TOPIC:

Any new microbrewery opening up will most likely require the assistance of a bank and you can be damn well sure they won't be giving out any loans without seeing a convincing business model first (pity they didn't do that during the bubble).

Myself and an accountant friend ran crass numbers one night and we reckon you need to be selling about 15 kegs per week in order to have a sustainable business.

"roryaherne":29vs0kk8 wrote: Myself and an accountant friend ran crass numbers one night and we reckon you need to be selling about 15 kegs per week in order to have a sustainable business.[/quote:29vs0kk8]

-Do the numbers again but slightly differently:
Do them once where all 15 kegs go to a single theoretical mega pub who sells all 15 kegs on their own each week.

Now do it again where you have one keg per week going to 15 different pubs.

Factor in the price of providing taps and monopoly CO2 to each pub, monthly line cleaning services, and the cost of delivering beer to each pub.

Now you understand the huge benefits of a tied pub and also, in part, why Porterhouse v1.0 as a "brewery only" business failed but Porterhouse v2.0 as a "brewery + pub" has thrived.



Creating a new market and converting new consumers to craft beer certainly make for more opportunities in the local market; but I fail to see why this should be about the "tyranny of OR" where it should be about the "opportunity of and". Anyone who doesn't take advantage of both the local and export markets, if they have the opportunity is a fool; maybe a nationalistic fool, but a fool nonetheless. (The whole question seems to be worded in a way that it appears to imply that selling beer for export is a bad thing to be avoided.)


I think one of the keys is to get more pubs selling craft beer; to get to a point where almost every pub HAS to offer at least one local beer because of consumer demand. It is easy enough to see that there IS competition between Irish micros for tap space at the pubs (just ask a publican why you don't see Irish Micro X available and you'll hear justifications that boil down to them having not enough tap space to carry everything and already having too many beers of that style available.)

The past 12 months have been incredibly, incredibly, INCREDIBLY positive when it comes to the Irish market showing that it will reward experimentation and product differentiation from Irish micros. Some of the "crazy stuff" released at festivals sold out quickly and received rave reviews even from those who have never heard of Beoir (some of it not so much, but that's how it goes). 8 Degree's Winter Warmer/Christmas beer is already sold out and there won't be any more in the distribution channels.

The Franciscan Well sold Shandon Century Stout, a PEAT SMOKED beer in 1 liter bottles for 12 euros in Dublin and it sold out incredibly quickly and STILL has people who would like to buy more but can't.

The market is ready for, and NEEDS more product differentiation from the breweries and I think this will expand the market and help ease the issue of micros competing with each other more and more. -When everyone has a pale/golden ale and a porter/stout and there's only 10 pubs in the country willing to sell the stuff (yes, major hyperbole; I apologize for that one in advance) OF COURSE THEY'RE COMPETING WITH ONE ANOTHER!

-This is a ridiculously, ridiculously risky business (especially in Ireland with the costs of entry being astronomical) why don't you act like it (directed at Irish Micros) and create some more risky beers?!? -If Dodgio is taking the most risks with their product line then Irish micros are surely doomed.

Again, I've been FAR more encouraged by the risks that Irish micros have taken with their products this year than any of the previous 4 years. I too have been afraid that we'll see the huge increase in the number of micros in the past 2ish years collapse from local competition but I see WAY, WAY more reason to be encouraged that this is only the beginning of experimentation, growth, and even a national microbrewing identity that results in TRULY unique beers and even styles. There are few things that would make me happier.

I'm just waiting to see full signs of CONFIDENCE and a unique identity out of the Irish micros and then I expect to see some amazing things happen. (I really hope that Shandon Century Extra Stout was just the first ringing shot in an experimental and uniquely Irish craft beer movement. (That is to say a movement that creates beers with an "Irish identity"$$ not a movement that just creates more breweries within Ireland.))


I know I've gone off on a tangent, but as it's the end of the year almost I can't help but thinking about the last year and where beer in Ireland and Beoir has gone in the last year. -John, Sean, and whoever else was involved in the Pre-budget Submission have done a hell of a good job promoting things that support Irish Breweries, Beer, and Consumers of beer this year. B+ work (with room for improvement next year, still) <!-- s;-) --><img src="{SMILIES_PATH}/icon_wink.gif" alt="" title="Wink" /><!-- s;-) --> !



Adam

&amp;quot;roryaherne&amp;quot;:19867c1s wrote: Myself and an accountant friend ran crass numbers one night and we reckon you need to be selling about 15 kegs per week in order to have a sustainable business.[/quote:19867c1s]
I would think that you have your fixed costs stripped down to a minimum here. I would consider that it could be more like 30 kegs.

&amp;quot;DEMPSEY&amp;quot;:t2t664g1 wrote:

&amp;quot;roryaherne&amp;quot;:t2t664g1 wrote: Myself and an accountant friend ran crass numbers one night and we reckon you need to be selling about 15 kegs per week in order to have a sustainable business.[/quote:t2t664g1]
I would think that you have your fixed costs stripped down to a minimum here. I would consider that it could be more like 30 kegs.[/quote:t2t664g1]

It's not that easy; it depends upon the size and cost of your kit, any rent on the facility, and the interest rate on any loans and a loads of other variables.

In the US they say that it takes a brew kit of 7 US barrels in size to break even; there is a mandatory 3 tiered distribution system in many US states, though so it's near impossible to make comparisons to Ireland given the differences in start-up costs, taxes, and self-distribution model.

I've heard one small Irish Micro state that they don't turn a profit until Keg #4 per month in each pub and that's only a partial profit. (Keg #5+ is supposedly a simple profit calculation, though) -Goes back to the idea that more kegs sold at fewer pubs is better.


Adam

Double post; editing down this one as I can't delete it any more.

&amp;quot;Biertourist&amp;quot;:3nr4uiwp wrote: It's not that easy; it depends
Adam[/quote:3nr4uiwp]
You are correct Adam,there are many variables to be considered.