pack: $4.99 (remember the early SN days anyone?) = $0.8317 per bottle
5g Cylinder: $38 (equiv cost compared to multiple 6-packs would be $44.35)

Margin
6-pack: $3.72
5g Cylinder: $26.64

So for arguments sake, let's just assume you can sell every bit of what you make, and you make one batch per day. This of course is WAY less than how much you could brew, but let's just start there:

11g = 1408 ounces = 117.33 bottles = 19.55 6-packs
OR 2.2 cylinders

If you sold it all you'd make:
19.55 - 6-packs @ $4.99 each: $97.55
OR
2.2 - 5g cylinders @ $38 each: $76.00

And your profit would be:
6-packs: $72.55
OR
Cylinders: $51.00

If you spent 8 hours/day working making one batch of beer, ordering supplies, making phone calls, cleaning the brewery, making deliveries, cleaning bottles/kegs, bottling and kegging:
Your hourly wage would be between $6.38 - $9.07 per hour.

Keep in mind none of these calculations include health insurance, taxes, business and alcohol licensing, health inspections, fire inspections, broken equipment, stupid customers that want a refund for no good reason, bad batches that you have to throw out, etc. If I didn't have a family, I would think about it seriously even at that low wage. Even in Chico, where SN would tower above me like a Dubai hotel. I love brewing, but I have to earn a decent wage to provide for my family, and making good money just isn't going to happen quickly if at all. I'd plan to not be profitable for 2-5 years, and be working my tail off from 7am to 7pm every day of the week. And most nights would be spend visiting local bars, restaurants and keg parties to promote my goods. Sounds like fun, but I'd only do it if I were a single guy with nobody to worry about but myself.

 

[Yankeehillbrewer]

I know that if you really wanted to be rolling in the dough, you'd go get a MBA and a really nice office job. However, if you're willing to make ~20k/year and work your a$$ off I don't see why you can't make this happen. Let's just do some rough figures...some of which I'm pulling out of thin air (or a less pleasant place).

Cost per 11 gallon batch: $25 (this could be less or more depending on your supplier, power bill, or recipe)
Cost per gallon: $2.27
Cost per 6-pack: $1.28
Cost per 12oz. bottle: $0.2136 + cost of bottles (help here for cost)
Cost per 5g cylinder: $11.36 + cleaning/sanitizing (help here for cost)
Maximum batches per 10 hour day: 4 (5 hours per double batch from setup->cleanup)
Average batches per day: 2 (different recipes, back to back)

Price to customer
6-pack: $4.99 (remember the early SN days anyone?) = $0.8317 per bottle
5g Cylinder: $38 (equiv cost compared to multiple 6-packs would be $44.35)

Margin
6-pack: $3.72
5g Cylinder: $26.64

So for arguments sake, let's just assume you can sell every bit of what you make, and you make one batch per day. This of course is WAY less than how much you could brew, but let's just start there:

11g = 1408 ounces = 117.33 bottles = 19.55 6-packs
OR 2.2 cylinders

If you sold it all you'd make:
19.55 - 6-packs @ $4.99 each: $97.55
OR
2.2 - 5g cylinders @ $38 each: $76.00

And your profit would be:
6-packs: $72.55
OR
Cylinders: $51.00

If you spent 8 hours/day working making one batch of beer, ordering supplies, making phone calls, cleaning the brewery, making deliveries, cleaning bottles/kegs, bottling and kegging:
Your hourly wage would be between $6.38 - $9.07 per hour.

Keep in mind none of these calculations include health insurance, taxes, business and alcohol licensing, health inspections, fire inspections, broken equipment, stupid customers that want a refund for no good reason, bad batches that you have to throw out, etc. If I didn't have a family, I would think about it seriously even at that low wage. Even in Chico, where SN would tower above me like a Dubai hotel. I love brewing, but I have to earn a decent wage to provide for my family, and making good money just isn't going to happen quickly if at all. I'd plan to not be profitable for 2-5 years, and be working my tail off from 7am to 7pm every day of the week. And most nights would be spend visiting local bars, restaurants and keg parties to promote my goods. Sounds like fun, but I'd only do it if I were a single guy with nobody to worry about but myself.

the best price I found on a 12oz longneck was from a supplier down in L.A. 25cents per bottle, and that's in bulk, buying by the pallet. Turned out to be the same guy that Butte Creek and Feather River get their bottles from. Caps are gonna cost you about a penny. I figured you could make about 20-25 cents per bottle selling retail. That would put your price per 6 pack at about $7.99. That's with a stores 40% markup.

 

[dontman]

Figure about another $1.00 per bottle for packaging + .50 for enclosures +.50 for cases.

Then you got fixed costs of a few grand per month minimum + equipment amortization. Costs of sales, vehicle lease, marketing costs. This is just the beginning of the grocery list of fixed costs really.

Figure minimum 10K per month in fixed costs which would have to be amortized over the cost of each unit sold. So if you sell 1000 six packs per month then you would have to divide that 10000 into the costs of those. So your cost is $13/ six pack.

