Brewhouse Considerations: Digging into the details

What may seem like a straightforward decision, selecting a brewhouse, is probably the most difficult decision of starting a brewery. This is second only to, “Should I start a brewery?” My company, Blichmann Engineering, has helped hundreds of brewers answer this same question over the years and it is a pleasure to share our collective experiences with you. At the end of the day, selecting a brewhouse forces you to do the research into all aspects of your brewery planning and that means a smoother start to your new business.

Speaking of business: You are no longer a homebrewer, so you’ve got to change your mindset. Your first focus should be to make your business profitable. As a brewer you’ve likely got favorite styles you love to brew. And while it is important to have variety on tap, don’t lose sight of brewing what your customers want to buy. Make sure to have those styles readily available. I’ve seen several brewers stubbornly turn a blind eye to consumer trends and preferences and lose business because of it. I’m not saying you need to fill your tap list with trendy styles, but keeping a lighter beer and a trendy style or two on your list will be a wise decision for your bottom line.

So how big of a system do you need? That is ultimately driven by your business plan. If you don’t have a business plan, you’d better get one in the works pronto. Your bank is going to expect one and it is the best way to learn in advance if you have a solid plan to make a profitable brewery. Business plans are living documents that encompass your market study, the niche you intend to serve, growth plans, financing, competition, and personal financial goals. I can’t stress enough how important cash flow is to a small business, especially in the start-up phase. The business plan can help you early in the planning phase know how much cash you’ll generate, how much you need to borrow, and that ultimately defines the affordability and profitability of your brewhouse.

After the business plan is mostly solidified sizing your brewhouse system is simple math. In fact, I’ll provide a link to my company’s online calculator later in this article. Let’s get started going through the key factors in your business plan that affects your brewhouse size.

One of the first decisions is whether you intend to operate as a taproom only, wholesale distribution only, or a combination. Wholesale-only breweries in the nano-size, 5-BBL and below, are fairly uncommon since you’ve got to sell a lot of beer to make enough profit to justify the investment. But some folks just want to keep things simple, forego the hassles of retail staffing and just want to brew; have their beers on tap somewhere and put a little money in their pocket. Nothing wrong with that, but do go in with eyes wide open.

Taprooms are much more the nano norm as you’re selling all the beer at retail prices — but with that comes a lot of cost of retail space and staffing. As a perspective, you’ll get about 200–220 pints per BBL net yield. Typical retail price for a pint is $5–$7 = $1,000–$1,500 per BBL. Typical wholesale price for that same BBL is about $500. All that said, most taprooms also sell a small portion of their kegs to outside accounts, not so much for additional profit, but for advertising to draw in new clientele.

Another absolutely vital part of the business plan is the market study. This doesn’t need to be a difficult task. If you’ve got other breweries in your community, what size systems do they have? How often do they brew each week? How much beer do they sell each week? How seasonal is their business? What are their best-selling styles? Other things can simply be observed. Do they offer guest taps? How often do their style offerings change? Do they have a kitchen or schedule food trucks? Do they make hard seltzer? Offer wine or liquor? If you do have a lot of local competition, what are you going to do differently to draw in customers? And this can be more than just beer related. If you don’t have another brewery in your area, find a community similar in size and demographic to yours, and go visit there. Brewers are more likely to give specifics if you’re not in the same locale.

Another factor that isn’t talked about enough is what your personal goals are. Not everyone wants to be the next Bell’s Brewery. Some want to supplement their day-job income and sell beer to local restaurants. Some just want to replace their current income doing something they are passionate about. These are perfectly valid reasons to start a brewery but they will affect the brewhouse you choose.

Finding your niche is also important and this, too, affects the brewhouse that’ll work best in your business. Will you brew lots of styles and always offer something new for your customers every few days? That will shift you to a smaller system and more frequent brewing. Looking for a few flagship beers and also planning to distribute some of your production? That’ll drive you to a bigger system. Will you brew and decorate to a specific theme? German lagers, sours, U.K. beers, Belgians, heavy metal, Sinatra? Those also affect your brewhouse and cellar tank sizing.

Some final words of wisdom to help you size your system is reminding you that there is a whole lot more to owning a brewery/taproom than brewing and cellaring. I call that the business of running the business. Alcohol and Tobacco Tax and Trade Bureau (TTB) reporting, finances/banking, purchasing and bills, IT and point-of-sale systems, equipment maintenance, managing and hiring staff, web traffic and other advertisements, growth planning, working the taproom, tours and customer events, etc. Unless you plan to hire a brewer out of the gate, only plan to brew three days a week maximum. That’ll leave the other three days for the rest. And a day to rest . . . maybe.

