Why starting a craft brewery is a bad idea
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- Опубліковано 5 чер 2024
- Starting a craft brewery is all the rage right now. But is it a good idea? A group of business students debate whether it really makes good business sense.
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The teacher owns 4 breweries and doesn’t want any competition
Competition is good for the craft community
😂
I think _UA-cam_ recommended this to me today because I watched a home brew beer video yesterday.
Same
Have you set up your own brewery yet ? Send free a sample my way
Whole Food Plant-Based Man lol same here man! Just brewed my 2nd ever batch then this BS video shows up. I’m not trying to start my own but props to those that do! Great Raft Brewing here in shreveport has sky rocketed since they’ve been open!
Me too
These people don't have a clue. People start breweries for passion.
this is about making money not passion or hobbies that dont pay the rent
The instructor said that.
@@ARCSTREAMS tell that to Greg Koch
what does that have to do with brewing as a business?
True!
So with this logic, should people open new restaurants or is the market already saturated?
I dont know there are four things always on demand
Food
Housing
Medicine
And morticians
Those will always be in demand for as long as their are humans so I'd say take your shot
It’s different people will at least look at their restaurant no one is gonna care about another beer on that shelf on millions of different beers
People have had enough food.... we need to start having interventions down here in America - of course it's saturated, BAN Food.
its more about the passion of doing like he said. most people that start a craft brewery either worked in another one or have been home brewing for years and just really love the craft. it's not about making tons and tons of money but sharing something you love with other people
The one student nailed it about finding a location where the market isn’t saturated. I live in southwestern Ontario and my city just got its first brewery about 2 years ago and these guys are just killing it. Now on tap at multiple restaurants in 4 different city’s, being sold in both the LCBO and Beer Store. But they were the first, you factor in the amount of people who were frequently having to go out of town to go to a brewery it’s not rocket science that if someone finally opens up a local one it’s going to do well.
Now, ask them, "who here would go to a microbrewery?" ... watch all of them raise their hands, duhhhhh
P R I love this
i love my iphone, doesnt mean i need to own the company duh...
I live in Massachusetts and the brewery we have in town does massive amounts of business. It's packed every night it's open.
Is that Harpoon Brewery?
Harpoon is garbage. Think Trillium and Treehouse. They have lines out the door every single day they’re open
Great video. I run a brewery from my farm in Australia. It is just my business partner and I, we can’t afford staff yet as there are restrictions imposed by local councils that stifle retail margin into our business and thereby inhibit cash flow to support others. We have made a name for ourselves regardless. Kicked off online sales. Always good beer at the end of a hard day’s work. We’re authentic. Never going to be wealthy from it. It is a honest day’s work, generally 12-16hrs 5 days and maybe 3-5 each on the weekend. If you can support local small business, remembering it is the dreams and passions of the founders. Please do.
Good luck mate. I also have a nano brewery. Despite what the professor says in the video, I don't think the Craft Beer market is saturated, even in the US. There are over 50.000 burger joints, coffee shops, pizza places in the US. There are over 80.000 beauty salons in the US alone. Theres enough market for everyone to compete and make a living. Maybe not get rich like you said, but at least you are doing what you love.
Starbucks cups everywhere! Symbolism?
This video is a lot more optimistic than the title suggests, especially the end.
in small suburban/semi-rural communities here in the U.S., a brewery that does a good job of mirroring the identity & history of the area they reside in really does have any opportunity to build a string local customer base that is loyal. Yeah they could go grab a beer anywhere, but the people who go to breweries aren't going there to drink Labatt Blue. If a brewery is done right, it has an atmosphere that you can't get at your local Applebees.
They will all be unemployed after graduation. Mark my words.
This was an exercise in peer pressure groupthink.
Because competition is too high lol
These students don't have any vision! They are like sheep, only seen green grass, never see the sky and what lies ahead
@@afrench4683 aspiring to be corporate shills
How many breweries do you guys own?
You actually pay for this kind of "education"???
They are probably specializing in big money making corporations and will make a lot of money themselves but it seems kind of like a passionless job
The statement that the market is saturated is completely untrue! In fact is very unsaturated, there are now slightly more breweries than there were before the prohibition. This might scare some people but you have to understand that the population of America in between the 1920 prohibition and 2018 has tripled, so in theory we should have at least 3x more breweries than in 1920.
