Still working on my business plan! Even though I do not plan on seeking
bank financing, I am really happy that I decided to do a business
plan. It is making me be sure that I have considered all situations.
This should reduce surprises later on. The drawback is I really want to
get started, but I am forcing myself to finish the plan before I do
anything else. Currently I am down to all of the financial projections
in the plan. The start-up costs, revenue projections, P&L
projections, etc.
I had some fun looking at kegs, and was surprised to find that so
many different options exist. Both the new and used keg market appears
to be pretty large. I like the idea of new kegs better than used as
they should have a longer life. The big thing appears to be leasing
programs. Many place offer lease or rent to own offers on kegs. At
first I thought this was going to be a bad deal, where you pay so many
times the cost of the keg over a couple of years. However, as I looked
into this I found I was wrong. The leasing programs appear to be fair
deal, and something I might consider.
What really surprised me was the cost to buy new custom kegs. It is
not much more to have your logo stamped into the side of the keg than to
just buy the plain kegs. Of course it does add up as you buy more
kegs, so the total expense is still more. It is also an extra expense
that might not be needed for a new company, but it was still surprising
to me. They do make the kegs look cool, so it is something to consider.
Lots of companies offer printing of the logo on the side of the keg.
That is nice too, but to have the logo stamped into the metal is pretty
cool. Given that, I am a start up I will probably go with the
printing.
I also
really liked the plastic keg idea, especially in the 1/6 barrel size.
They are lighter and can come in some cool colors. If you plan on
buying new kegs, you can custom order the tops and sides in different
colors. I am seriously considering this option, but need to do a little
more research on how well they hold up and the lifespan of a keg.
I need to find some reviews of different manufactures and use that to
help me decide. With so many different suppliers, I think it will make
the most sense to get a number of bids and use those to help decide
what options to go with.
Wednesday, April 23, 2014
Saturday, April 19, 2014
Cans vs. Bottles - Which is better?
Like everyone else, I have noticed that more and more beers are sold in
cans. Craft beers in cans seem to be the new fad. When I was out in
Colorado last November, I asked at one bar "what they had in bottles."
The server gave me a very dirty look and said they only have cans. To
me can or bottle was not the point; I just wanted to know what else they
had since I had tried all the draft beers. But this got me thinking,
why the switch to cans? Based on that experience I was guessing it was
some type of benefit to the environment. So I decided to do some
research to find out.
As I looked into this, it turns out that breweries have a lot of reasons to switch to cans from bottles. Cans keep more light out, they are lighter and less expensive to ship than bottles. For small breweries they are less expensive to buy and they don’t have a separate labeling process. People can take a can into more places since glass bottles are banned some places. In addition a number of places listed that it is better to use aluminum because it is less energy to recycle compared to glass.
Then I found some drawbacks. OK, really just one. All the cans have to be lined to prevent the beer from picking up a metallic taste. The liner is a form of epoxy and contains BPA. Now, the EPA says that the level of BPA in each can is pretty low and therefore should not be an issue. But BPA is linked to cancer and other diseases. To me, this seems like a pretty big drawback. Maybe the energy savings offset this?
So, I decided to look into the energy use and recycling of cans and bottles. It was very easy to find out that it is much more energy efficient to recycle aluminum than to create new aluminum from bauxite. It takes 5% of the energy to recycle it as to create new. So that’s a great benefit! However, I also found out that only 30% of aluminum is recycled. Mining new bauxite to create aluminum destroys rain forests and uses a lot of energy. But I guess saving on 30% is better than nothing.
I wanted to compare that to bottles. In research, I found that Bottles contain no BPA, except for the liner in the cap. A much lower amount than in the can, but still some BPA so that is not the best news.
On the energy side, it is again a different story. To recycle glass bottles, it uses 50% less energy than to create new. So Aluminum is a 95% reduction and glass is only a 50% reduction. Glass has a 80% recycle rate compared to aluminum’s 30%. This was all great information, but I had no idea what the numbers added up to. 80%, 30%, 50% of what?!
I needed to find out how much actual energy is needed to create each one. After doing some research, I found that it takes (on average) 79,000 watt hours to create 1 kg of aluminum cans today and 5800 watt hours to make 1 kg of glass beer bottles. That is a big difference! Then I remembered that a can weighs a lot less than a bottle. After you account for the difference in weight of each one can takes 1119 watt hours to create and one beer bottle takes 1154 watt hours to create. So a can saves 35 watt hours. That is 119 btus, or about 1/10 of a cent at current energy prices. That is not a big difference per can/ bottle. You figure on some waste and that these are averages and they basically use the same amount of energy.
After all of that, it appears that the real difference comes down to saving the brewery some money on shipping. Once you factor in the BPA, I am not sure it is really worth the little bit of energy savings. I am sure others will disagree, but I think I prefer to stick with bottles.
