I wanted to write an article covering some commercial brewing cost saving tips I've picked up over the years. As I think it could be valuable right now.
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Across the globe brewers are seeing the cost of making beer rise. With the purchase of hops & malt, delivery costs and utility prices all on the rise.
I've also roped in a few of my brewing industry buddies on this one too. As it a conversation I've been having with them recently
Brewers need to look at their processes plus, take some time to look at available suppliers and chat with them.
I've been talking with many suppliers in the last couple of months. To see how we can work together, to keep costs as low as possible.
In this article, we'll cover some easy to implement tips and processes which don't require equipment upgrades or significant investment.
In brewing there are four main ingredients; water, malt hops and yeast. I think the natural starting point, is to look at water first.
Please note: Justin Fox the Flow Master for Bespoke Brewing Solutions, was kind enough contribute to this article'I'd like to thank him for his time.
Furthermore, he offered advice on a couple of different subjects. So, I'll be dropping his nuggets of gold throughout.
When it comes to water there are a few basic tips we suggest. I've been brewing for over 25-years now. I admit in my early career, I picked up the bad habit of cleaning up many spills using a hose.
I've now changed; for example, if there is yeast slurry on the floor. I'll squeegee as much as possible first. Although, I still may might to finish the job, with a quick rinse with water to get the last bits.
However, this practice over time will save money, using less water. Plus, I've found it's often quicker this way, than trying to wash everything away with a hose.
When using a hose, it's good to use a high-pressure low flow nozzle water gun. This may seem like a small detail to bring up, I know.
High-pressure low flow nozzle water gunHowever, when you think how much water a brewery uses weekly, these small savings quickly add up. It's like the old saying 'look after the pennies and the pounds will look after themselves'.
Brewer joke, the job is 90% cleaning, well a lot of this cleaning involves using water. Small savings add up over time. In many countries you pay for water twice. Once when you use it and again when you send it down the drain.
If you don't measure it, you can manage it. If you measure your water usage regularly, and keep a record of it, then it can be tracked. Meaning any leaks or issues can be discovered more quickly and addressed.
Also, with this in mind, it worth taking time once a week for one employee to do a walk-through of all piping, looking for any possible leaks.
Over time leaks can present themselves, but be easily missed without regular checks.
Many breweries by design, have high water pressure. Pipes and particularly where there's a connection (point of weakness) can start with a small drip, which becomes more severe over time.
Did you know if three taps leak one drip per minute, over a year it equates to 100-gallons of wasted water?
As we said before; a once-a-week walk around the brewery, to check for leaks is good practice. Catching an issue early can save a brewery money. It's the same with your glycol lines too.
Glycol system are notorious for leaks, you can actually get dyes which you add to your glycol system to help a brewer spot leaks. Use your favorite search engine and use the term 'glycol leak detection dye' to find a suitable product.
Furthermore, make sure your glycol banks don't run low. It will make for a more efficient system. One other tip I've shared before on this website, is to have an engineer check colling the system.
I like to have an engineer check the glycol system in the month of May (northern hemisphere), if possible. It's before the weather gets too hot.
The main check is for the freon levels in the compressors. It's also a good time to check the cooling fins too, ensuring they are clear of dust and other particles.
I like to check the cooling fins once a month. If there's an issue use compressed air (plus wear a mask) to clean the fins out.
Compressor Cooling Fins for a Glycol SystemOn some compressors you can use water too but you need to check. If the fins are clean, the compressors work more efficiently, saving money.
Most breweries I've worked with, use compressors working with freon gas. Now in the summer it's hotter plus, it's the busiest time of the year for most breweries.
So, making sure your glycol system is in tip-top shape before the summer months begin, is a logical preventive maintenance action.
Plus, in the height of summer, if your glycol system breaks down, engineers may be too busy to see you right away.
This may mean your system can't run for a few days at the hottest time of the year, OR you have to pay a small fortune to get someone out ASAP. Neither scenario is ideal.
