Something's Brewing in Mid-City

It’s back to the business plan…  Hi Y’all, we’re still making progress on the brewery.  We’re actually pretty close.  We applied for our permit with the TTB and they responded quickly.  They need several more questions answered and then we should be good to go.  We’re hopeful that we’ll get our permit soon.

We’re also close to taking possession of our building.  Once we take possession, we’ll begin the brewery build out and I’ll start posting some photographs as we make progress.  As I’ve mentioned in the past, our building is roughly 12,000 square feet and it has access from two streets with  North Bernadotte being the main entrance, this is also where the power, water and sewer tie into the building so we’re planning putting the brewery on that end.  Our engineering firm has given us a great idea on how to manage water without having to cut trench drains in the slab; it will be interesting to see how this works…  we’ll share more information soon.

I say it’s back to the business plan because we’re at the point in our startup where we’re going to be spending a lot of money.  It will be interesting to see how accurate we were when we put our rough estimation together.  For me, this will be one of the most important phases of the startup.  All of our numbers are based on a several important financial consdierations which are:

1. Salaries and wages


2. Insurance costs


3. Legal and accounting fees


4. Lease and utility deposits


5. Supplies (office and such)


6. Licenses


7. Advertising and promotions


8. Equipment freight and installation costs


9. Equipment costs


10. Raw materials


11. Utilities


12. Lease expense


13. Contingency

The closer we’re able to get to the numbers we put together in our pro forma, the more likely we’ll be financially successful and sustainable.  It’s pretty easy to get distracted on the fun stuff, like brewing beer, drinking beer, marketing beer and dreaming big but ultimately, it’s the business plan that will guide us.  This is what our investors have bought into as well as our banking partner and the SBA.

Some of our plans have changed since we originally put together the business plan and we need to update it accordingly.  In addition, Mark has been diligent about getting multiple bids for equipment and for the most part, that has worked really well.  There are a lot of suppliers out there and there are even more sales people and depending upon who you talk to an how specific you are with your specifications and requirements, the pricing can vary by as much as 100%.

And, finally, if you’re wondering about our website, we hope to have it up and running soon.  While we may be beer aficionados, we are not website builders.  This has taken more time than we expected.  That said, we’re going to keep our website to the K-I-S-S model.

Cheers for now y’all and thanks for following us.  I hope you’ll be drinking one of our tasty beers in the near future…  If I haven’t mentioned this in the past, we plan to kick off our production with two styles of beer:  a pale ale and an IPA.

Hi Y'all

I’ve been thinking about this blog and when we started we were focused on the business plan and financing and brewing great tasting beer. We’re at a totally different stage today which has caused me to reflect on the process as a whole for starting a craft brewery. No doubt, in a year, my thoughts will be extremely different again…

For those of you out there thinking about starting a craft brewery, now that we’re almost two years in planning, you need to think of the big picture and move beyond the business plan and financing but never go beyond brewing great tasting beer! The business plan was a huge tool for us and we’ll keep using it… and as far as financing goes, if you have a dream and you do your homework, the financing will fall into place. It did for us.. I hope this doesn’t sound shallow because we really worked our asses off to get where we are so perhaps it wasn’t all that easy. What really happened was people realized a few things, we’re hugely dedicated, we’re taking a big risk and Mark is a great brewer with a vision of perfection.

Here are some additional hurdles for you to consider when planning your brewery…

Finding the right location… local zoning ordinances can be a challenge. We were fortunate that Mark did an extensive amount of homework before we found our pristine location. In New Orleans there are certain areas of the City that actually exclude breweries from existing and in other areas, depending on the zoning, a conditional use permit may be required. If you need a conditional use permit, you have to have a public hearing with the City Council. The current zoning ordinances for the City of New Orleans can be found here: http://www.nola.gov/city-planning/current-comprehensive-zoning-ordinance/.

So, you’ve done your homework on zoning ordinances and now you’re on the hunt for the perfect building. Are you going to rent or buy? For us, we opted to rent based on not wanting to tie up cash in the purchase of a property. Bank financed commercial property requires a 20% down payment. We did find a 5,000 square foot warehouse that we considered but making a substantial down payment with negative cash flow was not for us.

