NanoBrewery Attempt

[priceman75]

Hello
My friends and I have decided to begin the journey of a startup nano brewery.
We will be converting half of my garage into the all electric brewery. We will be using 3 SS 55g drums, 1bbl system with a 50amp control panel from the electric brewery.
I have a ton of questions for anyone who has made the conversion from home brewery to a licensed nano brewer. I am also looking for insight, tips, comments and pictures from anyone who has made this attempt.
Important questions I have are:
1. Does your home insurance cover any or all of the equipment used for this brewery or is it necessary to have a separate policy?
2. Are there certain companies you deal with specifically for your bulk ingredients?
3. In the beginning phase is it legal to "give away your beer" to friends, bars and stores to gain exposure?

I have many other other questions but if anyone can add their own experiences I would greatly appreciate it. Success stories and failures are welcome. I can certainly learn from others.

Thanks ahead!

Frank

 

[Weezy]

I wouldn't rush out and buy equipment. It's a long process to get this legal.

Buy a book: http://www.brewerspublications.com/...ociations-guide-to-starting-your-own-brewery/

Visit your local government. Talk to the permits office and tax office. Discuss what your plan is. Ask what is required for permitting.

Contact the county and ask what is required.

Contact the state liquor control board or ABC or whatever its called there about permitting. You likely want to start with their website. Theres probably a lot of info, include forms, there.

Contact a few insurance companies about liability insurance. Your homeowners will not cover anything and you need protection from clients and end users.

After you have a path forward to satisfy the local, county, and state, start looking at fed licensing requirements.

Develop a simple business plan. Investigate your expenses and potential revenue based on all costs from permitting feed to utilities to insurance consumables.

...and more.

 

[madscientist451]

I had my own business for 10+ years, (not a brewery) the recession finally put me out of it in 2008.
I'm a home brewer and wine maker and have seriously considered going back into business, this time either in beer or cider, but my past experience has made we wary and for now I'm staying out of it.
Running a business consumes way more time and money than most people realize and can have both positive and negative affects on your personal life.
So here's my two cents and comments about your post:
If you can't make it work on paper, its just not going to work.
So spend some serious time on a business plan that's realistic.
You mentioned starting in your garage and giving away brew.
You should have already done that with your homebrew set up.
If you are going to put in a 1bbl system you should have a plan to sell the beer you make. You should line up your suppliers before you consider buying equipment. You should also have a clear view of all the licensing requirements.
Brewing beer is one thing, running a business (brewery) is a different task that requires a different set of skills, a lot of time and access to working capital. How much working capital do you have?
A nano brewery near me runs out of a rented warehouse space and does about 12BBl a month. He sells out most of the time selling directly from the brewery in growlers.
What is your sales plan and production goals? What price are you going to put on the beer? What is your cost of goods sold? (that includes ingredients, all overhead costs, and paying yourself something) What is the profit margin on each gallon produced?
You should consider putting the brewery in commercial area in rented space, it would be easier for customers to find you and also be better to meet licensing and insurance requirements.
Don't quit your day job, make beer after work and be open Friday and Saturday afternoons. If the beer sells, you can expand. If it doesn't work out, you can sell everything. You'll be working 7 days a week, probably 80+ hours, including your day job. That would be 40 hrs on your day job and 40 hrs in the brewery and its probably not enough time in the brewery.
Can you handle that? Have a wife and kids? Do you think you'll have time to spend with them?

Think about that very carefully.

Be wary of partnerships. Put everything on paper. Your partners may have a different work ethic than you do and have different expectations of what is required and what they will get out of it.
I'll go back to what I said first, if you can't work the whole thing out on paper (including exactly what each partner is expected to do and get) then its just not going to work.

 

[beerme70]

You know it stinks to have to admit that you're right, but you're right. I have even thought about it, but decided that it's just not worth the hassle. Having to make sure that all your ducks are in a row to ensure that all the various government entities that don't have anything to do with your business gets their cut. In a TRUE free society, we should be able to make beer and sell it to whomever we want, with no government interference, but like I said before...they have to get their cut. SICKENING!

 

[riderkb]

It isn't the government that prevents a nano from turning a profit, it is the market. If you sell all of your beer in $5 pints then you might break even assuming that you are willing to work for minimum wage.

I've worked the production costs for breweries from 1/6 bbl to 10 bbl and found that anything smaller than 10 bbl needs to be part of another business like a brew pub.

 

[bobeer]

There are several threads on here having to do with opening a brewery. There's threads about small nano's and micro sized breweries. All with good information. Also, check out probrewer.com

I agree that before you put money into it you should speak with the powers that be and make sure you know exactly what you need to do. Once you do that then work on a business plan for a while so you don't go out of business after all your hard work. Good luck!

