Tag Archives: Storm Brewing

34 days out …. sneak peak at our Layout

Not much to say on this post.  I am a little foggy this morning, and needing to get 2 blog posts out as I missed one from yesterday.  The first post today will be around the finalized layout and look of our tasting room, and the exterior elevation of our space

We agonized for months over how exactly to design and locate the entire production and front of house spaces.  There were likely 5 or 6 meetings with our architects to get this correct, and hopefully at the end of the day, we got it right from a production standpoint, but also a tasting room standpoint.

Some keys about the front of the house:

  • The tasting room has a direct connection to the brewhouse, where most of the fun stuff happens in brewing beer
  • The art gallery is directly connected to the tasting room, allowing people to view some artwork while they visit the brewery
  • We have 2 long communal tables, which is a direct result of bring people together through beer.  If you want to come to our brewery and sit quietly on your own, you might have a tough time
  • We will have lots of natural light.  There are about 14 windows across the front, that will provide heaps of natural light into the space
  • There is a moderately separated retail area from the tasting room, which will allow the patrons of each to not interfere with each others good time
  • The lines from our serving tanks to the tasting room are crazy short, as the cooler is right there
  • The front of the house has really high ceilings, something you can’t really see in the drawings, hopefully making the space very interesting and welcoming

As for the exterior of the building, not much to do other than clean it up, repaint and put a few new doors in to make the building secure and a little more functional.

There was a lot of found value in the space, which we have tried to salvage and add to in a positive and authentic manner.  Both Iain and like things that are authentic and interesting, and we hope to have created a space that is, if nothing else, both of these things.  We hope you pop-in and say hi the next time you are in the area.

Architectural drawings Oct 31.2014

 

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36 days out … Use a Notebook and to do list!

Of the many things this process has taught me, there are several that stand out as key learnings overall.  Its hard to say how one should practice for these things, but likely knowing about them, reading books about them, and talking with others about them are a huge help.

The first thing that I have learned is how to get things done.  I feel like I have always been quite productive in my life.  Not quite sure where I got this, but ever since I turned 30, I have increasingly become a highly productive machine.  To that end, one of the best books I read for preparing for this venture was Getting Things Done by David Allen.  You will not be disappointed if you make the time to read this book.  It will help you be more productive with your days, and organize your life to stay on top of all the details.

Another trait that I knew was deep inside me, but never really exposed is an ability to work long hours with little sleep.  Normally, I am a high energy guy, so when it comes to sleep I like to get 7 hours of bed time a night.  Continuing to exercise and stay fit means that sleep is important.  However, for the past couple months, this has been shaved down to about 5.5 – 6 hours per night, with one night a week at 12.  I find I am capable of this, definitely a little more grumpy, unhappy, etc, but that should be expected.  Find your ability to work long and hard, and you will be in a good position to succeed.

One last trait, one that might just possibly be the most important trait is the ability to not get overwhelmed by the gravity of this situation.  Really, this is one of the most stressful and intense situations an average person could go through, and with the help of friends and family, I have managed to stay positive and on track.  If you have a tough time dealing with stress and multi-tasking, you will need to either take course, read or learn to deal with this possibility.

Another huge help is always having a notebook that contains a to do list.  Make sure you cross things out when they are complete, so you can get the satisfaction of accomplishing something. To do lists are key as are notebooks with all your notes from meetings and discussions.  I can’t tell you how many times I have referenced the book to find something I have been looking for.

Until next post, keep on keeping on!

Marketing Decisions

One thing I have underestimated up until now is the number of decisions that need to be made for marketing.  I always thought the big marketing decisions were the tough ones, but now walking through this process, it is the small ones that suck all your time and cause the most headaches with the schedule.  Paying others to do some of your work will help bring in a fresh opinion, move things forward, and get you to a place you wouldn’t otherwise have gotten.  It will still take hard work and lots of re-working things to get them right.

As a craft brewery, we kind of thought that marketing was secondary to making really great beer, and having a great tasting room to hang out in.  For the most part, it still is but the gap has narrowed quite measurably.  With so many amazing breweries swinging open their doors in the past few years (Brassneck, Parallel 49 Brewing, Powell Street Brewing, Postmark, 33 Acres, Steel and Oak, Yellow Dog, Main Street, and many more), it is now imperative that your brand be spot on.  Don’t get me wrong, I don’t think you need to have a perfect brand for customers to see, rather I think you need to achieve a few important things in your message:  Authenticity, why you did this, and what makes you so different.

Yes, yes the quality of beer is still paramount.  Make crappy beer or have the same selection of beer at your brewery week in and week out, and you will find yourself floundering.  At the end of the day, consumers care most about this.  But the people that spend their hard earned dollars at breweries also want to see a brand that meets their expectations.  What makes it harder for a brewery to meet these expectations, is that no 2 people have the same ones.  Some want authentic, and others want playful, some want seriousness, and others want unique.  What do you want?

Getting back to my original point, we decided to go in the direction of making something we think is representative of us.  Authentic, Fun, and pretty straight forward.  However, what you set out to do, like everything in this process, is not necessarily what we are going to end up with.  You see, making thousands of decisions over a period of months, if not years, puts you down a path that you didn’t necessarily intend.

