Nano brew as restaurant enhancement

Discussion in 'Beer Talk' started by Tonybelize61, Apr 16, 2017.

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  1. Tonybelize61

    Tonybelize61 Initiate (0) Apr 15, 2017

    Hi all. Thanks for this valuable forum. I have slightly interesting twist on the already overdiscussed issue of nano brewing for business and after trolling here and searching the subject for a few days, I fully understand that most nano breweries cannot sustain enough profit even for a sole proprietor as a standalone business.

    First, a little background on myself. I am now 55 and have been in business for myself since mid 20s in a fine dining establishment as chef 1st in my own 100 seat restaurant in Alaska and next in a small beachfront resort in Belize, where we were also an 11 room boutique hotel, tour business and restaurant. I've sold both businesses and now, bought a small beachfront place just a few hundred yards down the beach from the one I just sold as part of a 1031 tax diversion. I am successful in the restaurant business here which is a tourist area where 90 % of visitors eat out nightly. I am opening a 30-40 seat smokehouse casual dining place and think a nano brewery addition to this (3-5bbl) would be THE ticket to setting my place apart from the more than 30 other restaurants in my area. My beer sales would be on premises only and be kegs only.

    I would seek out used equipment and probably never expand the beer making portion, it would just be something to add to the theme and would add under $150k to the startup of the entire concept. The goal is to get another business up and running, then to sell it in 3-5 years. Property values on this commercial stretch of beach historically have gained 10% per year, plus any business value I add. I would simply be replacing the current rather bleak assortment of beer in this country (which cost us a little over $1 for a 9 ounce bottle of beer as a restaurant) with our own at hopefully a tiny bit better price per ounce, but tha value the nano brewery gives us as a destination restaurant would be a bit more than the $150k startup price in the valuation of the business when it comes time to sell, plus would result in filling seats at the restaurant as well.

    What do the experts on this form think? Don't sugarcoat, I've been in business for a long time and respect opinions from folks who are in their respective fields.
     
  2. Harrison8

    Harrison8 Grand High Pooh-Bah (6,285) Dec 6, 2015 Missouri
    Pooh-Bah Trader

    I have a few questions:

    1. Who is doing the brewing? Are you hiring on a full-time brewmaster with experience? Taking courses yourself?

    2. Do you have data on which beer styles sell well down there? And if so, do you only plan on brewing those styles?

    3. Have you looked into prices for the mash (malts, hops, yeast, etc.) and added in the labor to see the price/ounce?

    From personal experience, there are a lot of little brew pubs around here, but really they seem to make beer to sell to average folks. In other words, none of them are destinations for craft beer chasers. So if your intention is to create something to bring in an additional market, the chances are slim. Especially with so many good quality local breweries popping up around the country (USA). Of those small breweries, the folks I've talked to about the beer always seem to say "it's alright" or "average". It seems to be that 99% of their business is due to their location and their food, which gives them a chance to brew some beer and sell their own work.
     
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  3. JuliusPepperwood

    JuliusPepperwood Initiate (0) Jul 21, 2013 North Carolina

    I like your idea since when I travel I always look for dining options with good beer and Caribbean resorts towns are typically very bleak when it comes to beer. I see that Belize has a small craft brewery called Island Time Brewing. Do they do well? If I were you I'd pick their brain and see how hard it is to operate as a craft brewery in the area.

    I have no commercial brewing or restaurant experience but my advice would be to start small. I'd purchase used or even make my own half barrel brew system. Then make some small batch brews to supplement my existing beer and cocktail offerings. And if that goes well then grow the brewhouse capacity and possibly move to selling you house brewed beer exclusively.
     
  4. papposilenus

    papposilenus Grand Pooh-Bah (3,232) Jun 21, 2014 New Hampshire
    Pooh-Bah Trader

    A brewpub will get me in the door once out of curiosity. But if the house beer isn't very good, next time I'll go to the place with the best tap list.
     
  5. honkey

    honkey Maven (1,350) Aug 28, 2010 Arizona
    Trader

    If we're not sugarcoating... This forum is not going to have a lot of experts on starting/sustaining a brewpub. There's a lot of ways for a brewery addition to a restaurant to hurt the value more than it can help. Many people that start at this size want to pay someone just above minimum wage to brew for them and they hire inexperienced brewers that may brew great homebrew, but fail to make the leap to a commercial operation. Even when you're small, there is still a lot of paperwork, inspections, safety concerns, etc. On top of that, if the quality of your beer is bad, you will likely be resented by other brewers and you could develop a reputation for your beer which will hurt your food sales by way of bad reviews on sites like yelp, google, etc. Most tourists don't read reviews, they just look at overall rating. Beer enthusiasts can be brutal with their reviews. So after my word of caution, to do it right:

    1. Invest in quality. Good equipment. Good ingredients. Be prepared to pay an experienced brewer, a salary that is slightly above the median income for the area. Most experienced brewers will not be settling for less than $40-50k in just about any market. If the cost of living at the beach is high, you might be looking at $70k or more. Offer profit sharing, relocation assistance, and health benefits for the right candidate.

    2. Get a system that can produce enough beer to meet demand by brewing double batch brew days 3 days or less a week. At that rate, one good brewer should be able to brew all the beer and still do the other responsibilities without an assistant or other brewhouse employees other than the occasional help washing kegs or polishing tanks... things a taproom employee can double on.

    3. Figure out how much money you need to make off the system to make it all worth it, taking into account the quality of life of your employees (breweries take a lot of work that people don't count on), and figure out how to get to that point, and start with that. Tip toeing into the industry rarely works. Vice versa, jumping in trying to do too much can result in disappointment and resentment.
     
