Any Business savy Ranger's out there?

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Redrose100
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Posts: 58
Joined: July 11th, 2006, 6:50 pm
Location: WI

Re: Any Business savy Ranger's out there?

Post by Redrose100 »

Top Snot,
I'm not trying to stir the shit but attempting to point out that the brewing "Business" is brutal on the pocket, waistline, and mind in exactly that order.

I dug out some of our old records and the memories just came pouring back so I will share.

First and the worst in your case is your locale. "F'in Iowa" home of the 5% abv. Up in my neck of the woods we call this beverage "tea". We lost a ton due to piss poor legal advice and an attempt to do something to "Make it work"(Pasteurization). Iowa is the brewers bane. Most of us like a little kick in our beverage of choice. I tried to limit my products to a max of 10.5% abv because it is only funny the first time someone self combusts while lighting a smoke. Since smoking is now banned pretty much all over creation I might rethink this. Most of our brews were in the 6.2 to 11.5 abv range. I believe the Iowa statutes still enforce the 5% policy and anything above that gets hammered with that state excise fee (Around 25%) and you have to sell through the state. Selling through the state is fine if you have a pasteurized product but if you have a product that requires refrigeration you cannot count on them to do so. That and they are firm believers in the 90-180 day disbursement policy so your receivables are stuck in the hands of the state liquor authority until they choose to pay you. In the end you field the complaints and lawsuits and suffer all the returns because some politician farmer decided that beer should be at the same level of toxicity as mountain dew.

That said your product is going to have to be incredible to get the push it needs to be successful. Successful in this business means winning awards so you can market same to the masses. We chose not to go this route as back then the awards shows were more political than actual. Crap beers were consistently the ribbon holders. Go figure this happens at dog shows, beer shows, and national elections.

A 3-5 operation will be incredibly hard to sustain a product base. That's 1170 pints per cycle. That's a bad Thursday night. Now you are running 24/7 and having to deal with storage. And if your brew is successful you are adding equipment in three to six months. There is a stretch on the Wisconsin river where about 20 brewers live and they all run 3-7 barrel operations for pleasure. Some of these guys put out incredible product and not one of them will foray into a commercial venture because "It would be just too much work"

Note that in operating 5 different operations over a nine year period only two were profitable on the beverage side. Nearly all the restaurants had to carry their counterparts. This opens up a whole new line of crap because you are relying on something that you don't necessarily like to do and have to involve yourself with the "Foodies". Foodies are an annoying band of piss pots and whiners who believe that they are artists not employees and that they should be treated like royalty whenever possible. They are offended quite easily. You cannot explain to a foodie that his uniform is just that a cheap uniform and that no he cannot order more expensive ones because the sleeves are better and You can never tell a foodie that no he cannot order 9000 dollars worth of prime rib because he feels we will have a "Big Weekend". Comments like "You just work off of last months dinner count and I'll work on the whole feelings thing the next time I'm at the track" just leave them weepy eyed. And if I never hear the word "Drizzle" again it will be too soon. "Put that on a plate and get it out on the floor maestro." You have to attain a level of patience akin to that of a parent with a dozen ADHD kids and somebody flushed the Ritalin.

I fondly remember a Saturday evening right before I sold out where I had to drive in the dark of night to quell a rebellion because a waitress thought she had gotten Herpes from a cook but in fact after a thorough investigation it was found that the cook had only given her crabs and a little drip and it was in fact the dishwasher and his friend who had given her the herpes. And much to my dismay this was not the largest issue as when I arrived I was informed that due to "My shitty health insurance" and the fact that the diseased wench and another waitress chose to pierce each other with the same needle they were both now facing huge medical bills. And this brought a weekend night to a standstill as the waitstaff wouldn't work with the back of house and my customers were not being tended to. And yes at the end of the night when you fire all of them for crap like this you feel good but alas when you lose at the unemployment hearing weeks later that feeling goes away because your insurance is now going to go up across the board affecting all of your business interests.

Gary Dolan speaks the truth!!! Partners are not such a good thing ever. Everything falls apart at some point and then you have to go through the mad dash of who can buy who out while everybody's all butthurt. All seems well when you are busy and facing "Do or Die" but when the bills are being paid and everyone wants to go off in a different direction it gets hard to take because at the end of the day I am always right just as you are. The men seem to get over it in a few months but the wives will let this linger and cause problems for years.

