How to determine outputs/ still size

[ABL]

Hello, 

Thank you for reading. I am looking at opening a distillery but I still have no idea how to tackle the "How much do you want to make" question. 

Which also will determine still size. 

I know everyone in the business has started off with this question.

How did you arrive at you answers? 

I am looking at my city population and demographics but that isn't exactly answering the question (60,000 people).

The space I am looking at is a 25 ft by 100 ft building (2,500 sq ft) for the distillery, tasting room, and ... storage. 

I am looking at doing barrel storage in the basement to try and keep as many seats as possible. 

As far as what I want to make; it's the perfect asshole answer- like when people mention that the answers are out there. I am posting this in the beginners section bc clearly I'm new. 

I plan on making rum when filling orders for a local restaurant and then sticking to vodka, gin, and whiskey.

Does anyone have some advice on how to arrive at an actual answer?

 

A

 

[bluefish_dist]

How much you can sell and how much you can make are two very different questions.  Can't help on the how much can you sell.  

To answer the how much to make I will post what I think are some good estimates.  Not perfect, but they will help you plan.  Note I have posted this before.   Start with how much you need to make (gross).  Figure you can get $100/gallon for bottled product ($20/bottle) Maybe more, maybe less, but this is a rough estimate.   So divide gross sales by 100, that is how many gallons you have to make.  So roughly every $100k is 1000 gallons.  Divide by 50 to get per week.  That's 20 gallons or 100 bottles per week to sell $100k.  Distillation is about a 10:1 reduction,  so 20 gallons bottled is about 200 gallons of wash/wort into the still.  To determine still size, decide how often to run the still.  Once per week is a 200 gallon still, twice per week is 100.  For fermenter, figure a two week turn.  Some are faster, some slower,  so that doubles the still volume.  In rough numbers 400 gallons of fermentation, 200 gallon still run weekly gets you $100k/year gross.  

I think this shows why you need a pretty big setup to make any money.  also look at your fire code.  If you don't have sprinklers you can only have 120 gallons in a control area.  That isn't much barrel storage.  It goes to 240 gallons with sprinklers.  

[indyspirits]

1 hour ago, ABL said:

How much do you want to make

As much as you possibly can

 

1 hour ago, ABL said:

The space I am looking at is a 25 ft by 100 ft building (2,500 sq ft)

That may seem large, but you'll be clamoring for space in a year or two.

 

1 hour ago, ABL said:

barrel storage in the basement

Check with you fire marshal. Also keep in mind those barrels weigh close to 500 lbs.

Think about how much income you need to pay your bills. Work backwards from there.  Operating a distillery is hard work. The margins are slim, the hours long. Im not trying to dissuade you, only encourage you to put a substantial work into you b-plan and pro forma.

 

 

[indyspirits]

Well shit. @bluefish_dist said it better than I ever could.

[Foreshot]

Bluefish for the win.

For pricing look at other distillers around you. I would charge similar rates as them. You're selling a premium product, don't try to price match regular commercial spirits.

Unless you're experienced in the industry you're never going to be close to what your actual sales will be except by happenstance.

With most startups (not just distilling) you're most likely going to be selling a lot for the first 2-4 months. You're probably going to be getting at least some free press & general buzz. Ride that wave as hard as you can. It is that 2-4 month point when your product/marketing/location/etc will start to dictate your sales. Short of having a perfect product you're most likely going to see a drop in sales. Just be ready for it.

Also are you selling bottles only? If you're in a state that allows a bar do that. Unless you're selling a lot of bottles the bar will likely make you more money than bottle sales.

Sorry I can't help you more.

[ABL]

This^ so much this. Yes! I can work with that!

Thank you guys. The landlord is getting bids now for the maintenance. After that I'll have the financial numbers to finish this. @bluefish_dist this was exactly the formula I needed to sort things out. @indyspirits, not dissuaded at all. 

I couldn't just use other local distilleries numbers due to population size, and set up. One of them makes stills (shoutout to Headframe Distillery), and have multiple sites. 

If I was even more clueless the idea of "space" that would be a big shock in a year or two! Thanks to lots of behind the scene tours at distilleries I am already worried about space for packaging, bottles, and all the other stuff you just don't think about when you start out. 

I'm going to try to do a tank storage system from the main floor to the basement so I can barrel and do storage in the basement. 

Anyone have creative ideas on narrow space manuvers?

In Montana and we're allowed to have a tasting room, which I imagine is how I'm going to make most of my profits because I have to sell to state liquor store; pluses and minuses to that. 

All in all, I'd rather be working for myself with  small profit and call that hot mess my own than dealing with other people's fires.

While I doubt I'll get rich I hope to be a small staple in my town and do alright. That's enough for me.

Thanks for all the feedback again, and so quick! 

Hope to see you all at ADI next year, with a bottle and name of my own!

A

[Silk City Distillers]

Biggest issue with small spaces, you are going to hit a point where not having a forklift is a real problem.

Yeah, probably the furthest thing from your mind.

But when you start laying down 53g barrels on double racks, getting full skids of grain, or a full pallet of bottles, it starts to get really old, really fast.  What should take 5 minutes takes an hour of breaking down skids and busting your back.

While a stacker will probably work in the interim, you are going to get deliveries that are going to push the limit.  Got a full skid of bottles the other day that was like 2300 pounds.  Full tote of molasses is closer to 3000, trying to get it moving on a pallet jack takes two people.

How on earth are you going to get barrels in and out of the basement?  Freight lift or elevator is a pretty serious investment, especially if the building structural needs to be modified to support it.  I wouldn't even want to consider the potential for an accident trying to take a small 15 gallon barrel down stairs, let alone a 25/30 or 53.  If you have aspirations of cutting the floor open and using a hoist, remember that floor joists are on 16s, you won't fit a barrel through.

[Silk City Distillers]

Oh one last thing, you might want to seek out the blessing of your local fire official for using the basement for alcohol storage before you commit.  Yes, it's a scary thought to proactively raise an issue with the fire inspector.

But, in this case...

Basement, subgrade, below grade, 'no direct exit' - these are "bad words" when it comes to fire code and storage of flammables.  In some codes, in some jurisdictions, there are prohibitions and special requirements around basements - this applies to ventilation, additional sprinkler requirements, reductions in MAQs, or even outright prohibition (most don't apply to us though), etc.

If you have an inspector that is going to nit-pick about the main floor, they'd be full-stop on doing anything in a basement.  Keep in mind, with storage in the basement, should there be a fire, with fire fighters entering on the main level - this is a death trap, and there would be no way to even attempt to fight the fire.  This would be a fairly critical piece on information for the local fire crew. You don't want to be associated with the headline that mentions 5 local guys, fathers, including one father of a newborn little girl, running into your burning building only to fall through the floor to their deaths because nobody told them they'd be standing on top of 2000 gallons of burning alcohol.

I'm not trying to be overly critical, but now is the time to get the hard questions answered, not after you've signed a lease, bought a building, and started spending real money.

[ABL]

Sheeeesh, you got me, I didn't think of that first, but that would certainly be a costly mistake!

Thanks @Silk City Distillers, I'll call today

[DonMateo]

There is a South African distilling products company called Distillique and they have an excellent guide to sizing systems on their webpage.  Check it out.