Not quite a side hustle

According to Statista.com, there are 6,266 craft breweries in the United States. Thanks to Pioneers in the Industry such as Samuel Adams and Sierra Nevada; IPA’s, Pale Ales and session beers are now household names.

I would like to start a brewery that also serves as an ale house. It would be a place to hang out and socialize with some additional amenities.

Screen Shot 2018-09-08 at 8.32.48 AM

1. Growth

While there are 6,266 breweries in the United States, craft Breweries still only hold 12.7% of the volume share (Statista). This means, anecdotally, that there is a large market share waiting to have access to some delicious craft brew. I would choose a location based off population growth and low barriers to entry (taxes, licensure, etc.).

Ideally, this would grow from a grass roots operation with limited local distribution into a regional packaging operation as well. This would require a location with self-distribution to allow for up-front cost savings. This and several other of the operational goals will all play into the first goal of growth.

2. Sustainability

We only have one earth so we have to take care of the girl. In business, you always look for the win-win, and that can be achieved with sustainability targets. Using recycled paper and limiting plastic consumption will cut down on supply budgets. There are several initiatives in new brewing technology that would also work towards this goal, such as new packaging techniques that cut down on materials.

3. Cost Savings

When opening a brewery location is a huge factor. Some states are extremely friendly towards breweries where others are not. For example, in Texas beer is taxed to the brewery at $.20 per gallon. That number rises to $1.07 in Alaska! Those stats are brought to you courtesy of taxfoundation.org In Alaska however a brewery can also operate as a draft house under a brewery license. This means that Hoodoo or Resolution can serve a patron 36 ounces of beer at their brewery for consumption and do not have to purchase a specific beer license. When serving right out of the brite tank, there are no packing or distribution costs. The graphic below depicts what this consumption means for the brewery.

randymoss

Randy Moss approves straight cash and so do Breweries.

4. Distribution

Self Distro is necessary for my operations. While this is 4, it should probably be higher on the list. One of the biggest barriers for entry into the brewing world is distribution costs. The following is an excerpt from probrewer.com:

Typically, distributors work on a 25 to 28 percent gross margin for craft beers.

Taking 28% gross margin?! Maybe I should rethink this and start a distribution company. Those numbers are not as significant when you are producing millions of barrels a day, looking at you Coor’s…. For the startup brewery who probably already has incurred over a million in debt (it’s not cheap buying this stuff) this can be a limiting factor to growth or even staying alive.

5. The Brew House

It is essential for my operation to have a nice brew house. It helps growth by allowing the sale of beer that costs less to produce. It also helps sustainability since there is no packaging required. It would be a place for people to congregate and have amenities such as Wi-Fi.

The Setup

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Administration: Me an administrator and a marketer. I would do the boring stuff with QuickBooks. The marketer would push our products to the masses. Chief Brewer would also be a big part of administration and potentially be a shareholding partner in the business.

Brew team: Chief Brewer, Assistant Brewer, 1-2 hourly workers (with scale). I also plan on garnering help for free beer from patrons.

Draft House: 5-6 hourly workers to be behind bar and (Later) sell merchandise. Merchandise in this business is a marketer’s dream. We are selling our brand to customers to wear around and show others.

Distro: 2-3 hourly workers (scales with growth) to transport kegs and bottles. The brew team would handle this in the beginning.

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