Matic Hop Farm
There are some breweries that are waaayyy bigger than to those times. You would have to compare the overall output of those breweries which I suspect to be higher than pre-prohibition. But I didn't check the assumption.
Though I agree that the market is unsaturated, but that's only because of the recent developments. People want high quality beer and not industrial easy-to-drink-beer, so the market of high quality beer still is unsaturated.
There is actually less breweries than before prohibition. There was around 10000 breweries
@@gibson3lespaul Here in the UK the brewery count is also behind what it was just a little over 100 years ago, London itself used to have hundreds of brewers, It's recovered to 129 (from 9 in 2006 and 8 in 1976)
I believe in the micro breweries and the nano breweries! I think they’re a good common sense way to get some business to the cities that are in need of bettering the community. It’ll create jobs and will start putting money back in the community if the breweries are given a chance to succeed. I think everyone should give them a chance! I always find a new beer that I like....you just can’t be afraid to try something new!!
I do think opening a brewery is a great idea as long as you fit it into the correct location/city.
Well, they didn’t discuss so many other aspects of this type of business; event space, food, music, distribution, merchandise….
Their are thousands of bakeries, restaurants, coffee shops ect. Not all your revenue comes from the beer. The state I live in you have to serve food if you serve alcohol. So there is that additional revenue (and expense). The small town I live in farmed out the food aspect to another company, but you could also have several food trucks.
The biggest thing here are: location, location, location, and a quality product.
To generate more business, on off days. They have Bingo night, open mic night, and live music. The place is making a killing!!!!
They have merchandise, they have growlers, they have an event space, they cater. They have their beer on tap in other bars. They other HUGE THING WITH ANY BUSINESS LIKE THUS IS SPACE. Indoor/outdoor space, event space and most importantly PARKING!
It really doesn’t matter how many breweries there are, just like coffee, bakeries, or restaurants. If you do it right, you’ll do fine. And maybe you get bought out or like any other business you can sell it.
You would still make more than taking a job, and as a business owner you have write offs you don’t get as an employee.
Exactly. This lecture was painful to watch based on their limited understanding and outlook for potential other than the product itself. Every student based their reasoning single-mindedly.
Their mindset: would you buy this vacant plot of land?
Their answer: No. you can only build one house/structure.
Business minded individuals reply: Absolutely. I can can not only build one house, but also multiple single family condos, or a decent sized plaza for merchants/small businesses. Even a paid parking lot etc.
I started a tiny 300 sqft. recording studio in early 2013. After 1 year I was able to begin expanding my business space to not only recording, but to a photography/videography studio, to an event space, to a food and clothe donation center, to a movie theater (free movie nights for the community), clothing store etc. In less than 8 years, I’ve been able to expand to 4 new locations. 300 sft. to over 4,000 sqft.
Was beginning to write everything you stated, but you said it perfectly.
Family-owned private restaurants that are not affiliated with a major chain there are not too many of them. I look at these like I look at those and I am more likely to drink local because of it and I do. We have Four Peaks here in Arizona and I love that place
PumpkinsnBlackcats oh my God I know. The local economy tend to see a great boost bright local businesses like this. I live in Mesa Arizona and there are multiple microbreweries on Main Street. I mean it's really named Main Street for real LOL and there are multiple microbreweries on it and they are all booming
Best way to live! Support local!! Local farmers, restaurants, breweries, musicians, artists and business! Stay away from corporate exploiters like Wal Mart and the McDonald's of the world
Four Peaks got bought by Anheuser-Busch xD
@@Tristram27 oh man!
@@Tristram27 yep LOL
One keen rule of business is diversify.
You can open a brewery but that doesn't mean you need to be only selling beer.
When you walk into a 7-Eleven they don't just sell gas.
One should always step back and view everything from the outside with a 3rd person point of view.
The problem is that you need to sell quite a large volume of beer to break even and that requires quite a lot of expensive equipment upfront. The threshold of starting up is quite high. Doing a brewery pub is probably more feasible where you brew a few beers that you sell at your own establishment along with food and entertainment.
Define bad idea, if you love the idea and you can break even, go for it 💪
Every one needs a job, a craft brewery can encourage local business etc. There will always be market demand.
I like what he says at the end but to be honest a Nano brewery "smaller than a micro brewery" is like a pizza place at this point every small town will have several eventually. The owners won't get rich but they can make a decent living. Probably a way better living than if they worked for the man!