For instance, we always wanted our brand to be what it has become.  But to think that we named our company Strange Fellows Brewing is somewhat comical.  My partner and I always wanted a more serious name, but through indecision, other names being taken (this is huge) and the input of others, we ended up with Strange Fellows.  This set off a cascade of events that has slowly morphed our brand into something that neither of us could have imagined.

Also changing where we ended up is the list of decision that we needed to make, with each of these decisions having hundreds of little decisions to make the big decision:

  • website design and look and feel – hundreds of decisions in this bucket
  • can versus bottle versus growler – design, size and look
  • label for all product
  • logo – you will need to pick something that works on its own, with your can design, and in sizes all the way up to a decal on your car to sign-post at your brewery
  • bottle cap
  • merchandise
  • growler design
  • your story and how it relates to your brand
  • business cards
  • tasting room design meshed with your personal taste, budget and consumers taste

Each of these, and many others, have hundreds of layers to the decisions you need to make.  Its not as simple as just making the choice and living with it in a bubble.  Your decisions are not mutually exclusive, as one decision will impact another, often forcing you to rethink exactly what you are doing.  Let me give you an example.

We knew we wanted to put our beer into cans, so we charged ahead with this.  However, we didn’t know what kind of beer to put into cans.  So we had to decide which of our favourites we were going to brew, and put that out there to the world, without ever actually brewing these beers.  Which means you need to talk about flavour, alcohol percentage, etc without ever having tasted the beer.  Then you need to make a description of the beer, a beer name, a theme to your beer, create a UPC code, get preliminary approval from the LDB, get all the details on the can correct and be happy with where it is at about 10-12 weeks before you plan on packaging this product.  You see, cans need to be manufactured and that takes some time, which means before you even do anything, you need to have all your marketing complete.

It also means that once you make decisions, going back on those decisions will change other aspects of the design.  Invariably you will makes changes, and while you have your head down in the sand making all these decisions and changes, you end up with a can that may be great, but also may be quite far from where you intended to end up.  We’d be lying if we didn’t admit to this, as well as every other craft brewery in the Province.  So go easy on those people who have missed the mark with their marketing, as they may have gotten to a place they didn’t intend, and have no way of getting out.

To me, marketing matters most in terms of how much I connect with a brand.  This is everything from; what are the owners like, what is their message, what does the beer taste like, what are their thoughts on craft beer, why are they making beer, is this their passion, what other breweries do they like, and are they helping to keep Vancouver at the forefront of craft beer.  If a brand conveys all this information to me, or if I pick up on these things along the way, my decision on whether I like the brand is already made.  A company could miss 2 or 3 of these things and be alright, but if they miss 2 or 3 of these things and one of them is the quality of the beer, then I will move on.

For us, we’ve had the luxury of time, which has been our worst enemy for cash, but our best friend for crafting our story.  Having a brewery build-out that has taken about 9 months, in addition to a 12 month period that we were actively working on our brand, which comes after about 1 year of starting the process.  All this has meant we’ve been able to work out the kinks, and get it where we are pretty happy.  We could still make a few changes to our marketing, but for the most part we are pretty stoked about it.  I went through my diaries and have the following summaries from just our name selection:

  • January 2010 started working with my brother on a brand called The Crafty Monk
  • Over the next 18 months came up with a logo, and design for label
  • January 2012 met Iain Hill and started our partnership.
  • March 2012 Iain and I agree that we need to come up with a name together that is indicative of both us.
  • July 2012 changed name to Low Countries Brewing
  • Sept 2012 worked with Iain’s wife Christine on logo and branding.  We had a really tough time making the name look interesting and work well.
  • October 2013 after a year working with Low Countries Brewing, we decided to ditch the name as it was boring and not exactly what we wanted to do anymore,
  • January 2014 false start on Allegory brewing
  • February 2014 with our partnership about to dissolve over indecision about our name, we finally agree to Strange Fellows.
  • March 2014 to present we worked on our branding and marketing to end up where we are, which we hope is a pretty good place.

Without the time we had available to us, we might have ended up with a name like The Crafty Monk, or Allegory, both of which would have led us down a path that is much different than where we are today.  So take your time in making decisions, as creativity knows no time boundaries.  It would also relate to this entire process, as for us, getting all aspects of this project correct the first time is the most important thing.

 

Quick Update on Things …

I think back to the days when we were first getting started with the brewery, and I can’t help but think how much time I had to do things.  It didn’t seem like I had a lot of free time, but in reality I did.  What I really had was the ability to get on top of things, which I have completely lost now. Let me try to explain.

When you first start writing your plan, you have time to dream, think about your beers, your brand, name, etc.  It is a natural part of things, and something that if we didn’t do, we wouldn’t be doing this.  As time moves on, you tend to get to more of the meat of the operation, and you need to start figuring out some details.  As time progresses, you think you have figured out a lot of the details of your space.  Things like brewhouse, packaging size, general location of warehouse.  You think you have made a lot of these decisions, but you haven’t.

