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MicroBrewr 083: Market branding for a cider company with Common Cider Company.

MicroBrewr 083: Market branding for a cider company

Fran Toves’ son challenged her to enter cider into the homebrew competition. After her 3 entries made it to the top 10, she figured it time to take the product to market and started Common Cider Company in Drytown, California.

“There is no need to start a cider company with a million dollars.” [Tweet This]

 

Cider is not brewed the way beer is made, but similar fermentation tanks and bright tanks are used for making cider as making beer. After the initial attention at the homebrew competition, Common Cider Company started with a 400-gallon (13-BBL) test batch that got picked up by a distributor. They grew to 30,000-gallon (1,000-BBL) batches within a couple years.

Whereas a cidery or a cider house presses the fruit themselves to make juice, a cider company buys the juice pre-squeezed. A cider usually has a base of apple juice, but it can start with other fruits. A perry is made from pear juice.

“Cider as a base,” says Fran, “is a great platform to be able to introduce new flavors.”

Fran’s background in product development for the organic food industry is helping her with Common Cider Company. She emphasizes the importance of branding.

Fran says a small company can easily spend $50,000 to $100,000 on high-quality branding design for all promotional materials. With such a significant investment, it is very important to consider your message and what your company is about. If you want to take more time to learn about your customers and find your voice in the market place, just get simple logo at first. Then budget up to $100,000 for a re-branding.

That’s the route Fran planned for Common Cider Company. “I wanted to spend some time with our customers an just spend some time in the marketplace,” she says. “before investing in the brand.”

Sample Cider Packaging

Common Cider Company packaging cans Common Cider Company packaging cans 4-pack Common Cider Company packaging bottle Common Cider Company packaging bottle

They’re keeping a logo element from the original design scheme and hiring a branding firm to re-design their message. The results have been spectacular and you can expect to see more on store shelves soon!

Fran also has tips for the today’s listener question about budgeting and profit projections:

  • Decide where you are and where you want to be.
  • Put a budget for every core area including, branding, legal fees, sales staff, materials, and all other details.
  • Decide what you can spend on each category of your budget.
  • Use checklists so you don’t miss details.

“Your suppliers will give you pretty good information as far as what your cost of juice is and your yeast and any other adjuncts that you want to add to your product,” Fran suggests. “And that goes from your raw material to your packaging.”

As for projecting profits, Fran always advises starting with small batches. She suggests 500-gallon batches or 1,000-gallon batches at the most. Any larger, and you’ll have too much money tied up in product and it will take too long to sell.

After you sell a few batches to earn some money and build demand, then you start doing larger batches.

“It’s important to start small,” Fran advises. “Just like any business, you’ve gotta kind of walk before you can run.”

Listener question:

From Texas Rüegg: Where  do you find real accurate numbers to estimate cost of operation? I keep building spreadsheets with hundreds of calculations, but at best they are just guesses. I want to be conservative with my numbers and be sure that even the worst case will actually make money. So where do you find real data?

Can’t-go-without tool:

Pump.

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Dry ciders

Other resources:

You can reach Fran Toves and Common Cider Company at:

Sponsors:

Audible

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Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 080: Brewing the American Dream winner for 2015 with ChuckAlek Independent Brewers.

MicroBrewr 080: Brewing the American Dream winner for 2015

A friend asked Marta Jankowska and her husband whether they wanted to use his warehouse space and go pro with their brewing. The warehouse space fell through, but they were far along in the process, so they decided to go for it and opened ChuckAlek Independent Brewers in Ramona, California.

“Your time is so much more valuable actually planning on how to grow the business.” [Tweet This]

 

“Even though that original space fell through,” says Marta, “we were already so far along in planning that we just decided to go for it.”

They had run the financials, lined up some money from friends and family, and were ready to go. They just needed space.

They found the permitting requirements in the City of San Diego to be cumbersome and expensive, so they finally settled in Ramona, a little town in San Diego County wine country.

“More importantly,” Ramona explains, “we never wanted to be a warehouse brewery. We always wanted to be kind of a main street brewery. Something that was integrated in with community and surrounded by other storefronts.”

By chance, Marta was a tennis partner with one of the founders of Stone Brewing. He told her that over a hundred breweries were starting or being planned for opening in San Diego.

“How are you going to differentiate yourself?” he asked Marta. “The way that I see a brewery doing well in this town is having a really solid background story and a really solid concept. You need to come up with something that has a compelling story that you can tell to the consumer.”

To come up with a compelling story, Marta suggests you think about:

  • What you want the brewery to encompass
  • What message you want to communicate to the consumers

“A flashy label will get you that fist glimpse from a consumer,” she says. “But people are finicky these days, they’re not super brand loyal, they’re not going to remember something unless it really stands out in their brain, or you give them that nugget that they’re really able to hang onto.”

ChuckAlek has gotten some notoriety this year by being selected as the 2015 recipient of Samuel Adams Brewing the American Dream “experienceship.” They beat out others for apprenticeship, partner brew with Sam Adams, and a trip to Germany with Pink Boots Society.

Other tips from Marta:

  • Set aside time to plan for the growth of the business during the next few years.
  • Enroll yourself in a business mentorship program.
  • Start with the barebones, just to get off the ground. Then buy more equipment when you have the disposable income.
  • Build a nest egg for repairs and other unexpected expenditures.

Marta’s suggested software systems for a startup nanobrewery:

Brewery specs:

Kettle size: 1 BBL.

Size and quantity of fermentation tanks: 6, 3-BBL plastics; 1, 2-BBL stainless; 1, 4-BBL stainless; 1, 5-BBL stainless.

Size and quantity of bright tanks: 1, 5-BBL.

Annual brewing capacity/last year’s production: 250 BBL. This year on track to be at about 400 BBL.

Square footage: 1,700 sq. ft.

Years in operation: 2.5 years (opened January 2013).

Listener question:

From Grant Aguinaldo: What software systems do you use to manage your brewery?

Can’t-go-without tool:

Brite Tanks.

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Lager

Other resources:

You can reach Marta Jankowska and ChuckAlek Independent Brewers at:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 071: Four years from brewing school to brewmaster with Capital Brewery.

MicroBrewr 071: Four years from brewing school to brewmaster

Ashley Kinart began homebrewing to learn about the brew process so she could better answer customer questions at the craft beer bar where she worked. She eventually realized that it really interested her, so she enrolled in the World Brewing Academy at Siebel Institute of Technology. Four years later she became the brewmaster at Capital Brewery, in Middleton, Wisconsin.

Although Ashley is happy about her “quick rise to the top,” she says she would have liked to get more experience in every part of the brewery operations.

“I definitely would have liked to spend a little more time in cellaring, a little more time in packaging,” says Ashley, “to just have that full-scale overall understanding on every single little level.”

Prior to brewing school, Ashley attained a bachelor’s degree in biology. She says the science helped her better understand the material from brewing school.

“My science background definitely gets me a little excited about the small things like the microscopic happenings that are going on behind every step of the brewing process.”

Other suggestions from Ashley:

  • Start volunteering to get experience at a commercial brewery.
  • Do the best you can and work as hard as you can.
  • Don’t be afraid to ask questions of other people in the industry.

Most of all, actively seek knowledge.

“Being called a brewmaster was something that I not only didn’t see myself as, but also I don’t ever see myself knowing everything there is to know about brewing, which is why it really interests me.”

Brewery specs:

Kettle size: 35 BBL.

Size and quantity of fermentation tanks: 30 tanks ranging from 32-BBL to 161-BBL. Six are dedicated to lagering/aging.

Size and quantity of bright tanks: Three tanks ranging from 100-BBL to 129-BBL.

Annual brewing capacity/last year’s production: About 30,000.

Square footage:

Years in operation: 29 years.

“How much of your brewing knowledge are you actively seeking?” [Tweet This]

 

Listener question:

From Harold Giménez: What are your favorite beers? Who are your brewing influences?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Lagers

Other resources:

  • World Brewing Academy, Siebel Institute of Technology (Chicago, U.S.A.) and Doemens Academy (Munich, Germany)
  • Females Enjoying Microbrews.
  • Pink Boots Society to empower women beer professionals to advance their careers in the beer industry through education.
  • Brew Masters, Discovery Channel.

You can reach Ashley Kinart and Capital Brewery at:

Ashley’s social media:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 067: How to find investors for a brewery with Jenny Kassan.

MicroBrewr 067: How to find investors for a brewery

UPDATE: Mistakes and clarifications have been corrected, per Jenny Kassan.

You planned the brewery of your dreams. You researched the market and you know it will be profitable. But you don’t have a million dollars under your pillow to start it. Now how to find investors for a brewery?

Jenny Kassan, an attorney and consultant in Oakland, California, graduated from Yale law and worked for 11 years helping to build really small businesses. For the last 9 years she worked in securities law, “the very highly regulated world of raising money for a business.” Now she does consulting and teaches classes on how to raise funds for businesses.

As soon as you ask someone to invest in your brewery, you’re conducting a “security offering,” which is regulated by the U.S. Securities and Exchange Commission (SEC), as well as the securities regulators in each state where you offer the investment.

“Even if the regulators don’t catch you and fine you, you have created this liability for your company,” cautions Jenny. “If, for example, one of your investors was unhappy later and wanted their money back because you couldn’t afford to pay them or something, they could complain. And then it would be uncovered that you never did comply with those laws. And they would have a pretty good case against you.”

First, some background info.

There are generally 2 kinds of investments:

  1. Equity – ownership in the company
  2. Debt (loan) – must be paid back

There are 2 kinds of investors:

  1. Accredited investor – A person with a net worth of $1 million (excluding his or her primary residence) or annual income of $200,000, or an entity with $5 million in assets.
  2. Unaccredited investor

If you offer a security only to accredited investors, the legal compliance hurdles are generally fewer. However, there are legal ways to include both kinds of investors in your offering.

 

Until you have ensured that your offering is legally compliant, don’t solicit investors directly. Also don’t advertise your offering publicly unless you have done the legal compliance that allows advertising. At this point, don’t solicit investors directly, just ask general questions.

Anything other than one-on-one communication is considered advertising, which is regulated by the SEC.

“Have some informal conversations with potential investors,” Jenny instructs, “and say, ‘I’m thinking about raising some money—I’m not doing it now, but I’m thinking about.’”

Then ask general “if scenarios.” For example, “If I were to offer an investment opportunity in my brewery:”

  • Would you be more interested in equity or debt?
  • How would you expect to get paid back?
  • How long would you be willing to have your money tied up?
  • What kind of perks would you want?

The laws are flexible enough that you can design your investment agreement in lots of different ways.

“There’s a lot of kinds of equity that can look a lot like debt,” says Jenny. “There’s also debt that can look more like equity, where the payment that you make to your investor can vary based on the success of the company.”

After both parties come to agreement, they each need to talk with an attorney to make sure their desired agreement is legally compliant.

Most investments require some kinds of securities filing at the state or federal level or both.

After you figure what you’re willing to offer, you might be ready to conduct an offering. Talk to an attorney to help you do the necessary filings.

Direct Public Offerings

If you want to do a Direct Public Offering which allows you to do public advertising and include unlimited number of both accredited and unaccredited investors, you may need to file a Form D with the SEC and register with your state regulators. The filing requires attachments such as:

  • “Prospectus”
    • Risks
    • Business Plan
    • Description of management team and qualifications
    • Anything investors would need to help them make a decision
  • Sample security to be offered
  • Organizational documents for the company
  • etc.

The filing fee can range from a few hundred to a couple thousand dollars. Legal fees usually range from $15,000 – $30,000. It sounds like a lot, but if you’re opening a million dollar brewery, it’s a worthy 3% of the overall budget.

“I think it’s possible to do without an attorney,” speculates Jenny. “It’s certainly not the best strategy. It may take you twice as long and it may be a nightmare, but you should be able to get through the process.”

If you go at it without an attorney, remember that the regulators are there to help. So work with them, respond to all of their questions, and make their requested changes.

Once you get approval from the regulators for your Direct Public Offering, now find money!

Advertise your offering:

  • Talk to media
  • Get in the newspaper
  • Put it on your website
  • Send mass emails
  • Host parties and events
  • “Set up a million meetings”

Have your investor packet ready for when people want to know more.

“The best thing to think about,” says Jenny, “is to put yourself in their shoes and ask yourself, ‘What is everything I would want to know if I were them, before making a decision?’”

Include anything to help them make a decision, even the risks.

“If they find out later that you didn’t disclose something that was material to their decision,” cautions Jenny, “they could sue you and say you misrepresented what the opportunity was.”

Vet your investors

Another important thing is to make sure each investor is a good fit.

“You don’t want to accept the first investor that says ‘yes,’” cautions Jenny.

Find investors with whom you get along, and with whom your values and vision for the business align.

“When you are bringing in a fairly large investor,” says Jenny, “they may have a pretty big role that they are playing in your life for the next 10 years.”

And maybe we should saying something like… Of course this is lot legal advice. The laws are highly complex and vary from state to state. You need to speak to an attorney about your specific situation.

“You really have to vet your investors in the same way that they’re vetting you.” [Tweet This]

 

Listener question:

If you could ask one question to every brewer or brewery owner, what would you ask? Let me know.

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Cider

Other resources:

You can reach Jenny Kassan and her legal work at:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 062: Cohesive brand development for your brewery, with Measured Methods.

MicroBrewr 062: Cohesive brand development for your brewery

Measured Methods is a multi-purpose agency focusing on craft breweries and other artisanal crafts. They’re based in Burlington, Vermont, but they can provide a variety of services for breweries anywhere. They focus both on the front end, such as branding and anything a customer would see, and also back end, such as processes and supply chain issues.

In this episode, Eric Lussier and Bethany Baker, talk with us about branding, how to develop a look and feel to your company image.

“Behind your product quality,” says Bethany, “the single most important thing about your brand is to have a cohesive look and feel.”

A lot goes into a cohesive brand, such as:

  • Shelf-appeal
  • Color palate
  • Style
  • Event selection

When picking names, whether it’s your brewery, or your beers, think of something that sounds great.

“I often like to tell people that naming conventions are like tattoos,” says Bethany. “Everyone loves a good back story & meaning behind it, but sometimes it’s just because you enjoy the sound of it.

A name should also have a story behind it. And this long-term about the themes that you convey. You don’t want to alienate your audience by mixing it up too much, but you also don’t want to pigeonhole your brand by sticking to strictly to one theme.

“Before you brew your first batch, start promoting your brand.” [Tweet This]

 

Listener question:

From MoonFace on Twitter: What’s your go to beer or brewery?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Sour beers

Coffee-infused beers

Other resources:

You can reach Eric Lussier, Bethany Baker, and Measured Methods at:

Eric Lussier on Twitter:

Bethany Baker on Twitter:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 059: How to get the most out of a beer festival, with SuperFly Fabulous Events.

MicroBrewr 059: How to get the most out of a beer festival

Beer festivals are an important part of a startup brewery’s marketing plan. Stephanie Carson and SuperFly Fabulous Events in Asheville, North Carolina put on 11 beer festivals every year.

I asked her, how much do beer festivals play a part in a startup brewery’s existing marketing plan?

“I think it’s everything,” says Stephanie. “A startup brewery is not going to have the marketing budget, they’re not going to have the advertising budget, they might not even have a contact at a good distributor.”

“So I think attending a festival is really important.”

When you’re getting ready to attend a festival as a brewery, you’ll need to make sure you have several items. Some events will provide these, so always check beforehand to make sure you know what you’ll need to bring.

Stephanie says to make sure you have these items:

  • Creative looking tap handles
  • Carbon dioxide (CO2) canisters
  • Ice
  • Jockey box
  • Tent/awning
  • Items to sell
  • Something to entice the customers back to your brewery

The beer festival is a key part of getting your product out to the public. People attending the beer festival are your core customers: They love craft beer, and they seek out new beers.

There are some things that you can do to best leverage your presence at the festival. Make a good impression, initiate contacts, and turn those into long-term customers.

This is what Stephanie recommends to get the most out of a beer festival:

  • Help promote the event.
  • Be organized and on time.
  • Give a creative take-home item, so the attendees will remember you.
  • Bring a unique beer that is not available elsewhere.

“With so many craft breweries opening up, you can’t just have your old standards.” [Tweet This]

Listener question:

From Conrad B.: Why do you do what you do?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Dark beers

Other resources:

You can reach Stephanie Carson and SuperFly Fabulous Events at:

Sponsors:

InMotion Hosting

“Fast, reliable, affordable, web hosting.”

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Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 058: Be confident to get where you need to go, with Stone Brewing Co.

MicroBrewr 058: Be confident to get where you need to go

Laura Ulrich is the small batch brewer at Stone Brewing Co. in Escondido, California. She has worked there for 11 years, after working in the bottling line at Odell Brewing Company in Fort Collins, Colorado.

“Twelve years ago,” says Laura, “There wasn’t a focus on having the degree in brewing.” She says she would have liked to take more science classes to understand the technical sides of brewing.

It doesn’t seem to be hindering her. She created the widely popular Stone Smoked Porter with Vanilla Bean.

Laura has worked on the bottling line, in the cellar, and finally in the brewhouse. “Everybody’s gotta work together to make the end product get to the public,” she says.

Brewery specs:

Kettle size: 2, 120-BBL brewing systems.

Size and quantity of fermentation tanks: 68, 400-BBL fermenters; 6, 150-BBL.

Size and quantity of bright tanks: 2, 150-BBL; one, 390-BBL; 5, 650-BBL; 4, 850-BBL.

Annual brewing capacity/last year’s production: Brewed 285,075 BBL in 2014.

Square footage: 55,000 sq. ft. brewery, with 65,000 sq. ft. packaging hall.

Years in operation: 18 years (opened August 1996).

“If you really want it, you can have it.” [Tweet This]

 

Listener question:

From John D.: What’s your least favorite style of beer?

Book recommendation:

  • “I haven’t been reading books, I’m awful. I need to get back into it.”

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Session IPA

Other resources:

You can reach Laura Ulrich and Stone Brewing Co. at:

Laura is on Twitter at:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 057: Create new revenue streams for your brewpub, with Wisconsin Dells Brewing Co.

MicroBrewr 057: Create new revenue streams for your brewpub

Jamie Baertsch did an internship with Wisconsin Dells Brewing Co., in Wisconsin Dells, Wisconsin, and she stuck around until they started paying her. Today she’s the brewmaster, winning awards for her beer, and planning the expansion to a production facility.

Wisconsin Dells Brewing Co. is the brewing part of Moosejaw Pizza brewpub, which experiences 50% of their sales just in the summer months. During that time the brewing capacity is maxed out, but in the rest of the year it’s much slower. To keep busy and to make up for lost revenues in the slow times of the year, Wisconsin Dells Brewing how found creative ways to find income.

Besides a variety of beers, Wisconsin Dells also makes a line of hand-crafted soda beverages. Additionally, they put their beer into cans and bottles for off-site distribution.

Brewery specs:

Kettle size: 15 BBL.

Size and quantity of fermentation tanks: 4, 15-BBL fermenters; 1, 30-BBL fermenter.

Size and quantity of bright tanks: 2, 30-BBL bright tanks for beer; 9, 15-BBL bright tanks for beer; 4, 16-BBL bright tanks for soda; 2, 2-BBL bright tanks for soda.

Annual brewing capacity/last year’s production: 1,405.70 BBL.

Square footage: 200 sq. ft. brewhouse, 2 walk-in coolers, 3 large warehouses, 2 forklifts, one truck, 2 pallet jacks.

Years in operation: 13 years (opened May 2002).

“I spent 12 years learning how to brew. And now packaging is a whole new thing.” [Tweet This]

 

Listener question:

From 76Johnyb: Where do you get inspiration for your unique brews?

Book recommendation:

  • Phone book.

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Red IPA

Other resources:

You can reach Jamie Baertsch and Wisconsin Dells Brewing Co. at:

Sponsors:

“Compare free quotes from top suppliers within 48 hours.”

Kinnek "Compare free quotes from top suppliers within 48 hours." http://www.kinnek.com/microbrewr

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 056: Applying organic chemistry to brewing, with Golden Road Brewing.

MicroBrewr 056: Applying organic chemistry to brewing

Nadia Vazirzadeh had only a bachelor’s degree in biology, zero knowledge of beer, when she started working on the quality control team at Golden Road Brewing, Los Angeles, California.

“I knew I wanted to do something the rest of my life that I loved,” she says. “I still had people trying to convince that, ‘Don’t you want to be a doctor? What’s beer really doing for anybody?’ I take pride in what I do in the beer industry. I think it’s really important. I really like what I do and this alone is really fulfilling to me.”

As part of her job to make sure that the brewery brings consistently great beer, her daily duties are:

  • Check gravities
  • Get yeast for new batches of beer
  • Use the alcolyzer
  • Conduct grist analysis
  • Check IBUs
  • Put together sensory tasting for staff
Nadia Vazirzadeh, at Golden Road Brewing, convinced the 7 brewers into dressing up like Snow White's 7 Dwarves for Halloween.

Nadia Vazirzadeh, at Golden Road Brewing, convinced the 7 brewers into dressing up like Snow White’s 7 Dwarves for Halloween. Source: Facebook.

Nadia recommends reading about what you’re working with and reading about other breweries. “Everybody does something different,” she says. “Read. That’s really my main recommendation.”

Brewery specs:

Kettle size: 50 BBL.

Size and quantity of fermentation tanks: 16, 300-BBL fermenters, including some conversion tanks.

Size and quantity of bright tanks: 3, 200-BBL.

Annual brewing capacity/last year’s production: About 30,000 BBL in 2014.

Square footage: 32,000 sq. ft.

Years in operation: 3.5 years (founded 2011).

“I knew I wanted to do something the rest of my life that I loved.” [Tweet This]

 

Listener question:

From Pour & Beerded: How did you get yourself to make the leap to go all in or nothing? Especially if you quit a decent job…

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Sour beer

Other resources:

You can reach Nadia Vazirzadeh and Golden Road Brewing at:

Sponsors:

InMotion Hosting

“Fast, reliable, affordable, web hosting.”

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Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 055: Use contract brewing to de-risk, with minimal cash injection with Two Birds Brewing.

MicroBrewr 055: Use contract brewing to de-risk with minimal cash injection

If you’re like me, you don’t have a million dollars to start the brewery of your dreams. If you have brewing skills and can create recipes, contract brewing could be a way to create a product and establish a customer base with minimal initial investment. That’s how Jayne Lewis and Danielle Allen started Two Birds Brewing in Spotswood, Victoria, Australia.

Jayne and Danielle were longtime friends when they realized they each shared long-term life goals. Danielle had a background in marketing and sales, while Jayne had years of experience as a commercial brewer.

Nine months after they made the decision, they were working for themselves. For about 3 years Jayne brewed on dozens of other systems. Finally, about 9 months ago, they had increased their brand and their market enough to open their own package brewery.

Their whole business has been financed by themselves. So they don’t have outside investors.

Brewery specs:

Kettle size: 18 hL (15-BBL).

Size and quantity of fermentation tanks: 4, 36 hL (4, 30-BBL fermenters). 2, 72 hL (2, 60-BBL) due in June 2015.

Size and quantity of bright tanks: 36 hL (30-BBL). 72 hL (60-BBL) due in June 2015.

Annual brewing capacity/last year’s production:

Square footage: 460 sq. m. (4,951 sq. ft.).

Years in operation: The production brewery has been operating for 9 months (opened June 2014). The brand has been operating for 3 years and 9months (opened June 2011).

“You’ve gotta do what you have to do, in order to do what you want to do.” [Tweet This]

 

Listener question:

From Chris Tiffany: How do you preserve fresh hop character, especially aroma, when bottles may sit for a while before being enjoyed?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Sour beers

Other resources:

  • Pink Boots Society to empower women beer professionals to advance their careers in the beer industry through education.
  • Pink Boots Society Australia on Facebook.
  • International Women’s Collaboration Brew Day.
  • MicroBrewr 002: Using a Flagship Beer To Build a Brand w/ Alamo Beer.
  • MicroBrewr 015: Randal Denver’s advice for a homebrewer who wants to become a professional brewer.

You can reach Jayne Lewis and Two Birds Brewing at:

Jayne and Danielle on social media:

Sponsors:

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MicroBrewr 054: Start a debt-free nanobrewery, with Great Storm Brewing.

MicroBrewr 054: Start a debt-free nanobrewery

We all have a dream to start a brewery. Many of us don’t have the money required to start the brewery of our dreams. Lynn Jacobs and her husband, Jeff, started Great Storm Brewing in Colorado Springs, Colorado, with no debt. Best of all: They started making a profit immediately.

Great Storm Brewing opened in March 2012 with a 1-BBL system. Lynn and Jeff worked hard at first. But after 6 months they hired the first employee. The success has been so great that they contract brew larger batches under “alternative proprietorship” to help meet demand.

Now approaching their third anniversary, Great Storm Brewing has 8 employees and they’re preparing to install a 10-BBL system.

Lynn’s advice to someone who wants to start a brewery:

  • Save money
  • Practice your brewing
  • Create something you can duplicate on a larger scale

Brewery specs:

Kettle size: 1 BBL; in the process of expanding to 10-BBL.

Size and quantity of fermentation tanks: 10, 1-BBL fermenters; expanding to 3, 15-BBL.

Size and quantity of bright tanks: none; will get tanks with the new system.

Annual brewing capacity/last year’s production: Current 260; last year 187; new system will be 390-BBL.

Square footage: 3,750 sq. ft.

Years in operation: 3 years (opened March 2012).

“As soon as you reach one goal, you make another for yourself.” [Tweet This]

 

Listener question:

From Russ Neis: How do you adjust a recipe from 10 gallons to a 7 BBLs or more?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Experimental beers

Other resources:

You can reach Lynn Jacobs and Great Storm Brewing at:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

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Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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MicroBrewr 053: Pink Boots Society empowers women in beer, with Teri Fahrendorf.

MicroBrewr 053: Pink Boots Society empowers women in beer

Teri Fahrendorf had been brewing professionally for 19 years when she went on a road trip. She visited 71 breweries, brewed at 38 of them, and blogged the whole way. Throughout the trip, she did meet a few other women working in craft beer. They always asked whether there were others. So they started the Pink Boots Society.

Pink Boots Society is a non-profit to empower women beer professionals to advance their careers in the beer industry. Today, Pink Boots Society has over 1,500 members in 40 chapters worldwide.

You don’t have to be a brewer to be a member of Pink Boots Society. As long as you earn income from beer in some way, you can join Pink Boots Society. Members include brewers, loan officers, jewelry makers, lawyers, and blog editors.

Roles for women have traditionally been volunteer roles, says Teri, like child rearing or housekeeping. Consequently, modern society often expects women to work in volunteer positions.

“Your value that you are putting into the world,” says Teri, “needs to be recognized in a value that the world recognizes, which is cash.”

In addition to moral support and educational seminars, Pink Boots Society has a scholarship fund for women in the beer industry.

CALL FOR HELP:

Volunteers needed

Pink Boots Society is an almost entirely volunteer organization. So they’re always looking for more women to join and for volunteers. If you are a statistician or can work with data and numbers, Pink Boots Society needs your help. Get in touch with them here or through the contact info below.

“Your value that you are putting into the world needs to be recognized.” [Tweet This]

 

Listener question:

If you could ask one question to every brewer or brewery owner, what would you ask? Let me know.

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Saison

Other resources:

You can reach Teri Fahrendorf and Pink Boots Society at:

Teri’s other blogs:

Sponsors:

“Compare free quotes from top suppliers within 48 hours.”

Kinnek "Compare free quotes from top suppliers within 48 hours." http://www.kinnek.com/microbrewr

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Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

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For a brewery truly rooted in the community, consider forming a cooperative, guest post by Sara Stephens, Sustainable Economies Law Center.

For a brewery truly rooted in the community, consider forming a cooperative

The cooperative business model is gaining popularity. Even many craft breweries are forming as co-ops. If you’re thinking of starting a brewpub, the cooperative business model might be the way to go.

The Sustainable Economies Law Center (SELC) is the authority on co-ops. MicroBrewr Podcast recently spoke with SELC as part of a series about breweries as co-ops. Here, Sara Stephens, staff attorney at SELC and the Law Office of Sara Stephens, expands on how the cooperative business model can be applied to breweries.

Disclaimer: This blog post is made available only to give general information about the law and not to provide specific legal advice. The law is different in every state and subject to change. You should consult an attorney about legal questions pertaining to your situation.


For a brewery truly rooted in the community, consider forming a cooperative

Full disclosure: I am Nathan Pierce’s girlfriend wife. Because of that, I am learning more about craft beer than I ever expected I would. Although I’m not a big beer drinker, I am a big fan of entrepreneurship that helps create a more equitable economy. My job as an attorney at Sustainable Economies Law Center is to help people start cooperative businesses, equitable housing and land stewardship models, and other projects that create more resilient communities.

What impresses me most about craft breweries is how unlike conventional businesses they tend to be (in a good way).

  • They give back to their local communities.
  • They collaborate and share with each other.
  • They innovate and take risks.
  • They generally resist selling out to make a bigger profit.
  • And they seem like great places to work.

Because of these qualities, I believe the craft beer industry is ripe for the cooperative movement to take hold.

Cooperative basics and benefits

Cooperatives, I believe, are the best type of business to form if you want to be truly rooted in your community. By “cooperative” I mean an entity that is owned not by outside shareholders but by its members—the people who actively help the business to succeed.

Members might be:

  • The business’ workers (worker co-op)
  • The business’ customers (consumer co-op)
  • Producers of the product it sells (producer co-op)
  • A combination of those categories

Members of a cooperative jointly own the business, share its profits, and democratically manage its operations. This form of business keeps more wealth in the local community because the members (local workers, customers, and/or producers) are its owners. In the case of a brewery, the members could be the workers in the brewery, the consumers of the brewery’s beer, and/or independent brewers whose beer the co-op sells.

These members also have a say in how the business is run, so they can keep it from exploiting its employees or the local environment. Worker cooperative breweries, in particular, allow the people making the beer to have creative input and ownership in their work. Rather than focusing on maximizing returns to shareholders, a cooperative can truly operate for the benefit of its workers and community.

Listen to podcasts about breweries as co-ops:

MicroBrewr 046: Start your brewery as a worker-owned co-op

MicroBrewr 047: Proof of concept for a brewpub co-op

MicroBrewr 049: Planning California’s first cooperative brewpub

The cooperative model is taking hold

If you’ve been listening to MicroBrewr Podcast (particularly episode 046, episode 047, and episode 049), you’ve heard about these and other benefits of running a brewery as a cooperative. You’ve also heard from a couple of breweries that have chosen the cooperative model.

As it turns out, this trend is really taking hold.

Here’s the list of cooperative breweries Nathan and I have compiled so far. Some have not yet opened, but are well on their way. Below each, I’ve also indicated what type of cooperative it is or intends to be (as far as I could tell). Some of the consumer cooperatives below may actually be hybrids, if the workers are also members and exercise democratic self-governance. If you know of other cooperative breweries, tell us about them in the comments!

  1. 4th Tap Brewing Co-op (Austin, TX)
    • Worker cooperative.
  2. Black Star Co-op Pub and Brewery (Austin, TX)
    • Hybrid consumer and worker cooperative. First cooperative brewery in the world. Hear their interview on MicroBrewr Podcast episode 047.
  3. CO-HOP (Chicago, IL)
    • Still in planning. Looks like a producer cooperative and brewery incubator that markets the beer its tenants produce. No posts on their blog or social media in several months; I hope this project is still happening!
  4. Fair State Brewing Cooperative (Minneapolis, MN)
    • Consumer cooperative.
  5. Fifth Street Brewpub (Dayton, OH)
    • Consumer cooperative.
  6. Flying Bike Cooperative Brewery (Seattle, WA)
    • Consumer cooperative.
  7. Full Barrel Cooperative Brewery & Taproom (Burlington, VT)
    • Consumer cooperative, with democratic worker management.
  8. High Five Co-op Brewery (Grand Rapids, MI)
    • Consumer cooperative.
  9. Los Alamos Beer Co-op (Los Alamos, NM)
    • Consumer cooperative.
  10. Miami-Erie Brewing Co-op (Middleton, OH)
    • Consumer cooperative.
  11. San Jose Co-op Brewpub (San Jose, CA)
    • Consumer cooperative. Hear their interview on MicroBrewr Podcast episode 049.
  12. Together We’re Bitter Cooperative Brewing (Kitchener-Waterloo, Canada)
    • Hybrid consumer and worker cooperative.
  13. Utah Brewers Cooperative—Wasatch and Squatters (Salt Lake City, UT)
    • Producer cooperative. Joint marketing of Wasatch Brewery and Squatters Craft Beers.
  14. Yellow City Co-op Brewpub (Amarillo, TX)
    • Consumer cooperative, with democratic worker management.

Key legal issue: choice of business entity

Since I’m a lawyer, I’ll say a little about one of the biggest legal decisions cooperatives need to make: what entity type to choose.

The most important distinction between a cooperative and a conventional business is the set of principles under which it operates. Check out the International Cooperative Alliance’s Cooperative Principles, which most cooperatives strive to follow.

Your state law may or may not contain a “cooperative corporation” business entity type, or something similar. Even if it does, you could still form something else (like an LLC) and may want to for various reasons. Typically, the LLC or cooperative corporation will be the best choice because they limit your personal liability.

Every state is different, but in California, here are some of the pros and cons of incorporating as a cooperative corporation.

Pros of incorporating as a cooperative:

  • This entity type legally enshrines cooperative principles into the business, requiring democratic decision-making and member ownership. These principles can be part of an LLC’s Operating Agreement, but there is a risk that members could vote to remove the cooperative provisions.
  • The business must incorporate as a cooperative corporation in order to use the word “cooperative” in its business name.
  • The business can raise up to $300 from each member without triggering cumbersome securities laws.
  • If it meets requirements under Subchapter T of the Internal Revenue Code, the business can avoid the double taxation that conventional C-Corporations face. However, LLCs are not taxed at the entity level at all, so both of these entities receive tax benefits.
  • Salaries of owners are not subject to self-employment tax, unlike LLC owner salaries.

Cons of incorporating as a cooperative:

  • Even though all of the workers might be owners of the business (i.e. a worker cooperative), the law might consider them “employees,” requiring the business to follow employment laws. In that case, the business would have to pay minimum wage, deduct payroll taxes, purchase workers compensation insurance, etc. even while it’s just getting the business off the ground. In contrast, members who co-own an LLC generally will not be considered employees.
  • There are more administrative requirements than an LLC, such as annual meetings, Board of Directors meetings, annual report filing requirements, etc.

Resources to start a brewery cooperative

You should meet with a lawyer to determine the best entity choice for you.

Sustainable Economies Law Center also has a free legal resource library on cooperatives (currently under construction).

And the Democracy at Work Institute has some great legal tools, particularly for worker cooperatives.

If you are in the San Francisco Bay Area, the SELC offers drop-in legal advice three times a month for businesses and organizations trying to improve their communities. Come by for advice about your brewery!

The cooperative movement is growing and I hope you’ll join—either as a cooperative brewery entrepreneur or as a member-owner of a cooperative brewery!

Image showing Barn raising in lansing by Alexander W. Galbraith / Wikimedia Commons / Public Domain was modified from its orignal state.

 

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MicroBrewr 046: Start your brewery as a worker-owned co-op, with Sustainable Economies Law Center.

MicroBrewr 046: Start your brewery as a worker-owned co-op

The cooperative business model is gaining popularity. Even many craft breweries are forming as co-ops. If you want to form your brewery as a co-op, Janelle Orsi, Executive Director of Sustainable Economies Law Center, in Oakland, California can answer your questions.

The cooperative business model is still relatively unknown. A worker-owned “co-op” is usually democratically organized, so each employee gets a vote on business decisions and elections for the board of directors. Employees earn dividends based on patronage—the amount of time they have invested in the business, rather the amount of money they have invested.

Other podcasts about breweries as co-ops:

MicroBrewr 047: Proof of concept for a brewpub co-op

MicroBrewr 049: Planning California’s first cooperative brewpub

Cooperative businesses provide many benefits to society:

  • The work source is stable because the employees aren’t as at-risk of layoff.
  • Profits stay in the local economy, rather than going to faraway shareholders.
  • Customers are happier because they know the product is made by sustainable jobs.

Cooperative businesses experience many benefits:

  • Decisions are made from many contributors.
  • Don’t have to pay double taxes like C-Corporations.
  • Workers are happier because they have a say in their environment.

“If we buy beer from a worker-owned cooperative, we’re actually reversing the flow of wealth.” [Tweet This]

 

Listener question:

If you could ask one question to every brewer or brewery owner, what would you ask? Let me know.

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Pale Ale

Other resources:

You can reach Janelle Orsi and Sustainable Economies Law Center at:

Sponsors:

Audible

Download a free audiobook.

Audible. Download a free audiobook. http://microbrewr.com/audible

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher

MicroBrewr 040: Keep persevering to get to the end, with Blood, Sweat, and Beer movie.

MicroBrewr 040: Keep persevering to get to the end

Alexis Irvin and her partner Chip Hiden travelled across the country trying to find out what it takes to make a living doing what you love. They interviewed a bunch people in lots of different fields who all had their dream job. And they put it together into a movie and book called, The Dream Share Project.

Then they followed their own dreams, quit their jobs, and started working for themselves. For their next project, Alexis and Chip travelled across the country interviewing people with a dream job in one field—craft beer! They made a beer movie!

Blood, Sweat, and Beer is a feature-length documentary coming out in 2015 that follows 2 startup breweries, one in Braddock, Pennsylvania and another in Ocean City, Maryland.

For making Blood, Sweat, and Beer movie, they interviewed over 100 people for the film. Everyone from Sierra Nevada Brewing Co., New Belgium Brewing, Brooklyn Brewery, and small local breweries.

The most important things Alexis learned about starting a brewery:

  • Handle all of the legal paperwork thoroughly
  • Start with a team
  • Consider how your brewery can benefit a specific location

SPECIAL BONUS:

20% OFF digital download pre-order of Blood, Sweat, and Beer documentary.

Alexis and Chip gave us a coupon code exclusive to the MicroBrewr audience.

Go to the Blood, Sweat, and Beer website. Click “Redeem Code.”

Enter this code for 20% off: MICROBREWR

That’s a digital download of the film for only $3.99!

Be sure to connect with Blood, Sweat, and Beer documentary and thank Alexis for being on the show and for the discount.

“ Just keep going. You have to persevere to get to the end.” [Tweet This]

 

Listener question:

From Ray Pierce: Is it profitable?

Book recommendation:

Check out the entire list of recommended books, click here.

Your Free Audio Book

An upcoming beer style:

Sour beers

Other resources:

You can reach Alexis Irvin and Blood, Sweat, and Beer documentary at:

You might also like:

MicroBrewr 050: Have passion and be persistent with Craft Conscious in Cincinnati, Ohio.

Support MicroBrewr

Help keep MicroBrewr on the air. CLICK HERE for ways you can help.

Subscribe on iTunes             Listen to Stitcher