Opening a Nanobrewery!

[SavoryChef]

Just a heads up about working with your partner as a business partner. It may seem cool now, but spending 24 hours with them for a couple years pays a tole on the relationship. I have done this and it isn't easy, and we are not together anymore.

Just something to ponder over. Best of luck.

 

[Yankeehillbrewer]

Sweet! Another reason for me to come visit San Diego. Best of Luck

 

[Phunhog]

I have seriously crunched the numbers and have to say that the best way to make a nano work is to have a tap room. Without it....it seems to be a losing deal. Just not enough rate of return if you aren't selling the beer directly to customers. Selling wholesale to bars and restaurants sounds easy until you are running around delivering/picking up kegs, trying to get/keep tap space, and most importantly collecting what is legally owed to you. It has been pretty well documented that selling beer wholesale operates on razor thin margins. Let's say you are able to sell 1/6 keg for 75 bucks, which is pretty high. By the time you factor in ALL of your costs you might make 30-40 bucks....maybe? If you run a 1bbl nano multiply that by 6 and you will make a whopping 180-240 dollars per barrel. Of course it all changes if you are able to open a tap room....but that has even more start up costs.

 

[daksin]

Just a heads up about working with your partner as a business partner. It may seem cool now, but spending 24 hours with them for a couple years pays a tole on the relationship. I have done this and it isn't easy, and we are not together anymore.

Just something to ponder over. Best of luck.

This is certainly something we have considered 100%. We have made this relationship work over both long distance and close proximity for over 10 years (jesus, has it been that long?). We've been married in the eyes of the law for two now.

Honestly, I wish business partners of my past were more like her, and I imagine she feels the same way. If the brewery starts to affect our relationship (negatively), we'll trash it faster than spent grain.

 

[daksin]

I have seriously crunched the numbers and have to say that the best way to make a nano work is to have a tap room. Without it....it seems to be a losing deal. Just not enough rate of return if you aren't selling the beer directly to customers. Selling wholesale to bars and restaurants sounds easy until you are running around delivering/picking up kegs, trying to get/keep tap space, and most importantly collecting what is legally owed to you. It has been pretty well documented that selling beer wholesale operates on razor thin margins. Let's say you are able to sell 1/6 keg for 75 bucks, which is pretty high. By the time you factor in ALL of your costs you might make 30-40 bucks....maybe? If you run a 1bbl nano multiply that by 6 and you will make a whopping 180-240 dollars per barrel. Of course it all changes if you are able to open a tap room....but that has even more start up costs.

Absolutely true about selling to bars vs selling in the tap room. It's a very simple calculation to do. Conventional wisdom says a keg (15.5 gal) of good craft beer sells for $150 to a bar, which must then triple its investment to make money.

If I sell that keg directly to the public at CHEAP pint prices, there are 110 US pints or 100 imperial pints (16.9 ounces or 500mL- an "honest pint" if you're into that sort of thing) at $4.00 apiece, even if that's expensive IIPA, I can make at around 3X (or more) the profit on that keg selling it in my taproom vs to a bar. In case you care, that INCLUDES shrinkage- that is to say foam and overpour.

The taproom makes the nano feasible, at least in California. Selling dollar tasters makes it even MORE profitable.

 

[JiBiru8]

Thanks so much for your support. I couldn't agree more. You know what? I'm 25- I can afford to fail bigtime. It's not something I want to do, and certainly not something I'm planning on, but it won't be the end of the world. That's extraordinarily freeing- my wife is my business partner and I have no kids to support. Just cats.

It's all about low barrier to entry. I would imagine we're going to hit a plateau here when a lot of nanos start going under or the owners get tired of working 80 hour weeks to break even. Hopefully we'll still be young when that happens and can ride it out. If I can make the money I'm making now (not much, but enough), but do it making beer and selling it to my friends and neighbors, that's what I'm going to do.

I was told my entire life that I should do what I love to do and the rest will work itself out. Instead, got my degree in an interesting field and did some interesting work, but everything's a job unless you love it. Until now, "do what you love" has been more of a platitude, but I'm going to treat it like a dare.

This post is great. Good luck brother!

 

[daksin]

This post is great. Good luck brother!

Thanks!:rockin:

 

[organ]

Good luck!

