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Whats The Skinny On Brewing Commercially ?

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Doc

Doctor's Orders Brewing
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In a similar vein to this topic I started a year ago I'm after a bit of info.
There are a number of guys on this forum who are in the process of setting up commercial breweries (you SA guys know who you are).
There are also a number on here who brew commercially (a couple in SA, and NSW).

In some informal chats I've had with people in the industry, it appears that it take at least a couple of years to get a commercial brewing venture off the ground, financed and in production.

What is the typical lead time, and cost to setup a commercial brewing venture in Australia, and are then any good resources available for anyone silly enough to want to bet their life savings and future on such a project (ie. me) ? I'm talking govt, council and taxation requirements, other laws/zoning etc, infrastructure, business plans ....... blah blah blah.

I've seen some handbooks and guides available on the net but they are all US centric.

TIA,
Doc
 

Andrew

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Hi Doc,
And the answer isthere is NO straight answer..
There are probably hundreds of ways you can approach this.
Here is JUST ONEand this is a very basic explanation, I do not mean to intentionally insult anyones intelligence I just like simple explanations!Now, lets say you approach the whole issue of setting up a micro-brewery from a (very basic) marketing perspective.
There are two simple core approaches:
1. The product marketing approach, where you create an excellent product (your beer) then have to work out a way of getting it into the market and selling it. IE: create the product and attract the customers.
2. The consumer marketing approach, where you find a location where people want something different (a place/experience to go to and a new/different product (your excellent beer) IE: find the customers and create the product.
I believe approach 1 is possible but a tough road to take in Australia at this point in time. It can be done but would be difficult and possibly require as much money in marketing the product as it costs in initially purchasing the production equipment. Eg if you spent $sixfigures on a 2nd hand rig from o/s, expect to spend the same on marketing to be TRULY successful (ok, depending on how you define this personally I suppose).
Approach 2 is easier, but can take a LOT longer to fulfil basic key components such as location location location, and then theres all the paperwork that you (Doc) have already started to look at.

Without a doubt, the best thing is to obtain an excellent relationship with your local council, this one factor is massively important. If your local council is against you, then you will have heartache. If your local council sees you as an integral part of their latest tourism push, then come in spinner!

Regardless of how you go about it, eventually you will find that, as massively important the beer is, its only about 5% of the business that needs dealing with. Unfortunately these days, good beer does not a good brewery necessarily make.
Marketing, location, staff, accounting and admin, etc etc etc will DWARF the beer issue.
Prior Planning & Preparation Prevents Piss Poor Performance, and Ive been doing planning and paperwork for over two years now. And the restoration work down at the wharf is now currently 6 weeks behind schedule!

Im not saying you will get away with making crap beer, but it will only be a fraction of the time/issues you are faced with. Good Luck!

Personally, the relationship you develop with the key people in your business (the brewer, your accountant, the graphic designer, suppliers, the babe on cellar door sales etc) will be the key to your success.

I dont think I have really answered your question, but its past my bedtime!

Cheers!

BTW, I have your Vanilla Bourbon Porter on tap ATM but without the vanilla or bourbon, It is a splendid thing
 

Gulf Brewery

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Hi Doc

Just a few for you to consider :)

a) State Govt - in SA they were really helpful. (Office of Liqour and Gambling Commisioner)

B) Once you have that, then you can get council (shire?) approval for your development. If this is in a commercial area, then you may have a lot of work to do. You need to think through the entire brewing process from raw materials through to finished product / distribution / serving of beer. They will want to know all of your raw materials and your emmisions. This was the slowest step (so far) in my venture).

c) ATO for excise - this can also be a lot of work with calibrations etc. Record keeping is important for this as well, so you need to think about the overheads involved in that.

d) Food Production - you will have to notify the council about the fact you are producing a food product.

e) Water board - for the disposal of your waste liquid - can be difficult.

f) GST and import charges - you get a few of these just to get your gear into the country, but you can claim the GST back.

Cheers

Pedro the paperwork man.
 

Doc

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Thanks very much for the fantastic replies guys.

It was something I'd pretty much given away as a pipe dream as I have a very good career in IT. And of course it is a hobby, not a job for me.

