Nanobrewing: The Business Case for the Nano

The year was and I was standing in front of about 300 people at the Craft Brewers Convention in Washington, DC armed with nothing more than me, myself, and I. This was an open forum session that had no plan, other to answer questions from the audience. The only question I remember from this exhilarating hour of activity was from a young man who had an equipment question related to nanobrewing. Before answering his question, I made a comment about the typical revenue per barrel of beer sold through distribution channels and was immediately corrected . . . my hipshot was off by a factor of 4. I was thinking of a nanobrewery as simply a smaller version of a microbrewery. Wrong!

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Most nanobreweries are more akin to a brewpub than the traditional craft brewery. Only smaller, and often- times without a kitchen, servers, high overhead, long hours of operation, or the expensive downtown location. Nanobreweries are all about the beer, and thanks to legislative changes that allow brewers to sell beer in a bar without a restaurant (something that most states required when the early brewpub laws were enacted), nanobreweries are not always a restaurant. This allows the nanobrewery business owner to envision their business more like a boutique clothing store than a full-service department store. In other words, the nanobrewery has a much lower barrier to entry.

Nanobrewery owners have developed multiple business models that work. Examples include the small BBQ/pizza/hamburger joint with very small brewing facility tucked in a corner and often invisible to patrons (think retro brewpub circa ), the killer 2-barrel (BBL) homebrew system located in a funky garage with beach bar, pop-up sun shade that opens for service from 5-7 p.m three days a week and only serves beer to clients in the know, to the 300 sq. ft., light industrial space-turned-brewery that serves beer in a small tasting room adjacent to the local food truck pen where patrons can buy beer from the nanobrewery and food from their favorite food truck. The commonalities of these business models are lower overhead, lower capital investment, smaller footprint, small labor force, and lower barriers to entry in comparison to a 10,000 sq. ft. brewery-restaurant or 5,000 BBL/year packaging brewery with kegging, canning, and/or bottling equipment.

NANO AND LARGE-SCALE HOMEBREWING

Nanobrewing equipment has much more in common with a homebrewing set-up than most of the 10-20 BBL systems used in brewpubs and smaller packaging breweries. Similarities with homebrewing equipment, equipment availability, and relative simplicity of the business model (no elaborate restaurant, little to no beer packaging, and no distribution sales network), are attracting many homebrewers to nanobrewing. The remainder of this first column on nanobrewing will compare nanobrewing methods to the typical commercial brewing dynamic.

MILLING

Truth be told, milling is something that may be left to your malt supplier because the cost of a mill and the attention required for proper and consistent operation is something that may take 4-5 years to pay back. Most suppliers add about $0.05 to the cost of a pound of malt to cover milling. When the malt is milled, the original malt bag is typically re-used and sewn closed just like the original bag. As long as the malt is stored in a dry place and used within a couple of months, there are no real storage issues with pre-milled malt.

Buying pre-milled malt allows the nanobrewer to save space on a mill, and on equipment upkeep. Plus, the term &#;mill room&#; can send up red flags to building inspectors about dust explosions, and the decision to have a mill in the brewery may cost more than just the mill.

Nanobrewing equipment has much more in common with a homebrewing set-up than most of the 10-20 BBL systems used in brewpubs and smaller packaging breweries.

If a mill is included in the nanobrewery, it needs to be durable, reliable, and relatively trouble free. The milling operation is not the most important part of the brewing process for small brewers, but if the mill is unreliable it can put a hitch in the brew day before the mash begins.

WORT PRODUCTION

Most craft breweries with brewhouses in the 10+ BBL size range use either infusion mash or stirred mash brewhouses for wort production. Infusion mashing is usually defined as isothermal mashing where the mashing process and wort separation process occur in the mash tun. Stirred mashes usually occur in a mash mixer, and usually are transferred to a lauter tun for wort separation. Wort is boiled in a kettle, and the whirlpool process can be carried out in a separate whirlpool or the brew kettle.

Most infusion mash brewhouses are based on two main vessels; the mash tun and the kettle/whirlpool. Stirred mash brewhouses typically have at least three vessels, and sometimes as many as six. The simplest set up is a combination mash mixer/kettle, lauter tun, and whirlpool (the mash mixer/kettle has a mixer inside and cannot be efficiently be a whirlpool vessel), and the fussiest stirred mash system includes mash mixer, decoction kettle, lauter tun, wort receiver, kettle, and whirlpool. Note that hot liquor/ water tanks are not included in this brewhouse vessel count.

