So you wanna open a brewery?

In our March 2017 meeting we had a presentation from LAB Members Darren Oakley of Rockhopper Brewing (https://rockhopperbrew.co/) and Andy Parker of Elusive Brewing (http://www.elusivebrewing.com/) on their experiences of taking a home brewing hobby and scaling it up to a professional microbrewery.

Transcript

1. So you wanna open a brewery? are you mad...
2. Overview • What it takes to open a brewery ◦ Spoiler alert - it’s not just shiny stainless steel… • Progress Reports ◦ Elusive Brewing Co - Andy Parker ◦ Rockhopper Brewing Co - Darren Oakley
3. Things to arrange It’s not just the brew kit... • Location • HRMC Beer Duty Registration • HMRC Alcohol Wholesaler Registration Scheme (AWRS) • Sewage Disposal Permission (Trade Effluent Permit) • Water Supply • Environmental Health • Alcohol Licensing • Suppliers • Customers
4. Finding a location • Production brewery? ◦ Generally you need B2 (light industrial) use class • Location ◦ Are you planning on opening a tap room? If yes, consider transport links etc... • Access ◦ Large delivery vehicles need to get to you • Storage ◦ Lots of stuff - ingredients, process aids, chemicals, packaging, finished product • Drainage ◦ Mopping up 100’s of litres of beer is not an option if things go wrong... • Temperature ◦ Storing finished beer warm won’t do it much good...
5. • Register for beer duty. You need to do it - straight away • Also register for AWRS You can do both at the same time. The people from HMRC are actually surprisingly nice and helpful. Unless you give them reason not to be... HMRC
6. Sewage Disposal & Water supply • You need to arrange for effluent disposal… ◦ Contact your supplier, e.g. Thames Water • Beer is >90% water - better make sure you can get adequate good supply. • Register as a heavy/sensitive user ◦ You get updates when the water company are planning on changing the supply • Undertake regular analysis of the supply (Murphy’s can help with this but simple things like tasting as the CLT is filled also important)
7. Environmental Health • You are a food producer so you need to pay attention to this ◦ Adequate cleaning area ◦ Good process control ◦ HACCP (Hazard and Critical Control Point) documentation ◦ Stock and finished product control ◦ Data safety information for all chemicals / process aids ◦ Adequate information on your labels (refer to Trading Standards) • How much detail you have to go into on all of the above is down to your local council.
8. Do I need an alcohol license? Depends… • Do you plan on just selling to licensed premises (pubs, shops etc)? ◦ NO • Do you plan on selling direct to the public for special events? ◦ YES - you will need a personal alcohol license, and a temporary event notice for each event • Do you plan on selling/shipping direct to the public from your brewery? ◦ YES - you will need a personal alcohol license ◦ YES - you will need a premises license for the brewery
9. Suppliers • You’ll need to find suppliers for ingredients, chemicals and packaging • That IPA you brew with all those sexy hops… forget it ◦ You can sometimes get in-demand varieties on the spot market but they’ll be last year’s crop ◦ A contract is the only way to guarantee supply but for in-demand varieties, still hard • There are a few good ‘one stop shop’ suppliers covering a range of things (Elusive & Rockhopper use Muntons, Niche Solutions, Charles Faram and Simply Hops) • Considering the packaging formats you’ll be using (cask, keg, bottle, can) and the margins you’ll need to apply to each to cover material costs and labour
10. Customers • It’s a busy market. Don’t assume that because your beer is awesome, people will be queuing up for it • Do plenty of legwork and research to identify likely customers and talk to them. YOU need to generate the demand! • Don’t get roped into supplying PubCos from the outset - it’s very hard to make any kind of margin on those sales (plus high initial cost of joining SIBA’s BeerFlex/DDS) • Focus on what works well and do more of it, rather than spreading yourself too thin and eating into margin that way
11. Progress Reports
13. Elusive Brewing • 5BBL plant, was 2 now 3 FVs (soon to be 4) • Small 10x6M industrial unit • Full-time commitment from Andy • Self-funded and privately owned (as a limited company) • First brew on April 27th 2016 • No core range in the traditional sense • Target of selling 48 brews in first calendar year (on target) • First part-time employee on board • Cashflow positive and profitable in 3Q (re-investment approach) • Demand currently 3-4x production which needs to be managed carefully
15. Deciding where to pitch Elusive ▪ Creating a business plan ▪ Determining funds needed to start ▪ Raising funds ▪ Acquiring equipment ▪ Project planning
16. The long and boring part ▪ Finding suitable premises ▪ Establishing the business legally ▪ Permissions: HMRC, Planning, Water ▪ Design ▪ Commissioning
21. What could we have done better? ▪ Ditched first gyle - ££ ▪ Incorrect split of packaging ▪ Insufficient casks & poor tracking ▪ Cash flow ▪ Demand forecasting & local trade
22. What’s gone well? ▪ Picked up six awards & on ratebeer best list ▪ BrewDog Collabfest & collabs ▪ Strong demand ▪ Quality, for the most part ▪ Name getting out there!
23. What’s next? ▪ Plenty of MTB events nationally ▪ Festivals including LIBF (woah!) ▪ Move up to 20BBL FV capacity ▪ Premises license, onsite retail ▪ Hiring
25. Rockhopper Brewing Co. • 2BBL plant • 5x5M Garage brewery • Part-time commitment from Darren • Self-funded and privately owned (as a limited company) • First brew on July 30th 2016 • Like Andy, no traditional core range, more core styles • Target of selling 12 brews in first calendar year
29. • Good local demand ◦ 5 freehouses ◦ 3 bottle shops ◦ 1 jazz club • 6 batches in, all sold out • Cashflow positive from day 1 ◦ but will be quite a while before capital expense is re-paid... The Good
30. The Bad • TIME! ◦ 6-7 hour brewday ◦ 2-8 hour packaging days ◦ Selling and delivering to customers ◦ Collecting empty casks ◦ Paperwork • Cashflow - getting people to pay good money for cask is hard ◦ Only Saturday I was told a landlord had been given a “buy one get one free” offer from a brewery - and the beer was cheap in the first place! It’s a race to the bottom :’( ◦ Bottles make much better margins, but it’s hard to move lots of them • I don’t see me doing this on a part-time basis long term… ◦ In hindsight, should have saved longer and went bigger from the start