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Progress Thread: Craft Brewery Startup

A detailed account of a Fastlane process...

Atown512

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If you don't mind me asking though, what is Fastlane about a brewery?

While I haven't yet reached the fastlane, I do think I can answer this question. Being on the ground floor of a MASSIVE industry has shown me all sorts of new opportunities that could be fastlane. I sat around too long waiting for that perfect opportunity, and then this came along. A chance to turn a hobby into some money. I am building a brand, an income producing asset, and most importantly...a knowledge base to build upon in search of new opportunities.

Not to mention that, although Boston Beer Company was founded 27 years ago, Jim Koch is now worth over $200 million. He built a brand that grew exponentially...and so did his bank account. What he did may not be possible in today's competitive market, but I'm sure everyone else said the same thing about competing with Anheuser Busch and the other big boys at the time...
 

Atown512

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Well it took all day, but we got everything upright and in place. Now it's finally starting to look like a brewery. Today will be all about the plumbing and other small stuff. It's been an awesome journey so far...I keep seeing new opportunities in the industry. A salesman for a specialty plumbing insulation company came out and showed us some of his stuff. What he had was very nice, but VERY expensive...No doubt this could be done cheaper if produced somewhere else. I'll post some pictures of the stuff when we get some samples later this week, but for now, here's an updated picture of the brewhouse :thumbsup:


Tanks.jpg:
 
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viking88

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amazing mate!!! I had a dream once to start a vodka brand, but with my experience of importing and distributing/selling vodka from Russia, I realised that it would be close to impossible to compete with the big boys. I hope you make it!
 

JAJT

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If you don't mind me asking though, what is Fastlane about a brewery?

This is just speculation, but I would be VERY surprised if the big guys don't start buying out some smaller guys to start adding craft beer to their lineups.

Craft beer is EXPLODING right now. I've already seen one of Canada's biggest brands (Alexander Keith's) start to introduce a "Hop Series" which is very craft-beer-esque, at least in spirit/idea. Some other brands that started small have exploded in size thanks to the market push towards the tastier craft beers.

Also, there's always the chance for a buy-out or sell-off to an individual investor in the future. Buying a fully running small brewery is much easier than setting one up yourself.
 

Atown512

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Update:

It's been a good little while since my last post itt. A lot has happened, and we're getting really close to launch! One thing I can tell you from building a production facility from scratch is that delays are a bitch. It's nearly impossible to get our subs to show up and finish their job, the city is taking FOREVER to bring our sewer and water to the building, along with the million other small problems and endless trips to Home Depot. Nevertheless, we are very close to firing up the new brewhouse.

Since my last post we have accomplished:

Completed plumbing and electricity for entire building
Our plumber has been great, but we had trouble getting him to come out and finish the last of his work. We told him we'd give him a $100 bonus if he could finish in one day...to no surprise, he showed up and finished the next day.

Designed glycol cooling system...ready to order

Met with distributor
After meeting with the distributor I wanted, he convinced us to go 'self-distribution' for the first year or two. This way, we can get the extra 25-30% markup by dealing directly, and I can personally make sure everything 'from grain to glass' goes smoothly. The only negative to this approach is that Texas does not allow me to sell my distribution network...however, I can "trade" for expensive equipment, ingredients, or negotiate higher prices to our distributor

Finished cold storage and receive 500 additional kegs
These have our company logo and name embossed on them.
Kegs.jpg

I'll post more pictures of the brewhouse once we get things cleaned up and organized. Next week will be an exciting week when we begin calling on accounts. I know I'm leaving a TON of stuff out, so if anyone has any questions feel free to ask!
 
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Yankee427

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Great work on getting this going. I know of someone I graduated high school with that I hear he started up his own brewery as well. I think every guy that enjoys beer has thought to create his own brewery at some point.

Speed+ for taking huge action!
 

Atown512

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A little overdue for an update, but here we go. We're STILL waiting on the city to finish linking the sewer to our facility. Luckily this hasn't slowed us down too much, but still very frustrating. We've finished all of the major equipment setup, and have begun testing everything. We had a few leaks in our chiller system, but they are all fixed now, and everything else seems to be working. Now all that is left is to tie up a few loose ends, and clean everything up. We will be ordering the ingredients for our first batches this Monday, and should be brewing by the following week!

There are some interesting changes we will be making to our overall strategy. Due to some changes in Texas beer laws, we will be changing our license from a manufacturer to a brew pub license. This is purely a strategic move to gain a few new privileges that are only available to brewpubs. The main advantage will allow us to sell retail packaged beers for off-site consumption at the brewery. This brings our markup for on-site sales to 300-400%.

Because of the new laws, we have decided to put a lot more focus on our taphouse and facility grounds. We will now be open a few nights during the week in addition to our weekend tours. With our limited capacity, I have convinced our investors that we need to target the high-end market. One strategy for this will be the addition of a barrel aging program. I have just submitted an order for 4-5 different types of barrels to add some interesting flavors to our beers. We will be aging a few of our brands in red wine, tequila, brandy, bourbon, and scotch barrels.

