I’ve met and heard from many people who have danced with the idea of starting a brewery, and many of them tend to ask the same first questions in their quest to understanding it all, such as:
- How do I start a brewery?
- How much money do I need?
- What equipment should I buy?
- Is a brewery a profitable business model?
Heck, I’ve even found myself in this same boat asking these same questions. Whilst knowing the answers and relevant information to these questions are important pieces in it all, perhaps more foundational questions need to be asked.
As many of you know, I’m looking to open my own brewery. The podcast was an extension of this, I got to speak with some of the finest minds in the industry about brewing. However, at the end of the day the main question I ask myself and what I ask you today is…
WHY DO YOU WANT TO START A BREWERY?
The most important thing about opening a brewery, is being very clear about what you want to do. The simple notion of wanting to start a brewery because
- You like beer!; &
- You think it would be a cool thing to do!
I would say to this line of foundational thinking not being an entirely solid one.
What you need to be sure of, is that the brewery you are going to build is going to offer something different or add further value to the market. That could be a high-quality beer or a wild crazy style of beers that the likes of Wildflower are offering with their wild yeast fermented beers, it could also be a unique location or tap room experience, or it could be a community focused brewery. What you need to do is find your niche, that gap in the market, and once you have that figured out the rest of your brewery build plans becomes quite clear.
When I started my research on how to start a brewery, I called up Neal Cameron from Brewtique, who also featured on the podcast. Neal set me on the right path, and really gave it to me straight with the realities of it all. To paraphrase our conversation, it sort of went like this:
Chris: Neal, how much is the equipment going to cost me?
Neal: What is your budget?
Chris: Umm, probably around $80 – $100K
Neal: Haha, that’s quite small, heck doing a brewery on $150-200k is going to be extremely small, let alone that. Do you have a location yet?
Chris: Ahh, NO!
Neal: Do you know what kind of brewery you want to be? Do you have an idea on how much beer you want to produce each week?
Chris: Yeah, ahh, umm, NO!
You get the point. So, don’t worry about questions like, “how much is it going to cost me?” and “what equipment do I need?” because figuring out the philosophical questions below will allow the answers to the other questions come much more easily:
- Why do you want to start a brewery?
- How are you going to offer greater value or something different to the market?
DO I HAVE THE SKILLS & EXPERIENCE TO OPEN & RUN A SUCCESSFUL BREWERY?
Another worthwhile question that an aspiring brewery owner needs to ask themselves is do I have the skills to open and successfully run a commercial brewery? Passionate home cooks tend to fall in love with the notion of opening up their own restaurant one day. However, the transition from making a good meal in your home kitchen for the family of 4 to then opening a commercial kitchen to cater for hundreds to a thousand people each week is very different.
The same sentiment is applied to that of the avid backyard homebrewer. The transition from homebrewing 25 – 50L of beer at a time is not the same thing as commercially brewing 2000L plus a week. There is much more to consider, and the scaling up in regards to volume is not as simple as one would think either. Just because you can make a decent beer on the Grainfather in your backyard and the only feedback you’ve been given is from your mates who like free beer, does not mean that you have the skills or experience to make a good quality beer at a commercial level, let alone run a successful small business if you’ve never done so before.
I don’t want to dishearten the avid homebrewer with dreams of commercial brewing their favourite style of beer one day. If you’ve listened to my podcast you will know, I am exactly that mould of person that I have just described to you. The one thing that I feel I have done right on my brewery build journey is admit to myself that I do not have the current skills or experience to open up and successfully operate a brewery. So, I decided to talk to professionals from all walks of the industry to tell me the do’s & don’ts, the challenges, the mistakes made and what they would do differently. However, you lucky bastards now have the luxury of simply just listening to my podcast to be enlightened on how to go about it. But I still urge you to go out and do your own research and investigations in your local areas.
You could also explore, like I have done, is undergo formal training within the brewing industry. There are many more training options out there related to the Australian Brewing industry. I decided to enroll into the TAFE NSW Certificate III in Microbrewing course. Many other states offer it, as well as Universities and online platforms such as the Institute of Brewing & Distilling (IBD) and Siebel Institute of Technology. Have a listen to the episode on Training in the Brewing Industry with Richard Dubé from Siebel Institute and Richard Adamson from TAFE NSW where all we do is talk about what training options are available to those wishing to get into the brewing industry or start their own.
WHAT BREWERY DO YOU WANT TO BE?
Once the philosophical and competency questions have been answered around starting a brewery, the next question to be asked is “What type of brewery do I want to be?”. In the commercial brewing world, there is typically two main business models, and a word of wisdom by the professionals I have spoken across the industry, is do not get confused between the two. They are:
Brewpub Model – a great business model except in COVID. But prior to COVID it was a profitable business model because you’re making the beer at wholesale and selling it at retail and completely bypassing the channel and making all that margin in over the bar sales to customers. So, it’s a profitable business model from day 1.
Production Brewery – If you intend to be a production brewery you need to scale up appropriately. There is the adage that production breweries lose money until they make over 1 million litres, however if you live in an expensive city like Sydney this could be over a 1 million and a half. So, you need to have a plan on how you are going to achieve this, in a business & commercial savvy fashion. Otherwise, you will find yourself stuck in no-man’s land between a brewpub or production and will find yourself going out of business real quick. To go big and national, requires a lot of capital and energy, and there is ever increasing competition out there and great brands hitting the Australian market where you really need to be offering something different and not just another run of the mill pale ale or IPA, or if you do it better be top shelf.
Out of all the articles and content I end up putting out about starting a brewery, I think that this one should be regarded as the most important of them all. Having a good grounding on why you want to start a brewery, and what it is that is going to set you apart will massively help you understand all the other umpteen million questions that needs to be answered along the way.
Understand your brewery philosophy, work out how to add value or be something different in the market, research & train yourself, decide what business model you wish to be, and then make great beer!
Having an obsession for information, Chris found that there was a massive gap in his part of the world on how to go about starting a brewery, as well as being delivered in a way to provide a foundation for the layman to understand and act upon it.