 

[Hello]

1. Does your home insurance cover any or all of the equipment used for this brewery or is it necessary to have a separate policy?
2. Are there certain companies you deal with specifically for your bulk ingredients?
3. In the beginning phase is it legal to "give away your beer" to friends, bars and stores to gain exposure?

First, the easiest step to take right now is call your city/town and see if you're allowed to run such a business out of your home. Also, check with your HOA if you have one. My HOA doesn't seem to give two craps about what I do. I ask them every time I want to do something like put up a fence, add a shed, stand outside shooting ducks...they're all fine with it. The Town is different and I always ask the neighbor who may be affected by my changes if they're okay with it.

You may find out that you cannot run a brewery outside your home. If those folks say sure, then check with the health department. I wanted to make ice cream and sell it at the Farmer's Market. Seemed easy enough to me. I got everything sorted with the Town and my HOA, but when it came to the health department, owning a dog puts me out of the running for making anything in my kitchen to sell to the public. Renting kitchen space for something like ice cream was not really in the cards. Money was okay, it was the transport, storage, and equipment.

Also, you will need a permit for the new electrical, you'll likely need something for the conversion of the garage, but I would be wrong, and you may have to dig a trench in the concrete slab for a drain. That may be required.

So, before you get into spending a single dime on this endeavor, see if you're allowed to. Then you'll tackle the red tape of the deep pocketed government.

To answer your questions above:
1. My homeowner's insurance will cover me for my shed and my equipment up to $300k. I emailed my agent to ensure my shed and all contents were covered as it is not attached to the house. Call your insurance company to verify.
2. My LHBS gladly will sell me bulk grain at 30% off the price of the entire bag. Check with yours. You can do huge buys which are sent to you on a pallet, but I don't honestly know how much grain you'd go through with a 1bbl brewery.
3. You can give away your beer. Will a brewery/bar serve it for you? I am unsure. They have rules and policies they're bound to follow with that so it is best to ask. Start developing those relationships now because you have the time today.

Definitely go hang out at probrewer.com like bobeer said.

 

[beergolf]

I am no expert on this but from what I understand.

You probably cannot brew at your home for commercial purposes. You will need to have a commercial space. Then you will need to get all the federal licenses and permits. As I understand it, you need to have the commercial building before you can apply to the feds for licenses.

Depends on the state you live in, but most states a bar cannot serve home brew, so until you are a licensed brewery then you cannot
Sell or give away your beer.

I would suggest that you have a ton more research to do before you invest any money.

There is a thread about someone that went pro. Maybe you should contact them and they can give you some advice.

Good luck.

Edit: I found the thread I was thinking about. Hope this helps.

https://www.homebrewtalk.com/f14/i-went-pro-what-actually-takes-do-so-386476/

 

[PapaFoxtrot]

Lots of good advice above. My $0.02 to add is that scale sucks. What I do whenever I get delusions of grandeur about turning a hobby into a business is spend a little time with a calculator working on scale. For example, if you need a 12bbl monthly volume, then you're talking 372 gallons/mo. Assuming 2.4 lb of grain per gallon(that's low if you're thinking stouts or porters), that's close to 900 lbs of dry grain. Grain water absorption is about .13 gallon/lb, essentially doubling the weight of the grain. Just for grins, let's round that up to 2,000 lbs. Are you prepared to handle and dispose of one ton of wet, spent grain per month? If you're in a rural area, then cattle or horse owners will take it off your hands. If not, you're talking commercial waste disposal. Also, thinking about shovelling close to 200 lbs of wet grain out of a 55 gallon drum every batch doesn't sound like fun to me.

A couple other issues. Commercial electrical wiring is a different animal from residential. Brewing is a wet process, so all electrical in the area will have to be rated for wet locations. Controlling grain dust(an explosion hazard) will be an issue and all electricals in that area must be explosion proof.

One other thing I've learned from personal experience is that turning a hobby into a business is a good way to ruin a hobby. Whatever you decide, best of luck. The above notwithstanding, if you decide to go for it, then I'm rooting for you! I think going pro is a dream that all homebrewers have in the back of their minds.

 

[PapaFoxtrot]

Here's another good thread to read - all 100 plus pages of it. Probably a lot closer to what you and your friends have in mind. Note that his experience was that the brewery could not be attached to a residence per the TTB and he built a detached building on his property. Also, the thread doesn't exactly have a happy ending - but that's life.

 

[airbrett]

Find a way to talk to Mike Hess: http://www.mikehessbrewing.com/

I watched his brewery go from two beers on tap in a garage in an industrial park, to providing his first keg to a bar, to now having opened a wonderful microbrewery.

It is what got me into craft beer and has inspired me to start brewing for the first time.

 

[priceman75]

Hey Guys,
Thanks for everyone's responses. I truly appreciate everyone taking time out of their busy days to help me in this endeavor. That's why I love this community of like minded Brewers.

We do have a lot to think about and consider. Luckily we haven't made any real big commitments.

I will research some more and update you as we proceed.

Thanks again