You continue to work on your business plan, making what you think are decisions and changes of direction …. and then you do it.  You find a space to lease and you take possession.  This is when it starts to really happen.  You actually start making decisions, like general contractor, architect, brewhouse size, etc.  You think you are doing well, because you have made actual and concrete decisions.

What you don’t realize, is that you have only started on the tip of the iceberg.  There are thousands of decisions to make.  None of them are more or less important than any of the others.  Think of details such as these:  Size of cooler door to the inch, length of drainage trenches down to the inch, slope on concrete pour down to the degree, exact location of trade waste interceptor, etc, etc.  There is so many small decisions to make, it can become overwhelming.

Coming full circle, each of these decisions take time, and trust me when I say, you have very little of it.  Your funnel at the top is getting loaded faster than you can empty it.  About a year ago, you could pound out a good 60 hour week and be back on top of everything, but that is a pipe-dream now.  A 60 hour week will only mean that I have about 300 hours of unfinished work sitting around waiting for me to complete.  There is no way of catching up short-term, it is a matter of prioritizing and getting small jobs done.

Add to all this the work around the brewery.  I have been tying rebar and working around the brewery 7 days a week for the past few weeks, and there is still so much to do.  Take for example a typical day in my life.

  • Get up at 5am to 530am
  • Work in front of my computer until 745am
  • Get kids off to school and lunches made 830 to 9am
  • Drive into brewery to do work 930am
  • Manual labour all day at brewery until about 930 am to 3pm
  • Home to do work in front of my computer (accounting, marketing, business planing, etc) 330pm to 5pm
  • Down time, hang with family, 530pm to 8pm
  • After kids in bed, back to computer for more work 8pm to 11pm
  • Off to bed to do it again

This is a pretty standard day, and I know one that my partner also goes through.  If you are going to open a brewery, and you want to take an active role in starting it, be prepared for a day like this.

What you will find is that how badly you really want to do this will go a long way to making the above feel like work, versus feeling like a dream.  Luckily for Iain and I, the long days are a dream and the passion is burning brighter than ever, so we know we have made the right decision.

The jobs involved in opening a brewery …

There are many things to do in starting a business, that much is for sure.  But let me be the first to say that there are about twice as many jobs to get done as you first anticipate, when you are conjuring up your business plan months and years before actually taking that leap of faith.  With the help of this post, you can plan ahead, learn some skills, mentor from someone who has experience, take a few classes, or just meet someone with a complimentary skill set to yours.

In no particular order, here are the things you need to be good at:

  1. Salesperson:  Maybe I put this first because I feel like there is so much of this process that you need to get buy-in on.  Whether it be your spouse and why they should support you in opening a craft brewery, investors to see a bright future in your business, or even possible partners to believe in what you are doing, you are always pitching an idea to someone it seems.  Not a lot of people have sales experience, so I would recommend Spin Selling by Neil Rackham
  2. Janitor:  Get really good at sweeping.  This means finding a messy floor somewhere and getting a good broom and going to town.  A couple techniques.  There is the long stroke or the short stroke.  I seem to prefer long strokes on smooth surfaces and short strokes on rough surfaces
  3. Accounting:  There is no way you want to get behind on this one.  From the start, have a good idea of your plan for taking care of the books and reporting this information.  We use an accountant and they have set us up on a system that works with their office.  Essentially, we track everything in quickbooks, pay every bill and invoice, and then push this to them at the end of the year.  Easy enough, but it was a long road to get here.  My recommendation is to use Quickbooks, which is available online for $250.00 or so.
  4. Digger:  Another really important skill to have.  I suggest you head to the beach, and try digging a couple holes and a trench.  Do this a couple times a week, so that when it comes time to dig up floors, or shovel dirt, you are in prime shape to make this happen.  A key here is to manage your shovel loads.  Not too much dirt now …
  5. Marketing:  I have always kept marketing separate from sales as I think they are 2 very different things.  In short, marketing is the long term plan and vision for your brand, and sales is the day-to-day activity.  Read some books, look at other companies, brands and marketing whenever you can, and learn from others who specialize in this to get a better understanding of what you should (and shouldn’t) do.  My book recommendation here is Permission Marketing by Seth Godin.
  6. Steelworker:  My hands don’t lie, you will need to get good installing and tying rebar and wire.  I suggest you go get a job tying rebar for a week at a local construction site.  Make a B-Line for the site super and tell them how your baby soft hands are in need of toughening up.  Don’t forget to strengthen your lower back as well, as you will be bending over for most of the day.  Just find your happy place, and try to think about how great it will be to serve your beer to the world when you are finished.
  7. Decision Maker:  You will need to to learn how to make decisions based on the advice of others.  It will often involve a complex set of parameters with varying opinions, the exact answer you must decide on your own.  Good examples is whether to lease that warehouse that is empty or what floor plan to use for your brewery.  You will get opinions from realtors, bankers, lawyers, engineers, accountants, architects, and even your friends and family, but at the end of the day, you make the decisions, so don’t overlook or underestimate what is important to you and how this decision will play out long term.  My book recommendation is Crucial Conversations by Kerry Patterson, a must read.
  8. Painter:  Up, down, up, down, repeat.  Think of Mr Muyagi in the Karate Kid, and practice for painting with painting.  This process should actually start with power washing, so find a dirty piece of concrete and let loose about 1,000 PSI to see what it feels like.  When you have mastered use of the wand, you can move to painting.  This involves a lot of cutting plastic poly, taping, and scraping.  So get ready for the time of your life!  Remember patience is the key to getting a good paint job.
  9. Social Media:  There are some breweries that open and they have put nothing out there, while there are others who tell everyone what they are doing every step of the way.  I wouldn’t say one approach is right and the other is wrong, I would just say if you aren’t active in social media, at least understand what is happening and how you will take part in that down the road.  My book recommendation here is Guerrilla Marketing
  10. Psychologist:  When you are dealing with trades people, construction workers, and general labourers you are going to hear stories that will make you cringe and make you smile all at the same time.  Time to talk some sanity into these people!
  11. Human Resources:  you are going to hire people down the road, so its important that you understand what skills your team has, and what skills you would like to add to the mix.  Without question, every person you hire is important, but the first couple out of the gate will truly make or break you.  Hiring for Attitude is my book recommendation for this bucket
  12. Bathroom Cleaner:  Thats right!  Get down on your hands and knees and scrub.  Great preparation would be to head into your local Frat house and start cleaning the toilets.  You see, trades people have the aim of a 3 year old boy, and the cleanliness of …. well a construction worker.  So rubber gloves and eye protection are mandatory, while hazmat suit and respirator are optional.
  13. Copywriter:  A bit of sales and a bit of marketing in here, but that is not the point.  You need to be able to convey information to others in written word.  Whether it is your brand statement to consumers, a letter to your architects expressing your desire for changes to a plan, or the content on your website, you need to be able to write in concise terms.  Personally, I am not the best at this, as those who read my blog with regularity can attest, but it sure is something you can work on … like I do in writing this blog.  My book recommendation is Writing that Works.
  14. Phone Hanger Upper:  You will get good at hanging up the phone.  This is a product of having a lot of phone calls, but also a lot of telemarketers call.  I find the best way to get out of the conversation is to cut yourself off mid-sentence, that way the other person will think the line was disconnected.  Don’t hang up while they are talking, as it is a giveaway you did the dirty.
  15. Retail Manager:  A huge portion of a new breweries sales take place at the tasting room and growler fill area.  For a company like Brassneck, the experience they gained from their previous experiences only helped to make their retail experience what it is …. amazing.  Same goes for Bomber and others, as their retail experience only helped them to make sure they got the retail area perfect.  For us, we need to find help on that front.  We need someone who will understand what we are doing, and help us to nail it.  We are looking for this person and hopefully they can come on board at the right time.
  16. Mechanic:  We have yet to experience this one for the most part, but it would be wise to learn some basic skills around fixing things.  I have heard the horror stories of things breaking down and needing repair in a brewhouse are too numerous to mention, so knowing what to do, or who to  call is a very important component of keeping operations smooth.  Remember, red is positive and black is negative.
  17. Delivery Person:  When the production gets going, we know that a good portion of time will be driving around and dropping off product.  We view this interaction as very important, and something that we need to do in person.
  18. Production:  Maybe I put this last because it is the most important on this list.  I still maintain that we can get everything else on this wrong, or not have any skills in those areas, but as long as you make a quality product that is consistent, you will do well.  Maybe I am a little naive, but having good beer will make everything else easier.  So this is where you need to make a choice:  Either find someone who knows and wants to handle production, or learn the skills necessary yourself.  Guys like Ben Coli are a good example of someone who wanted to handle production themselves.  I would be antithesis of this, as I always knew there would be someone else handling this part of operations.  I think at the end of the day, you need to decide what role in the business you want to have, and go for it.  Book recommendation here is any and every book that has to do with brewing or production.

The most interesting thing about this list is that you will be doing all of these things on a daily basis.  There are days I go from item to item to item, and then I repeat a few of them.  That makes the job interesting, but also means you have to get really good at prioritizing, multi tasking, and working in several silos all at the same time.  For instance, as I write this post I am also answering emails, texting my partner and yelling at my kids!

Floorplan Update and Best Practices

Some of you may have come across a story written by Greg Clow of Canadian Beer News.  If you live in Canada and you are serious about beer, you should be checking his website on a regular basis.  Click here to link with our story and Canadian Beer News.  His article focused on Strange Fellows operations and what our full floor plan will look like when complete.

I have included both the layout we have moved forward with as well as the side profile of the space, so you can get a sense of the way our operations will look.  Not unlike anything else we put out there, things will change somewhat as we move ahead; however, 90% of what is on paper here will be represented in our build-out at the space.  Once you commit to submitting building, electrical and mechanical permits, you are also committing to what you have on paper.  So in other words, the size of a window in our tasting room that overlooks the brew house may get bigger, but we have committed the location for the bathrooms, the trade waster interceptor and the trenches.