 

[rexbanner]

Hey man, congrats. I'm also 25 and starting a nano soon. Finishing my control panel for my system before I take it live on Kickstarter in a month. What beers do you plan on having on tap year-round?

Absolutely agree on the tasting room aspect, that's all mine is. I won't be selling wholesale for a long time. In fact, I want to sell directly to the consumer whenever possible. I randomly met Sam Calagione last Saturday at a bar in NYC. He is a very nice guy and I got to chat with him for a bit. His DFH alehouses, basically brew-pub type concepts that don't brew on premise, are money-making machines. That's the direction I want to go.

 

[daksin]

Hey man, congrats. I'm also 25 and starting a nano soon. Finishing my control panel for my system before I take it live on Kickstarter in a month. What beers do you plan on having on tap year-round?

Absolutely agree on the tasting room aspect, that's all mine is. I won't be selling wholesale for a long time. In fact, I want to sell directly to the consumer whenever possible. I randomly met Sam Calagione last Saturday at a bar in NYC. He is a very nice guy and I got to chat with him for a bit. His DFH alehouses, basically brew-pub type concepts that don't brew on premise, are money-making machines. That's the direction I want to go.

Awesome- we'll see how it goes. I'm keeping my day job, for now, as they say. We're going to have an Ordinary Bitter, a Cream Ale, a Cali Common, and a Chocolate Stout as our core beers at launch. We're debating about the IPA, but that will probably be on all the time too. Basically super flavorful, easy drinking, unintimidating session beers. Some of the cores will have bigger versions (an ESB and an Imperial Common which is awesome, for example), and I'm a farmhouse nut so we'll probably have a saison, Biere de garde, or sour on tap year round too- basically a ton of rotating small releases.

 

[Dirty25]

Good luck to you. If it dosent work out for you in CA come to AR there is plenty of room for expansion here

 

[daksin]

Good luck to you. If it dosent work out for you in CA come to AR there is plenty of room for expansion here

Thanks!

Small market though: not too many of the good ol boys want to drink any of them unamerican import beers. They're too dark tasting.

 

[Jukas]

The taproom makes the nano feasible, at least in California. Selling dollar tasters makes it even MORE profitable.

I hope you mean when someone wants a sampler of tasters, and not when they simply ask for a taste of a beer before making their choice.

Most of the places I go I look at their beer board and figure out one or two I'm interested in, and then if it's not one I'm familiar with I'll ask for a taste of it to make sure I like it prior to buying a full pint and the bartender always brings me maybe a 1oz taster and I never get charged for it.

If I had to spend a buck, to make sure I wanted to spend 5 bucks on your beer I'm not sure I'd bother.

 

[45_70sharps]

I hope you mean when someone wants a sampler of tasters, and not when they simply ask for a taste of a beer before making their choice.

Most of the places I go I look at their beer board and figure out one or two I'm interested in, and then if it's not one I'm familiar with I'll ask for a taste of it to make sure I like it prior to buying a full pint and the bartender always brings me maybe a 1oz taster and I never get charged for it.

If I had to spend a buck, to make sure I wanted to spend 5 bucks on your beer I'm not sure I'd bother.

Rouge does it both ways.
They will bring me a small taste of something for free, but they have a deal where you pick 4 beers and they pour a 4 oz glass of each for you to try.

To be honest, I think the cheap taster pours are a good deal. I usually go through about 3 of the taster's of four beers and maybe a couple of the regular beers.

 

[Turner5]

His DFH alehouses, basically brew-pub type concepts that don't brew on premise, are money-making machines. That's the direction I want to go.

That is genius. It would be really cheap to open an additional tasting room in a different location.

 

[daksin]

That is genius. It would be really cheap to open an additional tasting room in a different location.

That is if you're already working off of a 30bbl system somewhere:rockin:

 

[Turner5]

That is if you're already working off of a 30bbl system somewhere:rockin:

Obviously, but down the road or for a larger start up it would work great. My comment was more directed at DFH.

 

[daksin]

Obviously, but down the road or for a larger start up it would work great. My comment was more directed at DFH.

Definitely. The Stone Company Stores out here are a similar idea, different execution. I expect they'll be popping up all over the country soon. I don't think I'll get to a point (even if we're successful) where I'd want to be that big. That rich maybe, but I still want to be pulling pints for people whose names I know.