This is where the nanobrewery is much more similar to homebrewing than larger, even marginally larger, craft breweries. Two-vessel infusion systems are quite common, but so are brew-in-a-bag (BIAB), recirculating infusion mash system (RIMS), heat-exchanging recirculating mash system (HERMS), and extract-based brewhouses. Common too are gas-fired and electrically heated brew kettles, which have essentially been replaced by steam-heated kettles in the 10+ BBL brewhouse.

The take away message here is that the cost and complexity of the nanobrewery brewhouse greatly reduces equipment cost in comparison to larger brewhouses. This distinction is especially true when comparing the cost of a steam-heated brewhouse to a gas-fired system, because the cost associated with steam (boiler, steam, and condensate piping, and gas line to boiler) is eliminated.

WATER STORAGE AND WORT COOLING

Most brewhouses, even small kits, use a hot water tank to store hot water generated during wort cooling. This makes perfect sense when brewing frequently because the hot water generated during wort cooling can be used in the next batch for mashing and sparging. And if the system is properly designed for the typical brew type (ale or lager), the hot water generated from wort cooling is just the right amount of water required for the next batch.

The most common type of wort chiller used in the modern brewery, regardless of size, is a gasketed plate heat exchanger or PHE (versus brazed PHEs). A single-stage PHE (just one type of coolant) using ~64 ˚F (18 ˚C) water can knock the wort temperature down to about 68 ˚F (20 ˚C) using about 1.4 volumes of water per volume of wort. Some lager brewers use chilled water for all of their wort cooling needs, and others use a combination of water and glycol in a two-stage heat exchanger for wort cooling. While these methods are the same with breweries of all sizes, a major distinction with nanobreweries is the water tank situation.

The best wort cooling system for the nanobrewery is one that is efficient, cost-effective, and totally cleanable.

Ambient or cold water tanks (depending on groundwater temperature and the type of beer being brewed) are usually found in breweries because the flow rate of water required during wort cooling is usually higher than what the water supply is able to handle. These surge tanks can be filled slowly and emptied quickly for wort cooling. Nanobreweries usually do not need an ambient or cold water storage tank. So this equipment can be crossed off of the list.

What about hot water? Hot water recovery tanks only make sense when the recovered water can be quickly re-used, and are always insulated to prevent rapid cooling. Since most nanobrewers are not brewing more than a few batches per week, the investment in insulated hot water tanks may not be justifiable. And if the investment is justifiable, re-purposed, home, hot water heaters are a great option to insulated stainless steel vessels.

The best wort cooling system for the nanobrewery is one that is efficient, cost-effective, and totally cleanable. This is where nanobrewing should be more aligned with other craft brewing systems because a wort cooler that can be opened for periodic inspection (gasketed PHE instead of brazed PHE) is important.

FERMENTATION AND AGING

Walk into your favorite brewpub or packaging brewery and you are likely to see cylindroconical fermentation vessels (aka unitanks) with individual tank cooling. Unitanks are awesome vessels because beer can be fermented, carbonated, and aged in the same vessel. They also permit easy yeast harvesting, are conveniently dry-hopped, and can be cleaned-in-place (CIP). But they are also expensive to purchase and require glycol for cooling. Most homebrewers are not using unitanks for fermentation and aging.

All options are open for the nanobrewer. Old school  open fermenters or carboys combined with pressure-rated aging vessels, fermentation and aging in carboys followed by carbonation in kegs, open fermentation in buckets followed by barrel aging and bottle condition, the sky is the limit. The limited production and small batch sizes of the nanobrewery really opens up the possibility of using dedicated walk-in coolers for fermentation and aging. Larger brewers cannot easily move full tanks of beer from one environment to another, but the nanobrewer can do this with ease.

More on this deep topic will be covered in the future, but the thing to consider is that expensive and elaborate unitanks are not required for nanobrewing. And nanobrewers have much more flexibility when it comes to using different yeast strains. Indeed, using a fresh pitch of dried or liquid yeast for each brew totally eliminates the need to harvest yeast from fermentation vessels, making simple flat-bottomed containers attractive fermenters.

PACKAGING AND DISPENSE

Anyone who has ever considered opening a packaging brewery knows that packaging can be extremely expensive and intimidating to imagine operating. Nanobreweries typically sell their beer through their own taps, so the only packaging that is required are kegs.

This is where I will give some of my own personal opinions about the business model . . . nanobreweries should strive to sell 100% of their production at their own facility. Seriously, forget about distribution; the US beer market is extremely crowded and looking to sell beer through distribution channels does not make financial sense for the nanobrewer. I will come back to this topic in future columns, but think again if you want to get your beer into local bars because the reduction in margin and added headaches probably do not pencil out. And if you believe this is effective marketing, look at how loyal multi-tap bars are to the beers they serve.

