Trip to San Diego

Rachel and I celebrated our 4th wedding anniversary around North San Diego yesterday. We went to the Wild Animal Park in the morning, which was fun. Going for a few hours was perfect though, I couldn't see myself spending all day there. Of note during our trip there, we saw two desert turtles getting it on:



I'm glad someone's getting some on my anniversary! (Just kidding, sweetheart!)

We then had an excellent lunch at the Stone World Bistro. We split the Spud Buds (pretty damn good!), and I had the Tikka Masala with a bourbon barrel aged Sierra Nevada Celebration, and Rachel had the Bruchetta BLT with the Craftsman Triple White Sage. The people at Stone put a lot of attention into the details of that restaurant, it was a great experience.

We met with Greg Koch, Stone's Co-Founder and CEO, and prodded him about the brewery business. Greg's a great guy and was very willing to share his expertise with me. Stone has seen huge success in their short 11 years in business and I think this is in large part due to Greg's business sense and vision for the direction of the brewery. Thanks for the advice, Greg!

We spoke briefly about The Bruery serving beer at the 11th Anniversary celebration, and I hope we'll be pouring there. By mid-September, we will hopefully have a few batches in the works, but they likely won't be ready to serve at the festival. If we're pouring our beers, we'll be serving some of our beers brewed on our 10 gallon Beer, Beer and More Beer (B3) system. I love going to the Stone anniversary festivals so I'm anxious to serve our beers at the event.

We moved on to Lost Abbey / Port Brewing in San Marcos, just 5 minutes away from Stone. This was Stone's first brewery, and it's always exciting visiting this brewery. Things seem to change on a weekly basis here. There's always something new going into the barrels, coming out of the barrels, and the people who work here are a lot of fun to hang around. Tomme was on a trip to beer-related trip to Italy (lucky bastard). We got to talk with Bo Winegarner, the assistant brewer here. Bo and I met the first time at the homebrew judging for the Orange County Fair, and since I've seen him at a lot of homebrew judgings. It's awesome that he's working at such an exciting and innovative brewery.

Lost Abbey has a very loyal following, and there were quite a few people hanging out on a Friday afternoon. Whenever I visit The Lost Abbey / Port Brewing, I'm always a bit surprised how friendly and approachable everyone is. It's a fun place to hang out. Whenever we open up our brewery to tastings, I hope there will be a similar atmosphere. I saw many familiar faces while we were there, and got to speak with a few people who actually read this blog. You guys must be really bored! Rachel says I need to make this blog more interesting, so there's a chance it'll be more interesting to read in the near future. I'll probably just post more pictures. Didn't I just post turtles humping? It's getting better already.

It was great to meet Julian, a homebrewer and fellow beer geek from our neck of the woods in Garden Grove. I asked him if he was going to submit anything to our homebrew competition, but he doesn't have any Belgian beers at the moment. He just did brew a malt liquor though, something that could fit into the Specialty Beer category of our competition. Forget the 750 mL champagne bottle shipment, we're going straight to 40's. I've heard great things about Julian's beers (especially his IPA's), so I hope he'll be able to enter something. I'm sure his Malt Liquor ("Thundertrain"?) kicks ass too, literally.

As a final note, The Lost Abbey is one of the breweries I look to for inspiration and techniques on how I'll be making my beers. Of particular interest is their barrel aging techniques. I'm looking forward to aging many of our beers in oak, and these guys know how to do it right. If you've ever had Cuvee de Tomme or Angel's Share, you know what I'm talking about. Check out the barrels at Lost Abbey (this is a fraction of what they have aging at the brewery):

ABC Visit, Didn't Submit Plans to City

Just a quick update on what's been going on. Yesterday I had a site visit from the ABC. They checked the measurements of the building, and confirmed I was running a production brewery for sales to retailers, not direct sales at this time. They were cheerful and seemed to be happy to be dealing with a brewery. They told me that they were just about ready to issue the license. They are going to hold off on issuing it until I tell them I'm a few weeks away from production beginning, as production (or sales, for other types of alcohol licenses) is supposed to begin within 30 days of the license being issued.