So according to the figures you would be earning $9.07/hour against a $50/hour nut.

 

[z987k]

Do you speak from experience? Or are you just spewing the negativity that you have read on the internet? Your attitude really seems to contradict your sig.

Well I looked into it quite heavily...as a dream if you will. Have I taken the plunge? No. Will I, no, as I don't consider myself experienced enough nor can I come up with the capital...I'm too young to have that much money.

Go spend some time on probrewer and read anything and everything you can get your hands on. Read some business plans to see what other people have done. There are quite a few out there in pdf if you know where to look.

The thing is a business is not something you go into half assed. There is a lot on the line and the simple FACT is with a pico brewery you are never going to make much money (I wouldn't consider it enough to live on). Numbers are what they are and I'm just trying to say, look into what this really costs. You time is not free(like it is with a hobby) and licenses are very expensive for such a small operation. Bottling machines are outrageous ($60,000+). Return on bottles and keg accounts are fractions of what you get from the tap at your place.(usually the return there is north of 200-300%, where bottles and kegs go for more around 25-40%) The place you buy will not be fitted with damn near anything you need, so there's construction. If you use your garage somehow(which is possible, but there goes your highest profit margin(pints in your place)and you don't have the water or electrical demand in your house for it. You really need 3 phase for pumps and coolers, and possibly the steam system for the steam jacketed kettle (good luck getting the power company to run 480 to your garage), but if you are that small maybe you don't need glycol chillers, temperature control or pumps. And you need at least a 2" water pipe coming in to be able to fill the HLT AND provide sufficient water for a fire system at the same time. You know what it costs for the city to come run you a new pipe to your place? The local place opening up was quoted $30k all said and done. That is a hell of a surprise cost.
So say you open up a 2bbly brewery. You have 1 kettle and 1 mlt, 6 fermenters(non temp controlled) and 6 bright tanks. Kettle is probably copper unless is steam jacketed and everything else is probably stainless. You're looking at 35k+++ not installed. Throw in licenses, construction (even for your garage), paying yourself, installation, raw materials, and surprises and we'll pretend you can do it for $100,000 cause there's more I didn't list.
Now say 3 week turn around from kettle to bottle or keg and you can only make 208bbls/yr. Lets say it costs $40(that's a low alcohol/hop beer with house yeast) per 1/2 barrel to make and you sell those to a distributor for $80. So on 208bbl/yr you make $40 416 times a year. $16640 a year gross. Get those 1/2bbl up to $150 to the distributor. Now you gross $45760,but that's some damn expensive beer. The customer will probably see $6+ per pint at that point.
See why small doesn't work?
If you'd like to throw alternate numbers or think mine are all wrong, I'd love to hear differently.

I'd love to do it.. but I just don't see how I could at this point in my life.

 

[Kaiser]

My question was whether commercial brewers have many different fermenters and you confirm my suspicion by saying that they would have 16.

They may also use double batch brewing which allows them to use fermenter that hold multiples of their brewhouse capacity. But yes, fermentation space is the real limiter in brewery capacity and why most micro breweries can't do lagers right. This is also the case why even in Germany lagers take only 3-4 weeks these days.

Kai

 

[Dwain]

bassguitarfishing,
All of this is good advise. However, the vast majority of the threads were reasons why not. I've looked into this at different times, places and levels. I too ran across a lot of negativity. Here's my $.02. Make an appointment with the ATF for your state. Most of the time, they have offices in several cities throughout the state. Sit down and have them go through with you exactly what is necesary for you to do what your goal is. Remember, they aren't doing you a favor,"IT'S THEIR FREAKIN' JOB". I would suggest you make a list of things you think you need to know. Ask whatever you want to and let them guide you. Remember, "IT'S THEIR FREAKIN' JOB". I have read some interesting articles on Pete's Wicked Ale and Sierra Brewing. Pete had the idea from the beginning to make it big and get out. Apparently, he's making chocolate now. Sierra has been around a lot longer than I had any idea so they must have been pretty successful as a small market beer before they branched out. My point is, don't let me or anyone else on this board pi$$ on your Post Toasties. You will never know unless you ask first hand. Go for it Brother and let us know where we can buy some of your awesome brew! Good Luck - Dwain

 

[z987k]

bassguitarfishing,
All of this is good advise. However, the vast majority of the threads were reasons why not. I've looked into this at different times, places and levels. I too ran across a lot of negativity. Here's my $.02. Make an appointment with the ATF for your state. Most of the time, they have offices in several cities throughout the state. Sit down and have them go through with you exactly what is necesary for you to do what your goal is. Remember, they aren't doing you a favor,"IT'S THEIR FREAKIN' JOB". I would suggest you make a list of things you think you need to know. Ask whatever you want to and let them guide you. Remember, "IT'S THEIR FREAKIN' JOB". I have read some interesting articles on Pete's Wicked Ale and Sierra Brewing. Pete had the idea from the beginning to make it big and get out. Apparently, he's making chocolate now. Sierra has been around a lot longer than I had any idea so they must have been pretty successful as a small market beer before they branched out. My point is, don't let me or anyone else on this board pi$$ on your Post Toasties. You will never know unless you ask first hand. Go for it Brother and let us know where we can buy some of your awesome brew! Good Luck - Dwain

Also talk to a brewer that has made it. The ATF may not know much about your business making it... but they should know a lot about government regulations on alcohol.

