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Most Wanted Brewery's Eddie Leon Talks Brewery Startups

So you're a homebrewer in Miami and you want to start a brewery. If population density is any indicator, the market is ripe compared to Asheville, North Carolina, a city of 83,000 people that has at least a dozen breweries (including brewpubs) and counting.

Eddie Leon, 44, founder of Most Wanted Brewery in Doral, is one of two brewery startups in Miami-Dade. Along with Wynwood Brewing Company, Most Wanted is on the rise.

See also:

Misfit Home-Brewers Help Lead Miami's Craft Beer Invasion


According to the Brewer's Association, a trade group, the financial rate of growth in the craft beer industry was 15 percent for 2010 and 2011. By mid-2012, that number was 14 percent. And the retail value of craft beer increased by more than $1 billion between 2010 and 2011.

With

numbers like those, a craft brewery investment might be the way to go,

even in a sluggish economy. That's the way Leon sees it, which

is why he decided to take his leap of faith. But for his middle-class family of four, it's a

huge financial gamble.

Leon earned a master's degree in architecture from Florida International University and runs his

own digital graphic design business. He got back into homebrewing after a several-year hiatus before deciding to go commercial.

Many homebrewers might have similar ideas.

But there is a process, a rite of passage if you will, to

becoming a professional brewer. There's plenty of red tape and many potential financial setbacks. So far, everything is clicking for Leon, having recently acquired a brewing space at 10400 NW 33rd St. in Doral. 


Short Order interviewed Leon in an attempt to demystify the beginning stages of a brewery startup in Florida.

New Times: If you're a homebrewer and want to start a brewery, what is the first step?
Eddie Leon:

If you're a first-time business owner, you should definitely have a

business plan that sort of lays out what is it going to cost you and at

what point you're going to generate enough profits to cover your costs.

Ultimately, you're putting all of your money into a machine that needs

to

generate revenue, and obviously nobody has endlessly deep

pockets, so you need to be able to do something with the gamble that

you're going to play that will sustain the growth of your business.

 

What goes into making a business plan for a microbrewery?
Anybody can do a microbrewery. First decide if you want to be a brewpub or a

production brewery, or a nano-brewery. A brewpub can make and sell beer with its food, and that's it. A production brewery can distribute anywhere but cannot sell food. The nano-brewery is a smaller and more affordable brewing system.

These are popular start-up business models, but the big problem is they produce much less beer while

working around the clock for not much money. You will

barely break even and reach full production capacity in a few months. It's all about economy of scale. A nano-brewery is going to

be less expensive, but the rate of failure is higher, so bigger is

better. From what I hear, if you're a homebrewer who brews a lot of

beer and wants to put it on the shelves and do it without very much

money and to do something the size of a Wynwood or Most Wanted, you're going to need at least a half-million dollars to do it. In the

brewing community, that's the general rule of thumb, and it could easily

go up to $1 million.

How do you gain wide appeal?
You have to go to a lot of festivals. I decided that I preferred more of the brand-building idea. This idea of

a brand that people can create a connection with, a lifestyle brand,

that can relate to the beers that we're making, and these would be beers

that are going into distribution. The important thing is that you need at least one beer that has somewhat

wide appeal so that most people will be able to drink it. And it has to

be a sessionable beer.

What is a "sessionable" beer?
A

sessionable beer is a beer that you can have, in one sitting, multiple

amounts. Let's say if you're watching a football game, you might want a beer that you can have a few bottles of as opposed to a very strong

dark beer that you can drink only half a bottle. It's good to have a

beer that's sessionable because that could be your flagship beer that

you can basically sell a lot of and it's easy to produce. A lot of great

breweries are able to

experiment with other beers because of the profits of their flagships.

To that I recommend homebrewers continue doing the great beers all of their friends love, but also keep in mind that those beers

might not necessarily be profitable. They need to have a least one good

beer that can sustain their growth.


What about beer recipes?
They

must be approved by the federal government. Certain ingredients on a list

you can use, but anything not on the list must be approved. Typically

anything that's already on the market shouldn't be an issue.

What about brewing space?
You

have to consider zoning restrictions, which are different in every

city. Check with your local laws on that. Once you have found a desired

location, contact your city and ask for a zoning

verification letter, which is critical. The city does the research to

determine whether a brewery can be zoned in a particular location. If

yes, then negotiate final lease terms with your landlord. Then get permission

from your landlord in

writing that he approves of having a brewery

on property. Also find out if a tasting room is allowed, which is critical

because up to 50 percent of revenue comes from the tasting room. Then you

confirm other technical things like appropriate electrical power

availability for equipment used. Typically a large brewing system requires three-phase power,

natural gas, and appropriate sewage and water connections. It's a lot

of steps, a lot of research, but you have to do your homework. Once you

commit, you don't want to break a lease where

you're completely liable for a few years' worth of rent.

What obstacles should one expect when starting a brewery?
Red

tape can be a very big problem for start-up breweries, especially in

Florida, where brewing is not necessarily a traditional thing. Other

than zoning issues, the next

big issue is making sure the building can hold the equipment. A regular

concrete floor cannot hold vessels that heavy, so you need to

rip out the floor and pour at least a foot of reinforced concrete.

First it's getting through the red tape, and it's making sure

you have a good location, and probably the biggest roadblock for most

homebrewers who want to go to the next level is cash. It's a very

cash-intensive operation. It's not cheap, and most people don't have a

half-million dollars to do something like that.

There is one

more thing: permits. Leon has not yet applied for his permits,

but several are required to operate a brewery. The Florida Brewer's Guild

website has a handy guide on permits. Aside from the federal brewer's permit, there is the CMBP

(brewpub) and CMB (manufacturer) licenses. The Florida permits cost $500 per year for brewpubs and

$3,000 per year for manufacturers.

Get more David Minsky on Twitter @DavidAMinsky and Instagram @daveminsky.

Follow Short Order on Facebook, on Twitter @Short_Order, and Instagram @ShortOrder.

Use Current Location

Related Location

miles
Wynwood Brewing Company

565 NW 24th St.
Miami, FL 33127

www.wynwoodbrewing.com


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