I like Larry´s last response to the question. I think it shows the same mindset what the actual micro brewery owners have when they found their buisness... Or very close to the same mindset.
They don´t necessarily do it to make a billion dollar revenue. And as far as I see many-many breweries popping up and still existing it mainly because of the love of beer and to give people something different which will be remembered by. Most of the brewery owners are quite friendly, open and approachable to ask about their buisness. Its never ivory tower. They are us owning a buisness giving us what we and they love. IMHO
I disagree that the demand for beer is stagnant. A certain percentage of each generation drinks beer, and generations are getting larger....
the real question is:
who here would start a buisness they have no idea's about.
making beer.
meanwhile craft brewery's in canada have sold to huge companies for mega profits.
so brain washing aside.
do what you're good at.
NoLeads Ent. I think it is a pretty strong talking point. Something interesting to me is that none of these people seem to acknowledge the pretty near-endless ways to brew beer in unique ways. Just because the number of breweries is up, does not mean that the brewing methods are overlapping at the same rate.
Just look at the Sour Beer market in the United States.
The key is to open a small craft brewery in an area without one and offer a beer hall, family environment, pub food, games, sports on tv, poker night etc. Offer a decent variety of beers for different tastes and boom, you'll get lots of business. You might never sell your beer across the country but you'll make a good living doing what you love.
One reason why I've considered starting a brewery is my brother in law own a bar in a small town snd the place next to him is empty. It would make things easier already having an established business with facilities present and then just having to add the brewery. But, it is a town of less than 2000 people, so I don't know how well it would take off.
@Kamala's speech writer you still considering this? 🤔
I agree with the saturation point. I've noticed this for quite some time ( I live in VT) . I think you can have brew pub , sell only on site and in select areas.
If you are going into the craft beer market to make yourself a fortune, you are in the wrong business. You have to love the product, the process and every step involved. Most craft brewers don't make that much money. It's about taking pride in your work. I work for a craft brewery, and it's not a huge money making operation. We do it for the love of beer.
Yeah, don't support local businesses. Give your money to major corporation's like Budweiser.. they need your money
Because I'll be wasted 24/7
Dito
Not a bad idea though 🤔🤔
4:44 left hanging
i watched him too xD
Hahahaha
they say he's still sitting there to this day with his hand up, silently waiting for his turn to speak
Alex Four lol
I have so many issues with the way this conversation was facilitated, don't know where to begin....
You’re making my want to open a craft beer brewery.
Tourism in rural areas could draw people like the vineyards in California.
This is UWO? I guess the never heard of Toboggan Brewing Co., Anderson Craft Ales or Forked River Brewing Company all thriving in a city of 400,000 people.
And Equals Brewing Company slated to open next year.
The main reason starting a craft brewery is a bad is that there are a lot of upfront costs that are only scalable once reach a certain volume. At this volume you would need multiple employees, a distribution network, and most likely more advanced and expensive equipment. This all assuming you can actually brew a really good beer, which really the biggest challenge.
For me, a professional brewer, brewing good beer is the easiest part 😅
The hard part for me would be the marketing/accounting/taxes/business
Well in the UK we have more breweries per head of population than anywhere else I believe, and I can believe it because practically every small town through to large city has at least one brewery. Yet there is still a demand for good beer and growth within the industry. More breweries are opening and the industry is buoyant. Hoping the pandemic hasn't changed this.
the other thing to keep in mind is quality as it relates to pricing. i digitize embroidery, as do many huge companies in the developing world. i charge ten times what they do, and i stay busy because i'm at least ten times as good. with beer it's the same. in fact, the more microbreweries there are, the more sophisticated everyone's palate becomes, and thus the more quality matters. how much better is flying monkeys smashbomb than, say, rickards red? if i had to quantify it, i'd say it's at least 35% better, and it's not likely 35% more expensive. i thought for decades that my asian competition would close that quality gap, and they just haven't. it's the same with beer. the big breweries make consistent beer, but they don't make particularly good beer despite steadily losing market share to microbreweries year after year.
I couldn’t have said it better!
Many people here don't want to open a brewery , so I will....Less competition 👍
Love and passion.....money will follow
I wouldn't drink a beer with non of these people
In south jersry.... ive known of 1 brewery to close its doors in the past 10yrs. Theres more than enough to go around
You do realize that most breweries only produce for local customers? They’re not trying to mass produce if this were the case then the restaurant industry would have caved a long time ago.
everyone who raised their hand will struggle to make ends meet no matter what they do
Especially in 2020 and beyond.
