Going commercial

[Lex]

Hi there, I’m somewhat new to the forum!
I wanted to ask the group some advice. I’m a Brit who has been living in the USA for 16 years. I just moved back full time with our daughter - and my other half the brewer will join us in December.
He has been brewing around 30 years and as well as home brewing has been working for large commercial breweries too.

So my question:
We have been looking at buying an existing commercial brewery in the U.K. but I also wanted to explore all the options. What if we wanted to buy a larger (home) property with some land, perhaps an old barn and build a small brewery on the premises? Somewhere up to a 10 barrel system. I have seen people on this forum get a license for brewing out of their garage. Who would we speak to to find out the rules and regulations for starting something on a private property? (Remember, I’ve been in America for years so I’m a bit clueless now). We would be looking probably in North Essex or Suffolk. We want to do it by the book, but also get a license to sell in an on premise tap room and also sell cans, bottles etc to go.

How the heck would that happen, if it could happen? Who would we talk to?

Cheers all! The help is appreciated.

 

[jof]

I'm no expert or have much knowledge of that region but here are my thoughts.
Property is very expensive in the UK, and larger houses are at a premium as people in London are moving out to houses with space for 'home offices' so competition could be fierce as Essex is within London commute distance.

As for brewing premesis.
Many farms has small outbuilding that they rent, which may be suitable. Examples near me are:
Frensham brewery (down a track & they did BBQ's in the summer last year)
Couple of boutique Gin distillers too.

The other thing that might be possible is to buy a closed pub.
(They often get converted to housing, but changing planning permission to residential can be problematical in some cases). But you might be fine if you are looking to brew and have a tap room, with the added bonus of accomodation too.
There may even be distress sales by the bigger pub chains of underperforming pubs especially with the current Covid situation.

 

[-Bezza-]

As jof alludes to, we have planning permission issues in the UK whereby property needs to be designated as having a certain usage category. I'm not 100% sure but would expect that to get a commercial licence, you would need to have premises that have a commercial designation.

Changing part of a residential property to commercial status could then have future implications when you come to sell the property, either because reverting part of someone's new home to residential status might be complex or off-putting to the new buyer, or because it will have tax implications for you personally (the sale of your main home is generally exempt from tax in the UK but any commercial part would not be - but this might not be an issue if you are US citizens or Greencard holders in any case as the US will probably want to tax you on this if the UK doesn't).

As an additional consideration, getting the required electrical supply to a residential property could be complex or expensive.

Overall, it's likely to be simpler to rent existing commercial premises.

 

[simon12]

As already stated the big issue is getting planning permission which has to be granted by the council and different councils may be more or less favourable to the idea. My guess in general is that in a normal residential house the might let you have a small 1-2 barrel brewery in a garage or shed (and may not even require you to get planning permission) but anything larger would be out of the question. If you got a house on agricultural land and wanted to have a brewery in an old barn thats not close to any other residential property I think it would likely be approved, note such a property would be expensive especially if its close to densely populated areas that would be your customer base. A pub as jof suggested would be the cheapest way to start as many sell for around the price just the accommodation is worth and the frequently have space to add a brewery. This ones on the market for £165,000 with a 2 bedroom flat, I don't know if you could get a 10 barrel setup in the out building or not.
Blue Anchor
133a High Street, Lowestoft, Suffolk NR32 1HP

Sales spiel
LOCATION
The Blue Anchor lies to the northern end of the towns vibrant High Street. Lowestoft is the second largest town in Suffolk with a resident population of around 65,000. It is still regarded as a popular holiday and leisure destination with numerous B&Bs/guest houses and holiday parks sited around the town, along with miles of award winning beaches.

The town of Lowestoft is situated along the East Suffolk coast approximately 25 miles east of Norwich and 45 miles north of Ipswich. The town is accessible via the A12 (S) and the A47 and has a train station with fast connections to Ipswich and Norwich. Its close proximity to the Norfolk Broads make it a popular base from where to explore the beautiful coastline and natural features.