The simplest and least expensive route is to keg all of the beer, store in a walk-in cooler that may also double as lagering cellar and hop storage room, and serve through taps that go right through the wall of the cooler. Easy-peasy, no fuss-no muss, and super flexible. Looking for more? Sell beer to-go in growlers or crowlers to supplement sales. Again, my view is to strive for 100% of sales as draft because of margins; growlers and crowlers typically are sold at a discount in comparison to draft beer consumed on-site, so be careful about this decision.

Doing sours and strong beers? This is where limited bottling may make sense if you are bottle conditioning part of your production to sell as a super-premium. Just make sure you fully understand your costing and prevent margin erosion by proper pricing.

The take home message about packaging and dispense is that this is where the rubber meets the road and where revenue is generated. Revenue is the one thing that totally makes nanobrewing different from homebrewing. This is a business and it should not lose money. Nanobrewery ownership should be fun and rewarding, and if the nanobrewery owner can do these things while getting paid for their efforts, the model sounds like a good deal!

Nanobreweries are small breweries that produce limited quantities of craft beer. These breweries often focus on unique craft beers and often serve the local market. The difference between large breweries, craft breweries, and small breweries is the amount of beer produced. The difference between a nano brewery and a microbrewery is the size of the brewery. The simple definition of a nano brewery is any brewery that produces batches of three barrels or less.

What is a nanobrewery?

The simple definition of a nanobrewery is that it is a brewery or brewpub that produces less than 15,000 barrels of beer per year. The annual cap at the Nano level is defined than at other levels.

A New Hampshire law limits nanobrewery production to 2,000 barrels per year, but not every state has such a law.

Some say a nanobrewery is a brewery that brews three barrels or less of beer per batch. This definition seems to be the most common, so we can continue to use that definition for now.

How to start a nanobrewery?

Determine your goals and vision

Before entering the world of nanobrewing, you must have a clear understanding of your goals. What type of beer do you want to brew? Are you targeting a specific audience or group of people? Your goals and vision will become the foundation of your nanobrewery and help guide your decisions throughout the process.

Conduct market research

Market research is critical to understanding competition and identifying opportunities in the craft beer industry. Research local and regional trends, analyze competitors&#; strengths and weaknesses, and assess demand for specific beer styles or flavors.

Choose brewery size

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Nanobreweries vary in size and production capacity. Decide how much beer you want to produce and how you want to distribute it. Consider starting small and scaling up as demand for your beer increases.

Develop a business plan

A solid business plan is critical to obtaining funding and guiding the development of a nanobrewery. Include details about your target market, financial projections, equipment and raw material costs, and marketing strategy.

Understand legal requirements

You must get the necessary permits and licenses to operate a nanobrewery. you&#;ll need a federal brewer&#;s notification from the Alcohol and Tobacco Tax and Trade Bureau (TTB), state and local alcohol licenses, and a business license. Additionally, it&#;s critical to familiarize yourself with local zoning, health and safety regulations that apply to your nanobrewery. As a responsible business owner, you will need to make the necessary modifications to your facility or brewing process to follow these regulations.

• Brewing kettle: used to boil wort, the liquid extracted during the mashing process.
• Mash tun: A vessel used to mix crushed grains with hot water to extract fermentable sugars.
• Fermenter: A container where wort and yeast are mixed for fermentation and sugar is converted into alcohol.
• Heat source: burner or electric heating element used to heat the brewing kettle.
• Cooling system: Wort cooler, used to cool the wort after boiling before transferring it to the fermenter.
• Disinfection and cleaning equipment: necessary to maintain hygiene and prevent contamination.
• Measuring and testing tools: hydrometer, thermometer and pH meter for monitoring the brewing process.
• Bottling or kegging equipment: used to package finished beer.

Nanobrewery system equipment functions

Although smaller in capacity than its larger counterparts, the Nano Brewing System is a functional brewing device. The essence of brewing is the same regardless of scale, but nanobrewing often emphasizes precision and flexibility.

Mash

The grains are soaked in hot water to convert the starches into fermentable sugars. The nanobrewing system must maintain a consistent temperature during this stage, which is critical for flavor and alcohol content.

Boiling

After mashing, the wort is boiled, usually for an hour, during which time hops are added. Boiling serves many purposes: sterilizing the wort, extracting flavor from the hops, and evaporating unwanted volatile compounds.

Cool down

After boiling, it is crucial to cool the wort . Rapid cooling aids in the formation of cold cracks (solidified and settled proteins), which contributes to beer clarity and stability.

