Want To Start A Brewery Anyone?!

[WSC]

As much as some people bag contract brews it is really the way to go in my opinion.

Takes the major headaches out of things and lets you focus on didtribution and marketing. Focus on getting volumes and then go to the bank/investment with a proven product and marketing approach. You can get good control over the beer if you want and control what goes into the beer and make the styles you want.

The exception to this would be if you had your own restaurant/pub etc (or bought an existing one in the right area) that you could make into a brew pub, that way you have food and beer sales revenue and maybe even pokies to keep you going. But most importantly you need regular base of customers.

Otherwise your $200k+ investment is going to take a long time to break even and start providing you with a decent income. Unless you can clear $100k profit then the 14 hours, 7 days a week are not going to be worth it. You may as well stick to your day job and enjoy the hobby.

 

[pbrosnan]

Seems to me that many people here are looking at the big bang approach. For instance 100, 000 litres a year sounds like huge over kill. I would advocate an incremental approach. I'm amazed that some many people are complaining about how hard it is to start up a small business. If you visit the tourist areas around the country you find many small businesses selling niche products and they're doing OK. Perhaps it's a macho "big is best" thing.

 

[Yeastie Beastie]

It is good to have a dream to start your own micro brewery, I know me and swmbo have, and are, working toward it.
As most have said, taxes, licencing, taxes, suitable premises, taxes etc are the killers.

KEEP THE DREAM ALIVE!!! Work towards it because it wont just fall on your lap.

 

[bconnery]

Fantastic place to set up a small business - if you are an accountant! phsstt.. anyone want to buy a used accountancy business in Tuross Head? Going cheap ..


And if anyone wants to go into the brewery business, call me first. ! Best alcoholic home brewing accountant in town!

And he'll take payment in kind...
Although that could kill your profits right there

 

[Fatgodzilla]

And he'll take payment in kind...
Although that could kill your profits right there

Ben, I like it better when people lie about me rather than say the truth ...

lifted from the site stuffaccountantslike.com (yes we do like some things)

All accountants are alcoholics. An alcoholic is a person who by definition cannot get enough alcohol and constantly seeks more. Not surprisingly, this fits all accountants, from those who drink by themselves to those who are always dressed for the club while at work.

Throughout college, accountants grew up on beer. A few of them even took classes on viticulture, which qualifies them as wine experts after two quarters worth of courses. When they have graduated to the workforce, accountants drink beer at company socials, partake of wine at dinners, and down shots at recruiting events. Note that when a company limits drinks at these events, accountants wind up that much more wasted.

From the days of the classroom to the conference room, accountants can drink. Not only can they drink, but accountants are among the most productive professionals after drinking. That is to say, while most people need to recover the next day, you will find accountants at work early the next day. This post-hangover productivity is well practiced by accountants during annual training where they stay out all night and sit in all day.

While accountants receive decent salaries, this does not stop accountants from making up their self-perceived undercompensation with liquid paychecks. Accountants are able to receive a constant supply of free booze from company functions and recruiting events.

Accountants tend to be risk averse individuals. As such, companies provide accountants with a safe cab policy. This policy is that although accountants should drink in moderation, a cab ride home is covered by the company with no questions asked.

If an accountant insists that they dont drink, you can bet that they are able to drink you under the table. If you want to impress an accountant, simply figure out what kind of alcohol they prefer the most. You can be confident that your gift will be put to good use.

Thank you and good night.

 

[unrealeous]

What's the definition of a computer?
An accountant with a personality...

But back onto the topic - I have a decent book called The Microbrewers' Handbook - has a whole lot of case studies of microbrewery startups. UK focused but definitely a good read if you want to get some more insight into what you'd be signing yourself up for....

 

[HoppingMad]

I think it's easy to say that the bureaucracy of this country means you can't make money, but you have to think your way around it.

I think there is a reason that many successful craft breweries (and vineyards for that matter) are pairing their drink with some kind of other offering. Whether that's a groovy cellar door set-up, some simple food, a gallery, an annual event, or even accommodation. Or setting themselves up in proximity to a tourist trail so you become another attraction along it. If you can't make money from the beer alone, many are making it from a combination.