I think we've covered water and glycol enough for now. So, let's move on to malt.
With malt I'd like to start with an example please, I took over the running of a small production brewery in Shanghai, China last year. It was in some disarray when I took over.
I mean the brewery had 3 bags of malt, only one-third of the tanks had beer in them and some of the beer was infected.
Please see the pictures of how the mash/lauter tun looked before and after I got to work. In four-years the lauter plates had not been taken out, according to the assistant brewer onsite.
The Lauter Tun Before and After I'd Cleaned It ' They'd Not Cleaned It For 4-Years!!!Furthermore, the raw material costs per liter, for all beers was high. Oh! And they had stupid amounts of many varieties of hops. Twenty kilos of Sorachi Ace anyone!
Quite frankly it was carnage'
As I spent time cleaning with the team, I also reached out to raw material suppliers I know, to get their pricing.
My aim was to substitute for some cheaper malts, or to use similar malts with greater extract potential, to bring the production costs of beer per liter down.
When looking to reduce costs by using cheaper raw materials, breweries must ensure this process, doesn't result in a significant flavor change.
It wasn't much of an issue for me, as the beer being brewed before me, wasn't great. My aim was to cut costs, revamp the beers and improve beer quality.
If you're making a beer using 100% Marris Otter Pale malt. The chances are, switching out a percentage of the grain bill, will not change the overall sensory of the finished beer in a recognizable way.
Please note: When discussing 'sensory' in this article, I talking about the color, aroma and taste of the beer.
When looking to change the raw materials, it's time to experiment. There are two main ways to approach this:
A lot of breweries may not want to experiment directly their main system, I can understand this. However, if you don't have a pilot, it might be the only option.
If you're a production brewery, then you should also have a pilot system. If you're a brewpub then why not get a small home-brew set up or better yet a small 50-liter system.
See the picture below of the pilot system my friend has at it his brewpub in Kunming, China. It makes 50-liter of beer per batch.
Such a system doesn't take up much space and ideal for a brewpub to experiment on.
Look these are only my suggestions, from my experiences, switching in 20% standard pale ale for Marris Otter doesn't impact overall flavor. Start at 10% and then keep increasing in 10% steps.
Sven Shared Some Commercial Brewing Cost Saving Tips With Us ' Click Here To See Them'Honestly the chances of your customers noticing any real difference are negligible. Do you know who will notice? Your accountant. Look the only way to know, is to try it yourself.
Experiment and test'however, as I say if you're not comfortable with this, then I understand.
The process is to check the COA's (the link is good guide to how to read them), trial batch and use small amounts in your recipes.
If all goes well then, it's possible to push the percentage of cheaper base used higher, for more savings.
If you felt you've gone too far then dial it back. As always, whatever changes you make, keep good records of them. Plus, only change on thing at time, otherwise you'll not know which tweak changed the sensory.
Likewise, when looking through those COA's, check the extract yield potential, like in the picture below. The extract potential of some suppliers can be significantly higher than others.
Side note: It's always worth checking this value of each malt before purchasing, and again before accepting delivery too.
For those who read my articles, and use imported malt'this section is for you.
Unfortunately, the craft beer market right now, is proving tough for breweries around the globe. It's leading to some breweries having to default on their malt contracts or unable being unable to meet their forecasts.
For example, as I write this, I'm in lockdown in Shanghai and several of the brewery staff cannot leave their living areas too. Our sales this week were 440L across the 10 venues, as many bars are closed as well.
When breweries suffer, so do the suppliers. There might be some room to work with, or possibility of substitution for lowers costs.
Recently one supplier I buy from, had some Marris Otter close to expiry date and was offering it at a reduced rate.
The malt was still good, but I don't use Marris in my house beers. So, I had to pass on the opportunity. As ever peeps; test, test and test!
