Progress Thread: Craft Brewery Startup

[Atown512]

Well I am back in the US from my poker adventures in Canada and Costa Rica. Things are really getting started with the brewery I posted about a few months ago. I haven't had too much time to post on here, but I have been keeping a journal of what's been going on. I plan on organizing it into a blog when I have a little more content, but for now I will make a quick list of what we've accomplished so far:

• Finished a complete business plan.
• Received quotes from the three major equipment suppliers. We are 95% sure we have our supplier chosen. Current ETA is 4-5 months.
• Acquired additional 20% investor to cover our decision to double capacity. The quotes we received showed we could double capacity for 33% more on equipment, and only 10% more when factoring PP&E.
• Building plans are 95% completed. Almost prepared to begin construction, just waiting on permits. Should be later this week or next week.
• Ordered and received "pilot" brewery system for testing recipes.
• Completed two test batches...So far so good :cheers:
• Formed two LLCs: one LLC will own PP&E. The second LLC will rent everything from the first. (I have a meeting this Thursday for a second opinion on this organization)
• We have chosen a brewery name. (Which I will share a little later when I am sure our name is protected)
• Changed one of our LLC names to the brewery name we wanted for brand name protection.
• Developed company logo, waiting on finishing touches.
• Posted a job listing for website design.

I will post more updates as things move along. Feel free to ask any questions, and if anyone is around Houston area, I'd be more than happy to share in the "product testing" :smx6:

Here is a pic of our pilot system:

 

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[Atown512]

As promised, here are a few pics:

Our pint glass with the first pour of our Pilsner:



The facility:



Our first order of kegs...500 more on the way!

 

[Atown512]

Hey guys!

A lot of stuff has been going on in my life lately, and I know it's been a long time since I've posted an update...so here it is. I wanted to take some time off of posting, and wait until I had a lot more value to put into my posts. Things have been going very quickly with the brewery lately so I may leave a few things out, but here is a list of the highlights that we've accomplished since my last post:

• Completed our first fully bottled and packaged sample 6-packs
• Received our first order of custom pint glasses
• Building structure has been completed...We still have a TON of equipment to install, including all of the necessary plumbing.
• PA has been signed....I now own 20% of B-52 Brewing Co.
• Federal and state licenses have been approved
• Majority of equipment has been shipped. It's crossing the Pacific as we speak....should be here mid-July.
• Confirmed 3 of our first 4 beer recipes
• Participated in our first tasting event at a very high end country club (Carlton Woods in The Woodlands)

Over the next few weeks, we will:

• Decide on brand names for first 4 beers...we have 2 nailed down, but I can't reveal them just yet
• Find and hire a more reliable graphics designer to develop graphics for our website, merchandise, and packaging
• Produce and decide on our 4th recipe. We are going for something funky with this one...possibly a "Ghost Pepper Stout"
• Receive brewhouse and cellar tanks from China sometime in the middle of July. Installation should be complete 2 weeks after delivery.
• Find a bottling line. This has been the most difficult piece of equipment to decide on. There are very few used options, and finding a line that has both versatility and speed has been a huge challenge. We're finding out first hand why experienced brewers tell you to brew in a bath tub and save all your money for packaging equipment.
• Design and order merchandise (T-shirts, hats, glasses, etc.)
• Finish website and add e-store to sell merch online.

We should be ready for our first production brew by the end of July. We have a consultant coming in for the first week of operations to look over our processes and make recommendations. I'll post some more pictures later today, but in the meantime you can check us out on Facebook at:
https://www.facebook.com/B52Brewing

 

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[Atown512]

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.


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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[Atown512]

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:

The brewhouse finished:

 

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[Atown512]

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]

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.

 

[snowbank]

Nice work. Cool to hear about the progress.

Shoot me your email. I have a friend in Austin who has gotten into the beer biz recently as well and seems like you are both at similar points- I'll get you guys in touch.

 

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[Atown512]

Update:

It's been over a month since my last update, and not much was accomplished up until about a week ago. Since then we have met with our attorney to straighten out the partnership agreement and overall organization of the company. Everyone is now happy with the PA, and we have made some changes to the organization.