DESCRIPTION
A prominent end of terrace property similar to other properties within the immediate vicinity. Comprising of two storey brick construction offering a double returned frontage, under a pitched slate roof. Via panelled gates is access to an enclosed courtyard with large outbuilding for storage. The public areas comprise of an open plan bar, with W.C's. There is a level beer cellar and spacious two bedroom owners flat over the first floor.

TRADE
No trade is warranted or sold.

ACCOMMODATION
Public areas
Open plan bar area with seating to accommodate up to 24 customers. There is a games area with pool table and a separate dart throw. Dual aspect windows overlook the High Street with dual entry doors.

Bar servery comprises of wooden counter top with back shelving and bottle fridges with glass canopy over.

Rear lobby providing access to separate ladies and gentlemen's W.C's.

Ancillary areas
Office area with internal stairs to first floor living accommodation.

Domestic kitchen.

Level beer cellar with useful storage beyond.

Owners' accommodation
Internally accessed only comprising lounge with double aspect windows over the High Street, two double bedrooms and family bathroom.

External
Fronting the property and immediately adjacent to the High Street is a paved area for loading and unloading only.

Currently under a pavement licence external picnic style benches provide some seating.

Panelled wooden gates provide access to the enclosed rear courtyard with large storage barn of brick construction under part tiled and corrugated roof providing ample storage options.

 

[An Ankoù]

You might try making a phone call to one of the suppliers of complete breweries. I understand Geterbrewed do breweries of about the size you want. They may well be able to help you with the other technicalities, or at least point you in the direction of someone who can.
https://www.geterbrewed.com/brewiks-equipment/

 

[simon12]

Also you need to realise in the UK many pubs are tied if not to a brewery to a chain and will not be able to order from you, how many will vary hugely from area to area but round me I think its less than 1 in 5 pubs that can order from whoever they want. After you have the correct planning permission there are alot of other hoops to jump through, first registering with HMRC but there's also trading standards & environmental health to name a few. If you have the planning you won't get rejected for any of the others but theres alot more work you have to do.

 

[Lex]

Thanks for all the replies! A lot to think about.

We have looked at some of the closed pubs for sale as they have the added bonus of the accommodation on top - the thing that has been putting us off is the British mindset that a pub looking building needs to serve food. We just want a brewery and taproom, and we are worried that if we buy an existing property, especially one that used to serve lovely food and was known for it in the area, we will just get angry clients and bad reviews when they come and only get beer. Which will ultimately hurt our venture. In America it’s not an issue (btw, I’m a British citizen and my other half is coming out on a partner visa).
Am I wrong about that?

 

[An Ankoù]

Thanks for all the replies! A lot to think about.

We have looked at some of the closed pubs for sale as they have the added bonus of the accommodation on top - the thing that has been putting us off is the British mindset that a pub looking building needs to serve food. We just want a brewery and taproom, and we are worried that if we buy an existing property, especially one that used to serve lovely food and was known for it in the area, we will just get angry clients and bad reviews when they come and only get beer. Which will ultimately hurt our venture. In America it’s not an issue (btw, I’m a British citizen and my other half is coming out on a partner visa).
Am I wrong about that?

Traditionally pubs served beer and then the gastropub came into being and now everyone's jumped on the bandwagon. But even in the 60s and 70s and 80s, you could usually get something to eat to soak up the beer: crisps, nuts, a stale pork pie or a doubtful cheese roll. I mentioned the Square and Compass in another thread as it was one of my favorites before it became infested with Londonite second-homers, they only served pasties, but they were amazing pasties. You'd go to the pub just for the pasties. If I had a pub I'd have one pot a day: chilli or curry or some kind of stew, and bread, just for those who are hungry.

 

[MmmmCitra]

Come down to East Devon, we're crying out for someone like you, plenty of farm buildings too.............. :small

 

[Lex]

I'm no expert or have much knowledge of that region but here are my thoughts.
Property is very expensive in the UK, and larger houses are at a premium as people in London are moving out to houses with space for 'home offices' so competition could be fierce as Essex is within London commute distance.

