Do you have your five-year business plan, a small fortune to keep you afloat through the licensing and permitting process?
BY EFRAIN VILLA
You decided to try your hand at brewing a batch of pizza-flavored beer in the attic, and the miraculous alchemy that ensued has your friends raving about your innovation, artistry and pioneering spirit. Flush with success, you’re ready to become the Steve Jobs of craft beer.
So what’s a budding ale-blazer’s first step? Open a brewery, right?
Well, not so fast.
Do you have your five-year business plan, a small fortune to keep you afloat through the licensing and permitting process, TTB forms in order, NM RLD applications ready to go, TAP account initiated, inspections lined up, equipment on back order, evidence for zoning hearings and ingredient contracts negotiated?
Of course you do. After all, you’re not a mere hobbyist.
Assuming you’ve already jumped through bureaucratic hoops to lay the groundwork, you can begin contemplating the day you’ll be able to sell your first pint of beer. Just remember that you’re legally required to account for every ounce of liquid you produce and, unlike other types of inventory, craft beer is taxed before a single drop is sold … and then taxed again during the transaction.
You also must ensure you’re consistently producing the same product in a process wherein the most infinitesimal variances in temperature or light mean the difference between crafting a masterpiece beer and a concoction only a skunk would be proud of.
In addition to the manufacturing process, you can count on spending lots of fun-filled hours dealing with payroll, marketing, accounting, business inventory and safety compliance. After a few short years of this, maybe you’ll begin turning a profit. Maybe.
“You can’t really expect profits for three years,” says Trent Edwards, the entrepreneur behind the Duel taproom project under way in the old Banana Joe’s building Downtown. “We opened our brewery in Santa Fe a little over two years ago on a shoestring. Looking back, I can say that if you are in this business only to make money, you’re in for a disappointment.”
From learning about zoning regulations that require explosion-proof devices and sprinkler systems in mill rooms to discovering that tap water inconsistencies can wreak havoc, new brewery owners face a steep learning curve.
“Even when I talk to veterans of the industry, they still sometimes have doubts and questions about a part of the brewing process or a regulation,” says Chris Goblet, director of the New Mexico Brewers Guild. “The seasoned brewers might want to explore mobile canning, whereas the new ones might need help with recipe tweaking, but ultimately, all of it is a work in progress.”
But hard work has its rewards, as Randy Baker and his wife Denise, who recently opened Rio Bravo Brewing near the Downtown brewery cluster (912 Second Street NW), confirm each day Rio Bravo is open. Randy says, “There is something outright beautiful and American about creating something out of nothing–which is what entrepreneurship is all about.”
Since opening this past summer, the Bakers haven’t stopped searching for ways to improve their brewery. “Consistency is one of the hardest parts of the whole thing,” Baker says. “You can’t be successful in this business by producing what I call snowflake beer. Variety is fine in snowflakes, but it’s no good when you’re batching a type of beer a customer expects to taste the same today as it did when they drank it last month.”
What can be learned from these cautionary tales? Research, and approach any business venture with caution and humility. And avoid snowflakes at all costs.
You can reach Efrain Villa at aimlessvagabond.com
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