It's every homebrewer's dream to take their hobby from the laundry, garage or shed to the glistening stainless steel of their own commercial brewery. It's not an impossible dream either.

Over the last few years a number of successful home brewers have taken the plunge and prospered - or at least kept the doors open - in their own microbreweriesand brew pubs.

Is the dream all that it's cracked up to be? Is the old saying, "If you work doing what you love then you don't work a day in your life" a truism or false promise?

This edition of Beer & Brewer begins a series looking at starting your own brewery. Each edition we'll feature a different brewer's experiences, as well as advice from a professional in the field - be it in brewing equipment, marketing, labels, employment; everything an aspiring brewer needs to know, but that they don't teach you at school!

So, you want to start a brewery...

by Luke Scott
Head Brewer, Otway Estate Winery & Brewery
Beer & Brewer's Technical Editor

It is the dream of most beer drinkers to own and run their own brewery, and it's often thought that breweries are a licence to print money, but just ask anyone who runs a small brewery and they will tell you how difficult it is. Through this article I will endeavour to provide a general overview and highlight some important factors to consider when opening a small brewery.

Licensing

An excise licence is required to brew beer commercially. It is granted from the government and this tax forms your major ongoing cost after the initial cost of equipment and venue for the brewery. The Australia Tax Office, which approves and monitors the excise licence, is fairly helpful as the more breweries there are the more revenue they generate. There are two separate rates for excise, a bulk rate and a packaged rate. It's a little known fact that packaged beer is taxed at a higher rate than keg beer. The amount of excise also depends on the alcohol strength of the beer you are brewing. For example, for a 50 litre keg of full strength beer at 5% abv you are looking at paying an excise of $52 per keg while for a 330ml stubby you are looking at 50 cents per bottle, which adds up to $12 per carton in tax.

Every state and territory is different in terms of their liquor laws. Victoria and Western Australia are relatively easy and not very costly in comparison to NSW, which may go some way to explain the health of their respective microbrewing industries. Obtaining a retail liquor licence for a small brewery enables you to sell your beer onsite selling at retail prices rather than wholesale and is certainly a key to success.

Location and set up

Where you set up your brewery is a major factor. An early decision needs to be made about how you are going to trade, be it as a brew pub or as a wholesale factory that sends most of its beer out to bottleshops and pubs to be sold. If you are considering a brew pub-style brewery location is a major factor. Your success stems not only from the quality of the beer you brew but the whole package you offer the customer in the way of food, ambience, entertainment and how you attract the punters to your brewery.

Beer Styles

The choice of beer to brew is an important decision. Most breweries in Australia today have a similar range of tried and true winners including a Pilsner, American Pale Ale, Belgian Wheat Beer and some form of black beer be it a Stout or Porter. All are great styles, though there is breadth for experimentation in brewing with the range and variety of raw materials. There is certainly room for the game and adventurous to step out of the square in terms of beer styles and create their own unique beers.

Equipment

Whether to buy new or second hand equipment and how big it should be are vital questions to be answered when looking at setting up a brewery. There is currently a shortage of quality second hand equipment available compared to the US and Canada where brewers always seem to be upgrading their equipment to meet with demand. A good suggestion if looking at going second hand is to see what is available in the US or Canada, bearing in mind the cost of freight and potential lack of follow up support and maintenance.

There are a number of brewery supply companies out there in the market and most are agents for overseas suppliers. Like anything in life, when it comes to brewery equipment you get what you pay for.
When deciding on size, always bear in mind that your labour cost per litre of beer brewed will stay relatively constant, be it a 600 litre brew length or an 1,800 litre brew length.

If the capital cost of setting up a brewery is too much, another option is to consider contract brewing. Contract brewing enables you to get your beer out in the market testing the water without the capital costs. There are a number of specific contract breweries and also some craft breweries that have tank space free to brew beer under contract. Contract brewing enables you to focus your business towards the sales, marketing and logistics of your beer brand.

Staffing

Generally, once you've mastered the art and the science side of brewing (no easy feat in itself) you'll find the actual brewing process the easiest part of the job. It's the other aspects of being a small craft brewer that are the most challenging and time consuming, such as being Mr Fix It when things break down, the marketing guru, the sales guru, and the customer service agent. The roles of bartender, delivery driver, tour operator and public speaker are all part and parcel of the small brewer's job description too. The best part after fulfilling all of those roles during the day is attending the Quality Assurance meeting which involves the task of sampling and research.

Through all that, you're also the Human Resources Manager and finding the right mix of personnel is always a key to success. If you're not brewing it yourself, finding a quality brewer is certainly an asset to your operation.

Branding & Marketing

It seems easy but buyer behaviour, brand recognition and marketing in general are some of the most import factors to success in the brewing game. You can make the best beer in the world, but if you can't sell it the business will soon finish. Packaging, label design, logos, company and brand names are all major considerations when starting off. One suggestion is whilst waiting for your licence to be approved or while chasing additional capital, spend as much time considering these aspects of the business as you can.