I've spoken about this before; asking you what hops you're using for bittering additions. If you're using the same hops for bittering as you do for aroma, for example Citra. Then you're doing it wrong.
Granted Citra is high in alpha acids (10 to 15%) but they aren't cheap. You need to be using suitable lower cost high alpha hops.
There are several hops' brewers in the industry typically use for bittering, which don't break the bank. Plus, offering decent/smooth bitterness.
If you don't use all your hops, it's good to vacuum pack the leftoversColumbus is a good substitute for Citra, I've actually been using this hop for part of my dry-hopping regime, for my house IPA too.
It's a under appreciated hop these days, as people look for 'joose' in their IPA and NEIPA's. Some of other bittering hops brewers use are; Chinook (good for some 'dankess'), Nugget (one I use a fair bit), Magnum and Warrior.
It's the same with whirlpool and dry-hopping'test, test and test.
I've been looking at some of the new German hop varieties; like Callsita, Ariana and using some more established ones like Mandarina Bavaria. They are cheaper for me to source and use in China.
So, they can be added into the mix to bring the overall price down of the hop load. Furthermore, they offer some great aromas and really add to the total sensory of the beer.
I'm a big fan of Ariana as it can add some real nice tropical notes. So, please explore and experiment with other hops out there. If it was easier for me, I'd really be leaning on some of the Polish and Slovenian varieties out there.
When I was in Armenia, this Polish hop farm sent me some great samples of different Polish hops to try. Unfortunately, I can't get them in China otherwise I'd be using them for sure.
Depending where you are these hops maybe cheaper to source but also make your beers interesting and possibly unique if nobody else is using them.
I'm brewing in Shanghai, as many of you know. So, pretty much all of the hops I use are imported. Hop prices are expensive for Chinese brewers, compared to many other countries.
I like to use Flex, which a CO2 extract for bittering. I've run the numbers and it works well, proving cost effective for me to add IBU's as a bittering addition.
Using Flex might not be economical to all brewers. You need to check the figures, to see if the number of milliliters needed to reach your target IBU's (using Flex), works out cheaper than the gram added equivalent using bittering hops.
I've written about hop cannons in the past having, in article such as 'Hop Cannons ' Issues and Fixes' and 'Hop Cannon ' FAQ's'. Modern breweries, producing a lot of hop forward beers are using hop cannons, as they can increase hop utilization rates.
As Justin Fox says,' When looking for cost savings in a brewery, the tangible expenses stand out as the easy wins, for example recovering cleaning solutions by way of a CIP cart, or increasing hop utilization via a hop cannon'
It's believed using a hop cannon, you can reduce your hop loads by 25 to 30%. Your mileage may vary. Not all brewers are convinced by hop cannons. However, I'm a fan, as are many people like me are.
Chinese Made Hop Cannon for my clientWhen it comes to extracts, I'm new to them as well. There are hop extracts for aroma, both for the whirlpool (like Incognito) and to use in dry-hopping (Spectrum).
Please note: I know I'm discussing mostly Bath Haas products for hop extract examples. However, it's because I've most experience with these products, as they are easier to source in China.
I prefer to write about products I've had experience with. However, there are other hop extracts you can try like Hopzoil from Glacier hops.
I'm not realty a fan of Hopzoil however, the aroma they produce seems fake to my colleagues and I, when we did some sensory bench trials.
Still, it's worth trialing them yourself, if you can get some samples.
For more micro breweryinformation, please contact us. We will provide professional answers.
Like we've said before, when it comes to using hop products it's all about trialing and experimenting with them.
Most of the more established hop products can be 'Googled', to find forums where brewers discuss their experiences and results using them.
For example, from my own research (using in experiments and some 'Google Fu'), it seems when using Spectrum only replace up to 50% of the dry-hop, with this product. It'll not replace pellets entirely.
Furthermore, you need to work out if using these extracts make economic sense and determine if you like the sensory too.