Gross lease of triple net lease – you should do your homework and determine what you can afford. With the triple net lease, you are on the hook for all of the maintenance, insurance and property taxes for the building. A commercial realtor will also have a hefty fees associated with your service and then of course, you’ll need your legal team to review any lease agreement before you sign on the dotted line.

Ok, so like us, you’ve found the perfect spot… what’s next. Well, what’s next is bringing the building up to snuff for opening a craft brewery. That is no simple task… will the concrete support the weight of the tanks, does the building a have a sprinkler system (required), does your space have enough parking spots? Are you planning on a tap room? I certainly hope so and if that is the case, is the property ADA compliant? Where are you going to place your boiler and CO2 tank?? Do you need an RO water filter and what about storage for all of your cooperage? How are trucks going to make deliveries and pick up your product? The list goes on and on… for us, we’ve decided to use an engineering firm to help us with these requirements. In addition, the folks who we bought our brewhouse from have also made some recommendations based on the footprint of our building. All the while, all of these folks answering your questions providing you with an invaluable service are expensive. You need to ensure you have enough cash and have budgeted enough to help you get your building up to code requirements. Oh, and in the meantime, don’t forget you have to continue to work on your beer recipes!

That said, we’re hoping to get our ducks in a row in the next month or two with production prior to December 31st! Feel free to contact us if you have any questions.

Cheers to that y’all,

Karen

PS - Steve Edwards, come for a visit!

"Cheers to that" Senator Lisa Murkowski

Hi Hop Lovers,



Here is some food for thought that I borrowed from Alaska's Senator Lisa Murkowski on the craft beer industry in Alaska:



"Happy National Beer Day! Here are some fun beer facts:
Alaska’s 24 breweries produce 323 different beers.
Alaska ranks 4th among the states in terms of breweries per capita and 17th nationally in terms of beer production.
Our beer industry employs over 1,000 Alaskans and generates $150 million.
From Healy to Homer, from Fox to Skagway, Alaska’s brewing companies are a key component of our economies, communities and culture. They’re also a point of local pride. Cheers to that!"



Now, who do I call first?  David Vitter or Mary Landrieu?



Cheers y'all and happy Tuesday.
Karen

What does it take to start a Brewery?

[caption id="attachment_142" align="alignnone" width="225"] http://www.blackberryfarm.com/brewery/landing[/caption]

Well, those were our thoughts several months ago.  We’ve been figuring it out one day at a time.  Outside of financing and good beer, it takes a management team and that is what we’ve been focused on for the last few weeks.  Here’s what we’ve come up – Chief Operating Officer (aka The Toots), Chief Executive Officer (aka the Grand Mistress), Brewmaster (aka Parade King) and finally Chief Spiritual Officer (aka Cardinal Beer Goddess).   No doubt there will be others such as Chief Safety Officer (aka Save the Day) and Human Resources Director (aka Hugs-a-Lot).

We’re assembling the team and working out the legalese and that my friends takes time.

On the personal front, I was traveling last week and had the chance to taste some great beer.  I had the Great Divide IPA while I was in Colorado and Tennessee’s Blackberry Farm - Farm Ale.  Both were delicious.  I had hoped to get a tour of Blackberry Farm’s brewhouse but it was all work and no play…  insert sad face here.

Well y’all, its another Friday and TGIF!  Please support your local craft beer company and drink some tasty craft beer.  And of course, leave fat tips for the servers!

Cheers for now,

The Grand Mistress

Less than 24 Hours to Go on the Business Plan

Hi Y'all,

It's been a busy few weeks... part of the course at Oregon State was a business plan competition. The winner of the competition gets to spend two weeks working as a paid intern at the Ninkasi Brewery. Now this is a true prize for someone who is interested in starting a production brewery.

We have to submit our plan by 11 a.m. tomorrow morning and to tell you the truth, I'm quite impressed with ours. We've run our numbers and it looks as though we'll be profitable at the end of year 2! Now that's something to cheers to... Hopefully our friends, fools and family will think the same and have interest in investing in our dream of running a production craft brewery.

We'll keep you posted on our success of lack there of. Other exciting news is we've filed our LLC paperwork and we're working on a logo with a graphic design firm in NOLA.

When our logo is done, we'll be sure to share - perhaps some of you might want to comment.

