Tag Archives: East Vancouver

New Breweries Opening In BC

5 Replies

We are set to be part of an amazing community.  It is the quality of people in this business that not only encourage new breweries, but also support the current breweries in the market.  People like you to be honest.  You read blogs about beer, you support craft breweries, you tweet about beer, you talk to all your friends about the amazing beers you’ve had, and you travel near and far to taste different beers.

The result of this is to encourage new breweries to open.    In fact, I pulled this graphic from the Brewers Association in the USA to show how the number of breweries has skyrocketed over the past 25 years.

126-Brewery-Count-HR

It makes a person ask the question, how many breweries is the market capable of sustaining?  Trying to guess this is like trying to figure out how much higher real estate prices can go in Vancouver.  So I grabbed the closest comparison to beer …. wine!  It made me wonder how many wineries are there now.  I found this graphic from wines and vines and it shows the number of wineries in the USA over the past few years.  As you can see, there are more than 7,500 wineries in the USA, which is about 5,000 more than the total number of breweries.

Winneries in USA

So when I see this, it makes me feel like there is a lot of room in the market for more breweries right?!?!  If there are 5,000 more wineries than there are breweries, then there must be room for anther 2,500 to 4,000 breweries???

So what does all this mean to the number of breweries in BC?  Well, the most excellent beer writer and blogger Jan Zeschky of the Province Newspaper recently published an article on new Breweries opening in 2014 in this great province.  Click here for the full article.  He identifies 19 new breweries that are set to open this year, which will surely be a record for British Columbia.

We are set to be part of this amazing community, and when I think pragmatically about things, I believe there is a lot of room for all the breweries opening up, and more.  So if you dare dream about opening a brewery, or any other business for that matter, do it.  Life is too short to put it off any longer.

I am living proof (and so is this blog) that your dreams can become reality, so long as you have a plan, you spend the time needed, and you surround yourself with amazing people.  Of course, there are a few other details that need to go along with these big picture things, but don’t let them get in the way of following a passion.

So bring on the 19 new breweries this year, and I say bring on another 19 next year and 19 more the year after that.  Lets fill the marketplace in BC with as wide a variety of breweries as possible.  I also hope that these breweries continue to do wild and amazing things with the beer they make.  Lets push the boundaries, lets challenge the ordinary and lets realize the potential that is within each and every brewery in this province.

The cat is out the bag ….

2 Replies

For those of you who want to know a few more of the details about what is happening with our brewery, Jan Zeschky (The Province Newspapers most excellent food and beer writer) has released an updated guide for new breweries planning to open in 2014.  The article shows there are 19 new breweries that plan on opening their doors this year alone!  All are in various stages of development, and it means that this year will be a banner year for new breweries in this amazing province.  For a full read of this article, click here.

While this is really exciting for the beer drinks of this province, and it will likely cement British Columbia as the beer capital of Canada, it also adds a whole new dimension of stress.  If you are a regular reader of my blog, you know I wrote about all the various kinds of stress you feel in opening a brewery.  Click here for a link to this post.  Well, now we can add another type of stress to the mix:  Why would someone pick my beer over all these other great options?  Seriously!  We plan on making good beer, but don’t all of these other breweries as well.  We are nice guys, but aren’t all these other breweries as well.  We plan on having a cool tasting room, but so does everyone else right.  You can see why there is a little stress in my mind!

Another question you ask yourself, and not that the answer really matters, but is anyone else going through similar stress and anxiety ?  I see all of these pictures and posts of people smiling and having fun, and I think how come I up neck deep in stress and work, and everyone else looks so happy?  I guess some days you doubt yourself as this process really sticks it to you.  I find it important to grind through the days that are a challenge and savour the days that are a success.  The reality is that sometimes you feel like you are all alone!

At any rate, I digress.  We are really excited to be a part of the surging craft beer scene in BC, and I hope that we can add value both in terms of our beer, and in terms of the information we provide to the general public.  I hope this blog has inspired some people to dream, and for others I hope it has saved them a bucket of money on mistakes.

