So, Wot’s… Uh, the Deal?

Obviously, I haven’t been writing.  Haven’t been brewing, really, either.  Three or four batches in the last year, which is pretty much an all-time low since I started all-grain brewing.

What happened?  As Raoul Duke said, “What’s the score here?  What’s next?”Fear-and-Loathing-in-Las-Vegas

 

*sigh*

I spent much of the summer of 2013 researching what was needed to start a brewery.  I’ll spare you the gory details, or I would if I hadn’t already written them, but the basic answer was obvious:  Money.  More specifically, money I didn’t have.

There are varying levels of investment for various levels of expectation.  I could start a brewery out of the garage for a relatively small investment of time and a few modifications.  My intent, though, was to create a new job for myself, and virtually no one is supporting themselves out of a garage brewery.  Income minus expenses would equal bankruptcy and loss of the brewery.

A real, income-producing brewery involves a much larger scale that I could not afford.  I had no industry experience to bargain with, or borrow against, as it were.  No one was lined up to invest, and even if they were, it would be difficult for me to relinquish any sort of control over the business.

The same was true for the taproom idea.  Leases, build-outs, employees, little cash, and no real experience to work with were not a winning combination.

The real deal breaker, though, was that over the months I had ceased to be income-positive.

So I went back to work.  Having a generalized IT background and years of experience means I can still get a job around here, in most cases, pretty quickly.  As it worked out, I found one within a couple of weeks and am still working there, this time as a supervisor.  Managing a team of six is a great opportunity, and the experience gained should help me when I revisit the brewery and taproom idea a few years down the road.

I’m eager to get back to brewing more regularly.  I brewed a stout and brown ale on back-to-back weekends and it was fun to get back to basics.  I only brewed five gallons, didn’t use the Tower of Power for anything but the hot liquor, and relied entirely on gravity to move the fluids around.  Hit all of my marks on the stout, but flubbed the brown a little.  Nothing fatal, but too hoppy.

Proximity to my LHBS has had an impact on me.  My previous job was less than five minutes from Larry’s.  Now I work a good bit further away, and Larry’s isn’t really on my way to anywhere, so I’m less likely to go.  I need to get over my aversion to ordering ingredients online.

bee and borageAt any rate, this site will probably be changing over the coming months.  I’m spending  time on other projects, like Madera Verde Garden, and I’d like to showcase some of that work (most of which is my wife’s).  I still enjoy writing, and I’m looking forward to presenting some topics for which I have a passion equal to brewing.

In the meantime, support another local brewery, and cheers!

Perfection in Five

I’ve been slowly progressing through what I call my “Perfection in Five” series. I haven’t been brewing the same recipes often enough to really dial them in.  By that I mean I haven’t defined a repeatable recipe and process.  Perfection in Five challenges me to produce one perfected recipe within five brewing sessions.

For years I’ve been brewing 10 gallon batches per session.  As I’m sure I’ve said before, it takes the same amount of time to brew five gallons as it does 10, so why not brew 10?  If I make a good beer, I want to drink it and I want other people to try it, so it works out well.  But if I don’t think the beer is good… well… it sticks around too long and becomes a burden.  Since Perfection in Five is an experiment that was meant to be completed quickly, I didn’t want a bunch of beer hanging around, so I decided that five gallon batches made the most sense.

Except I disposed of all of my “small batch” equipment when making room for my new equipment.

I’ve invested in a system where even a 10 gallon batch is small, so trying to produce five gallons really is asking too much.  I understand now that I want the option to scale back, so I decided to buy an industrial 10 gallon Igloo cooler for a mash tun.  This cooler is designed to keep water cold for a few days at a time, which tickles my fancy for mashing in a near-freezing garage.  My assumption is that it will do just as good of a job insulating a hot mash as it would a cold drink.  Yes, temperature control is a fetish.

I wanted another control for this experiment to be the ingredients, so I put together the recipe and calculated how much of everything I would need to produce five 5-gallon batches.  I gathered up enough grain and hops so that every run of my experiment would use the same batches of those ingredients.  Unfortunately, there wasn’t enough yeast available at my LHBS, so the control is slightly less controlled in that I will be using two different batches of the same yeast.

This is going to be fun for me, and it’s a great time of year to brew the German pils style I’m trying to duplicate with this recipe.

Research: The Competition

In my last post, I wrote about restarting the start-up process for the business I want to open.  First I wanted to open a brewery, but now I want to open a taphouse.  Dreaming up these businesses was the easy part, but understanding what to do next was less clear.  My instant gratification personality told me to go find a location, but my advisers steered me in a different direction.

