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My Experience of Going Commercial Darren Oakley - LAB, August 2021

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Overview ● Setting up a brewery ○ Mostly boring legal stuff… ● Rockhopper Brewing Co ○ The plan (beers / niche / customers) ○ Scaling up from homebrew (recipe / process) ○ How it went (the day-to-day running etc) ○ The end (why I stopped brewing) ○ Retrospective (lessons learnt / how did it go etc.) ● So… Back to homebrewing

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Setting up a Brewery

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I have talked about this before...

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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 Things to arrange

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Location, Location, 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…

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HMRC ● 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…

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● 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) Sewage Disposal & Water Supply

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● 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 Environmental Health

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It 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 Do I Need an Alcohol License?

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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 (Muntons, Niche Solutions, Charles Faram, 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

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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.

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My Story…

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The Plan

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The Plan NOTE: I don’t live in London… Back in 2016, Luton (and the home counties - my target audience) were a craft beer wasteland. There weren’t many independent bottle shops and pubs to target, so you couldn’t go very large in scale without distributing way further. Start small was the plan.

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The Plan Consistent ingredient selection (hops mainly) was tricky… Plan - brew core styles of beer, rotate hops etc. Main style - Pale Ale Differentiator - “Saison” / Belgian Ale

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Scaling Up from Homebrew

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Scaling Up from Homebrew ● 20L -> 300L isn’t a massive jump really ○ No major recipe alterations needed ● Main Considerations ○ Single infusion only ■ No step mashing ○ Mash tun capacity ~80-85kg ■ ~6% ABV limit for all-grain ○ Transfer to FV time ~40 mins ■ Take into account for hop stands etc ○ Full batch brew (300L) only ■ The cooling system just doesn’t work otherwise…

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How It Went

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How It Went ● Good local demand ○ 5 Freehouses ○ 3 Bottle shops ○ 1 Jazz club ○ 2 Luton council ran shops (local parks) ○ 1 Take away (one-off order) ○ Numerous beer festivals throughout the year ● Local community was great ○ Most local breweries, pubs and shops were very welcoming and helpful - one not so much… ○ South Beds CAMRA were great

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How It Went ● Initial sales/reception was strong… ○ Batches were complete sell-outs ■ 4-5 firkins/casks per batch ■ Remainder in bottles ● 9-12 months in… ○ Cask sales still mostly good ■ Lots of chasing required - even of regular customers ■ Infrequent customers were hard to get payment from ■ Some batches I ended up with a cask I couldn’t sell ○ Bottle sales slow ■ A single case could take a month or two to sell at the shops

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How It Went ● 12 months plus… ○ Pretty much the same as before plus… ○ GOOD: ■ Occasional big orders as name got out ● Cambridge Beer Festival (2 full batches) ● #saveourtown (1 full batch) ○ BAD: ■ As those orders were so big (full batches), the “regulars” were not happy they couldn’t get them at the same time and were not interested in a re-brew ■ Local craft beer place opened after a year after I started (bottle shop and cask/keg lines) would never order even a single cask or keg despite my always trying 😢 ■ LOTS of chasing for payment - one invoice (to another local micro-brewery FFS) took over 18 months to get payed…

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How It Went ● Financials ○ Scraping by… ■ Sales were basically covering the costs with very little profit ■ Any issues - costs came out of my pocket ● Time ○ Draining… ■ 10-12 hour brew days ■ 4 hour packaging days ■ 4-5 hour sales calls or delivery runs most weekends ■ Chasing people for payment

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How It Went ● QA Issue ~9 Months in… ○ Some bottles in a couple of batches had an infection that developed over time… ■ Bottle bomb in one shop 😱 ● Storage in shop wasn’t great (under halogen lights) but it’s not an excuse ■ Complete recall of 2 batches (bottles only) and refunded ■ ~300 bottles had to be destroyed ■ Customers were understanding but it took a lot of time to get them to have confidence in us again

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The End

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Apr 2015 - Brew Kit Ordered May 2015 - Garage Fit Out Aug 2015 - Company Incorporated Dec 2015 - Brew Kit Delivered Jul 2016 - First Batch Jan 2017 - Lily arrived Nov 2018 - Final Batch Timeline...

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Why I Stopped... Here’s the situation… ● Busy full-time job (paying the bills) ● Running the brewery (soaking up weekends and money) ● Young daughter (born ~6 months after the first batch) I couldn’t carry on all three and not burn out basically.

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So… What went wrong? ● Time (and timing) obviously… ○ I would never have started if we knew Lily was coming ● Scale didn’t help… ○ It was about right for the amount of local outlets ○ But not big enough to make much money

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So… What went well? ● Got my beers into several (local and not so local) venues ○ “THAT’S MY BEER ON THE BAR!” ● Got to know lots of people in the local beer/food scene ○ Collaboration with Luton Town FC Supporters Club and Chicken George (#saveourtown) was a real highlight ● I got recognised on the train several times! ○ “Are you the Rockhopper guy?” ● I think it helped me become a better, more consistent brewer

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Any plans to go again? Not right now to be honest… I quite like paying the bills, having weekends and seeing my family. Maybe one day in the future (if time/money is not a factor) we’ll see. I enjoyed the experience and met a lot of nice people so I have no hard feelings about it.

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So... Back to Homebrewing

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Why ruin a good hobby by going professional?

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● I have to admit, after I stopped brewing in the brewery, it was a good 6-9 months before I fancied doing a batch of homebrew so this does resonate with me a bit… ● I enjoyed running the brewery mostly - I met a lot of nice people, got my beer into some cool places and it’s always a popular thing saying “I run a brewery” 😁 ● If I hadn’t given it a go I’d always have that “what if?” in the back of my mind… I’m glad I tried it.

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