Starting selling your beer?

[olllllo]

It seems pretty clear that you have to abide federal, state and local regulations.
Any talk of loopholes, tricks, etc are internet babble IMO.

They rank right up there with the people that write EXEMPT in their 1040's and cite something to the effect that paying taxes makes them a war criminal and in violation of the Nuremberg Tribunals.

 

[Brewing Clamper]

It seems pretty clear that you have to abide federal, state and local regulations.
Any talk of loopholes, tricks, etc are internet babble IMO.

They rank right up there with the people that write EXEMPT in their 1040's and cite something to the effect that paying taxes makes them a war criminal and in violation of the Nuremberg Tribunals.

lol, that's hillarious! I'm tempted to try that next year!

 

[JamesKY]

From the research I've done, by far the most profitable way to start brewing commercially is to open a brewpub. Not that this is for everyone but it makes sense considering you cut out the middleman and can claim higher margins per pint for yourself.

You really have to go big scale if you want to bottle and sell to end consumers and bars. The margins are just too thin to make a decent profit otherwise. Again, I've only done very basic research into the idea but that seems to be the general consensus.

 

[jbreiding]

From the research I've done, by far the most profitable way to start brewing commercially is to open a brewpub. Not that this is for everyone but it makes sense considering you cut out the middleman and can claim higher margins per pint for yourself.

You really have to go big scale if you want to bottle and sell to end consumers and bars. The margins are just too thin to make a decent profit otherwise. Again, I've only done very basic research into the idea but that seems to be the general consensus.

this is the way i am going and figure its good starting ground. but i really dont see mass distribution in my future at all. maybe a keg here or there, but will keep it direct from the manufacturer.

 

[rohanski]

The 100 gallon allowance you have for homebrew is for personal consumption, not for sale.

I make 19- 5 gallon batches and the last one is 4.9 gallons just to make sure I stay in compliance.

 

[TexLaw]

How about “selling” it at church functions as free beer with donations? Can’t be any worse than the fish fry or bake sale except people can get drunk and kill……. I’m a non practicing Catholic but during Lent our church has fish fries and sells beer.

I know that, in Texas, there are at least two things going on there. First, you have to get a license to sell beer. That's just for the ones putting on the event. In Texas, you can get a single event permit that allows you to sell beer until midnight. I don't think it's all that expensive, and it's fairly common.

However, for the brewer, you also have to get a license to make beer for sale. That's where the brewers who are posting all these "tricks" are getting into trouble. There might be places where you can sell beer, but the brewer also has to be licensed to make beer for sale. Should some homebrewer show up at one of these events with a corny and a "donation jar," I see court proceedings in the future.


TL

 

[abracadabra]

What are the estimated costs of adding a small brewery to an existing kitchen? Don’t know but maybe 20 or 30K?

How about “selling” it at church functions as free beer with donations? Can’t be any worse than the fish fry or bake sale except people can get drunk and kill……. I’m a non practicing Catholic but during Lent our church has fish fries and sells beer.

Hell, you can’t even make beef jerky and sell it as the local shop.

I'd think the cost would be 3 times that if you found used commercial equipment at bargain basement prices. But I'm certainly not an expert on used brewing equipt.

I also think the law of averages would eat you up trying to do it on a donation basis.
1/3 of the people would give you more money then the beer cost.
the next 1/3 would give you about the same money it costs you and the last 1/3 would drink like fishes and give you little or nothing. Most every time I've been to a resturarant with a large group of guys least 1 or 2 of em stiffs the server, figuring he'll just freeload on everyone elses tip?

I know here in Georgia it's illegal to sell sporting event tickets for more than face value but people sell picnic baskets for $500 and give the tickets away for free.

Barn roofs evolved from Britians tax on every floor so technically that second floor was part of the attic and wasn't taxed. There are all sorts of ways to avoid violating the letter of the law but you'd better have yourself a darn good attorney. So you'll pay someone either the state or an attorney or both.

And with campaign contribution being basically legallized bribery you'd better bet the barriers to entry are going to remain very high.

