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

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

Setting up a Brewery

I have talked about this before... https://speakerdeck.com/lonbrew/so-you-wanna-open-a-brewery

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

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…

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…

● 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

● 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

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?

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

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.

My Story…

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The Plan

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.

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

Scaling Up from Homebrew

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…

How It Went

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

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

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…

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

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

The End

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...

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.

Retrospective

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

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

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.

So... Back to Homebrewing

Why ruin a good hobby by going professional?

● 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.

Thanks