Brewhouse Layout March 2014

Brewhouse Profile March 2014

We have allocated a total of $12,500 for permits throughout this process.  I have blogged about them a little bit under The Process of Starting a Craft Brewery, subcategory X:  Government Stuff.  There are lots of permits you need and getting them all in a timely manner is important.  To be honest, the process of preparing for permits and approval is one of the keys to getting this process right.  In short, for your business to move forward you need to submit for your permits in a timely manner, with information that is well thought out, thorough and correct.  Changes or missed steps here will cost you down the road.  Read more about permits at the page linked above (and I will add more details in the next week).

Anyhow, coming full circle here, our floor plan was a real labour of love.  Like any decisions you make with a partner, there is give and take.  However, when you add in an architect, mechanical and electrical engineers, a general contractor and your finances, you get a mish-mash of opinion and information.  You can never make a decision without effecting every other decision you have made in the past, and every other decision you will make in the future.

Some of the keys when creating a floor plan are as follows:

  • Keep everything as central as possible.  The longer runs you have for any electrical or mechanical, the more cash you will bleed.  For us, moving our main electrical panel 10 feet saved us $3,000.  So you can see that small changes can make a big difference.
  • Plan for the future, but prioritize getting to day 1.  It is important to think a couple of steps ahead here, at least that is what I have heard from other breweries, but don’t lose sight that you need to get to day 1.
  • Look to save money at every step.  Ok, maybe you are better at this than I am, but we are in full cash saving mode, and we feel like we have been for a long time.  Any chance we can save money on something, we are doing it.
  • Tasting room and Retail area.  A huge part of all these breweries starting up in Vancouver is the ability to sell your products from your business.  It takes what was once an impossible task, and makes it so much more realistic of an opportunity.  So make sure you design a space that works for your brewery.  For us we wanted something intimate, open to the brewery, and simple.
  • Work with sub trades early in the process.  You don’t have to pick who you are working with, but bouncing plans off them will give you real world answers to questions you have.  It was also help you find savings and efficiencies in your space.
  • Another dilemma on decisions.  You can have things done quickly, you can have things done for your budget, and you can have things done inline with your dreams, but at best you will get 2 of these things, but most of the time you will only get 1 of these things.  What will you pick?
  • Call the room where you mill your grains a “grain cracking room”.  Trust me on this one, it will save you a bunch of headaches at the City
  • Depending on if you are focusing on production or focusing on tasting room/retail sales, your layout may be different.  For us, we are a production brewery first, so the layout and design of the space tried to take this into account as much as possible.  Process workflow, material in and material out, future expansion are all important to us, and are reflected in our space.
  • Keep your cooler close to the tasting room.  Iain has so much experience with this kind of thing, that he is adamant that these 2 things need to be connected.  He talks about the shorter the run of lines, and being able to connect our taps to tanks instead of kegs will save us heaps of time.

What really gets us excited about our space is the connection between the tasting room and the brewery.  When you are sitting in our tasting room, you will quite literally be 10 feet away from the brewhouse.  Want to watch Iain add hops to a brew, just sit back enjoy your beer and watch from your perch.  You will also be able to have a first hand view of the barrel storage area, which we think is a really cool thing.  We also think the art gallery will add a nice connection to the local community, and we hope the growler and retail area will have good process flow so as to not back-up too much.

As I have always said, Iain is really good with this kind of thing, so if you have questions about how to lay your brewery out, feel free to contact us.  At the end of the day, follow your instincts on the way things should be.  Whether you have experience with this kind of thing or not, make sure you follow what you would want as a consumer.  You will deal with enough people along the way that aren’t into craft beer (like contractors, architects, etc) that their opinion will help to balance yours out.  Stay positive and you will find the way.

 

 

 

 

 

 

 

 

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A Crushing Day for Us ….

Well, the last 36 hours has been full of angst on behalf of both Iain and myself.  We finally received a detailed budget from our general contractor, and to put it bluntly, we are going to be way over budget on building our brewery.  It is an extremely bitter pill to swallow, especially after the increases we have made throughout this process to our budget.  At the end of the day, we are building a much larger brewery than we anticipated, and with a larger brewery comes bigger costs.

When I look back at my old copies of the business plan, I have to chuckle to myself as I once thought the retrofit of a warehouse, not including equipment, was going to cost about $400,000.  I look at that number and can’t help but think how naive I was.  That is both a good thing and a bad thing.  If I knew how much this endeavour was really going to cost I might have passed on following this particular dream.  I thought the $400,000 was enough to put up some walls, trenches, upgrade power, and put all the equipment in.  Boy was I wrong.  This was about 2012 when I was really starting to get into planning this brewery

Fast forward to late 2012, and after much encouragement from other brewery owners that I met with, we increased this amount to about $550,000.  In my mind, this was an increased of about 30% over my initial budget, and I thought this would be plenty.  But as you learn more about what is required to retrofit a warehouse, the number keeps getting chipped away.  All of a sudden, the additional money that came with a bigger budget seemed to have disappeared.

Fast forward again to early 2013, and it was time to increase the retrofit budget again.  It just seemed impossible that with tasting rooms and their pending approval, along with the realization of additional costs with most spaces, that we could retrofit a space for any less than about $650,000.  At the time, this seemed like a good number, and even included a sprinkler upgrade and water line upgrade.  We figure we would be free and clear, so we charged ahead with this number in our mind.

