Ever think about going commercial?

No desire since I know my lifestyle can't be supported by brewing. Otherwise sure- if I could brew and bring home the same each month then I'm game.

 

I tend to agree. In my rather extensive coast to coast travels over the years (being in the entertainment industry), I've visited literally scores of brewpubs and while a few of them made passable beer, I can think of only four that made some really stellar beers, with the remainder of them turning out some embarrassingly heinous crap (sometimes served less than a week after brewing. Pretty miserable stuff).
The food was the saving grace in some of those places. The place that opened up in the location I was considering in the early '90s was not bad for a while, and it's still there, staying afloat. But for some reason, in recent years it has become a triple threat (mediocre beer, sub par food, and pretty bad service). I think ultimately that it's the comparative novelty (in a college town) is the main thing keeping them afloat.
But I will give them props just for being able to keep it going in a town that for 30 years has had bars and restaurants with stellar and phenomenally well curated beer selections long before such a thing became all the rage and now almost commonplace.

 

Everything is done in 1 small building. Check us out Northbrewery.com

 

Yeah, there is a bit of an 'allure' that brewpubs have. Brewpub business owners really should not abuse this 'allure' by not having good food and OK beer. I suppose they could respond with something like: well, I am making money so I must be doing something right. From a purely business standpoint they would be correct but ....

Cheers!

 

Nice, I grew up in Endicott, UEHS class of '01(dating myself ) Ill have to stop by next time I visit the family

 

We definitely thought about it.

It is in most places a tough market, and getting much more competitive. There will likely be TWICE the breweries in operation by the time anyone just looking to start has actual beer on the market versus now. In Oregon, that number might be triple. Most are certainly smaller operations, so it doesn't necessarily equate to a doubling of total capacity, but that should still be a truly alarming prospect for anyone that doesn't have a stable audience already. I don't think that I would consider it if we were looking to start now versus our initial efforts about five years ago.
I'm also not sure that I could do it all over again. It is exhausting. Both physically and mentally, I don't think my wife and I could make a go of it. Even nearly three years in, we work at the brewery 60+ hours a week, and somewhere close to half that again outside of it. I typically sleep for 4-5 hours a night, which is better than our first year. And we have been one of the incredibly lucky ones!

Really though, good beer should always sell. If committed, make sure you have either a niche market or a darn near foolproof plan to develop an audience quickly. And be damned confident that you are as good or better than the majority of your competitors.

Selling direct to consumer is a HUGE benefit. You will need those extra dollars/margin. I would not recommend starting at this point in the game without a taproom of some sort with either product that will draw people in from a distance, or a location in an area with high population density (and ideally no competitors doing what you do, much less better).

Efficiency is incredibly important. Either start big (if you are positive you can sell it all, there are plenty of 30bbl breweries brewing a batch a week/month and struggling under massive debt) to lower cost per unit, or be prepared to do it yourself for years (and work harder to compensate). And not just the brewing; if you're starting small (we're ~10bbl) and expecting to make any money, be prepared to lay your own floors, run wiring, plumbing, bookkeeping, etc. The list is long.

Best of luck to those who've made or are making the leap. It's not easy, but it can sure be rewarding. Just not financially.

 

Would you be willing to speculate on whether it might be a bit easier to start-up in a state other than Oregon? Do you think that Oregon might be more saturated with breweries and therefore a more competitive beer market?

Cheers!

 

I think that's a very difficult question. Oregon benefits from some of the most brewery friendly regulation and tax rates in the country, so we have those benefits.

We also have the most pervasive 'good beer culture' I've ever seen (barring many rural locales). And, at only ~50% market share (if I recall correctly), there is still much potential for growth. Emphasis on potential.

BUT, there are an astronomical number of breweries opening and already in existence.

It would only be speculative, because who knows where each regions demand for good beer will plateau? The same way we have pockets of regionally specific dining culture across this country, I would anticipate that we will see the same for beer. Some areas may succeed in all but replacing the big adjunct lager producers (the Portland metro area is certainly making a go of it!), while others may top out fairly low.

My thoughts are that any entrepreneur needs to make a level headed evaluation of legal constraints, demand, and their ability to operate within these. A very level headed evaluation.

