Poll: Would you open a brewery in 2016/17?

@JDice20, a critical aspect of your business plan is a comprehensive competitive assessment including current breweries plus other breweries in the planning stages. The current craft production beer market is pretty competitive and in the next few years it will be even more competitive. A production/distributing brewery business is getting to be a risky business.

Cheers!

 

I agree fully, I'm very glad that breweries braved the risk and opened. And if I made award winning homebrew or I wanted to make opening a brewery my life's work, than I'd look into it. But my homebrew is average and I'd rather put my money and efforts into retiring early. Then I can tour all these amazing breweries!

 

Well that is why I'm saying to be cautious: 1 is getting better, but probably lost business getting there. 1 is horrendous, and nobody is probably going there.

Focus on the process and product over the end game.

 

Of course I would. I would love that!

 

Brew it and they will come. If you are extremely confident that you

 

The number of breweries now is about what it was in the 1870s. The population is ~8.5 x what it was then. That would seem to indicate that there is room for more, But....... what everybody said above. Make good to great products, that is better than what others have, &/or something different, and you have a better shot at it. ; )

 

In as much as I would love to get into the industry, where I am now I'd be pretty hesitant to start another one unless I was confident I had something new to bring to the table.
I'm in Metrowest Massachusetts, with almost a hundred breweries in the state, with another couple dozen at least in planning stages.
I am a homebrewer, and I think I have a couple interesting recipes that I brewer for my own amusement, a couple of them could be of interest to a larger audience, but I don't know that I'd bank on it.

 

It seems to me like success is so dependent on what you want success to really mean. I have felt for a while that trying to quickly emerge as a distribution brewery is going to be very difficult given the saturation on shelves these days. While if that were to work for you, you would make more money, I see the risk being massive given how much more capital you'd have to invesf in.

The model that seems to so clearly work now is a more modest one. Open a small brewery and serve primarily out of your own taproom. Keg beer so you can distribute locally to bars to get your own name out. If you make great beer you will be constantly selling out unless you live somewhere with zero population or there are too many really good breweries in close proximity. Without bottling and distributing, your costs are so minimal. I'm really not headed down this path right now, but if I were to have a change of heart a few years down the road this is what I would want to do.

 

Only if
1) I can make world class beers on par with all of the highly tradeable brewers (usual suspects in the top 50 beers or so)
2) sell respectable craft beer at a lower price than current competition and closer to BMC pricing.

In MD, and NOVA there are just too many wealthy people now have invested in and opened really extremely nice taproom setups with only pedestrian and so/so beers offered at premium prices. There really is no more room for beer tourism profits in my area, the Saturdaytrippers just can't be sustained and soon there will be loss of interest IMO in doing brewery visits on weekends. You got to have the skills and experience be able to pump out the top shelf stuff to consider getting in the game now. For point of reference..see how Aslin has quickly taken over NOVA beer scene in the last year or so with a pretty small lame taproom in an industrial park, compared to all the neighboring brewers that were alread there and most have much better ambiance. Another point of reference for my #2 point is New Glarus Spotted Cow. They sell more of that in Wisconsin than Miller Lite. No other craft brewers have seemed to figure that out yet.

 

But in the 1870s, two brewing companies didn't account for ~85% of the beer brewed domestically in the US nor did imported beer make up 13% of the total beer market (domestic + imported).

The average brewery in the peak year of 1873 brewed 2,300 bbl/yr with the largest breweries in the US, Best & Co. (forerunner to Pabst) with 100.5k bbl and Conrad Seipp at 98.5k bbl, together brewing a mere 2% of the 9.6 million barrels of beer brewed in the US that year.

 

Definitely depends on where...

also, would recommend a strong interest/following in social media, as well as, more importantly, the ability to brew a damn good beer. There are far too many breweries out there brewing mediocre stuff.

