Army of Experts

Before I talk about us, let's talk about them. Regarding the bailout bill, from the Wisconsin Restaurant Association:

As a result of the restaurant industry’s presence on Capitol Hill during these historical proceedings, one of the restaurant industry’s key agenda items was included in the bailout bill. Depreciation for restaurant construction and improvements was accelerated from 39 1/2 years down to 15 years.

I hate that @#$%. Yes, changing the depreciation schedule is good for the restaurant industry. No, the change doesn't hurt anyone else. Yes, I know that sidestepping the legislative process is Standard Operating Procedure for Congress and that people need to play the game to get things done. The loophole works both ways, though - Team Evil is equally capable of attaching unrelated contingents to bills that require urgent passage. That's how Wisconsin's idiotic Brewpub Tourism Development Act got passed last year. I hope the craft brewing community continues to beat that dead horse until brewing companies like Goose Island and Dogfish Head can legally exist in Wisconsin once again. I want that dead horse on television. How awesome would a New Glarus beer hall be, all serving cheese and sausage platters on the grounds of their new production facility?

Anyway, I have a Private Placement Memorandum (PPM) written and I'm scheduled to meet with a lawyer next week. I don't know if writing the document myself will make life easier or harder on lawyers, but at least Jane and I will have options. The big reason for seeking legal advice is to determine how our capital needs and various investment-solicitation strategies will affect which securities registration exemptions we'll qualify for. The following week, we'll be meeting with the city's Office of Business Resources to outline the city's involvement in our project. Our business plan's proposed timeline is pretty sad, so hopefully the city will help us straighten it out a bit.

Burlington Northern Pulling Out of the World

Our business plan is ready to shop around! We still have a small amount of revising to do, but I don't expect that to change as the fundraising process generates feedback. Jane is taking over the business plan tweaks while I assemble an investment offering. I use the word 'assemble' instead of 'write' because I'll be stealing most of its content from the investment documents of two other breweries.

I haven't bought any hops yet, primarily because most of the ones for sale were grown in 2007. Brewers are selling off their old stashes while the 2008 crop comes in. Properly stored year-old hops would be fine if I needed them right now, but I don't want to be using them next summer. I met with James from Gorst Valley Hops a couple of weeks ago, and it looks promising that I'll be able to buy all of my citrusy American hops from him next fall. At the risk of digressing, he's a horticulturist who's more interested in turning Wisconsin farmers onto hop growing than he is in growing them himself. His main reasons for growing them right now are to prove their worth and to test a mobile processing facility that he's building. It was pretty awesome to show him my beer list and hear him say "I can get you that" almost every time I mentioned a weird ingredient. He even knows some used equipment dealers.

It's been a while since I talked about pilot brewing. First off, my beer fridge is working again! A sloppy moisture control vs. energy efficiency switch is a much better problem to have than a fridge that's actually broken. 'Nuff said. The second mint porter tasted awesome, except when I drank it too cold. Low temperature gave it an unpleasant shaprness - I still believe a hop/mint interaction is involved, and I'll name CO2 as a suspect as well - but the beer is basically a dessert at "cool but not cold" temperatures. Despite it's warm leanings, the beer made an excellent custard float. Much better than the first batch. Reducing the beer on the stove to use as a syrup, however, did not taste good. Holy bitterness! Although I reduced the hops dramatically, the beer wasn't too sweet. I suspect the mint lends its own bitterness, which balances malt sweetness in a similar manner as hops. Next time, I'm gonna brew the beer with no hops whatsoever. I transfered the maple farmhouse ale into its serving keg on Monday, which tasted very nice in its uncarbonated state. I have a batch of pale ale in bottles as well, which will be given away at a Locksley after-party this Friday, and I brewed a batch of Belgian pumpkin ale last week for my brother's wedding. That's about it for now!

No Accountability!

I'm done with weekly accountability updates. The whole purpose of them was to keep me on track, which they aren't doing. This weblog is becoming tedious, and people who try to use it as a business resource will have a lot of useless crap to wade through from late June to late September. Setting frequent goals and reflecting on my progress is important, but the boredom of it shouldn't be yours to bear.

Da Beers

I mentioned in my last post that I made all of my beer recipes for a year. We're probably going to start with eight taps, which will prevent individual batches from being served for too long. We'll likely have four year-round, two seasonal and two rotating beers on tap at any given time. Behold, the preliminary beer list!

Year-Round:
House Ale - the signature session beer of RePublic!
Belgian Blond
Pale Ale - we'll name it Heartattack and Bine if Tom Waits doesn't sue us.
Chocolate Porter

Spring/Summer:
Ordinary Bitter
Summer Pils

Fall/Winter:
Scottish Heavy - the name is misleading; it's a session beer.
Belgian Pumpkin - a Squashed Stereotype, if you will.

