I’ve been considering starting my own Microbrewery or Brewpub.
Anyone have any experience in either?
What should I think about?
Which is better? Microbrewery or a Brewpub?
Any advice would be highly appreciated.
Which is better? Do you want a bar or not? If you want paying customers lined up at a bar, you want a brewpub. If you just want to make beer and sell it to stores and bars, you want a microbrewery. If you’ve never been in the restaurant business, run a bar, or even worked a counter, you may want to avoid brewpubs, as it’s like starting three businesses at once. OTOH, microbreweries do have to convince other businesses to carry their product.
Neither is “better”. It depends on what you want to do and what you’re qualified to do. I would define a microbrewery as a brewery which makes and sells specialty beers. A brewpub is a bar/restaurant that serves their own beer. Do you want to run a restaurant/bar? That requires a whole different set of qualifications than running a microbrewery. In either case, you need at least a highly qualified brewmaster, someone who can handle production (bottling, etc.) and someone with business/accounting experience. This could be one (very busy) person, a set of partners, or employees. If you also want a brewpub, you need someone qualified to run and market a restaurant, cooks, waitstaff, etc.
I have second-hand experience (my wife was a partner in a very successful brewpub startup before we were married) but I don’t think she can offer any secrets you wouldn’t get from general experience in the restaurant/bar industry.
By the way, if you decide a brewpub is what you want, you really should have restaurant/bar experience. If you don’t have that already, I’d recommend getting a job in one at whatever level you’re qualified for, from waitstaff up to general manager, and work your way up the chain of command to gain experience. You don’t want to do on-the-job training in your own business with your own investment at stake, and in the course of learning the industry, you will have a chance to learn if this is really what you want to do. Owning/running a bar is not a job, it’s a lifestyle, and it’s not for everyone.
A couple of highly successful microbreweries/brewpubs you might wish to contact; I’m fairly sure both have advice on how to, as they’ve been contacted by others thinking about starting one in the past:
Errol and Michael Flynn (father and son; that’s Errol’s real name – he owns it, Michael operates it)
Sackets Harbor Brewing Company
Sackets Harbor, NY 13685
Greenshields Brewery and Pub
Old City Market
214 East Market Street
Raleigh, NC 27601
(sorry I don’t have a contact name for them)
Thanks for the advice. I sort of knew the differences between the two, but thanks for bringing that into focus.
What about return on investment? I’m guessing that a brewpub will have a quicker rate of return, but will eventually be limited to capacity. Wheras a microbrewery will have a slower rate of return but better growth and eventual greater return.
Any thoughts on this?
The rate of return on either will be heavily dependent on the quality of your product, your marketing, and a slew of other factors. As anyone in the bar business will tell you, different bars may be run at a loss for many years, be wildly successful for a couple of seasons and then crash as trends change, or churn away with a good return indefinitely. It depends on some factors you can control (quality and marketing) and some you can’t (fickle fashion and local preference).
Assuming you can become profitable (which is not a given in either one of these businesses), you can expand in different ways. Pubs can grow by opening additional locations or franchising. Breweries may grow by adding larger production facilities. A brewpub might grow by doing either or both.
For example, the brewpub my wife helped open eventually opened additional locations in two other cities. After the initial startup investment, this gave the partners more income (three times the narrow profit margin) with exponential increase in management difficulties.
A brewpub I frequent in another town expanded by opening another brewery in a more cost-effective location to bottle beer for other retailers. The original brewpub produces beer for sale within the pub and the new brewery produces bottled beer that’s now widely available. Since the original site was in a resort town, it was too expensive to expand the brewery facilities there. Since other nearby markets couldn’t support an upscale brewpub, they expanded by adding brewery capacity alone.