Where are you going to open this brewery, Chicago or the suburbs? City of Chicago, North side.
Opening a brewery is insane. Are you insane? Never question my passion, always question my sanity.
So is this going to be a brew pub? No, this is what is called a production brewery. No restaurant. Beer only. I love brew pubs, but I don’t want to run a restaurant…at least not yet. I’ll be selling my beer through a local distributor which will then sell through to retail stores and bars. I’ll also be selling through my own retail store much like Half Acre has pioneered in our fine city.
Oh, so this will be one of those “nano” breweries? No, this will be a full on production brewery. Nano breweries typically brew on a 1-5 barrel system (or so) and brew very small amounts of beer each year. My brewery will have a minimum 15 barrel brewing system – called the “brewhouse” – and be able to produce thousands of barrels of beer per year.
What’s a “barrel” of beer exactly? 1 barrel (bbl) = 31 gallons = 2 kegs (half barrels). It’s the standard unit of measurment for volume of a brewery’s production in the United States. Europe and other places typically use hectoliters. In 2010 the craft beer industry produced a total of about 10,000,000 bbl.
There are a lot of breweries being talked about or planned in Chicago right now, what makes you different? Yeah, there are, and I know most of the folks behind those projects. We’re all very passionate about this thing called craft beer and we’re in it together.
What beers do you plan on brewing? Excellent question! I have two flagship recipes that I am currently tweaking over and over. I’ve brewed them many times over the past few months and I expect I’ll be brewing them for several more months until I get them exactly where I want them to be. I don’t want to reveal them right now as things change including ingredient availability (like certain hops), but I can tell you they are both sessionable beers, meaning easy to drink and not overly alcoholic. Something you can have a few pints of and keep your wits about you.
What about really hoppy beers or imperial stouts? First let me say I love all styles of beer. I love West Coast hop bombs, smooth German bocks, spicy Belgian saisons, you name it. Love them all. Buuuuuut, West Coast hoppy beers and thick, high alcohol beers will not be my focus initially. The American IPA market is saturated and if you’re going to launch with a beer like that, it better be damn good in my opinion. High gravity beers like imperial stouts are tricky to make well and have a limited market. Trust me, I’ll be brewing some special/seasonal beers and you can bet these types of beers will be represented, just not at launch. But then again, I do love a crisp, dry Imperial IPA. Hmmmm.
What about sour/wild beers? I love those beers! Give me anything barrel aged beer from Russian River Brewing and I’ll be your friend for life (which might not be what you want). Oh yes, there will be barrel aged/sour beer offerings. It will take time, and again they won’t be part of the launch, but man, they will eventually become a big part of the identity of Panic Brewing.
What about bourbon barrel beers? Indeed. Someday.
Ok, you sound serious. How serious are you? Serious enough to enroll in professional brewing school. I just completed the CraftBrewers Apprenticeship program at American Brewers Guild in January 2012. ABG is one of the three brewing schools in the country. I completed the classroom part of the program in November of 2011 and then completed the required five week internship in January 2012. Up until brewing school I hadn’t taken a class since college, from which I graduated in 1990, so this was a big step for me. I’m married with two kids and a mortgage. I’m putting everything on the line for this brewery. It’s going to happen.
What other qualifications do you have? Like just about every other professional craft brewer in this country, I started out homebrewing. I originally started homebrewing in 1991, back when ingredient selection was limited and knowledge was even more so. I brewed for about 4 years, stopped for various reasons, then started brewing again back in the Fall of 2008. It’s now gone far beyond hobby. Way beyond. In the Spring of 2010, Chicago was fortunate enough to host the Craft Brewers Conference, the major trade show for the industry. I took vacation time and attended all 4 days of the show. During the event I met numerous ingredient suppliers, equipment manufacturers, brewers, and attended loads of seminars (and got to meet Vinny Cilurzo, Charlie Papazian, Dan Carey, and many others). I learned a lot of important information from those 4 days and I’ll be putting that knowledge to use when the time comes to order the equipment and ingredients.
Go on, what else? I have a Bachelor’s Degree in Civil Engineering from Purdue University, so I’m pretty good with numbers, problem solving, and all things technical. My current day job is as a front end web developer. I’ve also won a few medals/ribbons in homebrew competitions.
How much money does it take to open a brewery the size you want to open? Good question. That number depends on many variables but I can tell you right now the ballpark I’m looking at is $750,000. That number includes absolute worst case scenario construction costs AND getting a canning line.
Jesus, that’s a lot of money! Why so much? Well, it sure seems a like a lot, but compare it to say, inventing a new car and getting it to market. In the context of a small business, $750,000 is not a lot of money in this country. It’s more than I have, of course. Opening a brewery requires capital to buy the brewing equipment. This equipment consists of a stainless steel brewhouse (boil kettle and mash/lauter tun), large stainless steel fermentation vessels, process piping, pumps, hoses, lab equipment, bottling/keg filling equipment, lease, personnel, construction costs, etc.
So how are you going to finance this brewery, Daddy Warbucks? That’s the problem, I’m not Daddy Warbucks, I’m just a regular workin’ stiff like you. That’s where hopefully you and/or your friends and family come in. I will secure a small business loan (yes, even in this economy, see below) to purchase the capital equipment. But, that’ll only get me about half way to the goal. I’ll also require working capital which will allow me to pay for my monthly costs such as ingredients, rent, utilities, maintenance, salaries, and such until revenues outpace expenses.
You seriously think you can get a small business loan in this economy? Oh yes, abso-freakin’-lutely. Craft beer is growing both in volume and dollars even now in this recession. In 2011, craft beer was up 15% in dollars, 13% in volume. In a bad recession. This is compared to 2010 where craft beer grew 15% in dollars and 12% in volume. Additionally, I’ve attended a SCORE seminar on SBA backed bank loans and have met with a SCORE counselor which has helped me gain a good understanding on how SBA backed loans work.
That’s great and all, but now everyone is going to try to get into the business to make all that sweet money, right? There’s a saying in the brewing industry, “If you want to be rich, don’t open a brewery.” Breweries require lots of capital both at start up and during expansion. It takes a long time to make any kind of real money. So anyone going into this business to make a lot of money should better do some research or they’re setting themselves up for dismal failure. And yes, there are many breweries in various stages of planning both in Chicago and the country at large. That’s a good thing. Despite its phenomenal growth, craft beer still only represents somewhere around 5% of the total domestic beer market. Exports of American craft beer to other countries are growing too. There’s a lot of room for more breweries, especially good ones.
I’m interested in opening a brewery too, can I have your business plan? Sorry, but I’ve put way to much time (months and months) researching and writing my business plan to just give it away. And honestly, if you really want to get to know this industry and the chances of success for your brewery, you really need to do all the leg work yourself. Trust me, it will pay off many, many times over.