Tuesday, April 23, 2013

What to do when your eyes get bigger than your stomach?

A couple weeks back I posted briefly that BSBC was postponing the start of bottling operations indefinitely.  I realized a few days ago that I didn't give a whole lot of detail which is not in keeping with what this blog is all about.  So with that in mind I wanted to circle back and give everyone a little more info on what happened and what we plan to do next.

The original plan for the brewery was to be draft only for at least a year, if not longer.  Bottling beer is a whole different operation than kegging beer.  The demands of shelf-life under less than optimal conditions are an ever present issue with packaged beer, much more than keg beer which lives its whole life cold.  The equipment to fill a keg is a couple hundred bucks.  The equipment to fill bottles is several thousand.  Given everything that was involved in just getting this brewery operational bottling was only a distant glimmer in my eye on day 1.  That being said, somewhere along the way I found a "deal" on three used single head counter pressure fillers.  It was a deal that (at the time) I felt was too good to pass up.  So I didn't.  Now these machines were never meant to be a long term solution, just a way to get some bottles out here and there.  In fact we used them to bottle the Determination collaboration with Triple Digit.

Now fast forward to the end of last year.  As I sat looking through all the sales figures vs. capacity and all that fun stuff I started to see that it looked like there was some unused capacity starting in early 2013.  That coupled with the constant barrage of "when are you going to start bottling" questions led me to decide that the time to start bottling was coming sooner than expected.  A bit of a deviation from plan, but a good one I convinced myself.  So the long process of setting up packaging began.  Lead times on printed boxes and labels can be pretty long so it took from December through March to get everything in place.  Not to mention the capital outlay for the design work, artwork proofs and printing everything.  There's labels and six-pack carriers and case boxes to source and purchase, not to mention bottles and caps.  All of which must be paid for in advance and bought several thousand at a time.  It was a daunting task that took just about every bit of available capital that I had at the time.  All the while I was working on the machines to improve their speed and performance.  Even though they were used to bottle Determination we had to do a lot of "fiddling" to get them to work well enough to package that small amount of beer.  When the time came to start bottling for myself the machines were working better but still not great and at excruciatingly slow speeds.  It took 6 people 6 hours to bottle around 30 cases of beer.  (An even modestly automated machine will do 60 cases an hour).  The process was very labor intensive and at times even dangerous (my brother-in-law cut his thumb pretty bad when a bottle broke in the capper).  The implications were that I would need to have 6 people here all day every weekend just to have a chance of making the amount of bottled product that I had committed to.  Because the machines were still a little finicky to work with I could not guarantee that every bottle would be consistent using volunteer labor (plus that's just too much work to ask of volunteers).  The odds of running out of product in the market on a week to week basis were just too high so I decided to scrap the whole thing.  It seems my eyes had definitely gotten bigger than my stomach and I had taken on more than I could handle.

In the end it has probably been a blessing in disguise.  Over these same months that I thought we would be growing some excess capacity in reality it has been the opposite.  Draft sales have picked up as we have come out of the slow season (if you can believe there is such a thing, but apparently there is) and now I can't make enough kegs to properly supply demand.  I am regretful that I had to back out of several commitments at the last minute as that doesn't generally reflect well on any business.  In the end though I think it is better to pull the plug at the start rather than put out an inconsistent supply of product and I hope everyone understands that.

So now what? 

Well the moral to this convoluted story is STICK TO YOUR PLAN!  I spent a lot of time working out the business plan for this venture and so far it hasn't led me astray.  So it's back to plan A.  We will continue to make only draft beer until such time as our capacity dictates that we must begin bottling.  At that time we will source the equipment needed to do it properly and (hopefully) never look back from there.  When will that be?  Who knows.  Maybe six months, maybe a year, maybe never.

So this premature foray into bottling has been a bit of a learning lesson for me.  In the brewing business (as in any business) it is all about managing risks and balancing growth in a way that works for you.  For some people the motto is "damn the torpedos, full speed ahead".  Not me.  When I see a torpedo I take the long way around.  In this case I guess I stared at the torpedo a little too long and it stung me a little, but staring at the 20,000 6-pack carriers will stand as a constant reminder to never get too far ahead of myself again.

At least until the next time....

2 comments:

  1. Makes good sense.

    It is clear to me that you have a good head for business and a conservative mindset in risk management. I believe that will continue to serve you well, and help ensure a solid market presence as you continue grow your business.

    T. A. Frazer

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    1. Thanks T.A. We'll see if the "strategy" pays off in the end...

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