It was at this time we started to inquire with investors about financing our brewery.  We based many assumptions on this cost, including how much we needed to raise from angel investors.  $650,000 seemed like our golden ticket to get everything we wanted.  So we charged on and hoped that we could what we wanted for this amount.

Then in the summer of 2013 we found what would eventually become our warehouse.  It was bigger than we really needed, but it gave us an excellent location, and most importantly a great landlord that wanted a brewery in his building.  We had our architect in, a couple contractors, some sub trades, engineers, etc and they all pointed to a retrofit cost of about $725,000, depending on a lot of things, such as electrical upgrade and flooring.  I have written about these items in the past, and they were huge uncertainties with out space.  So we moved forward with a newly increased budget of about $725,000 for a retrofit.

So fast forward to this week.  We met with our architect and general contractor to discuss the quotes they have received from sub trades (like mechanical contractor, electrical contractor, concrete slab specialist, etc) and also the budget from our general contractor on all the little things that make up our brewery.  All of this information, along with our wishes and desires, was put into a spreadsheet and at the very bottom of a huge excel file, there sat what was the anticipated retrofit cost of our brewhouse.  The total estimated cost for our retrofit was (drum roll) …. $925,000. 

It is hard to put into words what was going through my mind when this was presented.  It was like someone kicked me in the stomach …. and then kicked me again.  It was awkward for our architect and our contractor, as they could see that what I had believed and what I had assumed was wrong.  I must have looked like a deer in headlights.  Even now, I am fully consumed by frustration and anger that I just can’t seem to shake.  How is it possible that I ever thought $400,000 was enough?  It just seems plain old absurd!

We are so deep into this process, so far down the road, that there is no option but to find solutions.  For starters, it is very likely that the tasting room will have picnic tables and used chairs, be lacking any real artwork and design aesthetic, and have very little “extras” that other tasting rooms might have.  We have also had to dial back a few optional pieces of equipment that we hoped to have for the brewery.  Essentially, there will be a cascade of changes that are mostly out of our control, in addition to some extra cash that we need to raise from investors.

If I could pass some information onto others, I would make note of the following costs you might be looking at:

  • Electrical Upgrade – $75,000 and up
  • Mechanical – $125,000 and up
  • Tasting Room – $50,000 and up
  • Labour costs – $100,000
  • Development and Building Permits – $10,000
  • Concrete – $25,000 and up
  • Boiler and Installation – $35,000
  • Contingency – Easy 10% of your budget
  • Architect Fees – $25,00 and up
  • Engineer Fees – $20,000 and up
  • Management Fee (from General Contractor) – Cost plus 10%
  • Epoxy Flooring – $15,000 and up

Of course there is a long list of other small items, and they have all creeped up in cost, as we have a 9,000 square foot space.

In another few months, I will be sure to post all of our business plan online, so you can see for yourself what all the details in starting a brewery are.  For now, just know that what you think things will cost, will likely double from your initial estimates.  Just hope and pray that you have way more money than you need, or at least a network of people who would be able to offer some financial support to your business.

I hope to have some answers to our dilemma early next week, and I will pass along any notes I have on how to find savings in a budget that doesn’t seem to have a lot of wiggle room.

 

Bottle vs Can for a Craft Brewery

One thing we have long struggled with is the type of packaging we are going to put our finished product in.  Speaking with other craft breweries, we are not alone in the uncertainty we face in making this decision.  I have summarized the pros and cons of each decision, and I hope at the end of the post, you can give me some feedback on what is the best in your mind.  Starting your own brewery is a great thing, but it is important to have a firm sense of what you want, and merge that with the financial and marketplace dynamics you face.  In other words, what you started out wanting may not be what you end up with.

Really there are 2 choices that you can put beer into.  Either cans or bottles.  Before I dissect each of the options, here are some general comments.  I had long thought that cans were the clear environmental choice, but a few articles haver pointed me back in the direction of uncertainty.  Click here to read one article.  So with no clear winner on the environmental side, what about taste.  I hear anecdotally that people can taste the plastic in cans.  Does this mean they don’t pour the beer out of cans into a glass (yikes).  Also there is the image.  Is the wider market really ready for high quality craft beer in cans?  I know Steamworks and Central City have their beer in cans, and by all accounts do very well, but could you imagine a much smaller player, like 33 Acres or Bridge Brewing putting their beer in cans?  Would it make a difference at all to your perception of them.

Cans:   Cans are a good option for a brewery for a variety of reasons, but there are some downsides to them, which I have tried tried to summarize below.  Essentially, there are 2 options for can sizes 355ml or 500ml.  The smaller can is more North American while the larger can has a much more European feel to it.

