Welcome to Eagle Rock Brewery! The purpose of this blog is to keep all of our friends, near and far, up to date on our progress with starting our own little brewery. It is also my sincere hope that some other day-dreaming homebrewers can find some useful information in here to start their own breweries in the LA area. Hopefully one day there will be enough small brewers here in Los Angeles to turn it into a great beer city – one that us local beer-geeks will be proud to call home!
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Eagle Rock Brewery 
I can’t wait to see the brewery!!! It looks like you guys are doing great getting it all pulled together.
Good luckk Steve and Jeremy. We hope to see it someday.
Love,
Liz and Gary Glazer
I am really anxious for the Opening. Good Luck and Keep me informed when the Grand Opening is. Also have your Wife and Sister-in-Law Send me the Pictures from the October Fest.
This is my first visit, but certainly not my last, to EagleRochBrewery. I very much enjoyed it! You two make a great team and I look very forward to visiting your brewery one day in the near future. I’m proud of you both.
Finally a brewery close to home.
Hey, how do we join the mug club?
Hi Nelson,
For more info on the mug club, including how to sign up, follow this link.
Also, you can give me a call at the brewery (323) 257-7866, or stop by if you’re in the neighborhood (but give a call first to make sure someone is here).
Click to access ERB_MugClub.pdf
Steve and Jeremy –
Thanks for all the info y’all have posted over the past year. It really helps those of us who are seriously considering making the jump into the world of professional brewing. Finding concise info about the ups and downs of starting a small craft brewery in California is a bit hard, even with all the info on the net.
I do have some questions about starting a brewery that if you could give me some guidance/information on I’d appreciate it.
How did you come up with a ballpark figure on the cost of opening a brewery? Several sources give figures ranging from $250,000 all the way up to $600,000.
How did you estimate how much beer you need to produce and sell in the first year to stay afloat? Where will most of your sales come from – bottles or kegs? Are the on-site beer sales (at the brewery itself) a major consideration in forcasting your sales or just considered ‘gravy’?
Sorry, I’m full of them (questions, that is). As you can tell I’ve moved beyond the “wouldn’t it be nice to have a brewery” phase to getting my business plan started. Any info you’d care to divulge would be greatly appreciated. I look forward to stopping by once you’re up and running. It’s nice to see the beer scene in LA starting to bloom.
Prost!
Christopher
Hey Christopher,
Good questions. You’ve hit on some issues that are extremely important.
As you suggest, the figure for the cost of opening a brewery came from researching a variety of sources, but it will ultimately depend on many factors. 1) The size of the operation 2) The type of operation (ie brewpub, production micro, production brewpub, etc.) 3) The location 4) The type of equipment you’re purchasing (new vs. used) 5) The amount of renovation/building upgrades needed 6) The amount of red-tape between you & your goal.
The numbers you’ve quoted are probably a good range, but it really depends on your answers to the points above. I’ve heard stories of production micros starting up for as little as $250,000, but some brewpubs can cost as much as $1 million.
As far as figuring out your break-even point, you basically need to know what your expenses will be (building cost, payroll, utilities, marketing, maintenance, loans, etc.) and what your cost of sales will be (cost of raw materials, production & packaging). Add those up, and that’s what you need to make (in dollars) to survive. I know, this sounds easier than it is, but that is the basic idea of a break-even point in a nutshell.
You can figure out how that all translates into volume of beer if you calculate the cost of one of your recipes, scaled-up to the size brewing system you are projecting to have. This isn’t really that difficult…here’s what you do: First, scale-up your recipe from your homebrew-sized version to a commercial size, using your favorite brewing software, or old-school pencil & paper. Just to be conservative with your estimates, keep your brewhouse efficiency the same as it is on your homebrew setup.
Next, you’ll need to procure a catalog from a commercial supplier of brewing materials, such as Brewer’s Supply Group, Crosby & Baker, etc…This is very easy to do…basically just find them on the internet, call them up and ask for one. Then do a cost-analysis of your recipe. Figure out the cost per pound for your selected grains, and hops, and multiply by the weight of your ingredients. This will give you the raw-materials cost of your production. You should also be able to get an idea of packaging costs from these suppliers as well, and then you can figure out the “packaged-cost” of your product…or what it will cost you to send it out the door to the market.
For your first projections, make a guess at the percentage of kegs vs. bottles that you’ll be selling. If you’re not sure just start with 50%/50%. Then you’ll need to do some conversions. Let’s say you have a 15 BBL system, which translate into 465 gallons. If you do 50% in 5-gallon kegs, that’s 46 5-gallon kegs, or 15 half-barrel kegs (15.5 gal). If you do the other 50% in bottles, that’s 1,352 22-ounce bottles. So figure out how much each keg would cost, and each bottle, then multiply by the number of each package. Add that to your raw-materials cost, and you will have a pretty good estimate of the cost of your beer out the door.
From the research I’ve done, I’ve found that you’ll probably need to mark up your “out the door” cost by at least 75% (minimum) above your cost, especially if you’re small, and selling directly to distributors at wholesale prices. Generally, a distributor will mark up your product by up to 30% when they sell it to a retailer, who will then mark it up by up to 30% when they sell it to a consumer. Do some research on your own, and see what beers in your target categories are selling for. $30 per case of 12-oz bottles at the grocery store? $7 for a 22-oz bottle? Then figure backwards from there, and see if those numbers work in the range of your packaged cost. This process will require some playing with the numbers until you find a range you’re happy with, but try it out.
Good luck with your planning and let me know if you get stuck on anything.
Mucho thanks for the info! No matter what, it’s all numbers game.
Christopher
Hey Jeremy – (and Steve) – I’m excited about your venture, and we live in Eagle Rock also. I’ll be checking your blog, and look forward to your opening. Jer – miss you at the Sunday soccer games, but I’m sure its all worth it.
I’ve been looking forward to this, ever since I tryed your (“test batch”)brews @ Verdugo.
Glad to hear everything is ready for “wrap up”.
Salud!!
I’m so excited to hear that Eagle Rock has a local brewery. I grew up in Eagle Rock and have recently moved back. I cant wait to try your brews…
Hey jeremy, i met you at the 14 anv event in s.d. yesterday. I was impressed by your brew & inspired by just your presence of small guy in a big pond bigger brewerys. I’ve been a brewer for off & on for the last 12 yrs,but more intense the last 3 yrs getting into allgrain. Me & a friend are thinking of a similiar endeaver like yourself & was wondering what advice you had for me to increase my brewing education “limited time 3 kids” & also practical steps towards starting a small distrubution brewery? Much thanks micah
I am really anxious for the Opening. Good Luck and Keep me informed when the Grand Opening is. Also have your Wife and Sister-in-Law Send me the Pictures from the October Fest. see my blog usagamezone.blogspot.com
HI,I’m so excited to hear that Eagle Rock has a local brewery. I grew up in Eagle Rock and have recently moved back. I cant wait to try your brews…
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