*Distillery Trending*

[HedgeBird]

16 hours ago, Patio29Dadio said:

Not where I live... not by a long-shot.  Start a craft brewery for $1MM.   Start a craft distillery for $3MM.  Anything less and you are fooling yourself, IMO.

So basically me, and every other craft distiller I know, have been successfully fooling ourselves for years now.. 

[adamOVD]

A small distillery can be way cheaper to build out than a brewery. You need to buy a still, but it can also function as a mash cooker, and you don't necessarily need a mash tun. You can ferment in cheap plastic totes, and you don't have to crash cool them. Jacketed stainless conicals are crazy expensive. You don't need to invest in an expensive bottling line, or a ton of kegs, and can do a lot more with a small space.

To touch on the original topic though, I hope someday every small mountain town has it's own distillery. There is more potential for flavor varieties in gin botanicals than hops in IPAs. I think it will also be great for farmers. The farmers in our area are mostly growing alfalfa in our area. In most places I'm guessing its GMO corn. I dont know much about the industry but the farmers I've talked to are super excited to grow a rotating crop of natural grains, and seam to think they can make better money from it. That's why sharing info on forums like this one is so important. So new small distilleries don't suck like the OP worries about, and people seek them out instead of being disappointed by them.

[Silk City Distillers]

Yeah I agree - Out here in the Northeast, I suspect brewery startup costs are going to exceed distillery, just due to the startup scale necessary for a brewery to be competitive.  A "minimum viable" distillery seems much easier than a "minimum viable" brewery.

[Huffy2k]

2 hours ago, HedgeBird said:

So basically me, and every other craft distiller I know, have been successfully fooling ourselves for years now.. 

Blanket statements like that always make me chuckle.

[Patio29Dadio]

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That may be true where you live, but where I live you can start a distillery for $250,000.00 including the building and property and produce enough to make a good living. 

That is dreamy.  I was born in that state... Columbia... but it all went downhill from there.

[Patio29Dadio]

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So basically me, and every other craft distiller I know, have been successfully fooling ourselves for years now..

Depends on where you live.  What will kill you in CA is the cost of space and the cost of improvements to get the property to code.  Cost of utilities.  Cost of labor.

You might find a crappy industrial warehouse out in the sticks, but without much hope for any tasting room retail sales.  Even then you will have CA Title-24 regulations, CA health depart, CA extreme code compliance, etc.  Your improvement costs will be a killer.

Are you paying yourself a salary, or are your working for free?  You will need at least a $60k per year salary to barely survive in most cities in CA.  Your employees will also need to make close to that or will not have any (good) employees.

Are you heating with electric (hyper expensive) or gas (less expensive but then add the high cost of purchasing and installing a steam boiler). 

What are you selling before you have any aged product ready?

What will your average monthly burn rate be while you are getting ready to open and sell, and then until you turn a profit?  $25k would be a dream.   Plan on it being more.

Now you should have more customers to sell to, but you will probably spend $2MM - $3MM before you break even... depending on the location.   The most common reason that new businesses fail is lack of capital to carry them through to break even.   I would not advise anyone to try to start a CA distillery business without $2M - $3M in the bank depending on location.

However, there are a number of micro-craft breweries that can go into a 1200 sq ft space where they are basically a taproom and restaurant.  They make their own beer.  Sell pints onsite and growlers to go.  But they don't ever plan to go on the shelf.  This is a business model that works depending on location and it can be started for $1M.

I am sure things are a lot different in MO.  I guess that is why we should not make general statements about costs, as we do live in a diverse republic where the local economies are quite different.