The Odds and Ends of this Process

1 Reply

One thing that takes a lot of time, especially of late, is the final layout and design of the space.  It is quite easy to get approximate locations of the brewhouse, walls, grain room, bathrooms, etc., but it is another thing to lock in the exact location.  This goes against what I ever thought would happen, and makes you choose between saving time, saving money, but only getting one of these at once.

Are you as confused as me?  Maybe the words are not flowing from my brain to the keyboard this early in the morning, but the final location and final detail of things is taking a lot of time.  Why are these things important?  Well, without knowing how long of runs you need for mechanical engineers, electrical engineers, your general contractor and others, you can’t really get accurate quotes on work needed.  If you can’t get an accurate quote, when it comes time for an electrician to do the work, and they need to do something that is not in the original package, there is an up charge for this.  In other words, if the electrician needs to run power to 10 extra lights that were not in the plan, they charge extra.  It is also the time that they can “bend you over the table so to speak.”

So in trying to button down all the details of what to put where, it makes life really difficult for the individual(s) putting together the final plans.  For us that means our architect, our brewhouse designer, and our contractor are all working in tandem, with emails and phone calls going back in forth at the rate of about 10 per day, with weekly meetings, and with miscommunication at every step of the way.  It is very difficult to orchestrate, as often people are not focused on our project alone, meaning sometimes it is not convenient for others to work on our project.  There are also vision issues, time issues, communication issues, and issues with our issues.

One of the biggest issues you cross when it comes to the odds and ends, is saving money versus saving time.  At the end of the day, we try to save both at every step along the way, but it has proven impossible.  If you want something done quickly, you are going to pay more as you narrow the window of options you have.  On the flip side, if you want things done economically, often the time needed to save the money is huge.  For our project this means trying to balance out these 2 things, so that we can save a little time, but also a little money.  Let me give you an example.

Should you build a cooler yourself or have one prefabricated and installed by someone else?  There is something about a cooler that makes it very expensive to pay a company to design and install.  It is not like the engineering is difficult, the materials are relatively inexpensive, and the amount of time needed to put it together is nothing exorbitant.  So when you get a quote from a company that specializes in putting this into your brewery, the cost blows your mind.  The cooler can literally cost $40,000 to supply.  WTF.  So this naturally leads us to look at designing and building our own cooler.  Quickly you realize that you can build the same thing, and save yourself about $20,000 which is huge in the grand scheme of things.  The challenge with this route is the time involved.  The time needed to procure the pieces, put together design specs, meet code, coordinate trades, etc, etc.  What we are now realizing that building our own cooler will save us money, but it will suck a lot of time from spending it elsewhere.

When you have time sucked away from certain things that need it, then you are delaying the process for other things moving forward.  So in other words, there is always a delicate balance between time spent on a project, and time lost on another project.  There is also a balance between money saved and time saved.

Let this be a lesson to other future brewery owners, the balance of these things is a hard thing to do, and you will spend a lot of time heading down a path, and then after a certain amount of time, backtracking and going down the other path, only to realize that you should have stayed down the first path.  The key is to always be aware which path is the best to travel down, and to recognize when you are running into a brick wall ….. because as we have learned, there is never a brick wall to show you are on the wrong path, only a few hurdles, making recognition of this even harder.

My key learning is this:  Sometimes getting overcharged is alright, so long as you spend the time you save elsewhere to move another aspect of the brewery forward, or save money.  There are other times an owner needs to make a greater effort to save money, at the expense of time, as the cost savings outweigh the time spent.  Choose wisely!

Finish of the Tasting Room

11 Replies

So I received some amazing feedback from readers on what is important in a tasting room layout, and key attributes of the space.  It has proved very helpful in helping to construct a space that meets the desires or craft beer enthusiasts and also those who will be visiting our space.  However, the progress we have made has naturally led to another huge question:  What do you want in the finishing of the space?

Does an ultra modern space like 33 Acres go over well, or would you prefer a look and feel like Brassneck.  Are there other tasting rooms outside of Vancouver and BC that stick out for you?  Tell me what you would like to see?

  • Minimalistic/Stark
  • Traditional
  • Modern
  • Ornate
  • Made to feel like a bar
  • Left to feel like a warehouse
  • Repurposed materials

More than talking about our space, I would love to know what other restaurants, bars, and spaces in Vancouver you like.  Of course our space will have a personality of its own, but we are keen to know what direction you think we should go with the finish.  As always, thanks for the thought and the feedback.