Now that you’ve got the bulk of your plans together, we at Blichmann Engineering have built an online calculator to help you size your system (link after this paragraph) and it will give you recommendations for the types and quantities of cellaring tanks you’ll need. There may be others out there to explore that I am unaware of, so if you do find another please use them and compare. Be sure to consider at least one bright tank for clarification and carbonation. Most nanobrewers keg their beer, but many serve from bright tanks, or do so only for their flagship beers to cut down on keg washing and filling. https://www.blichmannengineering.com/tankplanner/index/index

I recommend running a number of scenarios, particularly growth scenarios, so you ensure you’ve got enough room in your facility for cellaring expansion. Also note that the cellaring equipment is almost always the bottleneck in a brewery. While it is certainly not recommended for nano-sized systems, you can always run your brewhouse 24/7 to turn out a lot of batches per week, but your fermenters are already working 24/7. So you will need to keep that in mind at this point.

Once you’ve sized your system you’ll need to select the power source. 7-BBL on down, electric is a great choice. Quiet, efficient, and the ventilation needs are fairly low . . . one of the biggest issues we run into with electric systems are their power requirements. They consume a lot of power, (roughly 4 KW–12 KW+) and you’ve got to make 100% sure your building can provide that. Most electric utility companies will consult with you about power that is currently available and also what can be run to the building if it isn’t currently available. Don’t trust your realtor or building owner at face value . . . or a residential electrician. In all cases, be sure to get power needs written into any purchase or lease contract. The other common choice, where adequate electric power is not available, or just too expensive, is natural gas. Be sure to choose an industrial-type burner with an enclosed burner box. Open-flame type burners generate a lot of heat in the brewery and can be difficult or impossible to get permitted for operation. Again, discuss your needs with the utility company and they can let you know if the building can support this.

Now that you have an idea about the size of your system and power source, there are a couple types of brew-houses out there these days. The traditional “skidded” systems include the boil kettle, mash tun, and hot liquor tank all pre-mounted to a stainless steel frame. All the interconnect plumbing is hard-piped to each tank, chiller, pumps, and so on. A platform is provided for access to the top of the vessels. The benefits of this type of system are that all tanks are plumbed and ready to go. Operation doesn’t involve moving hoses between tanks and pumps. And they have that cool “pro” look to them. The main drawback is the high price and the inflexibility to modify the plumbing if you want to use a different process. They also have a learning curve to know which valve does what.

The other common type of system is individual tanks that are either floor-mounted or on a stand and interconnected with hoses. Since they are relatively short vessels, no platform is needed. The benefits are a significantly lower price tag, flexibility in operation and layout, and they are much easier to move into your facility as individual pieces. The learning curve for a homebrewer is easy since they are plumbed and operated in a familiar way. The only real drawback is manipulating hoses during the brew day. But some manufacturers offer a hose valve manifold to somewhat mimic the hard-piped systems, yet maintain the flexibility of a hose-connected system.

Most manufacturers offer systems with insulation jackets. Some offer single wall, non-insulated vessels as well. While insulated mash tuns, as well as heat-exchange recirculating mash systems (HERMS) and recirculating infusion mash systems (RIMS) are the norm in homebrewing, they are largely unnecessary for any system over 2-BBL. The large size of the vessels retain heat much better and temperature drop over an hour is no more than 1–2 °F (0.5–1 °C). Insulation does help keep the brewhouse a little cooler but that is normally not a major issue. And it is nice to have the sidewalls cooler for burn prevention. But that does add cost to your system. In either case, step mashing and RIMS/HERMS systems are unnecessary as they are carryovers from small homebrewing systems. Today’s malts don’t benefit from step mashing, so save that time and money to invest elsewhere in your business.

Lastly, don’t forget about the other equipment that is vital to select upfront. They are also highly dependent on your system size. A glycol chiller or temperature-controlled fermentation room is key to successful fermentations. Work with a reputable company with good local support that sells a product with a reputation of reliability. Going cheap here can be the most expensive mistake you’ll ever make. Again, plan for growth. If you’re planning to keg the bulk of your beers, a keg washer is a definite time saver. It also provides a consistent high-quality cleaning and sanitizing. Water is a key ingredient, so be sure you’ve factored in water treatment, storage, and potentially a reverse osmosis (RO) system if your local water is difficult to treat. If you plan to crush your own malts, a quality grain mill is a must. While you can buy most malts pre-crushed, the advantage of having your own mill is consistency of crush, as the crush will vary somewhat between malt suppliers. If you’re only milling specialty malts you can get by with a high-end homebrew mill, but there are a couple mills on the market that are tailored for nanobrewers and are much more economical than large commercial mills.

Wrapping it all up, selecting the right system for your needs really is heavily based on your business plan. And the key factors there are being honest with yourself about how often you can realistically brew each week, carefully assessing your market potential, factoring in affordability with the cash you expect to generate each month, and determining what you hope to achieve by owning a brewery. Get these right upfront and you’re setting yourself up for success!

Written by John Blichmann