We now have three entities:

1. Limited partnership: This partnership will hold 99% of the assets including the land, building, and equipment.
2. LLC for assets: This entity will hold 1% of the assets...The explanation for this entity was not explained to me very well, so I'm still not sure what the exact purpose is. I know it is for liability protection, and another layer of defense for the assets.
3. Brewery LLC: This entity will conduct all of the operations, and lease the building and equipment from the asset company.

The biggest accomplishment this week was putting down the 25% deposit to order the equipment (about $56k) This has effectively lit a fire under our asses, as we now have about 5 months to get everything ready. I have a picture of our architect's draw-up for what our building will look like. We are going for a contemporary industrial hangar-like style.


Now we need to begin working on acquiring the licenses to produce and distribute. This will surely be the most annoying part of the process, and I will spare you all the details of this grueling part. Now that I have acquired the facebook and twitter pages, and our attorney confirmed our name is protected, I can reveal our brewery name: B-52 Brewing Co.

 

[Atown512]

Update:

So our equipment has finally arrived! I will post more pictures when I have a chance to upload them all. We have a consultant flying down tomorrow afternoon to assist with the installation. It should take us about two weeks before we will be able to brew our first batch.




Other than the installation, over the next few weeks I will need to:

• Setup supplier accounts
• Find and buy warehouse equipment
• Find a forklift
• Order materials for first batches
• Begin process for changing our license from Manufacturer's to a Brewpub license (More on that later)
• Create our brewery merchandise products
• Finish the website including an e-store

BTW: In addition to our merchandise, we plan to sell tickets to our tastings online. What e-commerce plugins for wordpress do you guys recommend for a small e-store?

 

[Atown512]

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


:

 

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[Atown512]

Update:
Things are going a little slower than expected. We are having trouble with our engineer getting the permits for our building. We should be back up to speed by Monday. In the last two weeks, we have accomplished:

• Finalized equipment layout (finally) and started putting finishing touches on cosmetics of building.
• Received final logo design including extra graphics from designer.
• Found independent suppliers for glycol chilling equipment. Everyone seems very willing to help with a brewery startup. Expected savings of $5k...Proof that putting in some of your own research can certainly save money!
• Received quotes for promotional merchandise
• Completed two additional test batches. Still have some tweaking to do on our Porter recipe.
• Established relationship with local art show. We will be supplying craft beer for their events starting in February.

 

[DennisD]

This is from the HARO (Help A Reporter Out) request I just received. I'd respond to this with a REALLY catchy headline ASAP. They're bound to get hundreds of people. Make sure you leave a valid twitter, email, and phone number. Make it as easy as possible for them to interview you.

4) Summary: Beer Brewers & Industry Professionals Needed!

Name: Jennn Fusion Save On Brew Beer Blog
Category: Business and Finance

Email: query-2p7p@helpareporter.net

Media Outlet: Save On Brew Beer Blog

Deadline: 7:00 PM EST - 4 January

Query:

Hello. I'm the chief writer for the Save On Brew blog, read by
over 25,000 beer enthusiasts. We are looking for industry
professionals to participate in an interview (via email) about
"the people behind the beer industry."

Requirements:

Please shoot me an email to Jennnfusion@gmail.com with your
name, credentials & contact info. I'll be in touch shortly!

 

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[Atown512]

Very cool. Eventually, I'd like to have a craft distillery. But this is cool. Love the logos.

Thanks! We are planning to add a small craft distillery to the brewery some time in the next year. The ultimate plan is to focus on beer, but have small batches of craft spirits and wine to complement a high quality image and hopefully yield higher prices for all of our products.

 

[Atown512]

As an Austin resident, I'm looking forward to it! Let me know when I can buy some!

We should have our first beers available at the end of September. We're still looking for a bottling line, so we will be keg only for a few months and probably won't have anything in Austin for a little while. If you're ever in Houston though, let me know and I'll show you around the brewery!

For the longest time I had a solid stout recipe and wanted to have my beer contract brewed and branded. I found out there is plenty of good stouts out there and I began to get into another similar industry, hehe.

Best of luck to you in your venture.

Thanks! We have been around the craft beer scene for more than 10 years now, and I definitely know what you mean. There are a ton of great beers out there, and a lot of the new breweries are doing the same things. We have a few tricks up our sleeves to stand out, and a lot of what I'm working on came from the advice of Kung Fu Steve.

BTW Steele...how are things going with your waterpipe?

 

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[Steele Concept]

BTW Steele...how are things going with your waterpipe?