  6. jesskidden

    jesskidden Grand Pooh-Bah (3,145) Aug 10, 2005 New Jersey
    Society Pooh-Bah Trader

    If you haven't already, you might want to check out the forums on ProBrewer - first by reading previous threads about "brewpubs" (which is really what you're suggesting, rather than use the "nano" terminology) and then posting additional questions on your own unique situation.
     
  7. NeroFiddled

    NeroFiddled Grand High Pooh-Bah (7,276) Jul 8, 2002 Pennsylvania
    Pooh-Bah Trader

    No disrespect to honkey (and he does have very good points) but I do have some experience in "starting/sustaining a brewpub" and there are a lot of other brewers on BA as well.

    I believe that if you've been successful so far it's probably a good idea, and that the investment will pay off in the end. Dogfish Head started on a SABCO system after all! And take a look at what kculrich wrote - totally true in my opinion, but you do want to strive for the best.

    I can't work the numbers for you as there are too many variables without seeing what you're working with, but I'm sure you can find some local brewers who'd be willing to take a look and give you a better idea of what's going on free of charge - I've helped several breweries get started, several which have become pretty large, just because that's how we tend to be ~ sharing information with others for the better good (don't pay anyone a consulting fee unless it's really small). That will also help you find a brewer. Perhaps you can find someone to do it part time (unless it starts selling!).

    Feel free to let me know if I can help you in any way.
     
    #7 NeroFiddled, Apr 16, 2017
    Last edited: Apr 16, 2017
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  8. Oktoberfiesta

    Oktoberfiesta Initiate (0) Nov 16, 2013 New Mexico

    Tricky. But like others have said, you have to do it right with staff,ingredients, and equipment. Even then, licenses and more paper work, and what will inevitably be smaller margins, if you're product is some $2 more/pint than other places, it better be a hell of a product.

    Without wanting to expand, just think a few years down the line as far as maximum capacity. Can your brewery end be break even or work at a loss, if its helping the food side.. I know many places that have gone beer first, then added some food. The other way around, without being a brand new business, is quite tricky
     
  9. honkey

    honkey Maven (1,350) Aug 28, 2010 Arizona
    Trader

    Reading my response, I realize that it could have sounded condescending in that regard. I simply meant that a forum that is aimed at consumers and enthusiasts is not the best place to look for advice on starting a brewpub. Even when talking to breweries that have been around for a long time and seem to be successful from an outsider's perspective, frequently you talk to the owners and they make comments like "I don't know why the banks continue lending me money." It is best to talk to successful and failed owners and figure out what works and what doesn't. I'm a big believer in the profitability of 3-5 BBL brewpubs, but how often do we talk to brewers in that size that say they're struggling for any host of reasons (at least, in my experience, it's a lot!)?
     
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  10. RogelioRodriguez

    RogelioRodriguez Initiate (0) Nov 7, 2015 California

    In California, bars pretend to be a small brewery so that they can get a liquor license, it's a backdoor trick and lot's of crappy brewers are popping up to get a special ABC license.

    A nano brew is going to cost more money and time to produce than it's worth unless you can your patrons to buy 9$ twelve ounce pours.
     
  11. mudbug

    mudbug Pooh-Bah (1,762) Mar 27, 2009 Oregon
    Pooh-Bah

    It's been quite a while since I've been in Belize, are you in Ambergris Key? From what I remember the best beer there was Belikin and yep, sold for about a dollar a bottle (9oz) I'd say you could make a go of it there and you don't really need to worry too much about competition, just the novelty of fresh beer would attract a lot of customers, it's not like they have a whole lot of choices. Can you get top notch ingredients? Are there still a ton of British military around? Maybe concentrating on what the Brits like might be a good idea. Good luck!
     
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  12. JrGtr

    JrGtr Pooh-Bah (1,775) Apr 13, 2006 Massachusetts
    Pooh-Bah

    Being that you have been in business for that long - you probably have that end of things ssewn up.
    I would say the first thing is to look at what regulations and licensing you would need to do this. I don't know Belize at all, I do know that some places you don't need anything to start something like this, but here in The States, the amount of hoops you'd have to jump though are enough to make anyone think twice.
    Then of course if getting the equipment and ingredients. I seem to recall a thread a while back - don't remember if it was here or on another forum, basically saying that getting quality ingrendients - malt, hops and yeast to Central America was also next to impossible without enormous costs.
    Last of course is brewing. Do you currently brew? Home or otherwise? Or would you be hiring a brewer?
    I'm not trying to persuade you one way or the other - I don't have any stick in the situation, just being realistic.
    If you can get this up and running brewing good beer, that could easily put your restaurant over the top, especially with tourists.
     
  13. Ranbot

    Ranbot Pooh-Bah (2,463) Nov 27, 2006 Pennsylvania
    Pooh-Bah

    If the main aim of the place is food, keep in mind that breweries tend to have odors the average restaurant goer may not appreciate accompanying their dining experience, although beer nerds might be more forgiving of brewery smells. Make sure there is a good separation between the brewing and restaurant areas, proper ventilation, etc. I'm not a restaurant or brewery owner with any specialized insight though, just an average guy who's been to plenty of breweries and restaurants and noted the different olfactory experiences.
     
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  14. PapaGoose03

    PapaGoose03 Grand High Pooh-Bah (6,057) May 30, 2005 Michigan
    BA4LYFE Society Pooh-Bah

    Good point. I remember my first whiff of the brewing process when I visited many brewpubs during my first year after getting into craft beers. It was offensive, but I became immune to the smell. A few years later after I started homebrewing, my wife would not permit me to brew in the house because of the smell. We're both used to it now and enjoy what I'll now call the 'aroma.'
     
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