Cheers for now and happy Friday,

Karen

Sustainability and Responsibility

 

Greetings all!

Well just received our syllabus for the Craft Brewery Start-up Workshop in Bend, Ore. on September 9^th.   It was refreshing to see that along with many of the typical topics one would assume would be discussed (e.g. finance, operations, logistics) was  sustainability.  Given that there are, at last count, 2,483 microbreweries in the United States, sustainability is a clearly a topic that all current and future microbrewery owners need to address.

Many of the larger microbrewers have already taken steps towards sustainability and beyond.  New Belgium, for example, approaches sustainability from the perspective of core company values, environmental metrics, sourcing and community.  Similarly, Sierra Nevada has had a long commitment to supporting the cause of sustainability and has a very extensive webpage detailing the steps that they are taking to continually improve their processes, energy efficiency/generation and minimize waste.

All along we’ve been considering how we can make our brewery, even in the start-up phase, more consistent with the tenets of sustainability; it will be interesting to hear how others are tackling this problem as start-up microbreweries.

 

Switching from sustainability to responsibility, the New York Times today featured the results of a small study out of Johns Hopkins which found that five beer brands were prevalent among emergency room patients who had consumed beer within the 6 hours prior to their presentation to the emergency room (Budweiser, Steel Reserve, Colt 45, Bud Ice, and Bud Light).  Moreover, nearly 46% of beer consumed by emergency room patients in this study was accounted for by four malt liquors (Steel Reserve – 8.1% ABV, Colt 45 – 6% ABV, Bud Ice – 5.5% ABV and King Cobra – 6% ABV), despite the fact that these four accounted for less than 2 percent of the beer consumed among Americans.

While things like study size, study location, demographics, etc make it difficult to interpret the implications of this study, the authors did suggest these results suggest that there should be better labeling on malt liquor beverages and less marketing. They also recommend a higher tax on beverages with higher alcohol content to discourage people from drinking more potent brands.

With many craft beers in the 6.5 – 7.5% ABV range, changes such as those suggested by the researchers conducting the above study, could have a significant impact on craft beer producers.  Consequently, like sustainability, responsibility and education are major considerations in the development of our business plan.

With the old adage, “all work and no play” in mind, it’s time to start brewing again.  Our recent first tap gathering has depleted our stores of tasty homebrew, with our robust porter being the latest victim.

The last of our experimental IPA batches (with single aromatic hops) is about to come out of the fermentor and will be transferred to a keg for dry hopping later this week.  While we wait for it to mature we are beginning work on a “sessionable” IPA recipe.  Our first attempt will draw from the taste profiles of our single aromatic hop IPA’s to date; can’t wait to get back to brewing.

More to come.

First Tap

Was able to try a few of our new beers out on friends last night and it was a resounding success.  We used a standardized beer tasting questionnaire from Beerology in the hopes of gathering helpful feedback for the next batches.  There was some great comments and all positive reviews.  Next time we’ll do a blind comparison with a “gold standard” of that particular style as the comparator. 

Our two latest beers are an American pale ale and a Cascade IPA.  The latter is part of an IPA series we’re doing featuring a single aromatic hop.  Our thoughts are to appreciate the taste of these aromatic hops solo before putting them together for a more complex flavor profile.  

In the meantime, we are working away on our business plan and have begun to talk to banks about financing.  Last week we were able to obtain the particulars for the Pegas Craft Tap and Novotap growler filling system (http://pegasdistusa.com/pegas-novotap/).  We first became acquainted with this system when we were in Russia a few years ago.  It’s a great system that allows a growler (both glass and plastic) to be filled under an atmosphere of carbon dioxide in about a minute with minimal waste (the Pegas distributor website states growler loss is as high as 30-40%).  The benefits for the consumer is that the beer tastes better longer and with the use of polyethylene two liter bottles it can be transported to the beach, fish camp, or camping without worrying about dealing with a large glass growler.  For the craft brewer  the benefit is that the quality of the beer will be preserved and there is a minimal amount of product loss due to foam over, etc.  

There are still some issues obtaining the brown polyethylene bottles (necessary to prevent UV damage to the beer) in the US but we have some ideas for a work around to this issue that will also tie in with our marketing plan.   