Earlier that morning, I met with Dan Stromberg from George Fisher. They manufacture pre-fabricated insulated ABS plastic glycol lines, pretty nice stuff. I'll probably go with their insulated lines, as my glycol run is relatively short and having them done right could save a lot of money in the long run from cooling loss. The building I'm in is very warm, especially towards the ceiling, so the more insulation, the better.

On Tuesday, I was supposed to go with my contractor to the city. At the last moment, I remembered I never had structural calculations done on the glycol chiller being mounted on the roof. We figured it's pretty important to get calculations for putting a 1,400 lb. unit on the roof of a relatively old building, so we're working on that now. If the structural calculations were completed, I wouldn't have submitted anyway. The inspector who would review the plans over the counter is on vacation for two weeks. We could have submitted through another inspector, but that could have been problematic, as we would be dealing with more than one inspector in that case. We just want to deal with one inspector so there aren't any conflicts between what the two inspectors require of us. My plans also are not very good, so I'm improving those to the best of my abilities. I wish I hired an architect right now.

As a side note, my strategy for opening a brewery on a tight budget is that I am doing many of the tasks to keep my labor costs low. I don't have talent or experience in many of these areas, so I'm learning quickly, but now is really not the time to learn. If you are considering opening a business, either learn before you start paying rent, or hire someone who knows what they are doing. Don't plan to pay people in beer. That might work for family and friends, but it doesn't fly for other people. Perhaps when I start cranking out beer, it'll work, but promises of beer in a few months hasn't worked so far.

I did go to the city to get a permit for putting in a 200 amp, 3 phase power service. I signed the lease based on a building with three phase power, which most of my equipment requires. It turned out I only had single phase, so I've been dealing with Edison in bringing in three phase to this part of the building. Luckily, they approved it and now my electrician can start on bringing in that power. I'm able to keep the single phase service also, so that will help out quite a bit.

Lots of Things Happening

Today my contractor and I will be meeting with the city to submit our plans. I'm a bit nervous about this, seeing that I drew up the plans, and I'm not an architect. These are minor changes, such as floor drains, a new electrical panel, and extending the plumbing, so hopefully the city will have mercy on my crappy drawings. I've been in contact with the building department and the inspector, so I think they know what we are doing for the most part. We'll see how that goes.

The ABC called me yesterday to tell me my application is almost complete. They need to come by on Wednesday and make sure I'm not running a restaurant there, and we're still waiting on the Board of Equalization to cash my excise tax bond. Otherwise, we should be good to go. Technically, I need to start brewing within 30 days of having the license, so a bit of a delay for the ABC license wouldn't be such a bad thing.

Also, the homebrew contest is getting a lot of positive attention. We'll likely have international entries, which is pretty cool, and a few newspapers are looking into writing articles about it. It should be a fun competition. I'm hoping to get over 100 entries, but if I had to guess today, I'd say we'll get 60 entries.

Batch No. 01 Competition

Today I'm announcing a homebrew competition The Bruery will be hosting. The main prize for the first place beer is that it will be brewed as The Bruery's first batch. That's right, we'll be brewing 527 gallons of the winning beer, more or less, depending on how well I brew that first batch!

Here's the press release I sent out today to local media, beer media, and homebrew clubs:

FOR IMMEDIATE RELEASE

Contact:

Patrick Rue
The Bruery
715 Dunn Way
Placentia, CA 92870
Phone: 714-400-6092
eMail: patrick@thebruery.com
Web Site: http://www.thebruery.com

Start Up Brewery Hosts Homebrew Competition to Determine First Batch

Placentia, CA – July 9, 2007 – The Bruery, a new craft brewery in Orange County, California, is holding a homebrew competition which will determine the first batch brewed at the brewery. Patrick Rue, Owner and Brewer says, “We are excited to bring the spirit and innovation of homebrewing into our new brewery from its inception. We're still avid homebrewers ourselves and we strongly believe homebrewing is a significant part of what keeps craft beer interesting.”