Andrew, it is the second approach in your list (Consumer Marketing) that has got me thinking about it again.

I know it won't be easy to do (if I have a crack at it), but I also don't want to be regretting it in 20 years time either (the missed opportunity).

I'll be doing some more investigation and we will see what eventuates.

Thanks again,
Doc
 

Ross

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Pedro,

How's the micro coming along / any news?
 

Andrew

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Hey Pedro, I rekon between us we could start up a side-business and put Palmer to shame by writing a very successful book: "Patience and perseverance - how to build a micro in Australia from absolute scratch".
Be a bestseller...

Cheers!
 

Gulf Brewery

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Andrew said:
Hey Pedro, I rekon between us we could start up a side-business and put Palmer to shame by writing a very successful book: "Patience and perseverance - how to build a micro in Australia from absolute scratch".
Be a bestseller...

Cheers!
[post="70560"][/post]​
And the follow up ones
Paperwork and the Microbrewer - how to repetitively fill in the same information for local/state/federal government with specialised chapters on - Rejected forms - how to fill in the same form with the same information and get it passed!

And the concluding book
I started a Microbrewery and only went slightly mad!

The Gulf Brewery is getting closer, nearly through all of the paperwork.

Cheers
Pedro
 

Andrew

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And the concluding book
I started a Microbrewery and only went slightly mad!
Be strong, brother, be strong. :lol:

Looking forward to swapping the occasional keg... :beer:
 

Boots

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I realise this isn't answering your question Doc, but this thread on BrewBoard (US) is discussing those people who have gone commercial, but not quite nailed it.

I know you'd be in no risk of going in half arsed :) , but it may develop into an interesting discussion if some pro brewers contribute to it.
 

GMK

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It would be very interesting if the Commercial guys posted approx dollars needed to set up...

Ie - equipment cost, licence costs, and also excise costs/considerations.
etc...
 

Gulf Brewery

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GMK said:
It would be very interesting if the Commercial guys posted approx dollars needed to set up...

Ie - equipment cost, licence costs, and also excise costs/considerations.
etc...
[post="71130"][/post]​
GMK

Quite simply, I will not do this. This exposes information about my business that is confidential. That is not to say that Micro's don't help each other with costs on various bits and pieces, but we do not discuss the overall costs of things like equipment in public.

I think you will find most business (not just breweries) are like this and will only talk in broad terms of what the costs are.

Pedro
 

Boots

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Nice one Ken :blink:

Pedro, while you're at it, can you let us all know what your recipes are, how much you pay for grain, and what you pay your employees.

:p
 

kirem

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Most of this information is available quite easily by picking up the phone or going to the relevent website.

That said, it is interesting that things seem to be so secretitive. I remember when The Gulf brewery was all secretitive about its location. A quick search on the liqour licensing web site showed up the application in the gazette and quite a bit of information including am address!

I am not so sure that being so secretitive is a wise thing, it makes people curious and if you look hard enough you can find out just about anything you want.

I decided not to post any information I turned up on Gulf brewery as he said he still had some security issues.

Here is a start;

Used breweries: A number of sites around. www.nabrewing.com shows most prices, not hard to work out the extras of freight and commisioning etc

Licence costs: basically the cost of licence plus advertisement. For SA; http://www.olgc.sa.gov.au/default.asp?menu...ence_021203.htm
just ring them and they will send you out a pack full of paperwork

Excise: this is lightly covered in the licensing but is governed by the ATO
http://www.ato.gov.au/businesses/content.a...ntent/52638.htm

Council permits, EPA etc etc. As has already been posted it is a never ending paper chase.

So that leaves many other areas, marketing, brewing a good product.

Good luck Pedro.
 

GMK

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Pedro - i understand - that is why i said approximately...i was referring to broad terms not dollars and cents....

was not meant in any way to be noisy or to offend.

Sorry if it did...

Trust Boots to go further though.... :huh: :ph34r:
 

Gulf Brewery

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kirem said:
Most of this information is available quite easily by picking up the phone or going to the relevent website.

