I hear what you are saying except they are two entirely different business models. How many people are going out to local pubs and ordering local wines? How long does it take to produce a wine as opposed to a beer? I think there are things in both industries that can be borrowed and/or copied, but at the crux of the issue they are two different business models entirely.
IMO you have a lot of pico breweries who are either going to succeed because they have great beer and great passion to work for pennies or are going to fail because, regardless of the quality of the beer the brewers are going to decide the passion is not worth the loss of freetime and weekends.
That sounds reasonable given that most of those breweries are on 15 bbl systems or smaller. Especially when you factor in how many are doing 1 bbl or less. Unless you’re a large packaging brewery, doing 500 bbl in your first year is solid. It’s well above what I’ve forecasted.
No one knows what the future will hold, but there’s a concept called “sensitivity analysis.” A static sales (or growth) forecast may make your business look profitable, but a very small difference in sales could make a big difference in whether your business is profitable. Same thing with projected growth.
Some parts of the business plan might be relatively robust, for instance it’s common for construction or plant costs to end up being much larger than anticipated, but the company is still profitable even with twice the start-up costs.
There’s no “one size fits all” solution, but I’ve seen a lot of business plans that just create one static projection of sales, and the whole thing would fall apart if they don’t hit their overly-optimistic numbers. That’s not to say you should be as conservative as possible, because risk = reward. The safest thing is to not open a brewery at all, but that’s not always the best solution.
I agree. That is why I suggested that if you want to open a pico/nano brewery to make your money somewhere else first. That way the brewery can essentially stay a hobby and not become a “job” since you aren’t relying on it for your income.
While beer sales are up, and just barely, there was a good point made at CBC this year that macro brands are losing more drinkers than craft beer is gaining. Many of them are turning back to spirits and some are venturing into alternative beverages like cider, malt beverages, etc.
And the argument that Kim, Jim, Larry, et al. are making is that their breweries, some of the largest breweries by sales volume in craft brewing, spend lots of $$ each year to not only promote their specific brands but promote craft beer in general. Some of the new small breweries are riding the coat-tails of that movement, and when they make bad beer, that negative experience blows back and impacts the big craft brewers too. And it impacts other breweries in the same local market too.
LOL. We own and operate a pico brewery. And there’s no doubt that the paperwork is a PITA. But, now that I’ve got a system down, it’s not TOO bad. But, I hear ya.
I can only speak from my experience, but I had a situation where someone was willing to give me the space and money to start a nano-brewery.
I decided mixing my hobby and work would be like mixing chocolate and crap. The crap would still be crap, but the chocolate would be a whole lot worse.