Read the trades and hit the conventions. This is a good resource and they are dozens of others:

http://www.probrewer.com/" onclick="window.open(this.href);return false;

I pipe in at probrewer from time to time but try and keep it to a minimum as it is much more fun to watch the wolves tear each other apart. There are some grizzly old brewers on there that could give the Kilted Heathen a run for his money.

Working for another brewer is tricky. I never did. I did hire other brewers who worked for both minor and major labels and got sued more times than I should have. No competes are common and while hard to enforce they are expensive to defend against. It just comes down to "is the cash worth the employees skills?" That and you will skyline yourself with the big boys and then they will crush you into little tiny pieces. They will interfere in all aspects of your life legally. You wont be able to buy glass, your ingredient vendors will dry up and limit your lines of credit, the state will all of sudden have a keen interest in how your operation is run, how clean it is, and any off count in volume will be considered a hanging offense, you books will be reviewed, looked at, reviewed again, and then maybe you won't be fined into oblivion. Your local sewer company will show up and demand to know exactly what you are putting down the pipe and in what quantity and yes that includes what Mario dropped off from lunch yesterday. Your liquor and food suppliers will no longer take your calls and credit will be terminated. You will be astounded to learn that when you initially got your liquor license there was not a pedophile murderer that shared both your first name and surname and may have lived at the same address you did back in college, but since there might be your license goes into review. Your equipment suppliers will not seem to know you anymore and the refrigeration guys will actually tell you that "You cannot have our equipment unless you bought it from an "Approved" vendor?Once you have pissed any one of the big boys off you are done.

K Ingrahm brings up a great point. Cannibalism. There are only so many specialty drinkers out there. Beer drinkers are a fickle bunch. I know guy's in Milwaukee that cried when Schlitz dropped out of the market. It's back and it is not so good as I remember way back when. My old man was on "Old Style" fan, in a pinch he would drink Pabst. I myself in the olden days would only drink "Special Export" and then I went to Germany and got ruined. My Grandmother drank "Blatz" and nothing else for her entire life. Made it easy on the bartender according to her. I call these folks the "Reds" they are never going to drink high end product. They will not pay 7.50 for a bottle of beer, ever. These folks count for about 60-65% of the market in my area. That left 30% for me and all the others to divy up between us. I was always happy to get a customer who bought one at the bar, one at the table, and a six pack to go at the cashier. If you go into the niche market of High ABV beer realize that no one is going to down a six pack in one sitting. I cant count the weekends I have made the run into Michigan on a Saturday and not gotten back until Tuesday because you have to burn the alcohol off or flatbed your bike home.

Marketing and research is important and to each his own. What worked for me here will probably not work for you there. And again in six months that is how rapidly the market will change.

College towns are a must. I know a micro brewer in a college town who just makes a killing by pouring the first two drinks off his "A" line and after that you are getting "Olde English" in a plastic cup. And no one cares. He is full up every night. Our college town operation outperformed everything else consistently and game weekends were just crushing.

Schlafy is amazing. They slipped under the AB radar and now they will have to buy them out. That should be your goal. Realize that you will never be able to get shelf space at the supermarkets and just get big enough to force a sale. For us, that entailed obtaining a bottling operation and that made the threat real and we were gobbled up in 5 months never to be heard from again.

K Ingrahm have you tried the Schlafly "Imperial Stout" It is in my top five best ever list. Amazing brew.

Red Roses top Five Beer List

1.) New Holland Breweries "Dragons Milk" (Great name) Ale Aged In Oak Barrels
The beer you hold in your hand, Dragon’s Milk Ale, is a crown jewel of New Holland Brewing Company. It is the unrivaled result of painstaking processes - both creative and scientific.

Expect a complex ale with a soft, rich caramel-malt character intermingled with deep vanilla tones; all dancing in an oak bath. Unmistakably distinctive example of New Holland’s Art in Fermented Form.

23° Plato, Alc. 10% by Vol.

About 7.50 for a 22oz bottle

http://newhollandbrew.com/corp/beer/high_gravity" onclick="window.open(this.href);return false;

2.) Full Sail Imperial Stout - Available March to April

A hearty brew that is black as night with a strong roasted malt character and a full body that should satisfy any stout cravings. Chocolate and caramel nuances blend with the hops for a smooth Imperial Stout. Half the batch will be racked in bourbon casks, after a year of aging it will be released as Black Gold Bourbon Barrel Stout in February 2011. It’s a stellar cellar beer, so make sure you put a few bottles away this year to compare it to next year’s bourbon barrel batch. Available in 22oz. bottles and draught. ABV 8% IBU 65

http://www.fullsailbrewing.com/brewmaster-reserve.cfm" onclick="window.open(this.href);return false;

About 8.50 per bottle

3.) New Belgium Brewing Company - Ranger India Pale Ale

So, here it finally is – New Belgium’s foray into the true American India Pale Ales. Bring out the hops! This clear amber beauty bursts at the starting gate with an abundance of hops: Cascade (citrus), Chinook (floral/citrus), and Simcoe (fruity) lead off the beer, with Cascade added again for an intense dry hop flavor. Brewed with pale and dark caramel malts that harmonize the hop flavor from start to finish, Ranger is a sessionable splendor for all you hopinistas. Thank your Beer Ranger!

