Micro-Brewery School Assignment

[thomasgorff]

Like every home-brewer, I dream of one day being able to produce a product to the masses. I am currently enrolled in a business class where I have to create a business with a working business plan. Naturally I was interested in creating a business about my passion... Brewing! Unfortunately, the internet is still in the stone age when it comes to information to open a microbrewery. I was wondering if anybody has ever found any good links that discuss the initial costs, a detailed equipment breakdown, utility costs, recipes for mass production, if they use all-grain or extract methods, or any other information that may be useful for me to take a look at so I can produce a good business plan and win over the respect of my professor this early in the semester! I don't know if this thread is the right place to post, but no category seemed to fit. Thanks in advance and all information would be greatly appreciated. Tom

 

[Nateo]

http://www.soundbrew.com/small.html

http://www.homebrewersassociation.org/forum/index.php?board=190.0

If you're talking about a brewpub, that's actually a restaurant that wastes a lot of money, time, and space brewing their own beer. It's a loss leader to get people in the door.

If you're looking at a distro brewery with a taproom, that's something else.

 

[dlaramie08]

www.probrewer.com
The people on that forum should know all you need.

 

[o2nut]

Here is a site that has some great stuff.

http://sites.google.com/site/republicbrewpub/

You probably do not have to change much.

I think they have a blogspot to somewhere.

 

[thomasgorff]

Nateo no optimism for the brew-pub huh? I was talking more about a micro with tap room and self distribution, etc.

 

[Clanchief]

Nevermind what I said. While I stand by it, I didn't read the original post closely enough to recognize that this is a school project, not an actual attempt at opening a brewpub.

 

[KevinW]

You know, once you get everything in order the next step is get some money and just do it!!!

(well I know there is more stuff but it sounds good)

Good luck and I hope you get an A+ (do they give A+'s anymore?)

 

[Nateo]

Nateo no optimism for the brew-pub huh? I was talking more about a micro with tap room and self distribution, etc.

In a brewery/restaurant setup, you'll make the most margin off of food and booze, some money off beer you don't make, and you'll be lucky to break even on the beer you make yourself.

I say this because of the space required, the capital required, the time required, and the knowledge required, vs just having a restaurant that sells craft beer. Your overhead, utilities, labor, and rent will be probably twice as much if you brew on the premises than if you just sell others' beer.

But, if the fact that you brew your own beer means you get more dining customers, you can lose money brewing, make money on food, and still come out ahead.

Lots of businesses have loss-leaders as part of an effective business model. Like a swimming pool at a hotel. The pool doesn't make any money, costs money to maintain, but without it you won't get the customers in the first place.

 

[david_42]

If you're talking about a brewpub, that's actually a restaurant that wastes a lot of money, time, and space brewing their own beer. It's a loss leader to get people in the door.
.

Definitely not the case in Oregon. I know many owners of brewpubs and both sides of the house have to make money for this to work. Just look at the ingredients: for beer they are 10-15% of the cost, for most meals, 30-40%. A typical 4 barrel system takes up less space than the bar and will be a fraction of the size of the kitchen. A 4 barrel brewery would employ 2-3 people.

 

[Clanchief]

Definitely not the case in Oregon. I know many owners of brewpubs and both sides of the house have to make money for this to work. Just look at the ingredients: for beer they are 10-15% of the cost, for most meals, 30-40%. A typical 4 barrel system takes up less space than the bar and will be a fraction of the size of the kitchen. A 4 barrel brewery would employ 2-3 people.

A big issue for this is where you live also. I'm sure that in places like Oregon and Colorado in particular, where you have strong craft beer cultures, and more relaxed alcohol laws, it's a more viable business. In Chicago, getting a liquor license in a restaurant is, in and of itself, one of the most grueling things a new business owner can do. That's why people try and buy old restaurants that have failed and buy their license rather than go through the effort of getting licensed. Here, it is VERY difficult to make that kind of business successful. It doesn't mean it can't happen, but it's an extra level of difficulty added to an already stressful business.

 

[Nateo]

I agree with Clanchief re:local variation. A lot of states don't even allow self distribution. In MO you can have a microbrewery, and sell growlers, but if you want to sell the beer to anyone else you have to go through a distributor. Also, if you own a micro you're not allowed to own a distribution company. There's some weird workaround for the wine industry here, and for anyone making <22% ABV fermented beverages, which are somehow different than a microbrewery making beer.

But I don't really understand that, and it goes to show that liquor laws in many parts of America are antiquated and needlessly complex, and that compliance is potentially a huge headache.

 

[thomasgorff]

Still running into trouble figuring out what the standard unit of production is based on. Some sites are talking about bbl while others are using hL and so on. What is the standard measurement in the US? This has proven to be much more difficult than I would have imagined. Equipment needed for a brewery and pricing seems to be all over the place for similar production output. I just need to figure out what the general costs are that would be associated with a 10 bbl brewery system (or other unit of measurement equivalent).

 

[Nateo]

Still running into trouble figuring out what the standard unit of production is based on. Some sites are talking about bbl while others are using hL and so on. What is the standard measurement in the US? This has proven to be much more difficult than I would have imagined. Equipment needed for a brewery and pricing seems to be all over the place for similar production output. I just need to figure out what the general costs are that would be associated with a 10 bbl brewery system (or other unit of measurement equivalent).

In America breweries use US beer barrels, 31 gallons (most other barrels are 31.5gal). Costs are anywhere from $100k if you can find used equipment or make your own, to $1m+. It will really depend on where you are in the country. If you live somewhere cheap, like Missouri, it will cost many times less than say, starting a brewery in Brooklyn.

 

[LandoLincoln]

Like every home-brewer, I dream of one day being able to produce a product to the masses. I am currently enrolled in a business class where I have to create a business with a working business plan. Naturally I was interested in creating a business about my passion... Brewing! Unfortunately, the internet is still in the stone age when it comes to information to open a microbrewery. I was wondering if anybody has ever found any good links that discuss the initial costs, a detailed equipment breakdown, utility costs, recipes for mass production, if they use all-grain or extract methods, or any other information that may be useful for me to take a look at so I can produce a good business plan and win over the respect of my professor this early in the semester! I don't know if this thread is the right place to post, but no category seemed to fit. Thanks in advance and all information would be greatly appreciated. Tom

What did business students ever do without the Internet? The mind boggles.

 

[ACbrewer]

I agree with Clanchief re:local variation. A lot of states don't even allow self distribution. ...

But I don't really understand that, and it goes to show that liquor laws in many parts of America are antiquated and needlessly complex, and that compliance is potentially a huge headache.

You left out that they laws are complex to help protect the larger makers from competition. The larger distributers from competion etc. - but that is a different thread

 

[ACbrewer]

Still running into trouble figuring out what the standard unit of production is based on. Some sites are talking about bbl while others are using hL and so on. What is the standard measurement in the US? This has proven to be much more difficult than I would have imagined. Equipment needed for a brewery and pricing seems to be all over the place for similar production output. I just need to figure out what the general costs are that would be associated with a 10 bbl brewery system (or other unit of measurement equivalent).

2dl =20l=about 5gal, so 1hl=about 25g (actually 27g). 1 bbl as noted is about 31.5g.

so 10 BBL would be 11.47 or 11.5 hl. (I just love math!) But most of the time I see BBL used for US systems, and refeneced in the ABC laws - atleast in VA where Micro Brew Lisc is less than 5000 bbl per year.