That said, it is interesting that things seem to be so secretitive. I remember when The Gulf brewery was all secretitive about its location. A quick search on the liqour licensing web site showed up the application in the gazette and quite a bit of information including am address!
Kirem

This is not specifically directed at you and it is not meant to be taken negatively, it is a frank discussion of my view of the facts.

Its not so much the location, but the details of the business $, what is spent where. Should I tell everyone how much I spend on marketing and in what form? Should I detail what deals I have done to get things cheaper? Some of this info forms part of my competitive edge and there is no way I would give that away.

As you say, a lot of the info is out there if you wish to look. Every business is different as well, so that is why business to business we talk in broad terms.

As for the info in the Gazette, that isn't the address of the brewery, but the address for the business :)

The simple matter is that for those who wish to pursue this seriously, you need to do a detailed business planning course and think the whole idea through. Then and only then may you come up with something worthwhile as far as $ and a business venture.


Cheers
Pedro
 

Gulf Brewery

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GMK said:
Pedro - i understand - that is why i said approximately...i was referring to broad terms not dollars and cents....

was not meant in any way to be noisy or to offend.

Sorry if it did...

Trust Boots to go further though.... :huh: :ph34r:
[post="71150"][/post]​
Hi GMK

In broard terms, follow Kirem's advice

Cheers
Pedro
 

GMK

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Cool - Thanks
 

kirem

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Pedro,

I am not sure that GMK was asking for specifics. His post says;

"It would be very interesting if the Commercial guys posted approx dollars needed to set up...

Ie - equipment cost, licence costs, and also excise costs/considerations.
etc..."

I gave some direction on where to find the answers to these questions.

He didn't ask and nor do I really care what you spent on marketing and what form, there are so many variables an answer would be in the form of a small book.

Although interesting your 'deals' might be to get things done cheaper, if you can't do deals or think outside the mashtun to get things done cheaper then perhaps stating up a venture like this is beyond anyone think of getting into it.

I admire what you are doing Pedro, but approximations on setup costs are no big secret and I would have thought that the more micros starting up the better off the industry would be. It is certainly how it works in the wine world.
 

Gulf Brewery

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kirem said:
Pedro,

I am not sure that GMK was asking for specifics. His post says;

"It would be very interesting if the Commercial guys posted approx dollars needed to set up...

Ie - equipment cost, licence costs, and also excise costs/considerations.
etc..."
I understand what you are saying Kirem, but marketing is part of your setup and ongoing costs.

I think that we have gone far enough with this discussion :) - if any other commercial brewer would like to provide costs on equipment, then go for it.

Cheers
Pedro
 

Ducatiboy stu

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Well I recently got my paperwork back from the local council regarding my Micro venture. At first they had no idea how to approach it as the guidlines they had where for comerciall breweries producion over 100 tones per week.

I have set (read setting) mine up as a home based industry, and as I live on a farm it becomes a lot easier, mainly due to space, noise and enviromentall concerns. They want to know what is going to happen to all the waste products and to know how it will be disposed of. Council was actually very helpfull, but had now idea of what is involved, as they have no guidelines for micro's. So amongst the paper work was " A guidleine for Microbreweries " dated 2002 from the Victorian EPA. I live in NSW. They are going to use this document as a basis for approval. Although it will need to be modified as my processes are different due to quantity being produced.So far so good with council.

The Liqour Licencing court wont grant a licence unless you can show them that council has has given consent for the property to be used as a brewery. Once this is done, you apply for a brewers licence ($2000 ), advertise the application, wait 28 days, get a police crimal record check. This is basically straigh forward and not much of a hassle.

The ATO wont grant any permissions untill you have a brewers licence, council consent and NATA certified calibrated equipment, which is only your Hydrometer and Bottleing/filling tank. Fermenters, mash tuns, kettles dont need to be calibrated, only the final filling tank so as they know how much beer was produced prior to packaging. They wont accept a bottel or keg count. if you loose beer between the filling tank and bottles/kegs then too bad. (ie if you produce 1000lts of beer but only bottle 500lts they will charge excice on the 1000lts )
I found the ATO very helpfull and great to deal with, and had a lengthy discussion with one of the technical guys and he explained what is required and why.And it aint rocket science. They just want good record keeping of grain stocks, they dont care about efficiency to much just accuracy and consistency
 

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