What do homebrewers commonly think about?
I hear many homebrewers think that starting a brewery is their dream job. After all, if you enjoy what you do you'll never work a day in your life. At least that's what Jim Cook of Boston Beer Company used for a campaign slogan in his advertisements.
Anyone can start a brewery, but if you know how to brew beer that is a plus. If you don't know how to brew beer then you need to find and hire someone who does. A business person who doesn't know about brewing approaches this question from a totally different perspective and I will not be covering that in this article. Having been a beer brewer on and off for the last 30 years I can only speak to being a homebrewer and thinking about starting a brewery.
Tim Nichols and Nathan Pierce, of Brewing Business and MicroBrewr podcasts respectively, do a very fine job at interviewing Master Brewers and people who have opened up or started their own brewery. I don't want to cover the process of the brewery business it's already being done. But if you've made up your mind to start a brewery those two podcasts are a great starting point.
This blog is intended to explore the thought process that this brewer or others go through when they're thinking of one day opening up their own brewery.
In order to seriously consider transitioning from homebrewer to owning a brewery, one must first love to brew larger quantities of beer for other people to enjoy. However, as I discovered time and time again:
homebrewing has no resemblance to brewing beer for business.
What does that mean? Can't you just scale up from your homebrew recipes to make batches of beer in much larger quantities? Oddly enough, you can't. As it turns out, you can't just multiply your recipe to get a beer to taste the same in large quantities as you do your typical five or ten gallon homebrew batches. The reason is that the equipment and processes used for brewing larger batches do not have the same brewing efficiency factors as the small equipment that is used by the homebrewer. As many of us homebrewers have discovered, even duplicating a recipe to get a beer that tastes the same repeatably can be difficult. This is because our brew kettle of our mash tun, our fermentation vessels, our temperature control all have a very poor efficiency rating, and that is too many variables to control.
Our equipment does not perform as consistently as larger brewery equipment. Professional equipment has a much higher efficiency rating. The amount of malted grains required for the recipe probably will be different because having better control of mashing temperature results in more efficient conversion of the sugars by enzymes. The better the enzymes work to break down the sugar, the more efficiently the yeast will be able to turn that sugar into alcohol. This also goes for the hops content as well. The more efficient the brew kettle, the less loss of hop aroma during the boiling process.
I mentioned scaling recipes up from small home brew batches to larger scale brewery recipes. I have met through the Start A Brewery group on Facebook that are thinking of or have already decided to start a brewery and they all pretty much use a software program like Beer Run or BeerSmith to scale up recipes. Most of the people that have started a brewery use this software as well. In addition to scaling recipes, the software also manages many or most of the other brewery operations such as inventory control and cost accounting. I don't have personal knowledge of the full blown personal computer program but I have and use the recipe portion of the mobile version of BeerSmith.
Do due diligence before making these decisions.
You have to consider where you are in life. Are you in your 20s, your 40s, are you retired? If you're in your 20s, it would be really easy to see what it's like by getting a job in a brewery before making a decision to start your own. If you're in your 40s, you probably already have a career and a job that you may or may not like, so financially this becomes a very important decision. If you're retired you have to decide if you want to put that much work into starting a brewery at this stage in your life. Financially, how does starting a brewery fit into your retirement plan?
I won't get into the details of financing, but starting a brewery requires a financial investment of some kind. The amount varies on how small or how large you are willing to start. You can start a nanobrewery much more easily and cheaply than you can start a craft beer brew pub. Research tells me that as little as 10-30k might get you started. You might also get money from Kickstarter or crowd funding sources, along with an investment of your own and family and friends. Then of course, there is private investment and business loans.
Next brings up another question, and that is whether or not to do food. A brewpub usually serves food, but the food issue combined with the beer brewing side of the equation essentially requires you to start two businesses at once. Maybe less is more, maybe food is important to your concept.
Do your homework. There are plenty of books and blogs on starting a brewery. Listen to podcasts like MicroBrewr or Brewing Business. Join Facebook groups like Start a Brewery, check out Beer Advocate forums for likeminded people. Ask a lot of questions.
I don't know how to write a business plan but I have close family members that do, so I would use them as a resource were I to write one. You may not know how to write a business plan either but you can either learn how to write one from a book or the Internet, or solicit help from a friend or family member to help you write a plan. The US Small Business Administration has a ton of great resources.
After you've exhausted your resources, make a pro/con list. I made mine but realized that I have not done all my homework so I must take my own advice. I will do due diligence before making these decisions.
Jim St. Germain is president of St. Germain Cellars and the resident hops enthusiast. When he isn't evangelizing IPAs (75+ IBUs!), he enjoys a nice glass of pinot noir or good whiskey, neat.