In my state of Maine one of the major craft beer states, banks stopped loaning to new breweries in the Portland and Bangor areas,. The largest and third largest cities. The banks see too much saturation. 300 new licenses for breweries are still in the works. What I've seen most breweries are successful however as more come in there will more more competition. And at some point breweries will start to fail, but that any business once competition starts. Competition is good, the beers will get better, the beers will get cheaper.
It depends where you start it! Today, Microbreweries are local retail businesses! With 65,000 bars and taverns in the US, why on earth are they saying the market is saturated with 6500 breweries?
Right, take business advice from CBC...
I would! There's an areas where it still makes sense but looking at the global market data you would never suspect it.
10-20 beers each!? that's gotta be somewhat of an over-estimation.
Nowadays that's a low number. 20-60 different beers brewed a year isn't uncommon by most breweries now.
@@AdamKeele American Craft Breweries sure, Craft Brewers over here are closer to ~15 still
Talking instead of doing is the worst way to start a business. Failure is the best path to success.
Wise words!
This can be applied to any business! 👏👏
well then there's wisco (my home state) and breweries are thriving here
Starting my own craft brewery. Got enough capital to produce 10.000 bottles of craft beer. Best case scenario: I sell them all, invest into making 30.000 bottles of beer. Worst case scenario: I fail to sell anything and end up alone with 10.000 bottles of craft beer. I win either way.
I noticed that the girl at 2:40 is wearing the exact same coat as the one on the back of the seat of the girl next to her.
I just noticed the girl. Blonde 4:41
He's right about what happens to "craft" breweries who get bought by inbev. People stop buying their beer. I stopped buying Goose Island when they were bought out.
M Row
The right thing to do.
Continuing buying there would just feed the "monster" of industrial beer and international monopolies.
This is a perfect example as to why business school is useless. Even the professor has shoddy market research. The students are just surmising one thing or another.
Quite a few micro brews made the jump to scale (Harpoon, Sam Adams, Sierra Nevada and others), and some were bought to larger corps and continued going.
Many microbrews fail, because the distribution is over the counter, and restaurants fail a lot. Many other microbrews make >$300 per sqft on over the counter sales. And not everyone wants to become a corporate tycoon with an MBA who only thinks about cost cutting and selling the least amount of quality for the highest price.
"Those that can, do. Those that can't teach."
The craft beer market comprises about 12% of all beer drinkers in the U.S. If part of your business plan is to find ways to persuade the American adjunct light lager drinkers to convert to drinking your beer, you may have something. The 12% are saturated sure, but the other 88% is fertile ground for expansion of the craft beer industry.
Its all about finding a niche. No you probably shouldn't do yet another Ontario IPA. But perhaps there are other underserved kinds of beer you can provide.
Once upon a time, like everything, this was how it was done - locally. So there is room if you do good work in a niche that is definable, just don't expect to be Labatt's or Seagrams. (Craft distilleries on the rise now.)
Okay I need help coz I want to start my own craft beer shop but Idk who to talk too or what legal documents I need to get
Good question , but very very very weak narrow responses....
All business face those basic concerns spoken of in the classroom...
Note: operating a craft brewery is like owning a bar.. there are various revenue streams within the umbrella...and potential opportunity in real estate. Distribution, warehouse ,etc
Of course there is competition but what’s unique there
Would I invest in a brewery? No... it doesn’t fit my style
Food and beverage industry is too labor/ management intensive not to mention heavenly regulated
1879gym so what business you think would be good to invest in
This has such a corporate/ think tank vibe to it. I’ve never thought of opening one in my life, but something about this really rubs me the wrong way.
The guy said a whole lot of nothing while reinforcing the student's fears of not opening a brewery.
Is the concern staying out of the red or is it just growth potential. Frankly if I can make a niche' for myself and make enough money to pay the bills then it works for me.
Taylor Burke
Well, this is a business class, so it definitely is about growth.
I don't know why i'm watching this i'm not even old enough to drink
😂🤣😂
Same reason restaurants are a bad business. What if you love flavour, good food and want to share it with others. Enjoying your job is much more important than big profits. So please work hard , do your research and open another craft brewery. You have my support.