The Biggest day in this Process – Lease Signing Day

1 Reply

It looks like the day might finally be upon us.  This is the day that seems like it should be the first step in the process, but realistically is more like the 500,000th of 1,000,000 steps in starting a brewery.  I have thought about this day for years.  It’s like I need to pinch myself to make sure this isn’t a dream.  We have signed subject removal for leasing our space.  After a 12 month courtship, and months of negotiating, feeling elated, feeling depressed, and most importantly uncertainty, we have done it.

I know what you are thinking:  Whats the big deal?  You found a place to brew your beer.  Thousands of other breweries across North America have found a suitable place to brew their beer, what makes your accomplishment any different?  When I think about it that way, it doesn’t seem like that big of a deal.  But when you consider that we live in Vancouver, where land and warehouses are at a premium, it feels like a huge accomplishment.

I would say the key learnings from this process would be as follows:

  1. Don’t even consider buying a space, unless you are rich.  And that begs the question, if you are rich, why are you starting a brewery?
  2. Dilemna:  You can only have a one of the following:  A good landlord, a good location, a good space.  Which will you choose?
  3. Get ready for a personal guarantee.  Unless you have a brewery already, and if so why the heck are you reading this blog, get ready to lay whatever personal wealth you have on the line with your landlord.
  4. Expect to spend a lot of money fixing this space up.  Our bill is going to be huge, because we have a larger space, but even for small spaces, expect to spend $300,000 minimum.
  5. Use a good commercial realtor, who works exclusively in an area.  Don’t use a friend or family member who doesn’t know a lot about what they are doing.  We used Matt Smith from Colliers, and were very happy with our choice
  6. If you are ordering new equipment, don’t order any until you get your space secured.  I’ve heard too many horror stories to go down that road.
  7. Expect the unexpected.  There will be a fundamental problem with your space that you didn’t anticipate, so budget some contingency for your build out.
  8. Engage with architects, engineers and other professionals from the get-go.  They will help you understand what is needed and what is to come.
  9. Don’t lock yourself into a size of brewery, type of brewery or anything else until you find your space.  We totally changed our strategy based on the space we found.  Committing to a space is important to do before you commit to a type of brewery you are creating.
  10. Last and most importantly, PRAY.  Thats right, because when you find a space that seems really good, I can guarantee that there will be someone else who also finds the space really good, brewery or otherwise.  There is a lack of good space, and expect landlords hold all the power to pick who they work with.

So now, the process of starting a brewery truly begins.  It is hard to believe that from the time I started to write a business plan to this point in my life has been 5 years.  So patience, if not a inherent characteristic you have, will definitely be something that you develop.  If you don’t, I would say that your journey into the world of starting a brewery might be a short one.

Today will be my last shave, and I can start officially telling people that we have a space to brew our beer.  Many thanks to all those people who helped encourage and support us in getting to this point.  Without all that you have given to this process, I am afraid I wouldn’t have been able to do it.

Damn Exchange rate!

1 Reply

Well what a bad surprise we received today about purchasing our equipment.  Instead of our equipment costing us about $550,000, we just got a 10% surcharge!  I blame myself, and I would recommend to anyone else who plans on starting a brewery to take note.  Watch the exchange rates and know the forecasts!  When a business needs to order equipment, fluctuations in the exchange rate can have a massive impact on costs.

Let me give you an example, from the time that we wrote our business plan about 4 years ago to today, the Canadian dollar has gone from about $0.95 Canadian for $1 American to what it is today $1.09 Canadian for $1 American.  As you can imagine this is crushing, and seeing the Canadian dollar lose $0.03 in one week, has become too much for us to handle.  We are purchasing some US dollars.

Unfortunately, this means that the cost of every dollar in equipment we buy, will now cost us about $0.10 more.  Just so you know, here are the costs for our equipment, at least what we have budgeted in our plan:

  • Brewhouse $250,000
  • Bottler $100,000
  • Fermenters and Conditioning Tanks $150,000
  • Misc Equipment $50,000

So all the costs of this equipment just went from $550,000 to about $605,000, as the suppliers we are working with accept American money only.  That sucks so hard I can’t even begin to tell you.  I feel so stupid for not thinking ahead to this possibility and changing some money over months ago.  If we had done this even just 2 months ago we would have saved about $25,000 in  costs.