Another reason brewers turn to products like Incognito and Spectrum, is they lead to less vegetative matter and trub in beer production. Resulting in lower beer losses, when compared to using all hops.
Yeast is a bit trickier than the other main brewing ingredients, when it comes to cost savings.
Still, we'll look at a few options here'
Now propagating yeast isn't an option open to everyone. You need to have some technical know-how, the right equipment and proper sanitary conditions.
There's a more 'ghetto' way to do this if you've a decent sized pilot system to feed you main brewhouse.
At the current brewhouse I'm running, we can buy a one-liter wet yeast pitches, and make a 150-liter starter with them. We then brew the main batch on the big system, then push starter we've made to the big batch in FV.
We make sure the cell count is appropriate. Typically, a 1-liter wet pitch goes into 150-liter starter. It's then later pushed into a 1,500-liter main size batch. Typically, the big beer batch has an original gravity below 15° Plato.
Also look at yeast strains, you can use too. For example, a lot of breweries are using Kveik strains more. Kveik and high-pressure lager strains can complete fermentations quicker and/or at higher temperatures.
This will lead to energy savings and money saved. I know of several breweries who have switched from using US-05 to using Kveik Lutra. Furthermore, Kviek strains are hardy.
So, easier to keep and reuse. The more you can reuse yeast, the greater the savings to be had. It maybe time to speak with your yeast supplier and assess the situation.
When I talk about processing, I'm talking SOPs (Standard Operating Procedures). These are the procedures put in place as rules to follow when brewing, cellaring and packaging a beer.
When it comes to processing and finding those marginal gains to save money, Justin sums it up really well. So, over to Mr. Fox'
'It's important to not lose sight of the indirect costs, which can rapidly increase when things go wrong. For example, extract efficiency has a direct correlation with how much malt you need to buy to make the beer, and driving this up will obviously reduce costs.
The watchout is, chasing a high extract can bring with it issues which will very quickly negate any realized cost savings.
Consider the tangible benefit of driving extract efficiency in the lauter tun, going from 85% to 90% will save you less than a kilogram of base malt per HL.
Malt Being Milled Ready For BrewingLautering times can quickly blow out, when adjusting mills to crush finer, extended labour costs countering the malt savings.
Increasing sparge water volumes and temperatures will increase efficiency, but will also increase the amount of malt tannins in your wort.
So, always think of what you are giving up in order to save money.
The best target for cost saving is to eliminate (or at least reduce) any instances of producing beer that is not up to scratch, which will either damage the brand, or worse, need to be dumped.
It's these events that are often never seen in the budget and cause the real headaches to the bottom line. '
This partially falls back to our last article on 'How to Make a Good Commercial Beer'. Where we talk about how 'beer quality is important' and long with value too.
I've written several articles on this site, looking into the different parts of the brewing process. Sharing tips on being more efficient. So, instead of writing it all out here, I'll link to them for further reading:
Brewing Boiling Tips ' Kettle Reactions ' Looking at the science of the boil, offering tips along the way.
Mash Thickness Tips ' We do a deep dive into the mash, explain what's going on and how your actions effect the finished beer including efficiencies.
The Brewing Process Step-by-Step with Pictures ' More of a top-down view of the brewing process, with some nuggets about beer processing thrown in.
This is a diagram I made for a client to help explain a possible system set-up for himStages of Beer Fermentation ' We look what happens to beer in the cellar, offering tips along the way.
Spunding During Fermentation ' One of my most popular articles, explains how to capture the CO2 created in the fermentation process, to naturally carbonate your beer. Leading to CO2 usage savings.
These articles go into some detail, about different processes to produce beer. They are sprinkled with tips on how to potentially save money in the brewery too.
Thanks for reading; I hope you've been able to pick-up some actionable content along the way. It was a fun article to write and thanks again to Justin and Sven for contributing.
Again, for Sven's cost savings tips please see this addendum post we made. As the price of raw materials rise, due to a number of outside factors. I felt this article on commercial brewing cost savings tips, was at timely one to write.
