The Perils of Opening a Brewery

By Greig McGill

“Living the dream, mate!”

That’s got to be the most common phrase said to me since I took the plunge, left my job in IT, and shifted Brewaucracy from an expensive part-time contract brewing hobby to a full-time, holy-crap-this-is-terrifying monster of stainless steel and debt. Don’t get me wrong, I’m not complaining. I needed to do something other than IT for the sake of my mental health, and while I remain firmly of the opinion that New Zealand in general doesn’t really need any more breweries, I think there are still localities that are under-served. Hamilton was most definitely one of these, so here I am. The Brewshop team have asked me to break with tradition a bit and write about some of the challenges to be had in moving from home brewing to a commercial entity.  This will be a bit stream-of-consciousness, so here we go!

One of the first things to consider when opening a brewery is the state of the market right now. I’ll be blunt; it’s in a weird place! After all the hard work done by the likes of SOBA, and beer writers like Geoff Griggs and Michael Donaldson, to educate the consumer about the broad range of beer styles available, a great dumbing down seems to be in progress. That might sound snobby, and I guess it is a little. I’ll own it. But honestly, we used to live in a world of pale and indistinguishable lagers, and sweet and indistinguishable NZ draughts. Many people did a lot of work to ensure there were vast numbers of beer styles available. And now, in 2018, it feels like we once again live in a world of just two or three styles, all pale and hoppy, and once again bordering on indistinguishable. That’s the market you’re entering as a brewer. So, the first thing to think about, if you’re wanting to go from homebrewing to a commercial brewery, is will you go with that trend, or against it? If you go with it, what on earth will make your particular IPA stand out amongst the hundreds of others on the market? What will be your voice? Why does the market need you?

Let’s say you’ve solved that problem. You have a business plan identifying the niche you will inhabit in the crowded market. You know how much beer you will need to produce and you have a sales and marketing strategy to move it in order to pay off your debt, meet your monthly bills, pay any staff, and generate some semblance of a living. I promise you’ve missed some stuff, but we all do! One of the biggest challenges I had was trying to find a commercial building in Hamilton, of the spec we needed, at a time when there were simply none to be had. There were plenty of random buildings around, but few had the layout, the high ceilings, the access to three-phase power, and a landlord willing to let us pour a serious concrete draining floor!

It pays to engage a top-notch sparky from day one. We were very lucky to have the brother-in-law of one of our shareholders (and an old mate in his own right) available to spec out the loading requirements. There’s always a lot more power used than you think you need, and even now, there are still things we simply can’t run at the same time without getting an expensive pole-fuse upgrade on the street.

Similarly, you will want a great plumber. Ideally they will also be a gasfitter, if you’re going with gas for your kettle and HLT heating. General knowledge of glycol systems and some refrigeration knowledge is also a plus! You’ll also want a refrigeration firm to look after your cool store, and your extraction and ventilation needs.

You may be happy project-managing the operation yourself. I made do with a combination of our builder and architect, with just enough of me sticking my nose in to drive everyone crazy! If I ever did this again, I’d certainly engage a project manager up front. Experience managing IT project teams was simply not translatable to this!

Once you’ve got your team of professionals ready to help build your dream, there’s the small matter of your local fun police. They often go by names containing “city council” or “regional council”. I don’t know how it is in other parts of New Zealand, but let’s just say that Hamilton’s local council are pretty much the least business friendly bunch I’ve ever had the misfortune to meet. They are seat-warmers of the highest order. Should the HCC building ever explode, productivity across the city would increase massively. Here’s hoping your local body are a little more helpful. In any case, you will need them for compliance in the areas of; wastewater, noise, emissions, RMA administration, contaminated land testing/verification, fire safety, accessibility, parking, liquor licensing, food safety, and anything else they can find to stick their noses into and prevent you from getting anything done. I might sound bitter, but they really are that terrible! Not only will this cost you a lot of money, it will also cost you a lot of time. They do not move swiftly. Be prepared for this.

Sourcing your equipment is challenging. It is worth spending a lot of time up front figuring out exactly what you want, and also what compromises you are prepared to make. People often think about the obvious things like MLT, Kettle, HLT, CLT (if desired), fermenters, and brite tanks. They often forget things like malt mills, keg washers/fillers, an augur to get the grain to the MLT, soft or hard piping, pumps, hoses, yeast propagation systems, control systems for heating and cooling, and methods for storing and moving kegs, grain, hops, etc. around the brewery. All these things need thought, and budget items associated with them. Once you have a good idea of what you want, there are many suppliers available in NZ and around the world to help build your brewery. You’re only limited by the old cost vs. quality vs. time problem!

Once you’re up and running (hopefully with a taproom to make some margin on your beer, since relying on just keg or bottle sales in this current age is pretty much madness), you’ll need a good system for managing your obligations regarding excise tax. You’ll also need good methods for forecasting sales, and thus production planning, and yeast management. I highly recommend building a beer portfolio that relies on as few yeast strains as possible, and implementing a small laboratory in order to manage your yeast health. Yeast makes beer! We need to look after it well.

Another thing many homebrewers simply don’t realise is that brewing ingredients, particularly hops, are finite and subject to the whims of supply and demand. If you design all your recipes to feature hops that are currently trendy, or likely to become so, then you had better be prepared to shell out big time for forward-contracts on those hops to guarantee supply. Even then, shortages happen, and you might not even get the hops you’ve paid to secure. Trends are in danger of killing this industry, and a smart brewer will strive to do their own thing and not just jump on every bandwagon going for a few quick sales.

Now you’re making beer, and hopefully selling enough to keep your head above water, you’ll want to prepare for very VERY long days, and all seven of them. Forget time off, and try very hard not to get sick. For every day of brewing, there are at least two days of cleaning, sanitising, packaging, and yeast maintenance. Not to mention the record keeping associated with any business. You’ll probably also want to make some time for sales and marketing so that your beer keeps selling after you’re no longer new and shiny!

If you’ve got this far, and you still think you might want to open a brewery, congratulations. You are truly “one of us”. Beer runs in your blood, and you’ll not be happy until it’s your life as well as your hobby. If, on the other hand, you’re thinking “oh no, I didn’t think it’d be that hard, I don’t think I want to do that”, then you know what? Good on you! You get to remain a homebrewer. You get to make beer for the sheer love of it. You get to use any old hops you like, because you can get them in the quantities you need. You get to play with obscure yeasts, fermentation techniques, and aging plans secure in the knowledge that you never need to sell a drop and if you have to dump a batch of beer, you still get to eat!

Why am I doing this again???

Cheers!

Greig McGill
Mashmaster General
Brewaucracy
Hamilton, New Zealand