Starting a microbrewery vs brewpub

[bathman]

Humor me as I started to fantasize about the pros and cons, difficulties and advantages, me costs of starting a microbrewery vs a brewpub. Any discussion on the matter. I want to explore any thoughts or experiences everyone here has had as I think to myself as I'm sure we have all dreamed. Thanks in advance
-Bathman

 

[hercher]

I'll preface my answer by stating that I was the brewmaster at a brewpub in NJ from 1996-2000. Don't take me comments as discouragement, but merely an effort to keep your eyes open.

The thing about running a brewpub is that you are really running two operations: a restaurant and a brewery. Both require a great deal of attention. Expect to work 16 hour days. When things are going well, it is A LOT of fun. When things are not going well, it is not. It also means a larger staff -- you can't run it by yourself.

The thing about running a microbrewery is that you will need a salesperson. That beer, as great as it might be, won't sell itself to area bars and stores. And the fight for tap and shelf space is intensely competitive. Plus you will need to be knowledgeable about your state's distribution laws. You will have the additional expense of a bottling line at some point in time.

 

[Rhumbline]

I've no experience with running a brewery but I had a restaurant for a short time. As Hercher said it's a ton of work and long hours.

It was the hardest work I ever did, for the least amount of money I've ever earned. No exaggeration.

Even though we were mostly opened just for dinner, an easy day had me there at 10 am to do prep work and I was lucky to get out before 2am.

A brewery with a tasting room might be ok.

Good luck.

 

[Xpertskir]

Before you worry about which is better you need to look at your states laws, the decision may be made for you.

 

[Punity]

Ill say that my desire was put off to run a brewpub when i first started, to much work in an area that I really didn't want to focus on. Yes food does help drive sales and offer another draw but for me it would take away from my passion of brewing. So I have a small brewery now, working out the kinks is enough of a headache with just myself and my partner.

If it was me I would start with a brewery if that's what you want to do and then grow it. If in a couples years adding the restaurant side seems like it would work then you can focus your attention on doing that.

I've always stood by the KISS method of work and it has done well to this point

 

[skitter]

I would want to do a brewpub as I love cooking and would obly have 1 or 2 of my own brews on tap at any given month

Sent from my SPH-L300 using Home Brew mobile app

 

[pdxal]

Here's a good book that will probably answer many of your questions:

http://www.amazon.com/dp/1938469054/?tag=skimlinks_replacement-20

 

[DoWBrewer]

I worked in restaurants for a long time. I don't think you can effectively run the brewing side and the restaurant at the same time. I would say hire someone who really knows restaurants to manage that side or at the very least hire a good consultant. Kitchens and bars are both tough to run. Bad workers can rob you blind, bad service can ruin your reputation etc.

I personally think a brewpub well managed is a better business. The more beer you sell at $4 to $5 a pint, the better. Your profit margin on pints is pretty good. Selling kegged beer to bars is very low margin.

One eye opening exercise on the brewing side, is to figure your cost per ounce to produce beer against the cost per ounce to buy kegged craft beer. When I was writing a business plan that really changed my plan. I moved from a small brew plant to about 15 barrels when I realized that was the point I could produce lots of beer cheaper than I could buy it. I would also recommend taking a class on writing a business plan.

I put a lot of work into my plan and ultimately decided not to do it, but I am really glad I went through the experience.

 

[hercher]

I would offer a few other points following my post above, and drawing on my experience. An advantage of the brewpub setting is that you can vary your beers a bit more. If you have strictly a brewery, you are going to want to start with 2 or 3 varieties, and people are going to expect them to be exactly the same every time. In a brewpub, people are a little more open to subtle changes from batch to batch. You also can substitute beers, drop or add beers from your line-up, and so forth.

The other thing I would suggest is that you, if allowed by law, obtain a full liquor license that will allow you to sell spirits and wine. For the same reason, you will want to have a BMC beer available. The reason is simple: imagine 4 people are going out for the evening. One of them either doesn't like beer at all or hates craft beer. Guess what? If you can't accommodate that one person, that is four people that won't come to your restaurant.

Having a partner or someone you trust to run the food and service portion of the business is a good idea, as well. Keep your menu very simple --burgers and sandwiches. They can be gourmet burgers and sandwiches, if you want, but if the menu gets too fancy, you will find yourself selling more wine than beer. Also, chefs are expensive; cooks are less so.

Make sure your wait staff is knowledgeable about craft beer. They need to be able to speak articulately about your beer, about beer/food pairings, and the brewing process. The more they know about your beer, the more they will enjoy your beer and want you to be successful.

Lest a lot of these posts seem focused on the negative, know this: when things are going well, running a brewpub is A LOT of fun. Its a lot of work, but you'll have a blast doing it.

 

[Rhumbline]

I would offer a few other points following my post above, ...

Great advice in that post, especially about including the BMC's. I'd suggest a similar approach for the food, if you choose to go that way.

You've got to have enough variety, you'll have the meat and potatoes guy with his girlfriend who wants a salad with grilled whatever (sorry for the stereotypes, reverse them if it bothers you). I think another important thing is to limit the menu items.

Three or four appetizers and four or five entrees. Makes it easy on the cook and prep staff as well as the wait staff.

Also, based on my brief but horrific experience, being a good cook doesn't have jack to do with running a successful restaurant and I suspect it's the same for a brewpub.

The biggest thing you've got to get right is creating a buzz. You might have the best beer in the world, but you'll never sell a drop of it if you can't get people interested in trying it. Businesses today live and die by social media and you'll need someone very savvy to manage that. Don't underestimate the importance of a good PR and advertising program.

Finally, and this is the tough part, you've got to have enough cash to support the place for at least eight months. Assume that you'll not take in one dollar for the first year.

Good luck, let us know what you decide.

 

[skitter]

Ironically enough a friend of mine at work is toying with the idea of starting a resturaunt, I suggested I could be making beer for the taps, but I think until I get better and can do AG brews, I will just manage getting local crafts on tap!

 

[sfrisby]

To those that discussed the full effort of running a brewpub, I have a buddy that has solid experience opening and running restaurants from casual to fine dining. It has been suggested to open a brewpub where he handles the restaurant and I brew the beer. Would love your thoughts on the OP's question (which may help his decision) when the restaurant management is handled and your job is just brewing beer. Thanks.

 

[Rhumbline]

To those that discussed the full effort of running a brewpub, I have a buddy that has solid experience opening and running restaurants from casual to fine dining. It has been suggested to open a brewpub where he handles the restaurant and I brew the beer. Would love your thoughts on the OP's question (which may help his decision) when the restaurant management is handled and your job is just brewing beer. Thanks.

I would guess it all depends on the split. Is he going to open a restaurant with you providing the beer? Are you going to be equal partners financially and labor-wise?

I'd advise letting him open the restaurant, with you leasing space from him to do the brewing. You sell him the beer.

Actually, I'd advise you not to go into business with a friend.

Even if the two of you are equal partners financially and he runs the restaurant while you handle all the brewing, there's going to be feelings that the other guy is just skating while I'm busting my butt. Or there will be creative differences where you want changes to the menu or he wants changes to the beer lineup.

 

[thisisbeer]

I would look at something from a legal stand point. In texas brewers are swithing the brewery to a brew pub for the added benifits. They are basically just a normal brewery. But saturdays they bringnin a food truck to feed people during tours. Also it allows them to have tap rooms and sale beer on premises. In texas you cant do those things under a normal brewery license.

 

[sfrisby]

Actually, I'd advise you not to go into business with a friend.

I have been doing some serious thinking on that very valued point.