OnTap Magazine

When people first hear about my podcast and my book, they wrongly assume I’m trying to convince people not to start a brewery at all. I’ll admit that I was angry when I first faced my failure when I finally walked (ok, ran) away from my brewery back in 2021. And in many of those early episodes, I still was angry. And hurt and maybe even a little depressed. But my goal today is to make the craft beer industry better and stronger and to do that I’m sharing all the nuggets and pearls I find along my journey. I believe the way to do that is to research failure and learn what is killing America’s breweries. Stare death in the face and laugh. And then to aggregate those stories to find similarities and correlations that the world can use to make craft beer better everywhere, even South Africa. Maybe after reading this, you’re a little more thoughtful about how that would look and whether it’s even a good idea. So, I hope with the lessons above, you now a little something about How NOT To Start A Damn Brewery. HOWNOTTO START A DAMN BREWERY LISTEN TO THE PODCAST https://podcasters.spotify.com/pod/show/ damnbrewery To be successful, a brewery needs to be the best bar in town. And, maybe, the next town over also. Each beer maker is locked in a death match with the bars, restaurants and other breweries and tasting rooms in their area. Any butt in any seat that isn’t in their building throwing cash over another bar is a problem. To be profitable, there needs to be enough seats to produce enough revenue during the hours a brewery produces revenue to pay more than just the bills. Run your numbers, decide how many seats you need to rack up the hourly cash you need and build your brewery around that figure. If you can’t find a building big enough then you can’t find a building profitable enough. I can’t say enough bad things about online review sites. But in my book, I gave it my best shot. Like I wrote in Mistake One, the best beers may not win in the marketplace and even online the best beers have some of the worst ratings. A brewery can’t make the mistake of choosing a lineup and designing a production schedule around what the loudest and stupidest humans are screaming about online. While hype beers are popular, they tend to be the least profitable and popularity without profit is like marriage without sex. If I’d said anything so far, I’ve said there ain’t a lot of money in beer. But there is some. There has been for centuries and someone will always make profit by making beer. But no matter what metric you use, one thing is clear: there isn’t MUCH profit. So, understanding cash flow models, how to apply them to the business and how to account for their fluctuations is one of the most important jobs every brewery owner has. Breweries need to constantly look for ways to improve revenue while actively seeking out ways to cut costs and reduce inventory. Where these cost savings and explosive sales numbers hide changes constantly and needs constant re- evaluation. Managing cash flow may be the least sexy part of the beer business but without a strong, dynamic plan to manage it, dreams become nightmares in seconds. KELLY KFM MEYER Author and host of the How Not to Start a Damn Brewery podcast BUILD A SMALL, INTIMATE TAPROOM GIVE EVERY F*?! YOU HAVE ABOUT ONLINE BEER REVIEWS DON’T FIGURE OUT HOW TO MANAGE CASH FLOW MISTAKE #8 MISTAKE #9 MISTAKE #10 Breweries typically see the producer/ distributor relationship to be a true outsourcing one. I make, you sell or something like that. And that couldn’t be further from the truth. The distributor business model requires that they have multiple brands of beer, maybe even some wine and spirits and for sure some non-alcoholic waters and energy drinks to stay profitable. By design, they don’t have the time or the money to care about any one brand more than any other brand. And, by design, if any one brewery isn’t the easiest to sell and the fastest to deplete, the distributor probably cares about them even less. Breweries have to produce and sell your beer themselves. A distributor will be happy to carry it to the retailer after it’s sold but their sales team is not an extension of the brewery. The better plan is to build a model where the brewery's sales team produces enough sales to make money. The best place to spend marketing dollars is in convincing beer drinkers to become raving, lunatic fans of the beer & the brewery. Then the distributor becomes simply labor in the chain and being a profitable brewery becomes a viable option. TRUST DISTRIBUTORS TO SELL YOUR BEER MISTAKE #7 42 | Spring 2023 | ontapmag.co.za