As brewers we should always keep a close eye on the raw materials market, as well as for new companies entering the space.
For example, I recently got approached by the company called Amédée and hope to try their products soon. Thanks to Stephane for sending us some samples. I'll be writing about them at a later date, when I've had the chance to trial them
Likewise, we should always be looking to improve/tweak our processes to see if we can save money without loss in beer quality. Certain techniques like 'DIP hopping', could actually improve sensory and save money too.
Anyway, thanks for reading and as ever, if you've any feedback or follow-up questions please feel free to me at:
Or if you'd prefer to send me a message on your preferred network. Simply, scan the appropriate QR code in the image below, add me, then send me a message.
I've been brewing for over 25-years in different parts of the world. I've overseen several installs and brewed on a number of systems. I worked in brewpubs and production breweries.
I now use the experience and knowledge I've gained to help other people, as a brewing consultant. If you'd like to chat about a project; to see if I might be able to offer assistance, then feel free to get in touch.
Plus, a whole lot more. I can also help with brewery processing to improve in-house SOPs. For example, I recently helped a client add spunding capabilities to their existing set-up.
For now, thanks for reading everyone, have a great day and happy brewing.
As the craft brewery market continues to grow, there is an increased opportunity for those interested in entering or exiting the industry to do so.
The craft industry has been steadily growing its consumer base over the past ten years, with the millennial population spearheading this positive forecast for the future of craft beer.
Despite these optimistic predictions, there are still some considerations that must be taken into account ' namely the different preferences Gen Z will bring to the market paired with supply chain issues as a long-term consequence of the pandemic.
But deciding to buy or sell a brewery is a delicate balancing act that requires more than just a love of beer. There's no exact instructions to follow for such a large decision, but there are a few very important considerations you will need to be aware of before hitting the ground running. Here are a few questions to ask as you weigh the pros and cons of each scenario.
Is there a 'right time' to buy or sell a craft brewery? Brewers Association data showing the explosion of craft breweries over the last several decadesFirst, it's important to understand market conditions before deciding to buy or sell a brewery. Do some research into current and future predictions for the market, and pay close attention to what others in the industry are saying.
For those looking to sell an existing business, take a look at the numbers to see if your brewery is considered profitable at this time. Businesses are always harder to sell if they start to show a decline in profits. Timing is everything when it comes to selling a brewery ' especially if the local market is already established and competitive.
For potential buyers, leveraging your connections in the craft industry is also going to be crucial because there are a lot of unknowns that come with owning and operating a brewery, no matter the size! Listening to other brewery owners' experiences is imperative. They might tell you about the importance of thinking ahead or how to prepare for the costs and time required to run a craft beer business. Chances are, those responsibilities might be more than you're planning for.
What's the brewery worth in the market?Potential sellers, be sure to review your local market's competition and demographics to see if there's a good amount of market share and future growth predicted ' or if this market is already a little too saturated to begin with. Also consider the economic impact of the craft beer industry on your state. Depending on whether or not it's sizable, it can help determine a fair asking price. Regardless of the size and age of your business, you'll likely want to work with a professional to perform a comprehensive business valuation and analysis to come up with a final number.
As a potential buyer, you'll need to do your own homework to make sure you understand not just the initial asking price but also the other costs associated with owning and running a brewery. Most breweries can range anywhere from $500K to $1 million in start-up costs alone, and while you're going to be purchasing an already established brewery, there can still be hidden fees and expenses you weren't initially prepared for. Find out where you'll receive financing from and be sure to go through the pre-approval process before making an offer.
What exactly am I buying or selling? Does the sale include anything besides the brewhouse?Yes, you're looking to buy or sell a brewery, but what exactly is included in this exchange? There are two ways a purchase can be structured: buyer purchases the assets or buyer purchases the business.