Rotating:
Grapefruit Lager - a light lager spiced with grapefruit zest.
Wildflower Belgian Pale - a restrained Belgian ale brewed with wildflower honey.
Cardamom Coffee Stout - thanks, Kevin, for the Arabic coffee idea.
Maple Biere de Garde - a farmhouse ale with unrefined Maple syrup.
Old Ale - a blend of fresh beer and stock ale that's been inoculated with Brettanomyces and aged in wine barrels.
Grand Cru, aka the Raspberry Belgianwine.
Imperial Black Lager - aged for a year before serving. Will I get dork points for naming it Gestahl's?

I'd love to brew a doppelbock, but mostly because I want to name it Lowest Common Denominator. I can't really see a doppelbock working as a pub beer, but don't rule it out.

Backtracking

Time that I spent updating the business plan this week: about six hours.

My deviation started on Monday, when I spent way too much time preparing cost estimates for another commercial brewer. It makes me happy that he thinks my work is thorough enough to apply to his real-world situation, but I should have gotten it done over the weekend.

I did rewrite some of the business plan on Tuesday. That afternoon, I met with an interested homebrewer to give him the lowdown on the project. He raised a lot of issues that'll be better to address now than later. The biggest is that our startup cost is going to be a turn-off to potential investors. That's what I get for thinking "I'll ask for enough to buy all new equipment, then buy as much used gear as I can and return the difference." To an investor, a 1.5-to-1 ratio of annual sales to initial capital may be acceptable but a 1-to-1 ratio may not. I'd been feeling guilty about my generalized startup costs anyway, so I dusted off the old itemized equipment list and gave it a makeover. At first, I wanted to find pieces of used equipment and plug their prices into the list. After a few hours, I realized it would take me years to estimate my costs that way. What I did instead was assume that used equipment will cost 40% of new and that I'll be able to find 50% of my equipment used, which means my expected equipment cost is 70% of all-new. There you have it: our first official business gamble.

Updating the equipment costs didn't take up very much time, but creating an entire year worth of beer recipes did. Why would I do something like that? To figure out my hop needs, silly! It's harvest time and there seem to be some hops available on the spot market (meaning they're not all going to fulfill prior contracts). A while back, New Zealand Hops told me that my chances of getting hops next spring are decent. They even thought that I could get organic hops, which is unheard of these days. The problem is that the hops in New Zealand aren't harvested until March, so I won't know where I truly stand until then - I'm still waiting for them to project their yield and give me a prediction. If I can get my grubby little hands on some hops now, I'm absolutely going to do it. If I don't and New Zealand fails to come through for me (never!), I hope you like guest beers.

Looking a little ways down the road, a future brewery owner who I met at the Craft Brewers Conference was awesome enough to send me his private placement memorandum. My legal paranoia dictates that he'll have to remain anonymous for the time being, but that document is going to be a monster help. Once the business plan is ready to shop around, I'll tailor the document for our needs and have a lawyer review it. Paying a lawyer to write one from scratch would probably cost over ten grand.

Pilot brewing continues, I still need a beer fridge, blah blah blah.

Logistics, Shmogistics

Madison Sourdough will sell us partially-baked loaves for slightly more than it would cost us to hire one full-time baker. We don't need to quantify ingredient costs, energy costs, staff scheduling and owner inexperience to realize the decision is a no-brainer. Randy George, you were right! I hadn't even thought of partially-baked loaves: freezing them until we need them will reduce waste and allow us to customize a delivery schedule, and the pub will still be filled with delicious bakery smells.

I spent all day yesterday at the Master Brewers Association of the Americas' Midwest Technical Conference. The event was very informative, relatively affordable (I don't have enough time right now to rant about the American Society of Brewing Chemists) and a lot of fun. As usual, I drank a healthy amount of beer and met a lot of cool people. The price of admission included a tour of New Glarus's amazing new brewery and dinner at J.T. Whitney's. I'm glad that I spent the day learning things instead of watching Michigan lose to Notre Dame. It's not gonna be my year for football.

I'm back in business plan mode. By the end of next week, I want to have the plan ready to show potential investors. Jane and I will need to do other things before we actually can, such as write a formal investment offering and make sure that we won't be breaking any laws, but we'll try to not climb those mountains before our gear is packed.

Anniversary Beer

In May of 2006, I brewed a beer that's known around the house as Raspberry Belgianwine. Once a year - on our wedding anniversary - Rachel and I share a champagne bottle of it. The base beer was essentially a 5-gallon batch of "imperialized" tripel. After a couple weeks of fermentation, I added 4 lbs of raspberries and a peeled vanilla bean. The beer weighs in at 10% abv. Here's what it looked like after 4 years of marriage:


So far, the beer has tasted better every year. If the trend continues, Rachel and I will be drinking the delicious final bottle on our 13th anniversary. Brewing the beer at the pub will require a coarse filter to fully separate the beer from the fruit. It'll also cost me about $160 per keg (half-barrel) to brew, unless I can find organic raspberries for cheaper than $4.00/lb. Money and hassle, pssht. This beer WILL be brewed for commercial consumption!

In other news, it turns out that Jane only spent a week in the UK. I finished the bakery book well before she got back, but I'm still giving myself another week to research bakery logistics.