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jdemars

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So, I've been approached about starting a brewery in a small town. I have done a few all-grain and mostly kits. These guys more or less just want to start brewing and have the money to fund a turn key system. We're not a big town so there is a lot of local appeal. They are in business to begin with and are taking care of the funding, and licensing to sell kegs.

Thoughts, words of advice? I don't think there is a real emphasis on turning a profit as much as seeing our tap at the local bars. Everyone involved has, and is keeping their day jobs.

cheers!
 

FatDragon

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They have the money to fund a system. Do they have the money to dump several batches of beer as you learn the ropes? Do you have the time and wherewithal to learn how to brew on a large system like that? Will there be an experienced brewer to guide you through the process, or will you be brewing by the seat of your pants?

With a few all-grain brews (mostly kits, as you say), you're more or less a novice homebrewer. Pro brewing is different enough from homebrewing that most of the well-heeled homebrewers here would struggle with it at the outset. In your case, you'll have an even steeper learning curve. I'm not saying don't do it, but be prepared for it to be difficult, discouraging, and time-consuming, and accept the fact that there may be very little payoff early on.
 

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jdemars

jdemars

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It is a group of four of us, two home brewers, and two beer drinkers with some cash to burn. We are very aware that mistakes will be made and that money will not be produced for a long time if ever. I made it clear that going from our current setup to a turnkey system would be a rocky transition, which made them even more interested in getting one and learning to brew on it.

We would be brewing by the seat of our pants. I'm a biology major, who studied water and currently a high school bio and chemistry teacher. We have done more kits than recipes, but have done recipes.

This could be a perfect case of learning to drive in dad's Porsche.

I'm here because I'm on the fence about the whole thing but kind of feel like if they want to make a business and buy the equipment, why not jump in with minimal risk to me and take a chance learning to set up and brew on a bigger system? At the end of a few years we might have a lot of really good to mediocre beer.

Im wondering what some recommended systems would be?
I remember reading about a system that has the same style 5 gallon setup as their 1 bbl setup, I thought it was an all in one brew in the fermenter type deal. Any ideas on a name?

Thanks again
 
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JZ1018

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If you are serious about this, then do some research of your own. Figure out what kind of system (how big) they are thinking and then find some breweries of the same size and go talk to people. See if it would be possible to work there as an intern during your holiday vacation. You just missed the nano brewery conference in Burlington VT that would have answered a lot of your questions. Maybe reach out to the organizers there to see if they can point you in any direction. I would love to be in your shoes in this instance, but I would also do a lot of research to fully understand what I was getting into.
 

wyowolf

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Hell I dont see why not, You have already said you arent in it to make money, so do your research, learn all you can and just have fun with it. It is quite satisfying to brew your own and be able to enjoy it at the end of the day. Mistakes? sure there will be tons, but its not rocket science, study all you can from smaller breweries and just go for it... best of luck and enjoy it!
 

bobeer

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This is a no brainer to me. I'd do this in a second. Make a business plan and plan to work hard. That's the only thing about this that confuses me. Brewing is a ton of work and esp on a big scale. Even if you're just doing 1-5 bbls it's a lot of work. Why wouldn't you want to make money on your hard work? You're going to have to come up with recipes of your own and do a lot of test batches which is a lot of personal time spent.
If I were to shop for a turnkey system I'd get a Colorado Brewing setup. https://www.cobrewingsystems.com/ I don't work for them or anything I just think their system looks the best for the space constraints and cost factors.
 

Sailingeric

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Have they thought it through? Getting the license, site to sell it- will it be a bar, a restaurant, or a tap room? If you are new to brewing, why not go see a few existing breweries and see how it is done. A smaller tap room breweries always seem to eager to show off what they are doing and how they do it when you go in during a slow time or set up an appointment to help out for a couple of days.
 

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I have been to several small town breweries setup by homebrewers. Without exception I wouldn't go back to any of them. Its fine drinking someones homebrew for free but when you're paying big bucks for craft beer you want something better than your average homebrew.
 

wyowolf

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I have been to several small town breweries setup by homebrewers. Without exception I wouldn't go back to any of them. Its fine drinking someones homebrew for free but when you're paying big bucks for craft beer you want something better than your average homebrew.

Not sure I totally agree with that. I have been to a number of breweries large and small. Some of the larger ones I was completely disappointed in the taste, of course some were great as well. Not sure its dependent upon size of the brewery...