This isn’t news this is some random business class with no accreditation
microbrewery, can adjust easily the taste/smell or add flavors when customers will highly recommend or suggest what they want.
This reminds me of another lecture I saw... "competition is for dummies" There's always that little side door that no one seems to bother using.
Micro doesn't necessarily mean small profit or inability to grow. It means your growth is limited to a localized market. You can go from a million in sales to ten million in sales and still be considered small.
If you look at the odds of success In business, it is low. Being an entrepreneur is about taking calculated risks and finding a niche in the marketplace that others dont see or have the stomach to make it.
If your dream is to open a brewery, do your research and have a solid business plan. Otherwise build a bar in your basement and make home brew with your friends. It will be a lot cheaper and less work.
neither the professor nor the majority of students know what entrepreneurship is
which University is this?
Which business school is this?
And no mention of opening a tap room. You would be the end seller of any micro brew you choose.
The owner of a craft brewery in my neighbourhood told me last month “it’s easy to have $1 million in the craft brewery business!……. You start with two million!!”…..
Hear that popping noise? That was the craft beer bubble...
Hello, I’m from the future in 2023 and the influx of successful micro breweries is amazing 😂 stay in school kids.
This broadcast brought to you by Anheuser-Busch.
Anybody saying what does passion have to do with business is obviously missing the fact that “passion” is one of the most important entrepreneurial traits to have…it’s the drive behind the business, it’s the authenticity behind the product. A business owner without passion lacks care for the product, ultimately not satisfying the customer…not to say money/finances is not an important part too. But it’s a balance of the 2.
That word "identify" again.....very nice ending from the prof
Brewpub verses brewery is different. If you can find a geographic niche then it may be worth it especially if you like brewing
Market isn't saturated because the local breweries don't have the largest reach for distribution.
@Joe Washington I still crush some miller lite. But i go for craft brew when I can do so in a reasonable manner.
We have micro breweries and wineries all over northern Virginia and they are all packed. Virginia is for lovers of beer. Loudoun county has wine and beer tours, your welcome.
you can say that about any business startup.
Had a feeling the professor wouldn't be opposed to the idea of starting a brewery. I also think that automation will allow a large percentage of the population to pursue more craft and niche oriented jobs that reflect their passions rather than large scale industry needs.
Since we import beer from Britain, Belgium, Germany, Denmark and the Czech Republic, we have a market that is not being served by domestic producers.
We also have a market of lime juice drinkers who enjoy adding a near-beer (e.g Corona) to their favorite drink for more calories. Eventually, this group will switch to another more fashionable drink, hence the overall beer market will shrink.
You realize that the huge increase of breweries is thanks to people who don't drink Corona or other industrial beer at all?
I would. I did. Doing very well too.
Larry nailed it.
Just looking for cheaper beer, but as fine as Heineken or Moosehead.... Can't find any that is 1/2 to 3/4 less than those two like in other countries.
Personal satisfaction is not just about money
Kinda missing that the craft beer market isn't like a lot of other markets. Not every brewery is available in every city, state, province, etc. On top of that, most craft beer drinkers have a tendency to constantly try new products. It's not like cars, where one purchase lasts a long time. Is it an over saturated market? Possibly, but that isn't as much of a hindrance this type of business.
No mention of Brewdogs in this discussion 😂
this video is two years old and the number of breweries are still going up, thus showing how short-sighted CBS is
Who's going out for drinks tonight? ...
So raise your hands if you think going to a craft brewery is a good idea
More beer is always a good idea.
How many make MEAD?!? Hu?! Ya that’s what I thought!
randsterama mead need more recognition then it gets
man this is old, but I really think the "make beers unique with aliens and artistic designs is the best approach for newer gens." but with that I use to drink heavy and try all sorts of beer. with that said no one is really going to make that beer their "staple" and be continuous buyers if so it would be a small margin.
Like my father and many older drinkers they stick to brands that have been around for generations. budlight, coors, budwiser.
those are the only ones getting alcoholics that are buying cases every weekend. end of story. even if it's a passion it should probably stay a hobby.
unless social media skyrockets your business randomly.
What they are not understanding is the scale of the brewery you would open run, beer brands on craft side are very geographical locked, you would brew for your geographical area. Not brewing for annihieser Busch where it's worldwide. Also I would craft brew based on the passion of making it your own, not to get rich.
A lot of people to compete with doesn’t necessarily entail a lot of competition…