The winning beer will be produced as the brewery’s first batch, named “Batch No. 01”. The winner will have the opportunity to assist in brewing the batch on their 17 bbl system, if the winner so chooses. The first, second and third place winners will also receive various prizes, which are still to be determined. The winner's name will be prominently mentioned on the bottle label. In addition, the batch will be served at The Bruery's grand opening celebration, which will take place in the Fall.

For more information, please visit http://www.thebruery.com

Based in Orange County, California, The Bruery is a small, traditional craft brewery which is slated to open in the Fall of 2007. The Bruery will specialize in brewing bottle conditioned Belgian-style and unconventional specialty beers.

END

TTB Approval Granted

I got a call on Friday from the TTB agent telling me I was approved! I was very relieved, seeing that I filled out all of the paperwork myself, which included the environmental impact of the brewery on air quality and navigable waterways, how I'm going to protect my precious beer from Osama Bin Laden, thirsty thiefs, and so on. I carefully filled everything out and tried my best to include every piece of information I thought was relevant. I'm glad to see law school was good for something!

Licenses and Approvals

Tony Clarke posted this comment: "I am also trying to start my own brewery although I am in the infancy of planning. I'm very interested in a complete list of what licenses you need to operate a brewery in California?"

This is a great question, and this is a big part of why I started writing about opening a brewery. There's a lot of hoops to go through, so hopefully this will help Tony and others start up their own breweries as well. This is what I've had to deal with so far, so it shouldn't be deemed a complete list, especially if you're from another state. Cities vary on what is required as well.

I'll break it up into categories, the main ones being general licenses that many businesses that sell a product and have employees would need to have, as well as ones specific to breweries. I'll also break it up by local, state, and federal, along with those respective agencies.

General:

Municipal Government (city):
• Business License- Most cities require businesses to file a license to conduct business in their city.
• Building- You need a building permit if you're going to make any changes to the premises, such as electrical, plumbing, walls, and so on.

County Government:
• Fictitious Business License- If you are called anything besides the legal name of the person or organization (i.e. The Bruery LLC or Apple Computer Inc.), you need to file one of these. Essentially, you're informing the areas you are principally doing business that your conducting business under another name than your legal name. I registered "The Bruery" so I wouldn't have to write LLC on everything.

State Government:
• Sellers Permit- The State Board of Equalization requires those reselling products to file for a sellers permit so they can collect sales tax and keep tabs on you.
• Corporations / LLC's / Limited Partnerships - You'll need to file Articles of Organization / Articles of Incorporation with the State. Keep in mind LLC's and Limited Partnerships have to pay $800 a year "fee" in California. Many other states don't have fees beyond the document fees. Make sure to research what choice of entity will work the best for your situation.

Federal Government:
• IRS Employer Identification Number- If you're not running the business as a sole propietorship, you'll need an EIN. It's basically the equivalent of a Social Security Number for tracking the income of the business.

Brewery Specific:

Local Government:
• Planning- You may need a Conditional Use Permit (CUP) for the use, and it depends on the city and whether you want to run a tasting room or sell on site. Check with the planning department first before signing a lease. I'll need a CUP for a tasting room, but I don't need one if I just stick with brewing and distribution without on-site or off-site direct sales. I decided to not apply for the CUP until after I begin brewing, as they tend to take a few months and I didn't want a tasting room to hold me up.
• Water District- You may need to inform the water district of the use. My water district doesn't seem to care as I'm a fairly modest in my water demand.
• Sanitation District - You'll need to inform the sanitation district of the use, and possibly get a permit through them before doing any work to your sewer connection. Research this before signing a lease-- there are many costly devices (i.e. clarifying tanks, sewage processing plant, etc.) the sanitation district could require of you, and it would be best to avoid these areas.
• Fire Department - You will likely have to get an inspection by the fire authority. They will check that you have the required amount of fire extinguishers, that no combustables are being stored improperly, and probably check out the boiler and/or direct fire burner on the kettle. You may need to lease a building that is sprinklered. The building I leased isn't sprinklered, but it wasn't a problem as the cut off is at 6,000 s.f. of leaseable space, and I'm a little over 5,000.