[caption id="attachment_83" align="aligncenter" width="130"] Pegas Craftap[/caption]

In the meantime we continue to brew.  Today we brewed another of our IPA series.  This one features Ahtanum.  Ahtanum has a decidedly floral presence with some spice and a bit of pine thrown in for good measure.  It isn’t nearly as popular as Amarillo, Centennial or Cascade for dry hopping and its aromatic properties but from what we could tell from today’s batch, it’s a tasty little hop. 

More to come.

Where Y'at?

It’s been awhile since I’ve posted.  We’re currently under the gun to get our business plan in order so we can present it at the Oregon State University’s short course on how to open a brewery.  We head to Bend, Oregon the week of September 9^th to get educated by the professionals from the Ninkasi Brewery.

So outside of the business plan you may wonder what we’ve been up to…  well let’s see…  we’ve fallen in love with session beer.  The winter weight gain has been pretty hard on me and I have to consider that outside of not exercising as much because it’s cold and dark, a contributing factor could be my love of IPAs!  So, I’m trying to wrangle the weight down before the snow hits the ground again.

Outside of drinking session beer, we’ve toured a few Alaskan breweries.  The folks at King Street and Midnight Sun Brewery gave us impromptu tours…  all we did was ask a few questions and the brewers were happy to show us their ‘kit’.  We also had a chance to stop in Denali Brewery.  We didn’t go to their production brewery but we did visit their brew pub.  Their business is on the rise.

I’ve begun to read the Louisiana Office of Alcohol and Tobacco Control’s website trying to understand what it takes to open a brewery.  Hurdle number 1 – we have to have a location prior to applying for a permit so I guess that means I need to contact Stacy Head, Council Woman at Large in New Orleans to try and figure out what we need to look for in a location.  Now, here’s the million dollar question – do we lease or own the property?  I’m in agreement with Mark, we purchase the property and locate the brewery on our on ground!



More to come y’all!

The Love of the Centrifuge

Centrifuge is where it’s at! Who needs a bright tank when you have a centrifuge? Mark and I went to Midnight Sun’s tap room yesterday and we were lucky enough to get a quick tour of their brewery. They have discovered the centrifuge. It’s an expensive piece of kit but well worth the money.

More to come…

Karen

Brewery Business Plan Update

And I’m back. Hi y’all, it’s been awhile since I’ve posted. This Alaskan summer is unbelievably beautiful. According to our neighbors it’s the best summer since the 1970s. All of this good weather makes it hard to focus on a business plan at the computer… but we do continue to brew tasty beer and hold first taps in our garage.

Yesterday I ran over to King Street Brewery to return a keg of their pilsner – which is the best I’ve had, I might add and spoke with one of their brewers and got a bit of market intelligence. Their brewery is 10 barrels and they have 20 and 40 barrel fermentation tanks and a 20 barrel bright tank and a 40 barrel bright tank. Such a great brewery I think an expansion will be in the works soon.

Back to the business plan, we’ve just about completed our executive summary and are now working on the financial section to include break even analysis. Based upon the numbers I’ve run we should breakeven in Production Year 2 at about 25,000 barrels. I’ll need to test this with multiple people to ensure I haven’t overlooked something. I’ve also been on the lookout for a decent piece of commercial property and have landed on paying $4.50 per square foot per year for lease space… now, I just need to understand what a ‘triple net lease’ means. Ah, more research…

Our goal is to have the business plan complete by the time we head to lovely Bend, Oregon for Oregon State’s “How to Start a Brewery” course in September. Once we get through that course, I hope to send the business plan to a couple of business schools and have some of their MBA students review and provide feedback. We shall see if we are going to make it a viable business before we start marketing our shares.

In the meantime, Mark’s beer is getting better and better and we’re getting close to our IPA recipe and I believe we’ve landed on a wheat – it may be the best I’ve tasted.

We’re headed to a tap room this afternoon for some more market intelligence and to enjoy some great craft beer. More to come y’all.

Cheers,

Karen

Creating a Business Plan

I’m glad to be home from The Netherlands.  Heineken is definitely king in The Netherlands and served everywhere in The Hague.  While I was there, I noticed the second most available beer was Palm which is brewed in Belgium and is a pale ale.  Hmmm….  Perhaps the Dutch can use an introduction to an North American style IPA.