70 IBUs
6.5% ABV
About 6.00 per 22 oz bottle

http://www.newbelgium.com/beer/ranger-ipa" onclick="window.open(this.href);return false;

4.) Schlafly Beer - Barrel-Aged Imperial Stout

Roasty, rich and malty, our Imperial Stout is aged for several months in freshly-emptied Jim Beam bourbon barrels, where it pick up the essential character of oak, caramel and bourbon flavors.

This is a perfect beer to pair with hearty, cold-weather dishes, smoked meats, foie gras, and virtually any dessert (especially chocolate). Great with long-aged cheese like Gouda, Parmesan or cheddar.

ABV: 10% IBU: 75

About 7.00 per bottle

http://www.schlafly.com/beers.shtml" onclick="window.open(this.href);return false;

5.) Shorts Brewing Company - Mystery Stout

This beer demands respect and respect it will have. Imperial Oatmeal Stout with cocoa and molasses. It possesses rare flavor combination’s which can overload even the most experienced beer connoisseur. Capture every bit of its warmth and wisdom, as it will demand all of your attention.

ABV: 10% IBU: 75

About 8.00 per 16 Oz Bottle

http://www.shortsbrewing.com/beer/our-p ... ery-stout/" onclick="window.open(this.href);return false;

And the best Production beer IMO

Leinenkugels Creamy Draft

A Miller Subsidiary

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snipe4fun
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Posts: 243
Joined: September 21st, 2007, 12:35 am

Re: Any Business savy Ranger's out there?

Post by snipe4fun »

It all depends on where you are. I live in North California, and what we lack in population we make up for with deep love and appreciation of quality beverages. In my county of about 150k people, there's at least 8 microbreweries (6 with restaurants attached), and over 23 small wineries (fewer with tasting rooms/restaurants).

If you're planning on doing a brew pub with restaurant, you could get most of the help you need from the SBA as long as you don't tell them about the brewing facility.

Above is good advice, though you should consider it with a grain of salt, as location has alot to do with your target market. On a broad scale, every state has its own laws governing alcohol sales and production. On a smaller scale, determining whether you live in a place where the only known beer choices are Bud, Coors, PBR, and Miller, or if you live in a region that appreciates small businesses, craft beverages, niche markets, small community type things is key. If you're surrounded by PBR zombies, you're SOL.

Half a million to 1.5 million for start up costs sounds really exorbitant. Last year I toured a small winery that specialized in champaigne style mead, doing 250-500 gallon batches at a time, and it was a one man operation. Granted mead is easier than beer, he didn't have a pub attached, and his next step of purchasing property and stepping things up several notches has yet to come to fruition, but it remains that he has expanded his product line from one or two varieties to something like 7. His sales over the internet have really taken off, (2004 Supreme Court decision in favor of small winery/breweries vs state's rights which were impeding interstate trade of wine/beer) so depending on how crafty you're planning on getting with your brews, you might find that local sales aren't the only option.

I've been brewing my own mead for several years now, but only as a hobby. I'd love to be able to sell the stuff (legitimately) but even renting a facility and starting real small like the guy I mentioned would require enough start up cash to rent a facility for 6 months while working through all the licensing etc - which all has to be complete before production can start. Add another year or so to establish market presence/customer base awareness and you've still got some hefty start up costs to contend with.


On the large scale options, and considering Redrose's employee quality, one of the local breweries had some employee health concerns a few years ago, I think Workman's Comp Insurance rates made a big jump that year, they closed down and reorganized as a Cooperative, in which all employees own some sort of share in the company, and also contracted their brewing out to a larger brewing company that already had the equipment, etc. I have not detected any change in the quality of their beers, and it seems that their distribution has really increased (shipping from this area is expensive, and a prohibitive step to get past at some point, for any local business).
A co 2/75 'Blacksheep' '93-'94
HHC 1/5 Scout/Sniper plt '94-'97

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