I like what Odd Side did in Michigan. It seemed like they started out brewing some unusual beers before brewing some "real" beers that are some of the more desired in the state. To each their own, of course, but that's the way I'd approach it...

There's too much competition out there to just brew "Another Brewing Company Pale Ale" or "Yet Another Stout" ... there are a lot of new breweries out there that don't come up with concoctions and are wildly successful, though.

Really though, I think the best way to get people interested (even if the beer's so-so) is to be active on social media. Have a label design contest. A "name your own beer!" contest. Tasting events. All of that.

Went way off on a tangent as usual so I'll just stop it there.

 

What a brewery start up cost these days?

$2M-4M?

 

It varies drastically... If you plan to go a bit more minimalistic such as a taproom only, no kitchen/food, no canning/bottling line, warehouse type space, etc... You can do it for $300-400K for the most part. It can easily get into the millions though, depending on expectations of course. There are so many ways to go about it for a wide range of budgets.

To answer the original question by the OP, yes I would!

I personally have been in planning the past few months myself, hoping within the next few months when the business plan is complete that I could get the ball rolling. I have spent months of research in regards to all aspects of the build (equipment, flooring, sewer, storage, permits/licenses, etc…) as well as the typical cost/profit planning and supplier/equipment/material quoting. Has taken quite a long time to build up the information but has been really eye opening to so many aspects of the “big picture” than you would ever thing. It’s exciting to say the least. Basically just need a location, my business plan and finalize my investor details… Then it's go time!

 

If I opened a brewery it would specialize in stouts/porters.

 

That's what I'm thinking too! I sometimes day dream about opening a small specialized brewery. The idea of having a full line up of styles, some of which I don't care for, sounds challenging and unappealing. I'd rather have a stout, IPA, or sour exclusive brewery with a cool small taproom.

 

Repeating much of what has been said by others, the single most straightforward way to analyze the answer to this question is with a robust market analysis--you need to not only understand the competitive landscape of your direct industry competitors (i.e., other brewers) but you also need to understand indirect competitors (i.e., things people might do for leisure instead of going to a brewery) and most importantly, you need to understand the consumer market (i.e., is there interest in craft beer at your proposed point of entry?).

And all those are just for opening a brewpub where your income would come from patronage at your brick and mortar location.

Planning on a packaged goods point of entry complicates the competitive landscape much further, as then you are looking at an analysis of competition for shelf/tap space and going head-to-head with any local businesses *and* regional and national businesses as well.

So I guess I would answer your question in two different ways:

1. "It depends", if you are planning on opening a local brewery and taproom whereby your main source of income would be from people visiting your brewery for drinks or growler fills. In spite of the rapid growth of breweries in the country, there are certainly still pockets of underserved areas, where a business that plans on competing for the hearts, minds and dollars of local consumers can enter and win.
   
   
2. "No", if you are planning on a packaged sales point of entry. The battle for consumer interest can't even start until after the battle for shelf and tap space, and there are just too many players in the game, with more entering every day as formerly local, regional or semi-national brewers make the step up to distribute regionally, semi-national or nationally. This is not to say that success is impossible, but it is a long and risky road ahead, and one in which many others have a head start, sometimes significant.

I also want to add one other thing that might be self evident, based on the focus of the rest of my post, but brewing good beer is but a small component of the path to success. Yes, you have to brew beer that people want to drink--beer that will make your customers return when you finally get them to taste it. But there is a lot of beer that I think many on this site would categorize as middling to decent-at-best that can succeed, even excel, in the right market conditions.

 

If it were me, I would have a very long-term approach. I'd get really good at brewing 2-3 different beers tops. I'd have tasting parties with other geeks to get their feedback and tweak recipes. If all goes well, then I would start the "process" (business plan, lawyer, etc.) in 2-3 years and go from there.

Most breweries are started up by brewers that have taken years honing their craft - homebrewing, then working at a brewery for a few years before even considering going off on their own. It's not easy, from what I hear. But I guess the key is good beer.