Fermentation

The cooled wort is transferred to fermenters, where yeast is added. The yeast consumes the sugar in the wort, producing alcohol and carbon dioxide. The nanobrewing system will feature fermentation vessels that are easy to watch and sample.

Carbonation and packaging

After fermentation is complete, the beer is either carbonated using forced carbon dioxide or carbonated using priming sugars. Once carbonated, the beer is ready for packaging, either in bottles, cans or kegs.

Clean and disinfect

A vital but sometimes overlooked feature. Proper cleaning and sanitation ensures that unwanted microorganisms do not spoil your beer. Many modern nanobrewing systems come with integrated cleaning systems, making the process more efficient.

Nano brewing brewery cost

The cost of a nanobrewing system can vary depending on some factors, including its capacity, the quality of the equipment, the brand, and the extra features it offers. For those keen to set up a nanobrewery, understanding the cost implications is crucial.

Brewery equipment capacity and price range:

CAPACITY (BARRELS) BRAND NAME PRICE RANGE ($) 1 BrewTech 2,000 &#; 4,000 2-3 BrewMasters 5,000 &#; 8,000 4-5 BeerCraft 9,000 &#; 12,000 6-10 NanoKing 13,000 &#; 20,000

Nano brewing system types

• All-in-one systems: These are compact systems that combine the mashing, boiling and fermentation processes in one unit.
• Space saving, perfect for small breweries or experimental batches. The price range is roughly $1,000 &#; $3,500.
• Modular systems: These units are more scalable than one-piece units, allowing breweries to add or upgrade individual components, such as fermenters or boilers, as they grow. Scalable for breweries anticipating future production growth. Price range is $3,500 &#; $12,000.
• Automated systems: They use technology to automate various brewing processes, such as temperature control, stirring, and even ingredient addition. Brewing is consistent and requires less manual intervention. Price range is $5,000 &#; $15,000.
• Gravity feed system: relies on gravity to transfer wort from one vessel to another, usually set up in a tiered structure.Fewer pumps and components, fewer possible problems. Price range is $2,500 &#; $8,000.
• RIMS (Recirculating Brewing Brewing System) and HERMS (Heat Exchange Recirculating Brewing System): RIMS use electric heating elements to heat the wort as it is recirculated. HERMS uses a heat exchanger for precise temperature control during the mashing process. Price range is $4,000 &#; $10,000.

There are various types of nanobrewing systems on the market, each designed to meet different brewing needs and capacity requirements.

Is it profitable to open a nanobrewery?

I&#;m sure every brewer will have at least one off-the-cuff idea. The idea is to sell craft beer to the public. They both wanted to share the joy of brewing beer with like-minded friends. However, professional brewing is not immune to many of the problems that other companies face. Such as cash flow, profitability, and whether it can pay employees. In response to these obstacles, brewing technology and start-up capital issues must also be overcome.

Nano Brewery is your best choice for starting a brewery. It doesn&#;t require much capital, and you can develop your own brewing skills through brewing. You need to believe it will bring you income, even if it&#;s not much. However, a nanobrewery is your first step to becoming a professional brewer. Most of the big breweries also started out as Nano Brewery.

How to choose a nano beer system?

Determine your capacity needs

It&#;s crucial to have a clear idea of how much beer you plan to produce. Are you brewing for personal consumption, a small bar, or a larger audience? This will determine the size and capacity of your desired brewing system.

Space constraints

Measure the space where you plan to build your brewery. Nanobrewing systems come in a variety of configurations, some more space-efficient than others. Your available space will influence your system choice.

Budget considerations

Having a clear budget will narrow down your options and make the decision-making process simpler.

BUDGET RANGE RECOMMENDED SYSTEM TYPE APPROXIMATE CAPACITY $1,000 &#; $5,000 All-in-One Systems 1 &#; 3 BBL (Barrels) $5,000 &#; $10,000 Modular or RIMS/HERMS 3 &#; 5 BBL $10,000+ Automated Systems 5 BBL and above

Scalability

Will you be increasing your brewing capabilities in the next few years? Some systems allow easy expansion, while others may be more restrictive. It&#;s wise to invest in a system that has at least some room for growth.

Manufacturer&#;s reputation

Research various makes and models. Look for reviews, especially from users who have similar needs to yours. Reputation is important; a respected brand usually means reliability and quality. Micet is known for its innovation, offering a variety of brewing systems suitable for beginners and professionals alike. Their products range from simple kettles to complex automated systems.

Get your nanobrewery turnkey solution

If you are planning to open a nanobrewery, you can contact Micet . Our engineers will manufacture beer equipment according to your brewing process. You can also contact us if you are planning to expand your brewery. Micet has professional technology and customized services and looks forward to cooperating with you!

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