Some other factors that need to be considered are the choice of ingredients used, be they imported or local malts and hops. The style of packaging and logistics and distribution methods are all key factors that, if done well, will improve the chances of success and the bottom line.

I hope I haven't discouraged anyone from opening a brewery. But it is important to recognise that loving brewing and being good at that one aspect are only the beginning. It is the goal of this series to provide an in-depth look at these and other issues. We hope the information will assist new entrants in the industry and make for  healthier, more vibrant Australian brewing scene and, ultimately, more successful craft breweries.

Just remember a fair amount of blood, sweat and tears goes into each glass of hand crafted beer, as do a few wads of cash - not always as a return to the brewer as everyone expects. Good luck!

A dream scenario

by Neal Cameron
Head Brewer, Be Bortoli Wines Pty Ltd

A ‘dream come true' is an overused phrase of late and I wonder how many people have really experienced such a phenomenon? You would think race car drivers, fighter pilots and beer journalists would be amongst those few persons lucky enough to really have had their long-held dreams come true. But how does the dream compare with the 5.30am alarm clock of reality?

A couple of years ago, I was in the process of leaving a Riverina city and a career in operations management that had long offered the stimulation of a warm Corona. Mr Darren De Bortoli (may he forever be blessed) and his clearly intelligent Operations Manager sat me down and wondered casually if I would be interested in starting a Brewery for them? Now, they were talking to a man who had self-funded a brewing qualification, wrote for local magazines on the subject of beer, ran beer appreciation courses and had twice attempted to generate enough funds to set up a micro brewery of his own. So, yes, I was interested. And there you have it, out of the blue, a dream scenario realised, in the De Bortoli Winery canteen, over a cup of poor espresso.

This then was the start of a 2-year project to visualise, justify and realise something that existed only in the mind of a few people with the wherewithal and capacity to make it real. There was nothing on paper, no rules, no guidelines, no omnipotent figure of fantasy tales guiding the erstwhile group on the path of righteousness; just a blank piece of paper for the newly created project team to fill in with colour as they saw fit. That and the enormous credibility of the De Bortoli family ­- generated over three generations - at stake, plus the necessary demand of a healthy return on hard-earned family money in an intensely competitive market.

Aye, and there's the first rub of those of us galloping into our dream scenarios. How many times does reality intrude upon these hop-scented dreams? In these visions of evening sunlight catching upon a glass of lazily climbing bubbles, while surrounded by the chatter of tired but wholesome and happy brewers, did the pressure of high expectation and financial reality creep in? And how many times did the smell of an infected ferment intrude over those jute bags of freshly malted grains. Not bloody often!
So lesson number one; unless your psyche is on the dark side of normal and your dream scenarios contain all that could go wrong, you will find that the journey from dream to reality carries many spiky bits to puncture the bubble.

However, the many such minor discords that were to follow pale[ale]d compared to the pure delight of being paid real money to lead a team of new colleagues in discussions on such mighty subjects as; What beers should we produce? Who is our target market? How big the mash-tun? What design of bottle should we trust to contain our perfect beer? How many bottles an hour must our shiny new bottling line gently feed into our shiny new labeller? Upon whom should we bestow the honour of being on the tasting panel? What level of automation should we build in? How should we propagate our yeast? What size of trial brewery to buy? How to source and trial the best materials out there? What colour carpet for the brewery office? My forearms soon grew pretty strong and my waist started to look pleasingly tucked-in from continually hugging myself with the pleasure of being paid to do something that I would exultantly do for free.

The overriding memory of the project is of the thousand questions to be answered, followed by a thousand more. All sculpting and tempering a vision for a beer that had previously not existed; one conceived to fulfil the expectations of those persons willing to shell-out a not insignificant $20 for six bottles of beer.

As time went on, the glory of such a project began to come clear. Contrary to what you think, it's not the hops and the boiling wort that gives the joy, nor the waking up every morning realising that you're in charge of a brewery (although I do rather like that bit). Nor even the task of tasting 20 ferments at 7.00a.m. No, the real pleasure in realising a dream such as this is the sheer creativity of the project. The enormous complexities of piecing together the offering and the infrastructure to allow the insanely tricky business of getting good beer into a bottle and out to the market in such a way that people will buy and continue to buy.

On a day-to-day basis, the many joys are often the joys of firsts. The first commercial brew, the first time someone comes back for a second beer. The first time you produce 5,000L of finished beer and realise that it is as good as you hoped. The first fully-liveried bottle coming off the bottling line and the first time you go into a restaurant and narcissistically order one of your own beers (and pay $10 for something you can get for free).

In the dream scenario, the response to your beer is of course divine, with queues at the bottle shops and journalists writing effusive missives quoting phrases such as the ‘new
beer messiah'.

Something unpredicted was that over the months of work, your beer becomes almost as a child. I wonder then how many parents could read objective reviews of their offspring on childadvocate.com without a tremor?

And whilst the hard and tiring reality of starting a brewery is nothing like the dream, the one thing that is not apparent in the dream is the profound feeling that for the time being, the world is as it should be.

And that's a pretty special feeling.