New Brewery Concept - Community Insight needed!

[zlehmann]

I'm sure that other people have had this idea (after some Googling I'm actually sure of it). I have a dream of opening a brewery that allows local homebrewers to use industrial grade brewing equipment to make beer and sell it right in the brewhouse (keg straight to a tap at the same location).

I have some questions that I need to address before I can get too much further along in the planning process and I thought this was a great place to come for some advice. One day I will convince myself of answering these questions one way, the next another. I need some outside opinions from some other homebrewers!

So the big question is this, as homebrewers, if you had the opportunity to "rent" a brewhouse for a day to make a batch (full half barrel keg) of your own recipe that gets sold at the bar without need for licensing, branding, or distributing, would you do it? Assume that I can make all this work legally of course.

And the second big question I have is as a homebrewer (I'm assuming you will be brewing on a 5 gal system), would you be comfortable converting your recipe to a full sized keg as part of this process?

I'm looking for any and all opinions! You're insight is extremely valuable to me! Thank you!

 

[surfmase]

Hello there,

To answer your question you have to answer the question every homebrewer (your potential customer) would first ask themselves: "why, what's in it for me?" I suppose I, me personally, would consider paying you for the experience in using better equipment than what I have at home. I would probably only consider this if there is also some support offered from the facility as far as technique. This last point would also double as security for your equipment, since you wouldn't want some gimp-fisted-baffoon with no clue coming in and ruining your stuff. The second potential benefit would eventually be a wider and deeper spectrum of feedback on my beer if outsiders can come in and order my beer. But how would you be able to formulate the feedback? "sorry I can't say how bad it is or whats wrong with it because nobody bought any." Another aspect is the potential sale of beer. Are you planning on offering a small percent of beer sales back to the brewer? If not, the only incentive is for the experience, but I would imagine that a individual would do this only a few times max. before investing in some nicer equipment themselves. Once the experience has been made, there is little reason to come back. If you plan to offer some percent of the sales, a royalty of sorts to the brewer, there may be some financial reason to patron your business. This would have to be a symbiotic relationship, and this would only be propelled by good homebrewers. What happens if someone brews a bad beer? Would you first screen it to see if its worthy of putting on tap? This part may become hazy. Hope my input helps.

 

[zlehmann]

Thanks for the response Surfmase, I have had this discussion with many people around in around in circles and it's somewhat comforting to have you thinking along the same lines. I hope some additional information below can help shed some more light on my hopes here.

In short yes the bar would give a percentage of the sale of beer back to the individual. The real idea here is two-fold. On one hand, as a brewer who may be toying with the idea of trying to start a brewery, or just seeing if their beer can perform on the market, you are basically getting your beer directly to a tap without any of the bonds, licensing, branding, and most importantly distribution. As a consumer at the bar, you're getting incredibly unique craft beers that aren't available anywhere else.

As far as Quality control, I or someone from the brewery would be there for every brew session to help with the equipment and offer guidance on our particular system. Every batch would be verified before sale to ensure we didn't get an infection or some crazy off flavors before it would make it to a tap.

I have a feeling that a lot of homebrewers want to see their beers on tap at a bar, and I'm hoping that desire would provide me with a market base for this concept. And for the customers at the bar, I know the first thing I do when I walk into a bar is look for a beer I've never had before. This place would definitely be on my fav bar list.

 

[sbaclimber]

I have a feeling that a lot of homebrewers want to see their beers on tap at a bar

+1
I brew the beer I like to drink for myself, but if nothing else, my ego loves to see other people enjoying my beer.

I know the first thing I do when I walk into a bar is look for a beer I've never had before.

+1
I am also always on the lookout for new beers. Be it in bars, supermarkets, festivals, family gatherings, you name it. :lol:

I really like your idea, and would definitely want to brew at your place, if it were anywhere close by. (not located in germany by any chance...!? )

 

[zlehmann]

Haha sadly no, but I appreciate the response!

 

[The Brew Mentor]

I think where the idea is flawed is mainly in the batch size.
Let's quickly run through some of the numbers;
Brew day staff $100
Ingredients, water, gas, cleaners etc. $100
Fermentation and processing handling ( transfers, cleaning, fining, kegging, keg cleaning, line and tap cleaning, serving, spillage and waste, etc.) $150
These numbers are conservative and incomplete but I think you can get an idea from here.

Selling an unproven Pint @ $5 would bring in $600 ( 5x120)
- Rough costs $350
- P&O $120
- Probable batch losses @10% $60
Profit sharing offsets rental

So all this for a possible net of $70 :shock:

Brian

 

[zlehmann]

I've spent a lot of time calculating the cost of making the beer and selling it. For the purpose of this post I'm simply trying to get a sense of interest from the homebrewer side of things.

I appreciate the info but I'd like to focus on the idea without the money at this point.

My numbers have been much more optimistic than yours

 

[Nosybear]

I'm not seeing the value proposition in this. I do know the thrill of having your beer on tap - one of mine was on tap up in the mountains all summer and every time we stopped into the Dillon Dam Brewery, I had to have a "Nosy Bear Koelle," my recipe (and a gold medal winner in their homebrew contest the previous year). Now the question: Would I pay to have that beer brewed there on a seven barrel rig (roughly 40 times the material and cost of my five gallon batches) just to have it on tap? My answer, no.