County Government:
• Health Agency- You'll need a license from the County Food Health Agency, Environmental Health Agency, or whatever your county calls it. For their purposes, a brewery is a wholesale food processing facility, so you'll be held to the same standards as caterers, granola bar manufacturers, and so on. They have fairly rigorous standards, probably more so than any other agency if everything else is planned correctly.

State Government:
• Alcohol Beverage Control- You'll need an alcohol license. In California, the small brewery will get a Type 23, which is Small Beer Manufacturer. A brewpub can get the same license, or they can get a Type 74. It takes 31-90 days (count on 70-90, or more if documents weren't filed timely) to get the license from the time it is properly filed.
• Board of Equalization, Excise Tax Division- You'll have to post a bond with the state, just in case you decide not to pay your excise taxes. The minimum bond is $1,000, which you can write a check for or get a surety company to post a bond. The surety will cost about $100 a year. California excise taxes are 20 cents per gallon of beer sold, so it adds up.

Federal Government:
• Alcohol and Tobacco Tax and Trade Bureau (TTB)- The TTB is the excise taxing authority for the Federal government, but this agency also reviews other aspects outside of taxation, such as label approval and environmental review. My experience has been positive with the TTB. You'll have to post a bond with the TTB also, the minimum being $1,000. You can use a surety for this also, or just write a check for the full $1,000. The Federal excise tax rate is $7 per barrel for the first 60,000 bbl per year and $18 per barrel after the first 60,000 barrels.

I'm fairly sure this is a complete list, but I'll post as I remember / learn about others I have to get.

Construction update

I am just about ready to submit our plans for permit to start construction on the brewery. I submitted the plans I put together to my contractor and he's getting bids from the electrician, plumber and concrete guy. Hopefully I'll see some numbers today and we can get the plans to the City and County Health. We'll be able to submit the plans to the City over the counter, which means I'll bring in the plans with the contractor to the Building Department, they will look them over, comment on what needs to be added, and hopefully we can add those to the plans on the spot and get them approved in the same visit. County Health will likely take the plans and spend several days looking over them.

Yesterday I moved most of the equipment to the other side of the warehouse in anticipation of the construction. My green forklift did an outstanding job. The only things I didn't move were the mash tun and boil kettle, as those are a little too large and tricky to move myself. They also need to have some work done to them, so they'll be kept in a different area from the rest of the equipment for now.

I can't wait until the concrete is torn up and things start happening!

Bought kegs

Two weeks ago I ranted about the high price of kegs, which I still stand by, but I did find some decently priced used kegs the other day and bought a bunch of them (168 of them to be exact). They are used 30L kegs (about 7.9 gallons) that were made by reputable keg manufacturers (Franke and Hackman) that were used for San Miguel beer in China. The valves were retrofitted for American Sankeys. I bought them for $65 each, a steal considering what others are going for right now. I like the size as well as many beer bars would prefer a smaller format for higher alcohol beers, which is what I'll be specializing in. They'll also be a bit easier on my back when I deliver them.

If anyone is interested in getting some of these, contact Frank Ma (626-318-2837), I think he has around 20 pallets left of them.

Here's a 'before and after' picture of what the kegs looked like, and what they will look like:

Almost have TTB Approval

When you're starting out a brewery, there's a bunch of agencies you need to get licenses and approvals from. One of the major ones is the TTB, the Alcohol and Tobacco Tax and Trade Bureau (I guess ATTTB doesn't have the same ring to it). The TTB is part of the U.S. Department of the Treasury, and it's main purpose is to make sure alcohol and tobacco producers are paying their excise taxes. Background checks, environmental issues, zoning issues, terrorism issues, and the like also come into play with this approval-- they are essentially the Federal government approval process.