One of the first things to do, they said, was to get to know my competition. As an avid beer drinker, I already have a good idea of which businesses I’ll be competing against, so I put a few of their names down on paper:

There are hundreds of pubs, taverns, bars and restaurants around me, so why did I choose these particular ones?  1) They offer products and services similar to what I want to offer. 2) They are geographically situated near locations I’m considering.  3) They have proven to be popular with customers.  4) I have been a repeat customer at each of these businesses.

I entered the business name and city into Yelp’s search engine and examined the results.  In addition to reviews, Yelp provides basic information that a customer would want to know, like business hours and amenities, so I built out a template in Excel to keep track of some of the common information I wanted to compare.

Competitors Template

I love data!

Qualities List

Whoa.

Then I plugged through every review for every competitor on the list and I recorded each time a quality was mentioned positively or negatively.  I built the list as I went along and the template filled out substantially.

Tallying reviewer comments took some time, because you often have to interpret what someone is trying to say and tie it to a specific label.  Certainly, it’s not a scientific process, but I’m sure some marketing company somewhere has turned it into one.

Many of these qualities were common to all of the competition, but some were specific to one business.  Finding unique qualities and quantifying the number of people who talked about those qualities really helped me understand the identity (or story, as a marketer might call it) of that business. It also became clear very quickly which common qualities, like friendly and attentive service, customers look for in their pubs.

competitors - data

Lots of pretty numbers.

Using this template, I can move on to profile businesses within a more specific geographic location, or ones that have not met their customers’ expectations, or ones that share the same “unique quality”, all of which can help me better understand how I might be more successful with my own business.

What I Learned

A few clear facts emerged during this first run at competition comparison: 1) People expect pub food at a pub, and having good pub food means they are more likely to come back.  2) If you’re going to serve food, people really notice if you also offer vegan, vegetarian and gluten-free options.  3) People will come back if they feel they are getting a good value.  4) People want to have entertainment options.

I suppose none of this should come as a surprise, but it changed my thinking about a number of things:

I didn’t want to open with an in-house kitchen, but now I’ve heard it loud and clear: People expect to have food with their beer.  I knew this, really, but my answer was to locate in an area where there were plenty of take-out options from restaurants nearby.  These kind of off-site food arrangements seem to be awkward for the customer, though, and I would sacrifice a lot of potential revenue if I wasn’t providing the food, myself.  If John Taffer is right, customers are likely to spend 52 minutes more in my taphouse if I have food available.  So, in addition to profit on the food, that would typically include another beer.

I was blown away by the number of comments related to diet-specific concerns.  I should understand this because, hey, I’m lactose intolerant.  I tend to avoid certain menu items when I eat out, so why wouldn’t someone else do the same?  My real takeaway from this, however, is that having good and plentiful diet-specific options really makes you stand out.

One business in particular received props again and again for the value they provided.  Their food is cheap and easy to prepare, which allows the business to keep prices low. The tantalizing preparation options really engage the customer and encourage them to come back for more, which they will because it’s such a great value!  This will be a challenge for me:  How can I create a similar value?

Dartboard

Entertain me.

Finally, people want to have entertainment options at the pub.  Originally, I envisioned a quiet place with nooks and crannies for people to tuck themselves away with a book or a tablet or for a quiet conversation.  Well… that’s what I would want, but I think I saw maybe one comment about how great it was to be left alone in a bar.  Instead, dozens of reviewers talked about shuffleboard, pinball, pool, darts, TV and movies.  “I loved that we could play a game of Boggle!” said no one, ever, apparently.

And that’s a perfect example of why research is important — it encourages you to compare your expectations against real data.  What you like isn’t necessarily what will sell.  Your niche may not be much of a niche.  Your target market might not be what you think it is.

Next up: Where should I set up shop?

Where to Begin?

Over the past couple of weeks I’ve been particularly focused on my business.  Recently, I made the decision to change course, and because that means starting the “start-up” process over again, I thought I’d make a better effort at blogging about what I’m doing.

Maze

This is what starting a business can look like from a high level.

When I first met with them, the Small Business Assistance Center provided me with a basic map for the start-up process.  From a very high level they break it down into nine stages:  1) Concept, 2) Research, 3) Planning, 4) Protection, 5) Funding, 6) Start Up, 7) First Mile, 8) Growth, 9) Profit!

The first step, your concept, should be the easy part because all you have to do is conceptualize what you want.  Presumably, you’ve already been doing that.  Until recently, I wanted to open a brewery (I still do), but today I’m envisioning a taphouse with many, many more beers than just my own.  I see two dozen taps, top-notch service staff, and a physical space that encourages customers to settle in for a couple of drinks.

