How to Start a MicrobreweryHow-To Guides — By Melanie McIntyre on April 9, 2013 at 8:00 am
Over the last couple years, small, independent breweries have been cropping up left and right in Central Ohio. For many beer aficionados, sharing their very own recipe with the masses sounds like a dream come true.
However, it’s important to realize that it takes a whole lotta planning and work to make that fantasy come to life. Lucky for you, we’ve found a couple pros willing to offer pertinent pointers to aspiring brewpreneurs. We hope you find their suggestions helpful.
Get money, money, money, money, mo-ney
How much money you should try to raise depends on the size of the operation you’re trying to establish.
“New breweries with all the necessary equipment can cost anywhere from a couple hundred thousand to upwards of a few million dollars, depending on many factors, including equipment type and size, number of fermenters and bright tanks, and location,” says Gavin Meyers, co-founder and co-owner of North High Brewing.
Let’s assume you’re looking to start a production brewery for off-site consumption. (In other words, not a brewpub− a brewery-restaurant hybrid that sells 25 percent or more of its beer on site.)
Are you just going to keg? Are you planning on bottling? How big an area are you planning to serve?
Each seemingly small detail has a big impact on what a brewery is going to cost.
“At the low end, if you’ve got plenty of time and are a DIYer, you may luck into some used equipment,” says Leonard Kolada, co-founder of Barley’s Brewing Co. and Barley’s Smokehouse and Brewpub.
“If you don’t want the hassle of some of your equipment breaking in the first year, you may opt to go the new route,” he adds. “A 7 bbl system with a few fermenters and hand kegging or botting might be achievable for around $100,000.”
Don’t forget, though, that you’re going to need a chiller, a walk-in cooler, and other equipment that makes you spend more than you thought you would, Kolada cautions.
“At the higher end, say with a 15 bbl system tricked out, you’re looking at anywhere from $250,000 to $500,000,” he continues. “Plus the stuff you forgot.”
Where should you look for this money?
What are family and friends for?
Kolada says he asked both if they wanted to invest in his venture, adding that half his startup funds came from equity investors and half came from bank loans.
Meyers and his business partner, Tim Ward, used a combination of non-equity investment from family and friends, their own personal capital, and an SBA loan from Huntington Bank.
Buy equipment (That beer isn’t gonna make itself)
You need a brew house, fermentation, washing equipment, bottling or kegging equipment, refrigerated storage, maybe even a cot to take a nap on at 3 a.m., Kolada says.
“At the very least, a brew house will consist of a mash tun, a brew kettle, a heat source (such as a boiler), and fermenters,” Meyers says. “Other equipment will include such things as bright tanks for carbonating the beer, heat exchangers, a glycol unit, refractometers, a walk-in cooler, and a grain mill to name just a few.”
Nail down your concept, so you can find an appropriate space
“As I got more comfortable with what the brewpub was going to be, I looked for an opportunity that fit the concept,” Kolada says. “When we developed Barley’s downtown, I convinced the owners of the property to sell part of the building to our group and also to invest in our concept. It turned out to be win-win.”
Since much of North High Brewing’s business is retail, its founders knew they wanted a high-traffic, high-visibility location. Its building at 1288 N. High St. was ideal for several reasons.
“We are excited about the transition that our particular block is undergoing, and its location makes our brewery easily accessible from campus as well as Short North foot traffic,” Meyers says. “Also, we love the building. Originally a Ford dealership in 1917, it was the perfect blank canvas to build out our brewery and bar with repurposed and recycled pre-Prohibition Era architectural elements.
Another deciding factor was the proximity to Middle West Spirits and Brothers Drake Meadery.
“With a distillery, a meadery, and now a brewery, our block has become a great symbiotic neighborhood of craft spirits production: Columbus’s new Spirits District,” Meyers says.
Know that square footage is just the tip of the iceberg
When searching for a home for their brewery, everyone thinks about square footage, but Kolada says your first consideration should be ceiling heights. (How tall is your equipment?) Then, look at the building’s structure.
“Is it going to be able to support the weight of filled tanks?” he asks.
Drainage is another important factor.
“Lots and lots of drainage is a must for a production brewery,” Meyers says.
Prepare to get your hands dirty
Most breweries work with a liquor attorney to navigate the myriad legal issues, license applications, and federal approvals that are par for the course, but the North High Brewing team decided to tackle them themselves.
“It took a bit longer, but we’re glad we did it this way, as we now have a much more intimate knowledge of brewing laws,” Meyers says.
“Other than obtaining the services of an experienced liquor attorney, there’s no substitute for working directly with the government agencies who are going to regulate you,” Kolada says. “I’ve found them to be very helpful in understanding how to do things properly.”
Remember that, as with most things in life, practice makes perfect
When it comes to getting your recipe just so, Kolada’s advice is simple (and repetitive): Practice, practice, practice.
“That…and not being defensive to comments from the people who actually quaff your stuff,” he adds. “Having said that, sometimes it’s possible that the person who’s drinking your beer doesn’t know what he’s talking about.”
At North High Brewing, they hired a pro, a brewmaster from Chicago named Charlie Davis. Armed with an abundance of beer knowledge,and a passion for perfection and sanitation, he has been turning out dozens of beer styles that Meyers is confident can rival any on the craft beer market today.
In fact, he says it’s important to hire professionals when you don’t know what’s what. When he and Ward put together their business plan nearly two years ago, they knew they would need an experienced production brewer.
“We talk to lots of home brewers who are thinking about starting their own breweries, believing that all they need to do is scale up their recipes,” Meyers says. “This may be true to some extent, but what these aspiring professional brewers need to keep in mind is that they are also going to have to become professional mechanics, maintaining the equipment, trouble-shooting boilers, identifying inefficiencies in the brewing process, etc. These are skills that take years of hands-on experience to master, and are critical to a brewery’s success.”
Realize you might lose money
“The only reason to getting into brewing is if you just have to do it, are willing to put in the blood, sweat and tears, and are willing to accept that you may lose money for a few years, if not forever,” Kolada says. “You have to have a passion for it that exceeds common sense.”