Not sure where this is, but if its that small of a town, there wont be much to compare it to most likely....

I wrote a thread about this a few months ago, I went to ashville, I could not believe the number of breweries there... but i only managed to go to a few of the most popular ones. I hardly liked any of them WAYYYYY to hoppy or weird tasting for me...and im pretty open i think when it comes to that...
 

Qhrumphf

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I have been to several small town breweries setup by homebrewers. Without exception I wouldn't go back to any of them. Its fine drinking someones homebrew for free but when you're paying big bucks for craft beer you want something better than your average homebrew.
Well, the vast majority of pros started at home. Not all, but most.

In the best case, someone business minded makes a couple poor homebrews and wants to make a buck, but has the wherewithal to hire an experienced brewer.

To the OP

There's some things that overlap between home and professional, and there's many things that don't, especially the bigger you get.

Plus the legal stuff is a nightmare.

My advice, take it seriously enough or don't bother. Basically everyone I know who's done the "keep your day job" route has either had their business fail or sold off their share and quit. It's a LOT of work.
 
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jdemars

jdemars

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Thanks for the info and guidance all! We'll be home brewing in the future brew house this weekend. We are not thinking taproom or bar, there are some locals with restaurants that we have talked with about getting a tap into. It's our plan to be floating free beer to them and the locals for quite some time until our beer is worth a damn.

Thanks again!
 

Qhrumphf

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Thanks for the info and guidance all! We'll be home brewing in the future brew house this weekend. We are not thinking taproom or bar, there are some locals with restaurants that we have talked with about getting a tap into. It's our plan to be floating free beer to them and the locals for quite some time until our beer is worth a damn.

Thanks again!
Are you allowed to legally self-distro? That varies widely around the country. For example, VA doesn't allow self-distro at all. DC does IF the product isn't carried by a distributor (although it's really more a legalized resale- retailer can purchase, pick up, and resell, than actual self-distro, although breweries outside DC get away with self-distro in town though not sure how legal it is, DC liquor laws are strange).

If your state/locality does not allow self-distro, you're paying a middle man and it could quickly become financially untenable (you make pennies on the dollar between distro vs tap room sale).

As I said, the legal stuff is enough of a hassle (and cost) that it kinda precludes the "keep it a hobby but sell it" part timer model you're contemplating.

(I understand you said that turning a profit wasn't the goal, but hemorrhaging money isn't sustainable for almost anyone unless your funding folks are just plain mad...)
 
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jdemars

jdemars

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Are you allowed to legally self-distro?
Good question, I'll pass that along to the business guys. They picked up the LLC today. To put this into perspective, we're a town of less than 900 and everyone knows everyone.

I think that they like the idea of being the "local brewers" and are ok taking the risk; they have enough resources to not be thinking twice about the "this may not go well" narrative that I have been pushing. I'm getting a lot of "who else in town is going to do it, eh?" "lord knows we all drink enough".

I think I need to watch Strange Brew and have a homebrew.
 

MikeScott

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My two bits would be do it if you want to. Maybe plan the opening after the start of your summer vacation so you have some time to learn the ropes. I would also agree that talking with a brewer close by would be a good idea, maybe see if you can help out with a brew day...

I've always heard that you want a tap room, you get the most back from the sales, and it helps a lot with cash flow.

Personally, if I was to invest my blood and sweat into the business, I would want a piece of the company...
 

Andrew Hodgson

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Personally, if I was to invest my blood and sweat into the business, I would want a piece of the company...

Even if its funded by folks who don't want to make money? I think take it as a chance to learn to brew better and let the guys who can afford it dump the money in for now.
 

tll77

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I certainly do not want to discourage your efforts, and I do hope you and your team succeed.
Make sure you do your homework, then go back and check your work, making the beer is just a small portion of what goes into operating a brewery.


For instance,
It's our plan to be floating free beer to them and the locals for quite some time until our beer is worth a damn.
I am pretty sure TTB and local ABC will never allow this.
 

MikeScott

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Even if its funded by folks who don't want to make money? I think take it as a chance to learn to brew better and let the guys who can afford it dump the money in for now.

I can totally understand that, but the way I see it, things change. Imagine the beers get really popular, and they start distributing farther away or the small town gets bigger. I don't think that they are going to drop prices so that they barely break even. If that's the case, then OP was part of the team that bled over the kettle to get them there.