Oh and Kai, have you read on continuous fermentation? It seems as if no one has really made it work, but seems like a great idea.

 

[double_e5]

Figure about another $1.00 per bottle for packaging + .50 for enclosures +.50 for cases.

Then you got fixed costs of a few grand per month minimum + equipment amortization. Costs of sales, vehicle lease, marketing costs. This is just the beginning of the grocery list of fixed costs really.

Figure minimum 10K per month in fixed costs which would have to be amortized over the cost of each unit sold. So if you sell 1000 six packs per month then you would have to divide that 10000 into the costs of those. So your cost is $13/ six pack.

So according to the figures you would be earning $9.07/hour against a $50/hour nut.

One little correction: Equipment depreciates, intangibles amortize. Sorry, I'm just an accounting nerd.

This is exactly the problem with doing this on such a small scale to try to make money. You can't cover your fixed costs. Most people here are forgetting about fixed costs and just trying to cover variable costs. Running something this small would be a cash flow nightmare. Is it possible? Sure, but I wouldn't want to do it to eek out a living.

 

[shrades]

Well I have along way to go to even try my hand at brewing enough for selling, but hats off to you all that have that dream. I'm turning 43 this March, and if I can think of any advice for younger people, GO FOR IT! There are alot of small breweries that are popping up here in the Midwest, and most of them are taking older breweries or older buildings, and spending there days nights and most of there money getting it done. But they are great places to sit back relax, and enjoy friends and good brew!

 

[bdlbrewster]

Make friends with your local brew shop manager or owner and convince them to buy a case of sixers. Don't worry about the little stuff. I brew at home and manage a liquor store, in which I sell my brews. A few locals buy my brew, and the local government is none the wiser. As long as the rest of the business is legit no one will care. Just make sure you spend time on your packaging and all is well. Costs me between $25-$40 to make two cases, and I sell them at $7.99 a sixer. It's about $20-$30 bucks profit a case. Menial but enough to keep me truckin. https://cdn.homebrewtalk.com/images/smilies/rockin.gif

 

[rfoster]

I have been brewing in my garage for about 5 years now. My friend owns a liquor store and said that he would be willing to sell my beer so as long as I have all my permits, etc. to produce the beer in California.

I am not looking to make big bucks off this, but more of a hobby as I am approaching retirement. I'll be happy to cover my expenses. I know you can't sell beer that you make in your home.

Thus, can I brew my beer at a local microbrewery and bottle it up for sale?

 

[DeathBrewer]

From what I've found, you need your own location and an "off sale beer & wine" license to label beer as your own. If you wanted to distribute your beer under their label, then you can get a "beer & wine wholesaler" license, then all you need is a warehouse location and that license is much easier to get.

I'm currently trying to do pretty much the same thing, but we want our own label on the beer so even though we would start by having it done by contract, the wholesaler license will not allow us to put our own label on it for beer (it is ok for wine *shrug*)


Read through the ABC website to begin, here are the license types:
http://www.abc.ca.gov/forms/abc616NR.pdf

 

[mkling]

For anyone interested in doing this, you might want to go over to the Brewing Network. Their Sunday Session radio show on 4-11-2010 was all about how to start a Nanobrewery or Partner brewery (renting an established brewery's facilities). I thought it was definitely one of their most informative shows.

 

[billvon]

My friends keep asking me how much it would cost to make a batch of "________" and that they would pay for it. I figure that so long as they give me money, and I go and buy the ingredients with that money and "donate" my time, thats its pretty much as legal as it can be.

Well, not quite; that is selling beer by any definition. If they brought you the ingredients it might be a bit more legal. Perhaps even just deposited money in a "general brewer" account at the local homebrew store?

 

[ReverseApacheMaster]

Well, not quite; that is selling beer by any definition. If they brought you the ingredients it might be a bit more legal. Perhaps even just deposited money in a "general brewer" account at the local homebrew store?

I agree -- any thinly veiled plot to cover up selling beer to your friends could be easily uncovered.

It's one thing for your friends to give you cash to buy ingredients and share the homebrew with them, but if people believe they are buying beer and/or if you are receiving an amount from people obviously beyond your costs and then sharing or "sharing" your beer with them, you risk getting into serious trouble.

 

[Airborneguy]

If you really want to do this, asking on this forum isn't the best way to get info. Overall, Homebrewtalk tends to be very negative towards this idea.

Lucky for me, I get a full retirement at 43 and will have roughly $200k to blow on my brewpub. Brewpub seems to be the way to go from everything I've seen and read.

 

[artyboy]

http://www.gcbrewery.com/