We are plugging along on our business plan.  The beverage industry is quite larger than I thought and beer is a huge player in the market.  Louisiana ranks 11^th in beer consumption but 47^th in breweries per capita.  I think it’s time for a change.

 

While I was gone, we received a quote for our brewery from Allied Beverage Tanks, Inc.  While Mark and his nephew are brewing a batch of IPA, I’m in the office trying to understand the ins and outs of this very detailed quote.

 

More to come.

Cheer for now,

Karen

 

Fermenter Build

So while Karen is away I thought I'd add a "gear" post. In the past I've had issues with controlling fermentation temperatures using only ambient conditions.  It's also a bit of a pain to be lugging 6.5 gallon glass carboys filled with fermenting beer around the house trying to find a room that's 68F.  To remedy this situation I've acquired a used refrigerator, for free, via Craigslist.

The side-by-side arrangement is very amenable to being converted to a fermentation chamber. Until recently, I've been able to use it as a fermenter with any significant modification.  All the wiring for the electrics/thermistor were passed easily through the existing drain after enlarging it with a 1.5" drill bit.

With the arrival of our Braumeister 50L, our brewing capacity has increased substantially.  Naturally, the next bottle neck will be the fermentation process. So last weekend I finally set about the task of further modifying my used fridge as a fermenter.

After surveying the interior to determine whether or not any necessary parts were in the way, I let loose with the sawzall.  Once the partition wall was removed, the exposed sheet metal edges and insulation were covered with some aluminum duct tape.  The shelving, with a removable top shelve was built in place.

I'm using a dual-stage Johnson Controls temperature controller to keep the fermenter at the appropriate temperature.  For the heating component a 75 watt incandescent light bulb, from a inexpensive drop light placed in a paint, acts as my heat source.  To keep the air circulating, two USB computer fans attached to the legs to the shelve were used.



While using a thermowell immersed in the carboy will provide the best representation of the actual fermentation temperatures, I find that the stopper used for a thermowell set-up isn't always sufficient for an airlock/blow-off.  A majority of the time I use a 2-3L yeast starter and the fermentations tend to be quite vigorous; so much so that they generally require a 1" blow-off tube/bucket arrangement.  For lack of a better solution, I normally attach the thermistor to the side of the carboy encased in insulation.

So now that the fermenter is finished it's time to brew.  Unfortunately, the short malt stack adapter that allows you to brew 20L batches in the 50L Braumeister was on backorder from Morebeer.com.  While I was able to find one on another website (and at a savings of $75 including shipping), we have to decide whether or not the first batch on the Braumeister should be a big one or not.

There's still some time before the weekend to decide and besides I need to check out the availability of supplies at the local brew store before pulling the trigger.  In the meantime I'll start familiarizing myself with the Braumeister's controls and post some photos of the test run shortly.

In the meantime, please raise your glass, of homebrew or craft beer preferably, to the state of Alabama.  As of May 9th, it is now legal to homebrew in Alabama making it the 50th state to adopt such legislation.

Cheers,

Mark

Education is the Key to Success!

Mark and I have signed up to take a course at Oregon State University; the course is focused on brewery startups.  The class is being held in Bend (another huge benefit of taking the class)!

The person who arrives with the best business plan wins a two week paid internship at the Ninkasi  Brewing Company.  That’s all I need to hear, competition.  We’ve been plugging away on our business plan.  Thus far, we’ve completed the Executive Summary,  written a ton of information on the US beer market and now we’re working the financials.

 

There are some brewery friendly states out there and turns out, Louisiana is not so friendly.  I need to call the two Senators and complain.  While I’m ok with the three tier distribution, I want to be able to sell my kegs, growlers, cans and bottles retail out of our very own tap room.  I hear a rumor that change was in the works; however, I haven’t seen this in writing.  I was in Houston a few weeks ago and there are craft breweries popping up all over in the state.  One thing I love about Texas is how pro-business the state is…

 

I’m heading to The Netherlands tomorrow.  I think a tour of Heineken is in order…  Perhaps their beer is a bit more tasty and fresher when consumed on their property.

 

More to come,

Karen