I can learn to brew better at home, and although I won't make any money doing it, if I'm tired, I can put the brew day off, but that's not going to be the case for a brewery. If they get popular, I won't be brewing 6 days a week after I work all day in my primary job. The wort must go on! His recipes are going to become the backbone of their offerings, and the reason people keep coming back.

Plus, it's good for those who are putting the money up in the first place. If things get tough, is it OK for him to say "never mind guys, this isn't for me. I'm going home"? Having a stake in the company will be the reason he stays there when he's wrestling with the keg washing machine at 11PM, for the third time that week.

I don't think OP would get an equal share if he isn't putting any money up, but there should be something. Startups do it all the time with "stock options", there's plenty of breweries that are employee owned, either way, he should have some sort of say in the direction the endeavor takes, and more of a stake in it then just an employee.

I may be taking the idea a bit too seriously though ...
 

bleme

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The smallest town near me that has a brewery would be Three Rivers Brewing, in Three Rivers (pop 2200). It cost him about $250,000 to get going but less than a year in, he is already expanding.
https://www.facebook.com/ThreeRiversBrewingCo/

EDIT: That is "less than a year after he opened". He had to rent the space, buy all his equipment, set it up, and let it sit for a year while all the inspections and licensing went on.
 

MaxStout

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I've been to more than a few of those "three guys who took their love of homebrewing to the next level" kinds of breweries. Most of them were slinging so-so beer for $6 a pint. A few others were quite good, but those were breweries whose beers were well-developed before they went commercial.

Have you entered any of your homebrews in a competition? If so, are you scoring high in the beers' respective categories? Can you make those beers over and over, with consistent results? Make sure you are able to build and execute high-quality beer first. Then you need to scale it up to brewery batches.
 

MapleGroveAleworks

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Agreed with @MaxStout - your beer will probably be mediocre for awhile. I think every homebrewer I've ever met has friends that tell them to go pro at some point. Do you think you can develop the skills to create professional quality beer? Or perhaps your town's culture won't care if the beer is average. I know a couple breweries who are the only show in a small town with average beer but still do fine just because it's all there is.

I'm just saying, at most of the competitions I've judged...there's probably only 10% or less of the beers I've had there that I would gladly pay $6 a pint regularly for. And that's for people who are submitting beers to competition. If you've just done a couple all grain kits, you're not even at that level yet.

But hell, if they have money to burn then go for it, why not.
 

GnenieGone

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If I had 2-3million to spare like these guys I'd go for it. Remember it's about the venue just as much as the beer.
 
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SEndorf

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I believe the OP is in Minnesota?
That's a self distribution state.
You describe is a very small town where everyone knows everyone.
I think realistically, if you all are keeping your day jobs, you would need some commitment from the local bars. You won't have time to do any other marketing.
Give them a few free test kegs before diving into a barrel system and all the licensing and nightmare that goes with it.
 

isomerization

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I've been to more than a few of those "three guys who took their love of homebrewing to the next level" kinds of breweries. Most of them were slinging so-so beer for $6 a pint. A few others were quite good, but those were breweries whose beers were well-developed before they went commercial.

Have you entered any of your homebrews in a competition? If so, are you scoring high in the beers' respective categories? Can you make those beers over and over, with consistent results? Make sure you are able to build and execute high-quality beer first. Then you need to scale it up to brewery batches.

Define high. Just curious, asking for a friend lol
 
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Dreams are wonderful. But do your research ahead of time. After 5 years of brewing, over 100 batches (most AG and my most own recipes) I decided to enter a few competitions and did well. Actually brewed with two different pros on their systems. So I got the big head and decided to see what it would take to start a brewpub. Did my due research- spent way too much time on this forum, along with AHA forum, and Probrewer.com forum. Bought and read 3 books. Visited 11 different brewpubs in the surrounding 2 counties. Talked to everyone who would listen to me.
Here's what it boiled down to for me: $375,000 to get equipment for a 7bbl system and set it up. And that doesn't include buying/leasing the location. Also doesn't include anything on the food side, which setting up a restaurant could easily double the cost.
So, 3 years later, I'm still homebrewing, still entering competitions, still spending waaay too much time on this forum, now have 21 books. And still looking for a sugar daddy with a spare $350,000-500,000 to spare. Good luck to you! :mug:
 
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