As I looked into this, it turns out that breweries have a lot of reasons to switch to cans from bottles. Cans keep more light out, they are lighter and less expensive to ship than bottles. For small breweries they are less expensive to buy and they don’t have a separate labeling process. People can take a can into more places since glass bottles are banned some places. In addition a number of places listed that it is better to use aluminum because it is less energy to recycle compared to glass.
Then I found some drawbacks. OK, really just one. All the cans have to be lined to prevent the beer from picking up a metallic taste. The liner is a form of epoxy and contains BPA. Now, the EPA says that the level of BPA in each can is pretty low and therefore should not be an issue. But BPA is linked to cancer and other diseases. To me, this seems like a pretty big drawback. Maybe the energy savings offset this?
So, I decided to look into the energy use and recycling of cans and bottles. It was very easy to find out that it is much more energy efficient to recycle aluminum than to create new aluminum from bauxite. It takes 5% of the energy to recycle it as to create new. So that’s a great benefit! However, I also found out that only 30% of aluminum is recycled. Mining new bauxite to create aluminum destroys rain forests and uses a lot of energy. But I guess saving on 30% is better than nothing.
I wanted to compare that to bottles. In research, I found that Bottles contain no BPA, except for the liner in the cap. A much lower amount than in the can, but still some BPA so that is not the best news.
On the energy side, it is again a different story. To recycle glass bottles, it uses 50% less energy than to create new. So Aluminum is a 95% reduction and glass is only a 50% reduction. Glass has a 80% recycle rate compared to aluminum’s 30%. This was all great information, but I had no idea what the numbers added up to. 80%, 30%, 50% of what?!
I needed to find out how much actual energy is needed to create each one. After doing some research, I found that it takes (on average) 79,000 watt hours to create 1 kg of aluminum cans today and 5800 watt hours to make 1 kg of glass beer bottles. That is a big difference! Then I remembered that a can weighs a lot less than a bottle. After you account for the difference in weight of each one can takes 1119 watt hours to create and one beer bottle takes 1154 watt hours to create. So a can saves 35 watt hours. That is 119 btus, or about 1/10 of a cent at current energy prices. That is not a big difference per can/ bottle. You figure on some waste and that these are averages and they basically use the same amount of energy.
After all of that, it appears that the real difference comes down to saving the brewery some money on shipping. Once you factor in the BPA, I am not sure it is really worth the little bit of energy savings. I am sure others will disagree, but I think I prefer to stick with bottles.
Friday, April 18, 2014
Brewing Equipment
I am slipping and not posting here as often as I had planned. I guess I
have been too busy and need to set aside time to work on this.
As I have been researching costs to start up a brewery, I have spent some time looking at brewing equipment. At a high level the equipment is no different than home brewing, it is just larger. However, like home brewing, I found a lot of different suppliers and different types of equipment.
One great resource I have found is Pro Brewer (www.probrewer.com). They have a lot of links to other sites and great tips on what to look into when selecting equipment. Another resource is the Brewers Association (www.brewersassociation.org).
With such a large number of different suppliers, I will be able to pick the size system I want and also have some options down the road for expansion or any equipment upgrades.
I have also taken advantage of numerous message boards to get reviews and opinions of the different suppliers. That has become a great source to find out details about build and shipping times as well as quality of equipment. It is much better than trial and error.
Right now, I do not want to mention any particular supplier or brand of equipment. That will come later once I actually place an order.
As I have been researching costs to start up a brewery, I have spent some time looking at brewing equipment. At a high level the equipment is no different than home brewing, it is just larger. However, like home brewing, I found a lot of different suppliers and different types of equipment.
One great resource I have found is Pro Brewer (www.probrewer.com). They have a lot of links to other sites and great tips on what to look into when selecting equipment. Another resource is the Brewers Association (www.brewersassociation.org).
With such a large number of different suppliers, I will be able to pick the size system I want and also have some options down the road for expansion or any equipment upgrades.
I have also taken advantage of numerous message boards to get reviews and opinions of the different suppliers. That has become a great source to find out details about build and shipping times as well as quality of equipment. It is much better than trial and error.
Right now, I do not want to mention any particular supplier or brand of equipment. That will come later once I actually place an order.
Monday, April 14, 2014
Busy Week
What a busy week, its been awhile since I made a post. Not sure if
anyone noticed, but I thought I would get a quick post in now.
I have been finalizing my business plan this past week. I found a great resouce, Score.org. They have lots of great resources for small businesses. I have found their templates to be great since they provide a basic template, plus lots of tips on how to do things. One great feature is that they have nice ideas on how to customize everything to fit the business you want and not just their notion of what a business plan or anything else should look like.
I did manage to have some good beers this past week. I hope everyone else has been enjoying some beer with this great weather we have been having.
I have been finalizing my business plan this past week. I found a great resouce, Score.org. They have lots of great resources for small businesses. I have found their templates to be great since they provide a basic template, plus lots of tips on how to do things. One great feature is that they have nice ideas on how to customize everything to fit the business you want and not just their notion of what a business plan or anything else should look like.
I did manage to have some good beers this past week. I hope everyone else has been enjoying some beer with this great weather we have been having.