Next week will mainly be cleanup, but we will also need to place a few orders, and finalize our merchandise. I found a great source for our merchandising needs, and now I can get almost everything from one supplier. I'll post more pictures when we start cleaning up. Over the next few weeks the fun really begins!
 

Atown512

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Ok guys, here's another update. After the nice kick in the a$$ I received at B&P this year, we've accomplished a lot. We ran into more unforeseen problems, but I am now much faster at solving problems and getting shit done. All merchandise has been ordered, and website is ready to start online sales. We decided to wait to launch the online store until we have everything in hand so that customers can buy more than just a few glasses and bottle openers. Should be open for orders in two weeks.

Our tasting area is nearly complete. All draft equipment has been ordered, just waiting to install everything once the last few parts arrive this week. Our facility has been inspected by the TABC, and we have been approved for our new license. Now we can go ahead and order our growlers for to-go sales.

The biggest update is that we finally brewed our first full sized batch! It took way longer than it should, but everything went surprisingly smooth for our first run on a brand new system. Now that we have completed our first batch, we get to learn a whole new part of the business: production schedules, budgeting, and forecasting raw materials...woohoo!

Next week, we will brew two more batches and fill the remaining fermenters. After that, it will be time for me to go out on my first sales calls. I already have several accounts lined up for our first sales, so these first batches should go quick. Hopefully the beer is good enough to get some repeat orders...these first releases are extremely crucial for our brand.

After more than a year of planning, and 9 months setting up, we're finally past the starting line...

I'll post more pics once I've had a chance to go through them all, but for now...
Some pics of the tasting area:
rsz_img_0674.jpg rsz_img_0673.jpg rsz_img_0676.jpg
The brewhouse finished:
rsz_img_0672.jpg
 
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Atown512

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Ok guys as promised in the Fastlane 2015 meetup thread here's a long overdue update.

We've been in business for about 4 months now and have accomplished a ton. We have a whole new set of problems and I'm learning that will never end with a growing business. As of now we have produced 12 batches for a total of about 8,000 gallons of beer. We have sold every drop and have only scratched the surface of our local market. We are starting to get unsolicited orders and unfortunately have to decline most new accounts because of our limited capacity. The big challenge now is increasing production while at the same time managing relationships with our accounts. We have to make sure we don't oversell and lose the tap space that everyone is fighting so hard to get. We are planning a major expansion and have already received additional equipment that will increase production by 25% but have not had the time to install.

We initially planned to distribute our own products but that is turning out to be a major distraction. We would need to divert funds that should be used for increasing production to increasing distribution (more vehicles, delivery drivers, and more CRM) This is normally handled by a third party distributor who generally take a whopping 30% of our margins. After factoring in the costs to distribute ourselves this figure comes down to a more realistic 15-20%. We originally planned to self-distribute after running the numbers and seeing the very large number we'd be losing to a distributor. After getting hands-on experience doing it ourselves we have come to the conclusion that it is simply not worth it. They are much better at it and already have the networks in place to handle growth. I now know why a clear company vision is important...It helps make decisions by helping you see when you are veering off course. We were focused on keeping 15% of the pie when we should be focusing on growing the pie.

Another challenge is trying to keep our brand fresh in a market that demands novelty. Our industry reports show that roughly 40% of craft beer consumers make their choice because it is local and another 40% buy because it is new. This creates a serious challenge since the majority of our capacity must be used to maintain reorders of our "core" brands. Regulatory requirements also make this more difficult by adding time to when we can sell the new products. We have to choose between the production problems with new products and the benefits of maintaining the customer awareness and buzz that they create. It would sure be nice if we only needed to make and sell one product.

So far we have confirmed demand and are building a very solid reputation. Our on-site sales are very respectable but could be better. I cannot disclose any information yet but we are in negotiations for a HUGE deal with some very influential people. I will post more if it works out. Now we need to clean up our act and scale, scale, scale.

I will leave on this final thought. I struggled with ideas for so so long until I got involved in this industry. After seeing the problems firsthand I have more ideas than I know what to do with. Now I am developing my own product that will solve a major pain point for breweries like us. My prototype is 95% complete and the damn thing works better than expected. I need one more piece of the puzzle and then I will be looking for manufacturers to simplify and bring the cost down. If it all works out I think this one simple product will make me more money than the brewery. I will post more details about that in my other thread once I'm closer to launch.
 

tafy

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Omg now I want to start a craft beer company, have you read the blog posts of brewdog from the uk? They are raising a tonn of money through crowdfunding and opening their own bars.
 

Atown512

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have you read the blog posts of brewdog from the uk?
I have read some of their stuff. They are incredible at PR and social media. Definitely a lot I could learn from them...
 
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EN_VY

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Awesome progress man! I'm a fan of craft beer, and I saw the scene explode last year. I'm also in Houston so I can't wait to try it. Badass logo too.
 

RedGuardian

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How are things going few years later? How many bbls was the original capacity?
 

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