OnTap Magazine

How many times have you heard that it starts with great beer? Sure, it does but that’s like saying that the first step to skydiving is brushing your teeth in the morning. Making great beer might be the smallest part of crafting a competitive business plan for a craft brewery in 2023. Ask your local brewery if they think they make a product far superior than macro produced beer. Of course, they do. So then why do the large-scale brewers outsell all of them combined by BILLIONS. Most breweries are started and operated by people who love beer. And for people who love beer it’s too easy to focus on investing in making your beer and the experience of drinking it better. But any dollar you spend in one area can’t then be spent in another. And marketing/ branding/promotions is where money is made, businesses are built and legacies are created. So, you really have to put more focus on making your beer make money than making your beer taste better. Efficiency and profitability have to come first or your brewery won’t last. This seems like every home brewer’s dream. Get a small, direct-fired system, create a ‘proof of concept’ and then grow with the demand for all the world-class beer you handcrafted. The problems here are three-fold. One: you can’t make world class beer on a half-assed system. At least not consistently. The technology isn’t the same. And don’t get me started on the limitations of small-scale packaging equipment. Two: butts in seats should be the most important metric to financial success. The market changed and the distribution model has no more money left in it. Breweries now have to focus on making money in their tasting rooms (see mistake eight) hour after hour, night after night. A small, intimate taproom is unprofitable and incapable of producing growth. Three: For a brewery to upgrade their equipment and move to a new building requires additional capital by the truckload. Expansion can’t be financed with a few good weekends in the tasting room. The idea that any small brewery owner is going to effectively and professionally run the brewing and the business week after week for years is just not true. The workload and brain load are just too much for one person to handle well. So, should they hire a brewer then? Most freshman brewery owners couldn’t spot a rockstar unicorn brewer in an interview because they don’t know what to look for. To have a chance, a brewery needs to hunt down a brewer with education, experience, ability to quickly solve problems. And he or she has to work for dramatically less wages than their education, experience, ability to quickly solve problems would net them in virtually any other industry. FOCUS ON QUALITY OVER MARKETING/BRANDING START SMALL AND BUILD HIRE A GUY TO MAKE BEER INSTEAD OF INVESTING IN A F*?! ING BREWER MISTAKE #1 MISTAKE #2 MISTAKE #3 The beers you choose to produce in a commercial brewery need to be commercially viable. Meaning that the cost to produce them is enough less than the price to sell them so that it creates enough revenue to justify the investment. Sure, that seems logical, but I can tell you from experience and from over 50 interviews with failed breweries that the number of breweries (large and small) losing money right now in ways that could be prevented is staggering. It is well North of 50%. Every brewery, large and small has to pick a lineup of products that they can make extremely well that will also make them money. Maybe that can be done with a triple hazy IPA or a whiskey barrel adjunct stout but, really, probably not. JUST BREW WHATEVER IS POPULAR (INSTEAD OF WHAT IS PROFITABLE) USE A MOBILE CANNER MISTAKE #4 MISTAKE #5 The entire US beer market shifted from glass to aluminum over the last 5 or 6 years. Large format bottles are virtually non-existent here at retail and only a few stragglers are riding the 12oz longneck bull. Cans are great vessel to transport beer from brewery to consumer but here’s the rub: they cost too much to produce. There are margins that you can squeeze if you’re creative and you own your own canning line. But outsourcing the canning to a third- party evaporates any profit that might have been left behind. A brewery that sells the cans in their tasting room can use the extra margin to justify the expense but no matter how creative someone gets with the accounting, owning is always better than renting with canning. Quality control is a big problem in the craft beer industry. Small breweries simply don’t have the cash or the expertise to have their own on-site lab. Or the staff to run an on- site lab. If I could pick one problem that causes themajority of the badbeer people’s palates are punished with by inexperienced brewers, it would be fermentation science. Good enough is not. Customers, retailers and especially distributors have no patience for variation. Both good and great breweries dump beer when it isn’t right. Great breweries just produce less dump-worthy batches. IF YOU F*?! UP, DON’T DUMP IT MISTAKE #6 ontapmag.co.za | Spring 2023 | 41