It worked for Dogfish Head. They made more money in their first years from having 'off-centred food' than having 'off-centred ales'. In that example, the food sales paid for the brewery, and for them to experiment away in the 'brew lab' while the hospitality aspect took care of the bills.

But agree with the contract brewing comment, that way is a darn sight cheaper and easier path, and would require much less startup capital.

Hopper.

 

[batemanbrewer]

pubreweryrestuarant

 

[Phoney]

Hopefully these guys have some luck in lobbying the gubberment in dropping the ridiculous excise taxes from microbreweries to put them on a level playing field with vineyards. It's complete bullshit that we can have such a thriving boutique family-run wine industry that is drawing thousands of tourists and millions of dollars into regional areas, yet we cannot have the same with craft beer because of unfair taxes.

It might be easy to achieve in the US & UK, but until some serious tax reform is considered in this country, sadly, most of these ideas we have will only ever remain as pipe dreams.

Government over-regulation in Australia really shits me to tears.

 

[domonsura]

It is good to have a dream to start your own micro brewery, I know me and swmbo have, and are, working toward it.
As most have said, taxes, licencing, taxes, suitable premises, taxes etc are the killers.

KEEP THE DREAM ALIVE!!! Work towards it because it wont just fall on your lap.

That last line there is the clincher, NEVER a truer word spoken. If you don't give it a go, you'll never know.

And incidentally - (whoever said Aus is a shite place for small business) if you really think Australia is a shite place to start a business - go and try and start one in NZ. When you go broke and end up back here, you'll realise just how bloody wonderful Australia is for many many reasons, not just the fact that a small business is perfectly viable.....Australia is a wonderful place to start a VIABLE business....a shite business on the other hand is a shite business wherever you put it

 

[chappo1970]

That last line there is the clincher, NEVER a truer word spoken. If you don't give it a go, you'll never know.

And incidentally - (whoever said Aus is a shite place for small business) if you really think Australia is a shite place to start a business - go and try and start one in NZ. When you go broke and end up back here, you'll realise just how bloody wonderful Australia is for many many reasons, not just the fact that a small business is perfectly viable.....Australia is a wonderful place to start a VIABLE business....a shite business on the other hand is a shite business wherever you put it

Now that's the best post I have seen all year. Kudos Wayne! Time we had a beer mate. :beerbang:

 

[Mercs Own]

contract brewing cost about $37 per case (last time I got a quote) - but have to commit to 1000 (aib or mildura) cases which means $37000 up front cost. Then you have storage and freight and if you really want to sell it you need a distributor who will try and charge $12 per case (last time I got a quote) now it's cost you $49 per case - a total off $49000 before you have sold it. Bottle shops will buy cases at $55 per case and sell them for $75 (last time I sold my beer to the shops) so you make $6 profit per case although you havent factored in freight, storage, design, fees, your time on the road or petrol costs and the rest.... in short your up against it. Do smaller runs and the costs are greater (it cost me $47 per case to make my beer couldnt afford a distributor)

I have to say that a lot of beer coming out of contract breweries are too similar due in part to them wanting to keep their costs down and therefore getting everyone to use the same yeast strain or grains or bittering hops - just my point of view and backed up through conversations I have had with a number of brewers I have spoken with who have used the contract route.

I did figures a fair while ago and a general over view is that it costs $2.50 to brew a litre of beer including excise. In a case of beer there is just under 8 litres of beer so that beer represents just under $20 dollars of cost so the other $17 bucks is packaging - thats a fair amount of cost to get your beer out there.

If you have a brewery and are selling your beer over your own bar - you make it for $2.50 a litre and sell it for around $15 bucks a litre - that is a nice little profit.

Yes I know this is all very simple and probably inaccurate because of that but on 8 litres of beer in your pub you make $100 profit where as on contract brewing you will be lucky to make $4.