Friday, April 4, 2014
Equipment Choices
One item I keep going back and forth on is what size equipment I want to
go with. There are many different options to go with; you can find
brewing systems in many different sizes from 2 – 20+ barrels (“bbl”).
At this point, I have ruled out anything larger than 15 bbl.
After size of brewing the next question is what size fermenter. I could match the fermenter to the brew kettle or I could double it and double brew every brew day. The latter gives the option of less expense on the brew system, but allows greater output. However, the drawback is consistently longer brew days (probably 12 hours vs 6.)
For the brewing system, I decided to look at what output I want to do. Overall my goal is to have fun with this, and keep it manageable. So I first looked at the 2 – 5 bbl range. If I brew weekly, that would let me produce between 100 and 250 bbls a year. This seems pretty good, and is about where I want to be on output. However, if I move up to a 10 – 15 bbl system, I could brew once a month and hit the same output. This got me really thinking about operations and what I want to do.
Some other considerations:
2 – 5 bbl system
- Brew more often
- Can brew greater variety of beers over short period of time
- Lower upfront capital cost
- More labor from brewing more often
- If demand is great, would require brewing much more often or upgrading equipment
10 – 15 bbl system
- Brew less often
- Larger volume of each beer, but longer to get multiple beers into production
- Higher upfront capital cost
- Less time spent brewing each month
- If demand is great, can easily scale up by brewing more often
To me, the big points are capital and how often I want to brew. I really want to get a few different types of beers out.
Currently, I am leaning towards the smaller system with multiple fermenters. If demand increases, I will step up to a larger fermenter and double batch to increase output. This option seems to keep the capital cost down, but still allow some scalability. I also really want to be able to get a few different beers out at the start. Brewing smaller batches weekly will let me do that and should still leave me time for my day job.
After size of brewing the next question is what size fermenter. I could match the fermenter to the brew kettle or I could double it and double brew every brew day. The latter gives the option of less expense on the brew system, but allows greater output. However, the drawback is consistently longer brew days (probably 12 hours vs 6.)
For the brewing system, I decided to look at what output I want to do. Overall my goal is to have fun with this, and keep it manageable. So I first looked at the 2 – 5 bbl range. If I brew weekly, that would let me produce between 100 and 250 bbls a year. This seems pretty good, and is about where I want to be on output. However, if I move up to a 10 – 15 bbl system, I could brew once a month and hit the same output. This got me really thinking about operations and what I want to do.
Some other considerations:
2 – 5 bbl system
- Brew more often
- Can brew greater variety of beers over short period of time
- Lower upfront capital cost
- More labor from brewing more often
- If demand is great, would require brewing much more often or upgrading equipment
10 – 15 bbl system
- Brew less often
- Larger volume of each beer, but longer to get multiple beers into production
- Higher upfront capital cost
- Less time spent brewing each month
- If demand is great, can easily scale up by brewing more often
To me, the big points are capital and how often I want to brew. I really want to get a few different types of beers out.
Currently, I am leaning towards the smaller system with multiple fermenters. If demand increases, I will step up to a larger fermenter and double batch to increase output. This option seems to keep the capital cost down, but still allow some scalability. I also really want to be able to get a few different beers out at the start. Brewing smaller batches weekly will let me do that and should still leave me time for my day job.
Thursday, April 3, 2014
Additional thoughts
Some more thoughts on the brewing license.
I have not become discouraged at all, but it showed me that I need to be more thoughtful and serious about my plans.
My original thought was, “can I get a license to be able sell my beer for fun?” I would be willing to spend a little just be able to sell some beer here and there. Once you add in the cost and details of a license, you really need to sell a certain amount to break even. You have rent, utilities, taxes, and insurance in addition to the cost of making the beer. At that point, it becomes more than just a hobby and turns into a business. At that point I think you need to make sure it turns a profit (even if it is a small one.)
With that thought, I turned my attention to what it would take to put an actual small business together. I know I don’t like to take too much risk, but realized that I will have to take some with this idea. If I am going to do that, I need to make sure that I have done my homework so the risk is manageable. I also realize that I work slowly due to the potential risk, but I am very grateful to my friends who keep pushing me to move forward.
I have not become discouraged at all, but it showed me that I need to be more thoughtful and serious about my plans.
My original thought was, “can I get a license to be able sell my beer for fun?” I would be willing to spend a little just be able to sell some beer here and there. Once you add in the cost and details of a license, you really need to sell a certain amount to break even. You have rent, utilities, taxes, and insurance in addition to the cost of making the beer. At that point, it becomes more than just a hobby and turns into a business. At that point I think you need to make sure it turns a profit (even if it is a small one.)
With that thought, I turned my attention to what it would take to put an actual small business together. I know I don’t like to take too much risk, but realized that I will have to take some with this idea. If I am going to do that, I need to make sure that I have done my homework so the risk is manageable. I also realize that I work slowly due to the potential risk, but I am very grateful to my friends who keep pushing me to move forward.
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