So this leads us to a point that we must now consider.  Do we raise more money to pay for this cost overrun?  Do we look to purchase our equipment locally?  Or do we reduce the size of our equipment and shave some costs off that way?  Maybe there is a combination of a couple of these to make it work.

At the end of the day, there isn’t much that we can do about this.  All we can do is manage our actions from here on out.  It is a tough lesson for us to learn, and while there isn’t a lot that I can do about this, I can at least help someone else out to save some money.

Finally, answers to our Electrical Nightmare ….

1 Reply

I have begun to realize that not everyone who is helping to get this brewery off the ground is willing to work until 2am, or makes this job the sole focus on their day.  In other words, answers that I expect within a couple weeks, sometimes take the better part of a month.  Sometimes these answers are not needed, so the time to get a response is not important.  But it seems like we need most of these answers in a timely fashion, and they set in motion a cascade of changes elsewhere, and each successive change is just as important as the last.

One of these huge considerations is the electrical issues for our space.  I have blogged about it, and it seems like we have been close to an answer for the past few weeks.  This is likely the biggest and most important answer we have been waiting for throughout this process, as our decision to lease the space rests on the advice and information we gather.  A bill of under $100,000 and we are golden to carry on.  Anything over this and we have a tough decision to make, and anything well over this means our dream is going to be dead in the water.  Additionally, we have already extended our contract to lease our space with the landlord past what we agreed to.  We were supposed to give our landlord an answer if we wanted the space by the end of November and we asked for a month extension, given the electrical issues and the lack of an answer around our Development Permit.

So here we are at this point.  We have 2 weeks to decide if we want the space, as the landlord requires an answer by the first week of January.  We have received our development permit from the City of Vancouver, so we are able to brew beer in this space.  We need to submit our building permit drawings to the City of Vancouver, and we need to find a solution to the lack of electrical power our space has.

Well as of yesterday, we found a solution to our electrical problem.  It looks like we are going to cut the power to the whole building, and re-run new power that will be sufficient for everyone, including our brewery.  This means that instead of getting a bill for well over $100,000, we should now come in around $60,000-$80,000 on this fix.  We are still a little upset by the amount we have to spend, but it beats the alternative, which is a pad mounted transformer, and the cost of which is about $250,000.

This means that all we have to do is hammer out the final details of our lease with the landlord, and we are going to lease this space.  I can’t actually believe this is about to happen!  Its almost like I have to pinch myself.  I know there are a few key points to be ironed out with the landlord, like tenant versus landlord improvements, personal guarantee (not unlike a kick to family jewels) length, but most of the important items have already been agreed upon.  In fact, our landlord has been very helpful and accommodating in working with our needs and challenges.  While his patience has started to wear thin, we hope that he still wants to complete a deal with us, and dot all the i’s and cross all the t’s.

I don’t want to get ahead of things, so I will leave our latest bit of good news at that.  I have learned from my mentors and peers that a deal is not done until you get a key to the front door, so I will not presume anything.  What I do know is this:  The lows we felt about things after our floor issues popped up, and then our electrical issues came to the front, have all been offset by the development permit we received, and then the answers around the electrical.

With any luck, we will have a firm deal in early January, submit our building permit application in 8 days, and start working on our brewery sometime in early March.  Should all this come together as we hope, we should be open for business sometime in August 2014.  Thats right, in about 8 months our brewery will be producing beer and slinging it to eager locals before you know it.

Given the amount of work to do, and the mountain we need to climb in order to get everything ready, I am going to take this Christmas break to relax and enjoy some time with my family.  The way things are shaping up, I may not see to much of them from February to August of next year.  Happy holidays to everyone that reads this blog and I hope you have a fantastic end to 2013.

Success …. Development Permit! Now what?

2 Replies

Today was a great day in our world:  We received news first thing this morning about the status of our Development Permit that was submitted to the City of Vancouver about 14 weeks ago.  Our permit was approved via rubber stamp by the City, which paves the way for us to move forward with permission to brew beer at our desired location.  In other words, from the City of Vancouver’s point of view, brewing beer in our chosen location is something we can do, should we want to do it.

I often hear that it is important to celebrate your successes, no matter how small, as you need to draw upon these when you are slugging it out in the trenches.  So tonight I have a smile.  Tonight, I feel like the dream of opening my very own craft brewery is one giant step closer to reality.  Tonight, I still feel in control of my own destiny.  Tonight, I feel re-energized and ready for the next challenge that I will face.  Tonight …… well if I keep going on it will soon be tomorrow morning.

While this success is great, we still have other challenges that are right before us.  The most important of those is finding a solution to this electrical issue.  We are underpowered at our space, and we are searching for economical ways around it.  It is painful to know that every conversation you have with electrical engineers and other professionals costs money, but what other options are there?

The latest update on the power is that we should know this week about what options are available, and then we can decide whether or not we want this space.  If we can keep the bill under $100,000, then I think we are going to move forward.  However, if we can’t find a way to keep the bill under this number, then I think we walk away.  Hydro and our electricians are busy scurrying around getting answers.

All the while this is going on, we are still working away on our building permit submission.  We have (rightly or wrongly) assumed that we will find an answer to the electrical issues, and given that we need to have a full set of plans ready for building permits ASAP.  Time is the big enemy here, as every delay in submitting our building permits is another day more that money just goes out the door.  If we can’t get our brewery up and running by August 1st, then we run the risk of needing more loans and lines of credit, and we also run the risk of missing out on the busiest time of year for breweries …. Summer.

Needless to say, with this small win, we are one step closer to making this dream a reality.  Tonight we celebrate, as tomorrow there is even more work to do.

General Update on Things

5 Replies

I have received some feedback lately around wanting a general update on our progress.  There seems to be genuine interest in how the overall project is going versus what we are encountering on a daily basis.  As such, this post is a little more of a general update on our progress rather than a general rant about this process, or a specific detail of things.

So as you likely know, we have submitted a development permit to the City of Vancouver for a space in East Vancouver.  On Thursday of last week, we were told we’ll be given an answer on this permit in the next couple weeks.  We are waiting for this permit, as we can’t lease the space we are interested in without first getting approval to brew there by the City.  In Vancouver, the only buildings that you can outright lease and know with certainty you can brew is M2.  The trick is that there isn’t a lot of M2 zones, and the buildings we were looking at in M2 just weren’t right for us.  So we ended up in an I2 zone, which is one where brewing beer is conditional upon submitting a development permit.  Any potential for us to use this space hinges on getting this permit, so we are waiting with fingers crossed to get good news.  As of Nov 18th, no news!

Another big process is collecting and securing money from investors.  Luckily, an investment in our brewery is eligible for the eBC tax credit, which basically means that 30% of each investors money is returned to them in the form of a credit from the government of BC.  It looks like we need to raise over $1,100,000 so everything we can do to help secure “financial partners” is welcomed with open arms.  We are going to be collecting money in the next 2 weeks from our investors, so I hope that what people have committed is what they are going to offer us.  If not, I am sure I will post something around my frustration with this.

Financing is another part of the business that is really important.  We will need both an operating loan and a line of credit in order to make the business float during the crucial first couple years.  Opening a brewery can be a recipe for financial hardship, as the line between profit and loss on a monthly basis is razor thin.  If sales fall behind a little bit, and costs are a little higher than expected, money can go out the window very quickly.  Luckily for us we were approved for a loan and line of credit to make our finances come together.  These will total about $450,000, and when added to the money we are raising we feel like we should be in a good position to make things work.

The layout of our space and submission for building permits is something we have been working very hard towards.  In fact, this has taken the majority of our time of late.  With the arrival of our Development permit by the end of November <fingers crossed>, we would like to have our building permit submission ready to go.  This means that we need to have the layout of the space virtually complete, have the work needed by engineers complete, have all the drawings and work from our architect complete, and to have all other inputs ready to go.  It seems really easy when I sit here and type this, but the reality is that there are so many moving parts to this, that it is incredibly complicated and difficult to carry out.  Finalizing the layout of our space has taken us over 8 weeks, as there are SO MANY variables to consider.  For example: Needs now versus in the future when we grow, tasting room connection to brewing space, retail area, production flow and functionality, the location of existing services, proximity of different spaces that need to be connected, etc, etc.

Equipment is something that we need to have ready to go, so that we can be sure it is ready in time for production.  We have looked to China, Europe, Canada and the USA for our brewhouse and tanks.  To be honest, I can see why this step can be either really easy, or one of the most difficult steps.  No two quotes seem to be alike, and the unknown factors of quality, timeliness of delivery, and follow-up support make these intangibles even harder to gauge in terms of importance.  A big hurdle to buying Canadian is the price.  Companies like Newlands and Specific Mechanical are local and have a good reputation in the business, but their prices are among the highest.  Moreover, it sounds as though some of the other start-up breweries have experienced some trouble with them.  Then there are the systems from Europe, where the quality is top notch, and the price matches.  Moving East to China, the land of cheap equipment, but one where the after sale service is poor, and other local breweries have experienced trouble with having to repair brand new equipment.  All of these things make choosing one company to work with very difficult.  At the end of the day, it is a balance between all these things, and hopefully one company stands out as the best.  At this point, we have no idea which one it will be.

Another huge part of this process is our name.  For the time being we are letting this one go for a few weeks.  While we don’t have an official name yet, the focus groups we ran were instrumental in getting us closer to making this choice.  The only problem is that we are putting out other fires that are more important at this time.  Things like financing, layout, legals, accounting, etc.  We anticipate having our name by the end of the year, and that should give us 8 months to create a brand around this.  I hope this is enough time and that we make decisions that are based on sound principles.

The legal side of things is something we kind of let slip and caused us a lot of grief and unnecessary stress.  In order to raise money and run a proper incorporated company you need to have:  A shareholders agreement (aka a partnership agreement), a subscription agreement, a set of articles for your company, and a share ownership agreement.  All of these documents are tedious to create, and require the hard work of a legal team.  Reviewing and revising take a lot of time and mean that you are continually working on getting these documents ready so that you can raise money, and provide a framework to investors on how your company will operate.

There are literally hundreds of other little things to do, some of which are major and some of which are minor pieces of major components.  There seems to be nothing that isn’t important in some way to the overall picture of this brewery.  To be honest, I would love to find the time to blog about all these things, but I just feel too much pressure to write about them, rather than working away at them.

Results from the Focus Groups

4 Replies

Without a doubt, the 2 focus groups we held were the best ideas we have spawned throughout this process.  The opportunity to connect with craft beer enthusiasts, and more importantly, to share our basic business premise with individuals who appreciate and seek out craft beer, was amazing.

We held 2 focus groups over the course of 7 days, and they were more than effective in helping us shape the name of our business.  To be honest, the results of these focus groups will help not only name our brewery, but also determine the direction of several other important variables that we are looking at.  Things such as the layout of our tasting room, the size of bottle we are going to put our beer into, and the types of beer we are going to produce are all facets of the business that we touched on in these focus groups.

What I learned from focus groups is that a name should be short, easy to pronounce and spell, meaningful, genuine, and unique.  There was a feeling among both groups that a generic name, or Vancouver based place name (such as False Creek Brewing or Strathcona Brewing) didn’t capture exactly what we are trying to do.  More importantly, people feel like these names can come across as horribly disingenuous.  Names such as Stanley Park Brewing (brewed on Annacis Island) and Bowen Island Brewing (Northam Brewing) seemed to come to mind when people thought of place names.

For the brewery we are creating, it seemed a name that was representative of what we are doing was most applicable.  In other words, a made up name, or a word that is picked for purely interest sake, with some connection to what we are doing will show people the honesty and approach we are taking to things.  This really matters to us, and as such we took this feedback to heart.

So we took out the names like Orange Brewing, Strathcona, False Creek and even East Van Brewing Company.  What we were left with was a group of about 8 names that really stood out as top of the list.  We are currently looking into the legal side of these names, and how that will impact what we choose to do and how that effects the last part of our naming competition.

Until then, thanks for the continued feedback and interest in things …. I really look forward to sharing the last part of the the naming process:  The final few choices and letting everyone vote on those names.