Coming of AGe #2

Last time on ‘Coming of AGe’:  I made a decision to brew commercially, I was in a reflective mood, I got my excuses in early.

 Starting a business doesn’t look to be an easy choice, regardless of the industry.  I’ve had ‘big ideas’ about starting my own brewing company and really believed I’d give it a shot “someday”.  Or, should I say, I’ve had ‘big ideas’ about starting my own brewing company and knew that despite my tall-talk I’d never realistically need to worry about proving myself as a business owner or a brewer.

To recap, I’m a homebrewer, I have no formal brewing qualifications, but have attended a three-year open university of life course in Alcohol Research.  I also have a growing collection of plastic buckets that have heating elements in them, plastic buckets that I want to put heating elements into, and a well-adjusted hoarding mentality: If it looks like it could be useful, put it in the garage.

Now I find myself in a dream-like-state, happy in the knowledge that I’m about to reach a goal, but daily realisations that I can’t wake myself up and that the ratebeer-daggers will soon be drawn.

When my friends and other interested folk ask me about the Northern Monk Brewing Co setup, I don’t have a straightforward answer for them.  You see, we have big plans and we have some faith in my brewing abilities and lots of faith in the owner’s business know-how, however our answer to the most common question; “so what size is your brewery” doesn’t satisfy everyone.

Buying a brewery and installing it into a suitable premises can cost a bit.  Not buying a brewery and not putting it in a premises can also cost a bit, and not just the initial investment.  Let me explain myself.

The options available to us (and others in our position):

  • Purchasing a brew kit and premises
  • Use someone else’s brew kit and premises
  • Email a recipe to a brewery and have them deal with it
  • Don’t do anything and enjoy brewing beer in your garage/kitchen for your own enjoyment

Speaking in the most basic terms:  if we were to purchase a brew kit and premises it would require investment from outside of our immediate influence.  If we ‘buy’ time on someone else’s brew kit we have to work under their terms and it isn’t that cheap either.  If we were to email a recipe to a brewery and ask them to handle it, we would both pack this in before it got started: that option just isn’t for us.  Despite the compromises we make when deciding on the best way forward, we know that we’ll be criticised to some extent.

Why not just purchasing a brew kit and premises?  We’re one of many start-ups in a competitive market and many of ‘us’ won’t survive the inevitable shake up after an industry booms, saturates and then discards what it no longer needs to satisfy demand.  A brew kit and a lease on a premises are risky assets to start-ups.  Also, can a start-up brewery be confident in making a significant investment when the returns cannot be guaranteed?  Most people need some level of income.

‘Cuckoo’ or ‘gypsy’ brewing is a broad church.  There is no recognised definition or boundaries as far as I can see.  Being a cuckoo brewer does not limit the output, the quality of the product or the perceived credibility of the brewer(s).  A cuckoo brewer may be a ‘small-batch’ brewer of ‘artisanal’ beers, beers that are furnished with reviews fit to burst with superaltives; or their output may be on a macro scale and those involved in the brewing company may not know their AAs from their elbow.  What I mean to say is, there is anecdotal evidence to suggest that not everyone involved with beer cares much for it, but they may like the smell of money.  I/we may not like it, but everyone is entitled to do it their way.

So you see the dilemma.  Mortgage yourselves to the hilt in an attempt to prove to the world that you’re serious about the vocation and the industry, accepting the financial risks that go with this, or mitigate some of those risks by renting kit time at an established brewery, accepting that there will be those people who dismiss your efforts as “in it for the short-term gains”.

The choices are there for anyone to explore, and it seems to me that one’s risk factors will vary depending on one’s bank balance (and other liabilities). 

It’s interesting for me to read my own thoughts, when more often than not they are fleeting ideas or worries with no real cohesion.  I can see that I am thinking about the criticisms before they’ve even happened, but what I can say is that it feels helpful to me to get these thoughts written, explore them and then move forwards in better shape for doing so.

I guess what I’m saying here, is that while future posts in this series will include the challenges of starting a brewing company, they won’t need to cover the same ground if I set the foundations early in the process/journey ….blah.

More on our decision once everything is in place.

*Follow @NMBCo (Northern Monk Brewing Company).

**All Grain (AG)

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6 thoughts on “Coming of AGe #2

  1. Hey Dave,

    Great honest post again..

    1) Have you guys checked out the brewing systems made in China? It is actually pretty solid, and in fact some are already building OEM systems for european and US brewery system companies.

    Many micro and brewpubs here have their brewing systems fabricated in China for a fraction of the price, and so far it taste better than plastic buckets 🙂

    If you want, I can pass u a contact of a local brewing consultant who is in contact with trusted chinese manufacturers. This friend of mine is working in a local brewery, and have help set up some breweries in south east asia.

    2) I do not brew professionally, but my background is in business and finance and spend a great amount of time studying companies, their management and numbers numbers numbers.

    There is no one stop business model that fits the F&B industries. You hear of horror stories, but there are also an equal amount that is doing so well, and expanding their outlets.

    All I want to say is that every brewery owner shit their pants when they run the numbers to work out how many pints/bottles/cask of beer they have to sell just to break even, and they think its impossible. But as business starts coming in, somehow the sales comes in and that becomes a distant worry, and suddenly its about keeping up with demand.

    – I feel the important thing if you want the brewery to be financially successful is not brewing great beer, but building a great brand.

    – Expand with caution, do not run up so much debt that you hate what you love doing, and end up working for the bank.

    – If the main worry at this stage is lack of starting capital, thus needing to find the cheapest option to every purchase then I would say hold up and raise more funds. Some things command a premium in price for the right reasons, and is justifiable. Having enough ammunition to last also helps keep your mind sound until you achieve positive cash flow.

    Anyhow i wish you success on this venture, and hope i didn’t come across as too preachy!!

    • Thanks for taking the time to reply in detail John. I’m probably not getting across the whole picture, how close we are to producing the beer etc. All I can say at the moment is that we’re starting up within our means and have a solid plan to take it forward without too much risk.

      Great lead on the brew kits, we’ve made a note of them.

      More info to come on this blog or on our website as an when we can make it available.

      Cheers,
      David

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