43 replies to this topic

[ANUSTART]

Anyone have any idea what it would cost to start up a small commercial brewery with regional distribution (kegs and bottles)? I'm thinking maybe a 10 bbl system (unless that's way too small), bottling line, tap room, lawyers, licenses, bribes, no restaurant though, that's too much work. I'm just thinking about the future (far into the future) and kicking around some ideas on how I can step away from the corporate scene. I have no idea what the startup costs would be, I'm guessing 300k or so?

[CaptRon]

Check out Probrewer.com They have great forums on finding the equipment that you would need. Nothing wrong with used equipment in a pro-brewery environment, Vinnie at Russian River Brewing was telling me that he got some his "new" equipment for their new production facility from Dogfish Head and he is pumping out awesome brews.I posed a simliar question on "the other board" not too long ago and it was pointed out that if you own a brewery, then you can kiss home brewing goodbye. But my thought is that if you are brewing in a professional facility and you own it, then who cares as you can take your work home with you.

[Big Nake]

I've spoken with a few guys that started and failed. The main theme to their demise was that they didn't think large enough, all the way around. The brewery was too small so they had to work harder and their loan was too small and they ran out of cash to start growing. The one guy told me that his loan was $750,000 and it wasn't enough.

[dagomike]

I'd actually think about contract brewing. Seems crazy, but lets face it, you need to sell your beer to make it. Work out a deal with an existing brewery. You would make the beer with them. They would package, and probably help you get in with distributors too. Focus on sales and marketing. That clears out tons of upfront costs and overhead. Plus, you'll get lots of hands on experience running a bigger system and fixing crap.When you establish your product, brand, and distribution, you'll be in great shape for investors. Get investors, not loans if you can help it.

[drewseslu]

Be prepared for success! 10 bbl is way too small, even if you do draft only in a moderately savvy market (well in that instance you could eek by for a couple of years, if eek by is your goal).I'm halfway through the third boil of the third brew of the day (15 hours and counting) on the 1.5bbl brewhouse at MBC to fill one of our 4bbl tanks to the absolute top because we dont' have a chance in hell of possibly keeping up otherwise.At this rate we may well over 200bbls in our first full year and I expect our max to be around 300-350bbls annually. Needless to say we've already outgrown our current system and the owners are having a really hard time investing in upgrading the brewery, and I even brought the brewery online $30,000 under budget.Get a bigger system than you'll think you need, get more thanks than you'll think you need, get more kegs than you'll think you need, get spare parts and test everything before putting it to use (preferably before purchase)./end rant

[ANUSTART]

I've spoken with a few guys that started and failed. The main theme to their demise was that they didn't think large enough, all the way around. The brewery was too small so they had to work harder and their loan was too small and they ran out of cash to start growing. The one guy told me that his loan was $750,000 and it wasn't enough.

750k?! That'll be tough to scrape up without a winning lotto ticket. Did he buy the building?

[ANUSTART]

Be prepared for success! 10 bbl is way too small, even if you do draft only in a moderately savvy market (well in that instance you could eek by for a couple of years, if eek by is your goal).I'm halfway through the third boil of the third brew of the day (15 hours and counting) on the 1.5bbl brewhouse at MBC to fill one of our 4bbl tanks to the absolute top because we dont' have a chance in hell of possibly keeping up otherwise.At this rate we may well over 200bbls in our first full year and I expect our max to be around 300-350bbls annually. Needless to say we've already outgrown our current system and the owners are having a really hard time investing in upgrading the brewery, and I even brought the brewery online $30,000 under budget.Get a bigger system than you'll think you need, get more thanks than you'll think you need, get more kegs than you'll think you need, get spare parts and test everything before putting it to use (preferably before purchase)./end rant

How big of a system would you have liked to have initially?BTW eeking by would be fine with me. The goal would be to not lose money and improve lifestyle. Breaking even would be my main goal, profit would be an added bonus. It'll be several years before I can afford to break even though.

[drewseslu]

It all depends on your plan/goals.For MBC a 4bbl system with 5 or 6 FVs instead of 3 would make this much more doable. We'll be able to get by with the tiny brewhouse, but the cellar definintely needs to upgrade.I would say for a small brewery 15bbl to 35bbl is a good startup brewhouse size.

[japh]

How big of a system would you have liked to have initially?

To give you an idea, when Deschutes Brewery opened up their Portland Brewpub, the brewpub-only system was 21 barrel.

[MolBasser]

Time is money. I would buy the biggest brewhouse that I could. For a commercial brewery (no brewpub) wouldn't even consider anything under 15 barrels. I think 30 barrels is a good place to start.Ales only? or lagers too? If you brew lagers you will quickly realize the need for lots of cellar space.BrewBasser

[zymot]

I'd actually think about contract brewing. Seems crazy, but lets face it, you need to sell your beer to make it. Work out a deal with an existing brewery. You would make the beer with them. They would package, and probably help you get in with distributors too. Focus on sales and marketing. That clears out tons of upfront costs and overhead.