I got a call yesterday from a very nice TTB agent informing me that I was missing a few documents and she went over some other things with me. One thing was she told me my background check came up that I had a court record from 1997. I had no idea what this was and it frightened me. Is my memory that bad to where I don't remember being sued or charged ten years ago? Luckily, my wife Rachel remembered.

On a warm June day in 1997, I got out of school at noon on the last day of school before summer vacation. I was going to Mater Dei High School and just finished my sophomore year, and my buddies and I agreed to meet up at Del Taco on Redhill off of the 5. I was driving down Redhill after turning on it from Edinger and proceeded to enter the Del Taco parking lot. I parked, got out of my car, and 10 seconds later a motorcycle cop was in front of me. The cop accused me of trying to lose him-- he said he clocked me a mile away and he had to go through 3 red lines to catch up with me. I said I didn't know what he was talking about, and he told me I was going 45 in the 35 mile an hour zone. He decided to drop his accusation that I was fleeing from him, and gave me a speeding ticket. A few days later, I drove by the area where he clocked me, and it was a 45 mile an hour zone. I was pissed off-- I was 16 at the time, and I didn't need a speeding violation on my record. I decided to contest the ticket, and went to court with my Mom. About 200 other people that day were wanting to contest tickets as well, and the judge told us we'd be here all day. My Mom decided she wasn't going to waste her day with this, so she told me I'd be going to traffic school to remove the ticket from my record. Ten years later and this shows up on my background check, and the TTB wants an explanation for it since it doesn't show on their record what the matter was about.

Anyway, after I send over several documents to the TTB, they will be ready to approve my application. Pretty quick considering I sent in these documents two weeks ago.

The other approvals I'm having to get are from the California Alcohol Beverage Control (ABC), Orange County Health Agency, and the City of Placentia. I've also applied for licenses with the California Board of Equalization for my sellers permit and my excise tax permit. Yes, the state of California along with the Federal government have special taxes just for alcohol producers.

The City and County Health Agency are more concerned about my plans for tenant improvements such as putting in floor drains, extending gas lines, other plumbing, putting in a new electrical service, and so on. The Health Agency wants to make sure I'm putting in these improvements in a way that is satisfactory for a food processing plant. My plans are now being bid on by my contractor, and then we'll send them to the City and Health Department for approval. They are minor improvements, so both have said it would be an "over the counter" process, meaning there's no extended deliberations about the improvements, and can be approved immediately (or denied immediately) once we bring the plans in.

The ABC will hopefully approve my license 10-40 days, so I'm thinking everything is on track for late August / early September. As most brewery owners have told me (or told me while laughing at me), I won't be open by August, September, or even October. Plan for December. That's the way I have it on my budget, so at least I'm trying to be realistic. I do think late August / early September is do-able though. We'll see.

Bought a forklift

Last week I bid on a glycol unit on eBay. If you don't know what a glycol unit is, it is essentially a refrigeration unit that I'll be mounting on the roof of the warehouse which will recirculate glycol, an anti-freeze-like liquid (don't worry, it's food grade). This liquid runs through a portion of the fermenters and bright beer tanks to regulate fermentation temperature and to bring the beer to a low temperature after fermentation.

Anyway, it was fairly new equipment, had only been used for 3 years or so before it was decommissioned, so I thought it might work for me. I won it for $3,500, a pleasant number considering I was going to buy a new unit with less cooling power for around $15,000. Then came the shipping costs, which brought the overall price to around $5,000. I still don't understand why it costs so much-- a 2,500 lb. pallet of grain from across the country costs $350 or so to ship. I asked how I could reduce this price, and was told that if I didn't need a lift gate, I could save $200. So I bought a forklift.

It's from 1986, has around 5,000 hours on it, and It'll handle 5,500 lbs., or at least it could in 1986. It seems to run well, and it shouldn't need to run too often for my purposes. I'll have to post a picture of the beast soon. It's lime green, which means it must be given a name. I don't know why things that are painted ugly colors have to be named, but it can be one of the brewery's mascots. Please post some suggested names in the comments area. Rachel and I came up with guacamole and limey, so you can tell we need some help with this.

EDIT: Here's a picture of the beast: