Archives For Brewer

There are a lot of factors and/or constraints that go in to designing a brewery but they mostly revolve around how much beer you plan to make. That question comes in two forms: how much do you want to make now and how much do you want to make later. Note: In the brewing industry in America, beer is measured in barrels (BBL) and one barrel is equivalent to 31 gallons.

The other big factor in designing a brewery is determining when you want to become profitable. Now, you would probably think that this would fall under the same umbrella as the first question of quantity and, to a certain extent, it does, however, profitability moves largely independent of quantity in that there are ways to make large amounts of beer and no profit at all.

The driver behind these two questions comes down to a few inputs; fixed costs (e.g., equipment and rent), variable costs (e.g., raw materials, utilities, and employment), unit sales, and unit profit. As the size of the brewery increases so do your fixed cost, and brewing equipment is expensive. If your fixed costs go up you have to produce more to recoup the expenses. Producing more increases variable costs and also expands your market which may drive you to need additional packaging options which means more capital investment and more fixed costs. The positive side of this is at some point you can make enough beer to breakeven and then move in the direction of making enough to become profitable.

So, how much do you have to make to become profitable? This has been the big question for Eventide for some time and we think that we have settled on a number. We are estimating that we will start with a 30 BBL brew house and 90 BBL fermentation tanks. We plan on entering the market at 180 BBL per month production and grow that to 24,000 BBL per year before we max out the system.  At that size system we will have to make 400 BBL per month just too breakeven, so it will be a bit of a struggle for the first couple of years. But, once we build a larger market base and stabilize our cost/profit flow, things will be looking up. Way up.

Cheers.