 

[bull]

yea the profits will not exceed the bills ,so drink up heres to ya home brewer

 

[JamesKY]

What are the estimated costs of adding a small brewery to an existing kitchen? Don’t know but maybe 20 or 30K?

Like everything in business it really depends on your unique situation. Questions like how many brews do you want to make and sell, what will your volume be, how much ingredient inventory will you maintain, etc need to be answered first.

The best thing you can do is talk to someone who has done it before. Luckily most markets don't appear to be saturated and the majority of small breweries were started by home brewers so they are eager to provide information. If one owner doesn't want to talk to you then call another one. You'll eventually talk to someone who wants to help you out.

 

[howlinowl]

The cost of adding a brewery probably varies from state to state. I looked at brewpubs in my old homestate of Kansas.... There's Hank's is Wiser
http://www.hankiswiserbrewery.com
in Cheney, where he's basically brewing in kegs and serving out of corneys, he is using keg fermenters from Sabco I believe.... Also, there is Moe's place in Beaver, Kansas
http://www.mosbrewpub.com/
that looks to be using a B3 sculpture.

So, you could put something together on the cheap, will it fly? Maybe so, maybe not. I don't believe that anybody in my present hometown of Port St. Lucie, FL would want to drink beer brewed in a keg..... they'd want to see that big shiny brewery.

Also, the floorspace of a restaurant is premium priced. If I were to start a brewpub, I'd think about putting the brewery in some cheaper commercial warehouse space, put the beer in kegs and truck it over to the pub.

Is it legal?? Dunno. Barebones in Stuart used to sell beer brewed in their restaurant brewed in Maryland. But they don't now...maybe they were told they couldn't anymore.

http://www.barebonesflorida.com

 

[DrunkTrucker]

Does anyone know what kind of laws there are for something small like selling gift baskets? Like if you wanted to sell a six pack with homemade beef jerky or cheese. I wonder if you would need a major license for something like that?

 

[RedSun]

I'm not sure where most people get their estimates, but a new brewpub opened here in town and talking with the owners, it's a seriously spendy investment, 500k-1mil to do things right and no guarantee you'll make money in the first three years. Talking with people in the business sobers up the pipe dreams....

-RS

 

[faber]

There's a place in town here called Montana Ale Works. It's in an old depot, has a train car out front for summer dining. Looks kinda cool. Tourists go in there all the time thinking it's a brew pub. Why wouldn't it be? It's kinda big, and that name....It's not. They have their house beers brewed by contract brewers out of town and they have that big ol' depot full of tables, where tourists fill up on $40 buffalo steaks, and single-malt scotch, some as much as $50 for a double.

Locals sit at the bar and drink the pints of "house beer" for $2.50.

They are squeezing every $ out of every square foot and doing very well. The former manager once told me that when they first opened six years ago, they were planning on building a brewery in that space and only intended to contract out their brewing temporarily. Well, as soon as they figured out that dining tables bring in more than pool tables, the in-house brewery plan was scrapped, and now it's a big, loud, VERY profitable joint.

There also was Spanish Peaks Brewing (Black Dog Ale). They had a cool little brew pub, but following the example of the Ale Works, moved into a bigger space, stopped all on-premises brewing and went for semi-upscale "trattoria dining." They did much better by doing that. (The company imploded later, but for other reasons.)

"Brewpubs" without breweries. Pretty weird. But it must be pretty rough to "keep it real."

 

[mr_cad]

I did not see this posted so forgive me if someone already did it. Info form Homebrewers associations where you can pick the state you reside in and see the statutes.

http://www.beertown.org/homebrewing/legal.html

 

[SenorWanderer]

I did not see this posted so forgive me if someone already did it. Info form Homebrewers associations where you can pick the state you reside in and see the statutes.

http://www.beertown.org/homebrewing/legal.html

nice link, mr_cad. just looking at 5-6 different state's laws, most of them stipulate no barter in the language, which i think any reasonable person would agree includes all the schemes mentioned above, like selling the keg, etc.

also, the AHA (beertown.org) offers for sale a 196 page, $80 book called "The Brewers Association Guide to Starting Your Own Brewery". probably a good place to start, if you're REALLY serious.