+1. Reduce your initial investment. The money saved can go towards sales, marketing and distribution.Let some one who has gone through the learning curve of brewing beer on a large scale do it for you. You can specify every point of the process so it will truly be your beer.This is how Sam Adams got startedzymot

[DuncanDad]

It's funny that this should come up.A little background on our life style here at our place. We have what we call a "leap frog" marriage. The short of that means, one of us supports us while the other pursues their dream. Each cycle is 4-6 years. While I was trying to get me business up and running, the wife/girlfriend supported our family. We are currently in the cycle where I'm supporting our family while she is pursuing her goals in life.Any way-back on point. She asked me the other night, what I would like to do when my turn came around. I said I'd like to have a small brew pub. I checked around and the equipment could be had for around 100k for a 30 bbl system. The building would be another 150-200k. Outfitting the building, 1 year supplies, for 1 year, food, taxes and misc. stuff would be another 300k .600k just to get up and running for the first year.Hmmm, I think I could stay home and find a way to take the 600k work so that I get 5%-10% return a year and I could brew every day of the week if I wanted and give away the beer.

[ANUSTART]

It's funny that this should come up.A little background on our life style here at our place. We have what we call a "leap frog" marriage. The short of that means, one of us supports us while the other pursues their dream. Each cycle is 4-6 years. While I was trying to get me business up and running, the wife/girlfriend supported our family. We are currently in the cycle where I'm supporting our family while she is pursuing her goals in life.Any way-back on point. She asked me the other night, what I would like to do when my turn came around. I said I'd like to have a small brew pub. I checked around and the equipment could be had for around 100k for a 30 bbl system. The building would be another 150-200k. Outfitting the building, 1 year supplies, for 1 year, food, taxes and misc. stuff would be another 300k .600k just to get up and running for the first year.Hmmm, I think I could stay home and find a way to take the 600k work so that I get 5%-10% return a year and I could brew every day of the week if I wanted and give away the beer.

Well you already have the advantage of having started your own company, to me that's a huge advantage. I'm thinking of starting to go to the free entrepreneurship seminars that are put on by the local chamber of commerce.

[Big Nake]

I don't think this is for the faint-of-heart. Think about the beer marketplace... the competition is unreal. Beer drinkers can be fickle and loyal to the point that the "new guy" will be at a disadvantage. Your beers would have to be outstanding. What sector of the beer-drinking market would you target? Would you look for craft-beer drinkers/beer enthusiasts who may be in smaller numbers or more middle-of-the-road beers to appeal to a wider audience? I would think that your whole effort would have to be ultra-solid so that you got some brand recognition and a loyal following and that's the type of thing that is earned over many years. My wife just saw a Sam Adams commercial the other night where Jim Koch says something like, "I'm having so much fun brewing beer that I feel like I haven't worked a day in 20 years" and my wife said, "See Ken? Giddy-up and open a brewery". I was like... I'm sure that Jim Koch must have felt like he worked a little in the past 20 years. Put a $600,000 (or so) price tag on all of that... wow, that's a lot of pints. All that said, I've asked some of the other locals when they're going to be ready to join forces and open a brewpub. What do they say? I don't want to open a BREWPUB!

[BrianBrewerKS]

If I ever hit the lottery, there will be a brewpub with me as its owner. Actually, you can do it pretty cheaply, but it just depends on what your goals are. There's a brewpub about 20 minutes from me that is super small. Hank is Wiser. The guy that opened it is retired. He saved up over the years and opened his brewpub up for very little. Granted, he's located in a very small town which is fairly close to a decent size city (Wichita).I've actually never been to the brewpub, but I did sample some of his beers at the Midwest BeerFest a few years back. Pretty decent. He doesn't do a ton of business...and he doesn't serve much food...but he's prolly breaking even.I could possibly see myself doing that when I retire...that is if I'm not traveling and farting around.But if I hit the lottery? I'mma open a kickass brewpub with great food (that's the key with brewpubs...gotta have great food)

[ncbeerbrewer]

There are many good points being made here in regards to this topic. Getting into the industry is very hard. Brewpubs have such a bigger start up than a microbrewery. If it were me I would go the microbrewery route. I would wanna brew beer not sell food. Its a huge undertaking but can be done. All depends what you want and how you wanna do it. Worlds away from tasty homebrewing though.

[denny]

And consider that making the beer is the easy part....selling it is the hard part! If you have a brewery, you have to convince retailers and distributors that they should give you a shot. I have a good friend who had his beers contract brewed in the SF area. Great beers, but they went under in a couple years because they couldn't get distribution.

[japh]

And consider that making the beer is the easy part....selling it is the hard part!

This is true.There's a fine balance. I've thought about the same thing, but I worry that my market may be saturated with craft breweries. I know Denver isn't as saturated, but it'd be a worry. Other locations may have difficulties getting people to try any craft beer. Each market is different.

[BrianBrewerKS]

See, to me the brewpub would be the only way to go. With a microbrewery, like Denny pointed out, you have to convince distributors that you are worth distributing. That's not the case with a brewpub. You sell directly to the customer in a brewpub.Of course there are other obstacles with the brewpub route, but it does cut out the distributor part of the problem. (at least until your beers are popular enough to possible distribute)Of course, I love food and cooking...and my degree is in restaurant management...so obviously I'd be interested in the brewpub side of things.

[japh]

If I ever hit the lottery, there will be a brewpub with me as its owner.

See, if I hit the lottery, I wouldn't want to be forced to go to work at a restaurant every day.If I won the lottery, I'd build a kick-ass brewery at home, a great home bar, and I'd invite my friends over. A private, invitation-only brewpub.