There is a risk. You will get both strange and bad batches of beer. Someone will want to brew their double imperial chocolate fresh hopped saison and about five people will drink it, including the brewer. You will dump lots of beer. Breweries make their money by making large quantities of the same relatively cheap beer people like to drink, yes, even at craft scale. Examples: The Dry Dock in Aurora, GABF small brewery of the year in 2008, gets awfully tired of producing their Apricot Blonde, their best sellers. Likewise, the brewers at Palisade Brewing get awfully tired of making their flagship brew, Dirty Hippy. We here are not a representative sample of your customers! There's a reason 90% of the beer consumed in the US comes from MillerCoors or Inbev. It's what people want to drink. So if you're going to do this, when the homebrewers aren't coming up with beers brewed to their individual tastes, your staff is going to have to produce "standards," beers that the average joe will recognize and drink. So if you want to use the homebrewer idea, kind of the same business model as self-publishing, as a way to maximize the use of your capital, I'd say why not, I just would really question it as a primary business model.

Sorry, if you pitched this to me on Shark Tank, I wouldn't bite. Too many risks for me. I'm out....

But if you follow your dream, I do wish you luck. And who knows, it might work.

 

[BDgrainbrewer]

Due to the fact that I love to drink my previous brews while crafting another, and the liability involved for driving while intoxicated, my vote would have to be no. I do wish you luck in your endeavor, but this is not a viable option for me. Cheers!

 

[The Brew Mentor]

My numbers have been much more optimistic than yours

You may need to re-calculate then. Haha

I didn't even touch on shipping, licensing, liability, insurance, depreciation ....
Shall I go on?

Brian

 

[UgliestLemming]

There is a similar company here in St. Paul, just a slightly different take. They provide the equipment to brew, the brewer is only able to select a recipe, not make their own, but the brewer pays and takes their own beer home. The other part of their business is making their own and filling up growlers for folks. This may work better than trying to sell an untested brewer's recipe to a bar. It's more for people who want to brew their own but don't want to do it at home.
http://www.vinepark.com/ Is the place that came to mind when I read your post.

 

[zlehmann]

My numbers have been much more optimistic than yours

You may need to re-calculate then. Haha

I didn't even touch on shipping, licensing, liability, insurance, depreciation ....
Shall I go on?

Brian

Oh I'm not saying you're wrong, just that I don't want this to become the focus here.


As far as a previous poster mentioned, it was my intention to have a number of "flagship" beers that we make regularly to fill in gaps with bad batches or lack of interested homebrewers.

 

[The Brew Mentor]

So, will you have a big brew house for your flagship beers and a pilot system for your home brewers?
Brian

 

[zlehmann]

That's one of the ideas I've been toying with. Ideally I would like to run everything on one system, but my concern is that homebrewers will be unwilling(able) to scale their recipes up successfully to a multi-barrel size.

 

[PZ]

Interesting idea! It's appealing to me but there are some real issues to consider. I think a new system and a different batch size are too many changes for a homebrewer (or anyone maybe) to handle all at once, especially for a one-off brewing experience. Perhaps offering to mentor brewers with big ambitions over a period of time would make sense. Their "graduation" would be making their own beer and seeing their name in lights. (By then you could talk them out of the sour imperial mocha chipotle milk stout.) They could either pay for the experience or work it off. Although you say the finances are not your focus right now, our friend the Brew Mentor speaks from experience -- you probably don't envision becoming a homebrew charity

There is a shop here in NYC that offers "brew on premises" on a nice 10-gallon system. Perhaps there are elements of this model that would work for you. They target the product to a wide range of abilities and offer as much or as little assistance as the brewer(s) want(s). The shop sets up and does the clean-up, and the brewers (sometimes a bachelor party) come back to "help" package the product and take it (all) home. There are times in the summer when my kitchen is over 110 degrees that I wonder why I don't let someone else sweat it out while I drink a beer and stir the pot (literally) when I feel like it. But the truth is, the beer tastes all the better after all the work. But that's me. I also don't care about seeing my name in a bar. If I want accolades, I'll take a growler to work.

Good luck! I hope you can come up with a plan that works.

Best, PZ

 

[zlehmann]

There is a shop here in NYC that offers "brew on premises" on a nice 10-gallon system. Perhaps there are elements of this model that would work for you.

I know it well, it's my local homebrew shop! Thanks for your insight.

 

[The Brew Mentor]

If you have a pilot system like a Sabco and a larger system for your house beers, it may work.
The pilot could be used to produce 1 offs, test batches and occasionally bring in a home brewer to showcase their product.
They would hype it to their friends and you may get some new customers at the bar. They'll likely drink only one of their friends beers and then drink your beer and eat your food.
No way would I give them money back on the beer.
They pay a hefty rental fee for the privilege of brewing on a small but professional system. They also end up getting a 6-7 hour personal tutorial on brewing.
You still have to do all the work on it and juggle a tap handle.
My .02 cents
Brian

 

[Nosybear]

Brian's idea is starting to sound like a workable business model. Problem is you won't just have the pilot system sitting around idle most of the time, you'll have to staff to help out the amateur on the system, you'll have to have extra fermentor space.... Not to mention you'll have those guys running around under foot tripping up your staff producing your flagship beers, you know, the ones that keep the lights on and the staff paid.... ;-) Recently the guys at Ruby Street Brewing let me help them brew on their ten-gallon rig for a Big Brew Day. It was instructional but I don't know that I would have paid for the experience. We split the cost of the ingredients and I got half the wort. But I drink beer with the owners of Ruby Street. Make the amateurs pay for the ingredients and the staff - you're filling up idle time on the pilot system - and take the profit from the beer. Let the amateur have some of the wort, if you choose.