My point is brewpubresturant - big set up costs but bigger potential for profits (and loss)

Keep in mind that the $200 000 brewery you bought will most likely cost $200 000 to install - slab, refrigeration, gas, electricty, plumbing, glycol, labor, fees, taxes, training, advice etc etc Price does not include building, lease, insurance etc

Why any one would do either is beyond me....but I am in!

 

[amiddler]

Anyone that reads Beer and Brewer Mag, may remember the 4 mates that built a brewery in there back yard. It helped them that one was a Stainless steal fabricator and from memory one was in the electrical game so the build was quite cheap. (Cheaper than buying one) I am sure one was in sales as well so getting the brand our was easy. Having said that from the first drawing to selling first carton to the local bottle shop was over 5 years. It was only a 400L system and the boys put out 50 cartons every Saturday.

If a group of mates are willing to go the long haul in setting up such a brewery, my hat off to you. You have alot more patience than myself. I will stick at making 30L a fortnight for me.

Drew

 

[Batz]

You guys need to sit back and relax a bit.

Batz

 

[Jono_w]

That last line there is the clincher, NEVER a truer word spoken. If you don't give it a go, you'll never know.

And incidentally - (whoever said Aus is a shite place for small business) if you really think Australia is a shite place to start a business - go and try and start one in NZ. When you go broke and end up back here, you'll realise just how bloody wonderful Australia is for many many reasons, not just the fact that a small business is perfectly viable.....Australia is a wonderful place to start a VIABLE business....a shite business on the other hand is a shite business wherever you put it

This^ , my friends sums it up beautifully.

There is not a day I don't think about owning my own brewery , bar or restaurant and it is a goal that I have set myself, so enough of the hard facts and dollar figures bringing peoples dreams to a abrupt end.
I believe in being realistic but some things have to be left to chance..

If you want to make money, Get a job.

If you want to make something of your life, have a go.

Passion is what it's all about.

Cheers..

 

[IainMcLean]

I know a commercially successful brewery that cost under $10k.
Labor intensive, but it is growing.

Really? Who / where?

 

[pbrosnan]

Scroll down to the bottom of this, most are producing <= 50K litres

http://taxreview.treasury.gov.au/content/s...icrobrewers.pdf

 

[roller997]

The key to a startup microbrewery seems to be:

Sell on premises via a brewpub type setup since you
a) Pay less in excise than packaging smaller than 48 liters ( I thought it was about $1.85 per liter when I checked some time ago)
B) You don't pay for distribution or for retail margin
c) Your packaging costs are signficiantly lower
d) Less likely to keep on buying kegs to replenish "lost" property
d) You have full control over quality of lines & freshness of beer
e) It builds your brand so you can get ready for the next step to distribute your wares.
f) You have greater diversity in terms of your income

The risk (beyond cost of an appropriate liquor license) is obviously picking the right place at the best location you can afford and some heavy promotion / marketing of the (presumably) old pub to bring new customers to it

Have we had any indication what the $200K is supposed to include / not include and how big it was?

An ideal setup would be a central brewery in an industrial area with great water which services a number of direct sales outlets - Pretty much the way that Redback started up - From what I was told, they had their main production facility in one place and then had nice shiny copper vessels at the pubs which may have served as pilot breweries

Cheers

Roller

 

[///]

A much wiser man once said to me, 'you can make as much beer as you want, but how are you going sell it?'. For Rocks Brewing it was a case of taking over our own cellar door aka Harts Pub.

The production side really is the easy bit, but walk into most pubs in Sydney and you'll have 1 or if your lucky 2 taps 'free' (i.e. uncontracted). So for Rocks we have our own site and own our own taps and we are booming along.

I agree with Paul on the contract production (and those numbers are pretty much spot on), brewers beware! Control your sales and you will have a business, trust it in the hands of others and well .... it will be come 'interesting' with deep pockets needed.

All the set-up stuff like licensing and council is not that hard if you have all the correct information and support and is just something to go through. That does not last as long as the year on year sales stuff, unfortunately sales is what it is all about regardless what you do.

Scotty

 

[mxd]

it's been shown before but a starting point could be this one. A bit of info about it