It’s fun to play around in the concept stage and dream many dreams, but at some point you have to act or the dreams will go nowhere.  Once you have an idea of what you want to do, it’s time to do some research.  Kirk Davis from the SBAC says that this is a step that many new business owners overlook or don’t appreciate enough.  I was one of those.  I wanted to go from the concept stage to the planning stage to the start up stage, but it’s simply not effective to try to do that.  In my next article, I’ll talk about what kind of research I’m doing and what I’ve discovered so far.

Sea Change

aquarius-wallpaper-11778-hd-wallpapersThey say that the only constant in life is change. According to my wife, that’s doubly true for an Aquarius, which, unfortunately for her, I am.

dude question

That doesn’t look like a beer, Dude.

I’ve been thinking hard over the past few months about what I need to do with my business.  Starting a brewery is capital-intensive, which means it’s expensive.  Yes, I could brew a barrel at a time, but I wouldn’t have time to do much else.  If I want to be efficient (and profitable) then I have to buy a larger system, and that takes money, which means investors or loans, which means increased risk.  I knew this going in, but I chose to look past it.

I’ve always been concerned about how I will make money during the down time between applying for my brewer’s notice and the point when I can sell beer.  I bounced a few ideas around in my head but never came up with something that really made sense.

So my wife asked me the question, “What are you really trying to accomplish?”  Truth is, I had been asking myself that same question over and over.  The answer was much clearer in my mind than I expected:  I want to run an establishment where people want to go to drink really good beer.  Not just my beer–any good beer.  That’s different than what I’d envisioned.

I love to try new beers.  I make it a focus to try every new beer I find in a tavern or restaurant.  I know other people are like this, too, and I can’t think of a better quality in a customer.  Are you like this?  If so, I’ll make you a deal:  You keep coming in, and I’ll always have something new for you to try.

cheers

Where everybody knows your name… and only occasionally get up in your business.

I love a place where I can be comfortable by myself or when I’m with a group.  Sometimes I want to tuck myself away in a corner to read or write, sometimes I want to sit at the bar and chat with the beertender and other patrons, and sometimes I want to sit at a big table with nine of my friends and celebrate the end of the fantasy sports season.  That’s a tall order for one establishment, but that’s what I want to offer.

And I love to teach.  Sometimes to a fault.  I want to help my customers understand and appreciate beer, and that has to be a fun thing to do when you have a wall of taps behind you, through which flow some of the best beers in the world.  Or… I can take your order and piss off so you can enjoy it in peace.  Whatever works for you.

A successful tavern could pave the way to starting the brewery, especially if I can find the right location to make that easy.

The Taxman Cometh

And I’m not even talking about the looming U.S federal income tax deadline, rather, I’m talking about the 500% increase in taxes on beer production that’s been proposed by the Governor of the State of Washington, Jay Inslee

As I’ve gotten older, I gotten more cynical about government — who hasn’t, right?  But cynicism doesn’t change the reality of any situation, and I realized that I’m not doing anything to change that reality.  Today I sent a message to three representatives in our state House, Mark Hargrove, Pat Sullivan and Joe Fitzgibbon, and the text of my message is included below, if you’re interested in reading it.  Hargrove and Sullivan are the representatives for my residence and the desired location for the brewery.  Fitzgibbon appears to be a potential champion of the cause, and he’s on the House Finance Committee.

I also realize that a sternly-worded letter isn’t likely to change reality any more than cynicism is, but I am voicing my opinion to my representatives, right?  Isn’t that how it’s supposed to work?

This tax increase is an extremely hot topic in the WA brewing industry right now, as you might imagine.  The potential economic impact to small brewers is, from my perspective, staggering.  Let’s take a look.

You know what?  Let’s not.  You should, though.  Washington Beer Blog did it better than I would, and I have other work to do.  Educate yourself, beer drinker, for the sake of all that is local beer — seriously — then talk about it with someone else and let the legislature know if you think it’s the right thing to do.

Text of my email to my representatives:

I am writing to ask that you reject any bill or proposal that will increase taxes on beer production, and that you provide vocal support to the WA Brewers Guild’s request to exempt microbreweries from the permanent $23.58 per barrel tax proposed by Gov. Inslee.

I am in the process of starting a brewery in the city of Auburn.  My residence and my desired location both lie within your jurisdiction.  Having just been laid off my from job at <some local company>, I have an incredible opportunity to focus on starting a business that will source its raw ingredients from Washington agricultural producers, and will provide jobs to local residents, tax income to the city and state, and fantastically good beer to the residents of the city I’ve lived in for over 26 years.  This proposed tax increase puts my dream at risk at a time when I can little afford to see more money go out the door.

