The teacher owns 4 breweries and doesn’t want any competition

So with this logic, should people open new restaurants or is the market already saturated?

I think _KZfaq_ recommended this to me today because I watched a home brew beer video yesterday.

These people don't have a clue. People start breweries for passion.

Now, ask them, "who here would go to a microbrewery?" ... watch all of them raise their hands, duhhhhh

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.

I live in Massachusetts and the brewery we have in town does massive amounts of business. It's packed every night it's 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.

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.

Starbucks cups everywhere! Symbolism?

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!!

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.

I do think opening a brewery is a great idea as long as you fit it into the correct location/city.

You actually pay for this kind of "education"???

They will all be unemployed after graduation. Mark my words.

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.

Define bad idea, if you love the idea and you can break even, go for it 💪

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.

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

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!

Every one needs a job, a craft brewery can encourage local business etc. There will always be market demand.

I disagree that the demand for beer is stagnant. A certain percentage of each generation drinks beer, and generations are getting larger....

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.

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.

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

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.

Because I'll be wasted 24/7

Yeah, don't support local businesses. Give your money to major corporation's like Budweiser.. they need your money

4:44 left hanging

Tourism in rural areas could draw people like the vineyards in California.

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.

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.

10-20 beers each!? that's gotta be somewhat of an over-estimation.

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.

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.

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.

I wouldn't drink a beer with non of these people

Many people here don't want to open a brewery , so I will....Less competition 👍

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

Right, take business advice from CBC...

everyone who raised their hand will struggle to make ends meet no matter what they do

which University is this?

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.

Love and passion.....money will follow

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.

Which business school is this?

In south jersry.... ive known of 1 brewery to close its doors in the past 10yrs. Theres more than enough to go around

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?

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.

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.

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.

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.

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.

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!!”…..

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.)

neither the professor nor the majority of students know what entrepreneurship is

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

I would! There's an areas where it still makes sense but looking at the global market data you would never suspect it.

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.

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.

I don't know why i'm watching this i'm not even old enough to drink

Talking instead of doing is the worst way to start a business. Failure is the best path to success.

This broadcast brought to you by Anheuser-Busch.

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.

Wise words! This can be applied to any business! 👏👏

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.

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.

I am soooo opening one

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.

I would. I did. Doing very well too.

Hear that popping noise? That was the craft beer bubble...

you can say that about any business startup.

So raise your hands if you think going to a craft brewery is a good idea

That word "identify" again.....very nice ending from the prof

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.

microbrewery, can adjust easily the taste/smell or add flavors when customers will highly recommend or suggest what they want.

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.

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.

Why you WANT MORE crafting is because it is Farm to table craft industry not beer industry!! The new local coffee is the brewery. It is a craft substance whose demand grows every year. Also it's returns far exceed other industries!!

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.

And no mention of opening a tap room. You would be the end seller of any micro brew you choose.

yeah, and none of these students know a damn thing about brewing beer or wine for that matter! Of course it is going to seem lime a bad idea, if you have no clue what it involves

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.

Hello, I’m from the future in 2023 and the influx of successful micro breweries is amazing 😂 stay in school kids.

Larry nailed it.

This isn’t news this is some random business class with no accreditation

Brewpub verses brewery is different. If you can find a geographic niche then it may be worth it especially if you like brewing

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.

More beer is always a good idea.

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.

Thanks! I enjoyed that.

No mention of Brewdogs in this discussion 😂

“Is it a good business decision .. I don’t know “ well thanks for that…

So that's a business Prof saying there's more to starting a business than dollars and cents. Totally agree but I think he's teaching the wrong class?

The problem with the discussion here is the prevailing paradigm. We are stuck with four or five huge breweries who own the market because of prohibition. Since the 1970s, craft brewers, driven by homebrewing, have defied all odds to make and sell beer that sells at a substantial premium over macro brewed beer. It doesn't matter how deep the pockets of the huge breweries are and nobody cares. Prohibition has been gone for nearly 90 years and it is only now that fresh, locally produced beer is once again available nearly everywhere. The craft brewing expansion is not over until bars cannot sell macro beer anymore. Once people discover and consume fresh beer, the days of watery, tasteless macro beer are over. All of them learned this in their microeconomics class; it's called competition. Competition was destroyed by a constitutional amendment that bankrupted all but the largest macros. The pendulum is swinging back, and none of these people know how far it can go. Macro still absolutely owns the market. There's no telling how much of that can be captured by craft brewing. One thing is for certain, though. The prevalence of local tap rooms versus package only breweries in the last few years suggests that there's way more room for expansion. If brand new, virtually unknown breweries can sell beer at 5 bucks or more per pint and grow, there's plenty of room for growth.

Bad advice, the craft beer market has beerly (pun intended) scratched the BIG beer market. Back in colonial days, every town had at least one brewery. Then prohibition killed them off. When it was lifted corporations took over. Young people and old are rediscovering good beer. I love how they are like "niche market" and "unique branding" are the way to get into the brewery business. That is exactly what a craft brew is.