 

[brewt00l]

Does anyone know what kind of laws there are for something small like selling gift baskets? Like if you wanted to sell a six pack with homemade beef jerky or cheese. I wonder if you would need a major license for something like that?

Same laws apply to my knowledge...'cept of course now you prb have FDA fun included in the mix!

 

[abracadabra]

I'm not sure where most people get their estimates, but a new brewpub opened here in town and talking with the owners, it's a seriously spendy investment, 500k-1mil to do things right and no guarantee you'll make money in the first three years. Talking with people in the business sobers up the pipe dreams....

-RS

Most any new brew pub owner would more than likely try to talk up the investment required to keep competion down. And while I'm sure it would be easy to spend $500k to a cool Million $ on a brew pub. I'm also sure it could be done for a lot less than that. Here's a break down based on Sabco prices and while it by no means is a complete list of every thing you'd need I think it would give anyone a good idea of the basic starting point.

3 propane or NG Brew Magic brewstands @ $5070 each = $15,210.00

brewing 2 kegs per day 5 days a week you'd need 20 Sabco Triclamp Fermenters
$570 x 20 = $11,400.00

40 kegs for conditioning and 10 for dispensing and spares @ $395 each = $19,750.00

That comes to $46,660.00 for the basic brewing equipment.

You'd still need coolers, dispensing equipt. a conditioned air facility for conditioning, a Bar and if you wanted to make a go of it down south you'd need to serve good food so I figure a restaurant kitchen and dining room costs also which can easily run $50k-200K depending on what you trying to do. Then there lic. money, start up costs and depending on where you live protection money. Most folks won't eat or drink in a place thats not attractive so you'd have decoration costs plus signage and advertisment costs. So I'd say it could be done for between $200k-$250K. Or that you could add a brew pub to an existing pizza place for $55k-$70K. And while thats by no means a state of the art brew pub it's a far cry from a million $.

 

[the_bird]

There's no way you'd run a brewpub of any size (certainly not big enough to be profitable) with a BrewMagic system. Even the small brewpub I frequent locally has a 5BBL system, which is just about as small as you're going to be able to get away with. I'm not buying the $1M figure, though.

 

[Yooper]

Does anyone know what kind of laws there are for something small like selling gift baskets? Like if you wanted to sell a six pack with homemade beef jerky or cheese. I wonder if you would need a major license for something like that?

You need a commercial kitchen if you offer food for sale. It must be inspected by the Health Department and have things like dish sanitizers, etc.

A local couple here who makes BBQ sauce for sale rented out church kitchen to make their stuff, so they could follow the rules and have a commercial kitchen.

Brewpubs would be the same- a properly licensed kitchen and a properly licensed brewery would cost a fortune.

 

[Cheesefood]

http://www.nabrewing.com/products.shtml

Realize that most of the people selling stuff failed with their breweries.

Here's the thing that I can't get over: a lot of people come to this board and eventually ask about starting a brewery. None of them seem to have a great amount of business knowledge when it comes to running a start-up, and everyone assumes that their beer will be profitable.

Now, not to be insulting to anyone, but homebrew has a reputation as being terrible, and it's because a lot of homebrew is really bad. But, like our children, WE love it despite its faults.

Here's something I never see:

"Hey guys, I have a recipe that's a real hit. It's won gold in 10 major national competitions and I'm at the point where I can flawlessly replicate it time and time again. I can brew 100 gallons for about $0.60 in ingredients per pint. It's not something standard like and IPA, so it's not going to be a threat to many pro brewers flagship products. How do I sell this to a professional brewery and protect my recipe so that I can eventually brew this on my own?"

You know why I never see that? Because people with killer recipes - ones that have credentials behind it like an NHBC gold medal - are on the radar of pro breweries. You think Jim Koch doesn't know the name Jamil Zanishwhosyermama? Or Charlie Papazian?

We all have good recipes, but if you want to make it in the pros you need to either have an insane amount of excess capital and luck or an outstanding resume. For every Ben and Jerry out there, there are a billion stoners who make great ice cream. For every Sam Cagalioni, there's a million guys with a bag of fruit and odd hops.