Going good, I gave another company (transformer tubes) exclusive rights to manufacture and produce my product. The engineer Evan over there tweaked the design and we are getting it down to $200 MSRP. We worked out a nice deal and I get commissions on any of their or my product I sell. It is a little money while I pursue my new venture ...

Your logo looks badass, especially on that pint. That is nice you have some innovation tricks up your sleeve, so many styles have been done so many times that a lot of stuff tastes alike in the industry. Look forward to see what is coming.

 

[JAJT]

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.

 

[tafy]

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.

 

[EN_VY]

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.

 

[DennisD]

What are your next steps?

 

[Atown512]

What are your next steps?

The highest priority right now is getting the building started. If everything goes to plan, we should be ready to start later this week. Once we have all the permits and construction begins, we can go ahead and order the equipment.

In the meantime:
- I need to complete two more test batches this week.
- Receive final company logo design
- Finish setting up the Facebook and Twitter pages, as well as find a freelancer to design my website.
- I will be meeting with the investors to finalize and sign our operating agreement.
- Meet with attorney to confirm the LLC arrangement is correct

 

[Likwid24]

Nice Work. I've always wanted to start my own craft brewery. At one point, I was thinking of doing that instead of my paint brush cover. Can't wait to see your progress. Good Luck!

 

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[McWonderful]

First of all, I love trying new beer! Do you plan on starting off with different types of beer or do you plan on sticking with one proprietary blend? My friends always talk about starting a bar/brewery and they sort of got me interested in the idea (of course when I bring up the process of a start-up I don't get much feedback). Seeing the process outlined here is definitely inspirational so keep up the work and good luck!

 

[Atown512]

First of all, I love trying new beer! Do you plan on starting off with different types of beer or do you plan on sticking with one proprietary blend?

Thanks everyone! So far the plan is to start with four different types ranging from light to dark in color. We expect our lightest beer to sell the most, but will make sure and include the next three most
popular styles with our initial releases. We will also be releasing a special beer for each season that will not be part of our main product line.

 

[Ãœbertreffen]

SPEED for you, Atown! Keep up the good work. I look forward to your updates.

Shoot me your email. I have a friend in Austin who has gotten into the beer biz recently as well and seems like you are both at similar points- I'll get you guys in touch.

SPEED+ to you too, sir. It's great to see the community come together to help one another.

In addition, Atown, I have a contact in the DFW area who operates a liquor store. If it can be of benefit, you're more than welcome to PM me.



- Devin

 

[Atown512]

Shoot me your email. I have a friend in Austin who has gotten into the beer biz recently as well and seems like you are both at similar points- I'll get you guys in touch.

PM sent.

In addition, Atown, I have a contact in the DFW area who operates a liquor store. If it can be of benefit, you're more than welcome to PM me.

Thanks Devin! It's awesome to have so many people willing to help out. I am still learning about the distribution part of the business, but I know we are definitely planning on selling to the DFW area soon. We will be focusing mostly on the Houston area at first, then Austin and Dallas. I'll shoot you a PM when we get a little closer to having a finished product.

 

[Ãœbertreffen]

Thanks Devin! It's awesome to have so many people willing to help out. I am still learning about the distribution part of the business, but I know we are definitely planning on selling to the DFW area soon. We will be focusing mostly on the Houston area at first, then Austin and Dallas. I'll shoot you a PM when we get a little closer to having a finished product.

You're welcome! I'll check in from time to time on your updates. Keep up the good work!


- Devin

 

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[lookingahead]

Will be awesome to watch this move along, can't wait to see some product rolling out. Will there be online sales once everything gets rolling? Even though I'm not in the Dallas area, I'd LOVE to offer tasting

 

[DennisD]

Is it bad form that I'm considering offering free services in exchange for beer? lol

 

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[Atown512]

Is it bad form that I'm considering offering free services in exchange for beer? lol

Actually, it is way more appropriate than you may think! The Egyptians used beer as a form of currency to pay slaves, tradesmen, priests, and public officials.

Just in case anyone is interested, there is a very interesting documentary that ran on Discovery Channel last year called: How Beer Saved The World. There are three episodes, the first two are much more interesting than the third. I think you can watch the full episodes on Youtube. Here is a link to the first one: How Beer Saved the World (HD) - YouTube