  1. More transportable and lighter than bottles
  2. Beer keeps better in cans than bottles
  3. Per unit cost is less expensive than bottles
  4. About 66% of all beer sold in BC is sold in cans
  5. Government liquor stores want new listings in cans
  6. Canning lines are more expensive than bottling lines and notoriously more finicky.  We have quotes for a canning line at $90,000, and the price can go sky high from there
  7. Minimum orders for cans are about $30,000
  8. You need to figure out what beer you are going to sell and then hope the market likes it, as production time for cans is much longer
  9. Image of someone drinking from a can doesn’t always conjure up quality craft beer
  10. Lead time for can orders is much longer than a bottle label order
  11. A couple different sizes of cans which completely change the look and feel of the marketing

Bottles:  On the other hand, bottles are a great option for a new brewery, as the 650ml bottle is the standard size for craft beer, and is well established in the BC marketplace.  Not unlike cans, there are both pros and cons to packaging beer in bottles.

  1. About 33% of all beer sold in BC is sold in bottles
  2. A beer bottle doesn’t put off any odd tastes, whether perceived or not
  3. A beer label allows for more colours and detailed artwork
  4. The amount of time needed for artwork and printing is much shorter than producing cans
  5. Bottling lines are less expensive than canning lines, and you can buy change-over parts to switch between bottle sizes
  6. We have quotes for bottling lines at about $60,000 and the price can go way up from there
  7. There is a much wider variety of bottles available to put beer into (all are in ml):  330, 341, 350, 500, 650, 750, 1000
  8. Government liquor stores are trying to get out of bottles, so a listing with BCLS is much harder to obtain
  9. In my opinion, a bottle of beer put out a different image than a can of beer

So you can see how we are conflicted on the decision that we are going to make.  We have flip-flopped back and forth from cans to bottles and we have really wrestled with the decision.  What would you do?  What would you want us to do?  The trouble we now have is that we can no longer waffle on this decision.  We need to place our order so that we can get our equipment in time for the launch of our brewery.

So vote here, and let me know what you think.  I would love to hear from you as well.

The End of One Dream …

How do you thank someone for the ultimate sacrifice?  OK, we aren’t talking giving up a kidney, or sacrificing their own life in the line of fire, but my amazing wife has provided me with the means to start this brewery.  Thats right, starting this brewery is taking sacrifices from more than just myself and my business partner.

Let me give you a little context.  There is nothing my wife has wanted more over the past 5 years than to build a home.  A place to have memories, raise our family and get away from the daily grind that is our life.  We both envisioned the process as an arduous one, but at the end of it, you would have a home that you helped bring together.  It was her dream, and we worked hard to make it happen.  We bought a piece of land about 3 years ago with the dream of building our home …

Let me take a further step back.  About 10 years ago, I started talking to friends and family about the dream of opening a brewery.  Thats right, this has been a 10 year process for me.  In a way I have become the definition of patience (and for anyone that knows me, this in itself is a little hard to believe, but thats another story).  For the first 4 years, it was a lot of business planning, sampling, and more planning.  The dream seemed very far away  About 6 years ago, I started to get more serious and decided to get my real estate licence, allowing me the time to get out of my full time job, and focus a little more time on my brewery, as being a Realtor allows for a healthy dose of flexibility.  I ended up parting ways with my job in 2011, and have been focusing on real estate and starting a brewery for the past 3 years.  As time has moved on, I have kept getting more and more serious.

So back to 3 years ago, when my wife and I purchased a property for developing.  We purchased knowing that my brewery dream may or may not come together (it has been 7 years that I was talking about it with no progress after all), so we just went with it, and hoped things would work out.  As you can imagine, we followed down both paths simultaneously and didn’t try to overthink much of anything.  My wife hoped that things would work out with her dream of building a house, while I hoped that things would work out with my dream of starting a craft brewery.

You can imagine where this headed.  About 6 months ago we subdivided our property and were finally in a position to think about building our dream home on one lot and selling the other.  This was a moment that we waited for about 20 months to happen, so it was a great moment for our family.  It was about the same time that things with our landlord got very serious for the brewery space.  We made an offer on our commercial space for the brewery, and we were finally in a negotiation with a landlord.  You see, we had tried unsuccessfully for 12 months to lease spaces, and never got to the point of actually being in negotiations.  The process with this landlord was going so well that we applied for a development permit (what you need to get to be allowed to produce beer … a key step to say the least) with the City of Vancouver before we had a lease in place.

Not knowing how all this would go, we continued forward with the dream of building on our property.  We continued to meet with an architect, and we moved forward house plans to the point where we were ready to build.  We just needed to sell one of the lots and we were ready to start building on the other lot.  Selling anything in the last 4 months of 2013 was difficult, especially a property like ours.

Fast forward to very early January 2014.  We finally found a dance partner for one of our properties.  This meant we could sell a property and begin building on the other.  However, it was also in January that we knew we were going to sign our lease.  So it meant my 2 worlds were colliding and we had no certainty with which to make a decision.  Essentially, do we move forward with selling only one property and hope that we can find a way to finance building a house on the other property, all the while, financing a significant part of the brewery.  If you have been following my blog, you know that I always think Cash is King, so it would be so tough to do both.

At the end of the day, after a lot of tears, arguing, and selfishness to be completely honest, my wife and I agreed to follow the dream of starting a brewery.  The time and financial burden of building a home, in addition to the time and financial burden of starting a brewery proved too much for us to handle.  So we decided to sell both halves of our property instead of just one half, allowing our family to focus on my dream, and bringing to the end another dream.

Think about it from the standpoint of my wife.  Every time I talk about the brewery, I stay up late or get out of bed early, every time we write a cheque to pay for something, every time some asks how things are coming along, and every time I come home to our rental house, my dream is at the expense of satisfaction in her life.  People ask me about the brewery and I get excited, and when people ask Deanne about building a house, she just sees my dream, at the expense of hers.  When people ask what has been the hardest thing about starting a brewery, it is this.

So, to come full circle, I hope one day to be a brewery owner and build my wife a house of her dreams.  It might be a few years before his happens, but I do plan on returning the favour to her for the sacrifices she has made for me.  I can’t think of a more selfless person, and for this I am forever indebted to her.

My amazing wife has given up her dream of building a home on our property, allowing me to start a craft brewery.  Her sacrifice is the ultimate and one that will allow me to stat a craft brewery.

My amazing wife has given up her dream of building a home on our property, allowing me to start a craft brewery. Her sacrifice is the ultimate and one that will allow me to stat a craft brewery.

I have never felt so many different kinds of stress!

One of the things about opening a brewery that you go through is STRESS!  Thats right, a word deserving of capital letters, because it is not something, when you are dreaming of this, that you think about at all.  In fact I had friends and other entrepreneurs tell me about stress, and I always dismissed it, or paid it some superficial lip service about how I was a laid back guy and it wouldn’t get to me.  Well it did get to me over the past month.

What I have realized is there are different levels of stress.  I will try and talk about each and how it relates to starting a brewery.

Instantaneous Stress:  This is the stress that comes out of nowhere, like being late for a meeting, which is very intense and lasts a very short period of time.  Often it is unexpected, and comes and goes before you even realized what the heck happened.  I don’t mind this kind of stress, as I don’t loose sleep at night thinking of how I am going to be late for a meeting the next day because of traffic or not leaving enough time to get there.

Decision stress:  As I have blogged about previously, there are heaps of decisions you need to make when you open a brewery.  Name, bottle size, engineers and architects, size of tasting room, branding, financials, company structure …. you get the idea.  Sometimes, you only have the odd decision to make, but other times you have 5 or 6 big decisions to make and they compound to make the decision even harder.  How do each of these decisions cumulatively effect your business, and will you end up with the company that you thought you would have?

Performance stress:  Ok, it might put a smile on your face, but it isn’t that kind of stress!  This is the kind of stress I feel when I think about me as an individual living up to my expectations, and those of my shareholders, and everyone else that is depending on this business to be a success.  Full stop, I worry that my performance in the day to day operations will be good enough.

Long term success stress:  This is the kind of stress that keeps you up at night.  Will I be able to make money, will I be happy, how will this business effect my personal/work life balance, and will I have any investors that want to be friends with me if this business goes bankrupt?  When you are investing thousands of hours in time, and thousands of dollars without a paycheque, failure is not an option.  I am far too old and far too deep into life to have another “learning experience.”  The only way I can cope with this stress is yoga before bed and exercise.  It seems to be the great balancer in my life, an I hope to always have time for this.

Family stress  I think we all feel this, and it goes without saying; the stress of my families well-being and happiness is more important than anything else.  I love my wife and kids too much to sacrifice their long term happiness.  How will my kids respond to me being gone 12 hours a day for the first year of this business?  How will my wife feel about the same thing?  I think the only way to deal with this is to unplug 1 full day a week, and to pick your spots when you work versus when you spend time with your loved ones.  I only hope I get the right mix!

Beer Nerd Stress:  Thats right, I said it.  I worry about how our beer will be received from the world of beer nerds.  While we are certainly going to sell our beer to everyone that wants to purchase it, I think the opinion of local and abroad beer nerds really matters to me.  I want to make beer that I would be proud to serve to those “in the know”.  Unique, unapologetic, and delicious.  I would hate my brewery to be a company that was put alongside other less than respected breweries.  It would ruin this whole process and take away from my dream to be a respected brewery.

I’ve Got Something to do:  This is the stress associated with having a deadline, and a finite amount of time to complete this task.  This stress is right up there for me.  Its like a real life episode of Chopped.  Recently I ran a couple focus groups on naming my brewery (I will blog more about this later), and the days leading up to the first focus group was intense.  It was 2 days of preparing, emailing, calling, booking, rebooking, re-emailing, buying, printing …. etc.  This is a really hard type of stress to deal with, as any escape from this stress will only put more pressure on you.

The stress of all these things …. In other words the stress of all this stress!:  The last bit of stress that comes to mind, is the stress of all these things.  Cumulatively, all these stresses can stress you out.  This is the kind of stress that can really impact you both in the short term and definitely in the long term.  The only way to deal with it is to stay positive, believe in yourself and those around you, and to make lists.  Ok, maybe there are some other ways also, but every person is different, and I am certainly one that falls into that category.

My next blog will focus on the naming contest, and the 3rd stage of that process.  I hope that we have our list of 3 names in the next couple days, and then pass this out to the world for their opinion.