The asset buying process means you as the buyer are purchasing more than just the physical brewing equipment. You may also be buying the trademarks, the existing business's reputation and market share, its digital assets and accounts, and customer information. Buying a brewery's assets means you are buying all of the things that make a business a business ' without including any potential liability or risks that came with the business while it was in the original owner's hands.
As a seller, you're likely going to want to sell the brewery as a 'business', which in many cases would mean you proverbially 'wash your hands' of the entire situation once the paperwork has been signed.
Regardless of the scenario, as both the buyer or the seller, you'll want a business lawyer to take a look at the agreement and help you to understand what is ' and isn't ' included in the purchase agreement. It's crucial to know what you're buying or selling and negotiate accordingly!
How does the location of the brewery affect its future?Taprooms and brew gardens draw in the local community, creating a space for residents to enjoy a beverage and good conversation beyond traditional bars and restaurants. The most successful breweries move beyond those economic and geographical benefits, and become a draw for craft-beer tourism, a growing sector itself.
In fact, a recent Brewers Association survey found that 1.6% of craft beer drinkers will take 10 or more trips a year to visit breweries more than two hours from home. Understanding the location and demographics of the area you're looking to buy or sell a brewery within will help to form a more complete valuation of the business both now and in the future.
As a brewer, you'll also need to tap into your local population to understand the types of beers that will best suit its consumer demands. Do locals prefer lighter, domestic-inspired beers such as lagers and pilsners, or are they adventurous and open to trying new, unfamiliar things? Do you have a hoppy-forward crowd for IPAs and other variations or does the geographic location lend itself to dark porters and stouts during the colder months? These considerations play a large part in building a sustainable business plan for a brewery.
What's unique about this particular brewery? A brewery's branding is almost as important as the beer it serves.A brewery's branding is almost as important (if not more) than the beer it produces and serves. That's because there's been such an increase in competition within the craft brewery space, so you're going to need a cohesive and memorable brand to stand out.
This is another thing to weigh when deciding to purchase an existing business. How successful has this business been in attracting and retaining a customer base? Is there something unique about it ' whether that be its taproom, location, types of beer it's known for serving, etc.? If you can't easily identify something that makes this brewery special already, it will be another thing to add to your to-do list once it changes ownership.
From a seller's point of view, anything you've done previously to make this business stand out amongst its competitors should be calculated into the business valuation.
Ask yourself:
Each of these items will contribute to the overall profitability of your brewery sale.
Are there any regulatory or legislative requirements I need to be aware of? Talk to your business partner(s), other brewery owners, a lawyer, and financial professionals before making any binding decisions.Due to the nature of the business (a direct connection to alcohol production and sales), there are quite a few state regulations and laws that you need to be aware of when purchasing or selling this type of business. In the U.S., both the federal and state governments heavily oversee the alcohol industry, and requirements will differ depending on location and situation.
Educate yourself about the types of legal documentation and permits you'll need to obtain prior to the sale. Ask questions of other brewery owners in your state to learn first-hand how the permitting process works. Work with a professional to outline property, casualty, and liability insurance options, as well as other permits and licenses required for brewery operation.
How do I get started?Once you are ready to start the buying a brewery process, you'll want to work with a legal representative to create a purchase agreement for both parties. This document must make it very clear what the conditions are of the brewery sale and what the expectations will be during this closing period.
Be sure to carefully read the fine print before signing any contracts or legally binding documentation. There are a lot of moving parts during the sales process, so be sure to really understand what is being agreed upon before signing anything.
Like all major decisions, buying a brewery or selling is not something that should be decided quickly or without the proper background research. Possessing a deep love for craft beer is only the first step ' the rest of the plan will require a little more work but will be worth it in the end.
For more information, please visit professional beer brewing equipment.
*Note: This article does not contain legal advice and should only be used as a reference and starting point for determining what legal documentation is needed to open and operate a brewery. Refer to your local and state laws for specific information, and consult legal counsel when reviewing binding contractual agreements.