So maybe it was Optimism Day at BarBEERians, but this New York Times article may put in dent in your good mood, if you’re ever looking to start your own, large-scale brewing operation, that is. The article’s a few weeks old, but it discusses the rigors of starting your own brewery in these trying economic times. Using Sixpoint Craft Ales in Brooklyn as the article’s jumping point, J. Alex Tarquinio finds that creativity and originality in brewing beer is the key to weathering the storm.
“We are not going to pursue the traditional brewery path,” said Mr. Welch [owner of Sixpoint Craft Ales], who grew up in Milwaukee, a city steeped in beer-making history. “It doesn’t make sense to ship it halfway around the world. That is an antiquated business model.”
The economics of the beer business can be daunting. Microbreweries need to sell thousands of barrels of beer a year before turning a profit. Until they do so, small business loans can be hard to get. And ingredients like hops have gotten pricey.
Not surprisingly, the article also shows that microbreweries have taken a slight hit with the economic downturn.
Paul Gatza, the director of the Brewers Association, said that the pace of new microbrewery openings had slowed this year with the recession. Last year, 56 microbreweries were opened, and 10 closed. Three of those that closed had opened in 2008. This year, the association has tracked 25 microbrewery openings and five closings.
Even among America’s craft brewers — as aficionados call the independent breweries — some have grown into larger operations. The Brewers Association reclassifies microbreweries that exceed 15,000 barrels of production a year as regional breweries. In this way, nine microbreweries became regional breweries last year.
Even so, that was still a positive number in the number of breweries going into operation in America. However, what will be interesting to watch is if we ever hit a plateau in terms of beer makers. Looking at the number of wineries that exist in California alone, I find it hard to believe that microbreweries are even close to skimming the ceiling in terms of market saturation. Of course the economic slide will limit the number of new openings, but it’s encouraging that we’re not losing breweries as quickly as we gain them. However, if you are looking to start your own big-time brewing center, you might want to think twice.
Kathleen and Mike Dewey founded Mt. Carmel Brewing four years ago. Ms. Dewey manages the office and distribution, while her husband is in charge of production. They started the business with a $10,000 family loan, which they supplemented with credit cards while they got their brewery off the ground. At one time they had roughly $40,000 billed to credit cards, all of it for business-related expenses. But they have paid off those cards.
Ms. Dewey said that anyone who wanted to start a microbrewery should either have a substantial sum of money to begin with — or a great deal of patience. “It can be very dreamy thinking about starting your own microbrewery,” she said. “But unless you have several million dollars, be prepared for a lot of hard work.”
So who’s in the mood for donating a small sum of a few million dollars so we can start the BarBEERians Brewing Co.? You know we’d make great beer!