Join your chamber of commerce and see if there's a need for a brewpub in your neighborhood. In a developing area, they might actually have a request out there for someone to open one and offer incentives and tax breaks. Get some money together and put together a business plan. Find businesspeople in your area and try to pitch your plan to them to see if they'll invest with you. Make sure you have your financials in place. Attend an investors workshop where you can make your pitch to VC's, Angels, etc. Have samples ready to hand out at all times and make sure you have an award attached to them so you can talk it up.

The last thing you want to do is put all of your own money into a brewery and then see it fail and have to lose house and home. Hire a business manager who knows how to run this type of establishment. Hire a FOH and BOH manager to make sure you get the restaurant / bar properly set up and staffed. Prepare for the best and the worse: what if you're at full capacity every day? Will you have enough beer and food on hand? What if no one shows up?

In short, you need to know how to run a business, not just brew 5 gallon batches in your garage.

 

[olllllo]

I don't know Cheese.
I think a clever loophole around the BATF; the IRS; Federal, State and local authorities is the way to go.

It's a crazy plan, but it just might work.

 

[olllllo]

Jamil is on the record saying that he makes more money in his real job than he ever could in the Brewing Industry.

 

[Cheesefood]

Jamil is on the record saying that he makes more money in his real job than he ever could in the Brewing Industry.

He's the Director of Engineering for Macromedia. Not exactly an average chump job.

 

[olllllo]

He's the Director of Engineering for Macromedia. Not exactly an average chump job.

Right, I know.
He has skills that allow him to do whatever he wants and he chose not to go into brewing professionally.

My point is that knowing how to brew is not some magical power that will make you a captain of the brewing industry.

I'd rather partner up with a guy that owns or manages a bike shop than the best homebrewer.

 

[Cheesefood]

Right, I know.
He has skills that allow him to do whatever he wants and he chose not to go into brewing professionally.

My point is that knowing how to brew is not some magical power that will make you a captain of the brewing industry.

I'd rather partner up with a guy that owns or manages a bike shop than the best homebrewer.

He's a Director with Macromedia, and yet his website sucks ass.

For most people, drinking craft beer is less about the taste than it is about the experience of trying something obscure. I can guarantee you that a crappy beer with a great label will outsell a great beer with a crappy label in a one-day selling contest. However, if one label can claim the beer to be a proven winner, it'll outsell others. Don't believe me? Think about Miller Lite's newest campaign. That being said, there's also something to be said about making something people are comfortable with. DFH's beers are a bit too radical for most people. It's tough to justify dropping $10 on something you might not like, especially when you have the choice between one bottle of 120 Min IPA or a 12er of Miller Lite.

 

[olllllo]

Must be why I have a great label.

 

[mr x]

We all have good recipes, but if you want to make it in the pros you need to either have an insane amount of excess capital and luck or an outstanding resume.

Marketing and creativity. That's what will make or break most people. Even a half decent product can make money if the marketing is right.

 

[Criniit]

Hmm well there is kind of a loop hole. You could rent out a warehouse or something along those lines and set up your brewery stuff there. You fill out the forms pay taxes blah blah blah for a brewpub..

The % is different in every state, but Georgia law is that a brewpub has to have 50% sales from food, so you could sell your beer from there and then once a week or some have a grill out and sell hotdogs and hamburgers or whatever, if you could make 50% of your revenue then your golden.

 

[delboy]

It's 100 gallons per legal adult, up to 200 gallons per household, per year. Not 200 each.

A hundred gallons isn't that much 5 us gallons = 32 pints so 100 gallons = 640 pints divided by 365 days and you get 1.75 pints a day, you would hardly have to be a raving alcoholic to hit those sorts of figures.

Have to say i prefer the UK system, unlimited fermented beverages!!!

 

[Cheesefood]

A hundred gallons isn't that much 5 us gallons = 32 pints so 100 gallons = 640 pints divided by 365 days and you get 1.75 pints a day, you would hardly have to be a raving alcoholic to hit those sorts of figures.

Have to say i prefer the UK system, unlimited fermented beverages!!!

1 US gallon = 8 pints.

So says teh g00glez: [ame]http://www.google.com/search?q=gallons+to+pints&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-USfficial&client=firefox-a[/ame]