We wrote and rewrote our business plan multiple times to continually temper our expectations and provide for a worst case scenario. While I said above that I'd be hesitant to try to start again given timing and our personal abilities, I KNOW that none of those business plans and financial projections would now be pessimistic enough. It's not saturation. I don't think we're that close yet. But it is competition, and it is only going to get much stiffer everywhere before any brewery in planning in any location is actually operational.

Edit; it's actually been months I think since I've even seen an adjunct lager tap handle. But with consumption growing, that doesn't equate to saturation, though it most certainly bespeaks competition!

 

I appreciate you taking the time to make that thoughtful post.

Cheers!

 

Hey Chris

I had the same thoughts back in 1991 - did a business plan and actually had a green flag from Fleet Bank fo starting a microbrewery in RI. I got cold feet and now I am looking back at it wishing I had done it. Though I must say back then there was less competition, micros were not as popular and competing with the domestic commercial brewers and foreign breweries for sales.

It would be different now. I wouldn't do a micro I would do a restaurant, just make sure the food is good as well and you should be alright. There are too many different micros now. I don't want to sound like chicken little but there is going to be a market readjustment at some point. The market can only sustain so many different brewers. I just can't predict when or how many brewers can be sustained.

Good luck to you

Bru-ster

 

That model won't make it. The learning curve is way too steep and the capital way too high to be going in green to everything. Brewery startups like this either don't even open or fail within a short period of time, unless their pockets are deep enough to endure an onslaught of costly learning lessons.

Of course quality had to be there, but opening a brewery has very little to do with the beer itself. Quality is a variable factor to the extent of location and demographic. A young brewery in Northwest Georgia will be held to a much lower quality standard than a young brewery in SoCal.

 

There was more than a little sarcasm in my post, but I had another conversation 2 years back that the guy was determined to open a brewery because his 4 Mr. Beer batches were AWESOME. I think it was the mental model I was talking about not the business model. It used to be that homebrewers mastered homebrewering, went to Siebel, worked as an assistant brewer, then went about opening a brewery. Now too many think they can jump in because everyone else is.

 

I don't think anyone should go pro just because their four Mr. Beer batches were AWESOME. Now, if they were AMAZING, I could see it.

We shouldn't forget the fact that 95% of homebrewers make above average homebrew.

 

Lifetime earning potential is what's really kept me out of it.

I've got a decent job with solid benefits, vacation time and a 401k. Open a brewery and well, we're completely reliant on my wife's decent job and not-quite-as-good benefits. Vacation time is gone and that 401k is going grow very slowly. Like a lot of people my age, my retirement account doesn't get much attention. I'll check on it quarterly-ish, but that's about the most thought I want to put into it. Starting a brewery would mean I'd have to be a lot more hands-on with that.

Then there's other personal goals. I'm a cyclist - an expensive hobby. We're hoping to buy a house. If I had started up when I initially thought I was going to, I probably wouldn't be considered for a mortgage. No kids yet, but its on the list. I'm assuming self-employed brewers don't get a ton of paternity leave...I'll always dream about it, but short of a truly enormous windfall of cash, it's not going to happen.

 

You might be the first person I've heard say they actually lost weight after starting work at a brewery. Congrats on your life promotion!

 

Doing it now. Starting a business is so easy and cheap and takes no time at all! I highly recommend it to anyone. It's definitely NOT an emotional rollercoaster, full of late nights, time crunches, finding out the perfect location's water line won't be big enough to service your business and will cost $150,000 to upgrade, or a drain on your savings account. It's none of those things. It's NOT penciling a 30-page business plan, reviewing financials AGAIN every couple weeks, getting drilled by potential landlords ("I don't even see why you would want to put a brewery here"), checking out 50+ locations, paying lawyers and architects crazy sums of money to review 40-page leases of legalese and draft blueprints for another location that falls through. It's not filling out form after form of the same information for the TTB, signing, scanning, and e-mailing said forms and keeping it all straight. But keep a big smile on your face, nodding and laughing along with the 84th person who tells you, "When you open, if you ever need a taste tester, I'm your guy!"

Sorry. Been at this a while now, and it's starting to take its toll. But hey! It's our choice and our dream, so I can't complain too much. Just thought I would vent a little to give a glimmer of some of the frustrations you will go through if you so choose to go through with this.

 

"All the children are above average".