The mass producers of beer have already been paying this tax, but the small producers have not.  This exemption has not given the small brewers any real competitive edge against the big boys, who have tremendous economy of scale, but it has allowed the small brewers to retain more of their earnings, and virtually all of them have invested those earnings back into their businesses in the form of equipment, real estate and labor (jobs!).  An $18.80 increase on each barrel of beer is a HUGE increase in costs to these small businesses — well over 5% on every keg they ship out the door.

I applaud the directive to properly fund the education system in Washington, but I’m asking that you don’t do it at the expense of one of America’s fastest growing industries.  Because all of the new breweries in Washington are “microbreweries”, this change in policy will affect EVERY SINGLE NEW BREWERY in the state.  Washington’s beer products are widely-known, but we have a long way to go to compete with states like Oregon and Colorado.  I feel strongly that Washington, the largest producer of hops in the world and among the country’s leaders in barley production, has perhaps the greatest potential of any state to provide world-renowned beers that could be household names like Microsoft, Amazon and Boeing have become.  If you allow Gov. Inslee’s proposal to to move forward in its current form, you will dilute that potential.

Today I happen to be working on outlining my production costs.  These numbers will determine my fate with investors and creditors, and ultimately will decide if I can afford to start this business.  Right now the spreadsheet says that state taxes will cost me $4.78 per barrel, and the totals look okay.  When I type $23.58 into that field, the numbers change — and so do my chances of success.

Plans, Vol. 1

Despite my lack of posts, I’ve been keeping an eye on the site traffic and recognize I have a lot of work to do.  I intend to break up a few of my earlier Blichmann posts to provide more thorough reviews and better pictures.  I also have a few reviews I haven’t started yet.

I find myself with more time on my hands than I expected to have right now, so I’ll be out in the garden making improvements and documenting that work.  Next week I’ll be picking up the butchered hog I purchased this year and will be making prosciutto and country ham with it, plus sausage, bacon, pulled-pork, ribs and so much more!

Plus, I have more than a handful of brewing recipes I want to work on, so you’ll see a bit about those in the coming weeks, too!

The Tower of Power Saga Continues

I got through a few batches of beer with two fully-functioning Tower of Power controllers.  You don’t need two, but it is nice to set the temp on the HLT and walk away.  For legal reasons, I would not suggest actually walking away but you get the idea.

The system really is awesome and I enjoy brewing with it.  The flowmeter is great and so are the simple controls.  After a few batches to get a feel for how it worked, it was easy to set the temp to maintain the target, and it worked especially well this past weekend when the temperature in the garage was near freezing.

As far as the overall system goes, I still would like to tweak the Autosparge to recirculate the wort and sparge water via an adjustable length tube.  In other words, get these liquids into the mash tun without splashing and introducing oxygen at the surface.  Probably a nit-picky detail, but what do you think?

But recently an issue surfaced with the HLT controller:  When I would touch the connector for the temperature sensor where it plugged into the back of the unit, the temperature readout would fluctuate wildly — by tens and hundred degrees.  When it would stabilize, it was unclear if the reading was correct and I found that, in fact, it wasn’t.

As a troubleshooting measure, I plugged that temperature sensor into my mash controller where it’s reading was rock-solid and accurate.  Applying pressure to the connector when plugged in to the mash controller resulted in no change whatsoever on the readout.

So the HLT controller has once again traveled back to Indiana for refurbishing.  It wasn’t so bad without it this past weekend but I did forget to watch the HLT when it was heating up for the mash out and overshot by a lot.  That would not have happened with the controller.

Sounds like I should get it back next week.  Perfect time to start working on National Homebrew Competition recipes.

Tower of Power, Redux

After weeks of frustration, I finally have an answer regarding the problems I’ve been having connecting my Blichmann Tower of Power controllers to my laptop:  It’s the controllers!

Today I took my laptop and communication cables down to The Beer Essentials (thanks to Bruce and Robert for offering to help) and I connected everything to the demo system they’re using down there.  What do you know?  Everything worked just fine.  Whew!  I had started to worry that I was losing my technical prowess…

Come Monday morning, these controllers will find themselves on the road back to Lafayette, Indiana for a warranty repair or replacement.  In the meantime, tomorrow I’ll be brewing a new beer, this one a clone of a well-known local amber ale.  I’ve had mixed results with ambers in the past, but I’ve been on a roll over my last few batches, so I’m expecting the best results.