As for brewing premesis.
Many farms has small outbuilding that they rent, which may be suitable. Examples near me are:
Frensham brewery (down a track & they did BBQ's in the summer last year)
Couple of boutique Gin distillers too.

The other thing that might be possible is to buy a closed pub.
(They often get converted to housing, but changing planning permission to residential can be problematical in some cases). But you might be fine if you are looking to brew and have a tap room, with the added bonus of accomodation too.
There may even be distress sales by the bigger pub chains of underperforming pubs especially with the current Covid situation.

Thank you! I have been looking into this, and just started a new thread about it since so many nice people on here mentioned this as an option. I like that we can also get a place to live wrapped up in the purchase this way. There’s just a lot of rules that I’m unfamiliar with which make it a little uncertain.
I’ve also been looking into renting farm outbuildings but feel I need to be around a bit longer to get a feel for the areas and get better acquainted with the farmers. Are they already zoned for production? I guess we would need to put in drainage and look into licensing?

 

[Lex]

Come down to East Devon, we're crying out for someone like you, plenty of farm buildings too.............. :small

Devon and Cornwall were high on the list at one point! We love the Falmouth Sea Shanty Festival and the country there is amazing. The locals can be a bit iffy with non locals though right? Can they handle an American?
We need a place with enough craft beer drinkers to make the venture viable. Covid has put a wrench in the works but we are still trying to go with the plan.

 

[Lex]

As jof alludes to, we have planning permission issues in the UK whereby property needs to be designated as having a certain usage category. I'm not 100% sure but would expect that to get a commercial licence, you would need to have premises that have a commercial designation.

Changing part of a residential property to commercial status could then have future implications when you come to sell the property, either because reverting part of someone's new home to residential status might be complex or off-putting to the new buyer, or because it will have tax implications for you personally (the sale of your main home is generally exempt from tax in the UK but any commercial part would not be - but this might not be an issue if you are US citizens or Greencard holders in any case as the US will probably want to tax you on this if the UK doesn't).

As an additional consideration, getting the required electrical supply to a residential property could be complex or expensive.

Overall, it's likely to be simpler to rent existing commercial premises.

Thank you a lot for this reply. It does seem that having something on premises at a home is not the way to go, it was just one of the avenues we were exploring but good to know not one that we should continue to explore. We don’t want to get too tied up in planning permission issues.

 

[Lex]

As already stated the big issue is getting planning permission which has to be granted by the council and different councils may be more or less favourable to the idea. My guess in general is that in a normal residential house the might let you have a small 1-2 barrel brewery in a garage or shed (and may not even require you to get planning permission) but anything larger would be out of the question. If you got a house on agricultural land and wanted to have a brewery in an old barn thats not close to any other residential property I think it would likely be approved, note such a property would be expensive especially if its close to densely populated areas that would be your customer base. A pub as jof suggested would be the cheapest way to start as many sell for around the price just the accommodation is worth and the frequently have space to add a brewery. This ones on the market for £165,000 with a 2 bedroom flat, I don't know if you could get a 10 barrel setup in the out building or not.
Blue Anchor
133a High Street, Lowestoft, Suffolk NR32 1HP

Sales spiel
LOCATION
The Blue Anchor lies to the northern end of the towns vibrant High Street. Lowestoft is the second largest town in Suffolk with a resident population of around 65,000. It is still regarded as a popular holiday and leisure destination with numerous B&Bs/guest houses and holiday parks sited around the town, along with miles of award winning beaches.

The town of Lowestoft is situated along the East Suffolk coast approximately 25 miles east of Norwich and 45 miles north of Ipswich. The town is accessible via the A12 (S) and the A47 and has a train station with fast connections to Ipswich and Norwich. Its close proximity to the Norfolk Broads make it a popular base from where to explore the beautiful coastline and natural features.

DESCRIPTION
A prominent end of terrace property similar to other properties within the immediate vicinity. Comprising of two storey brick construction offering a double returned frontage, under a pitched slate roof. Via panelled gates is access to an enclosed courtyard with large outbuilding for storage. The public areas comprise of an open plan bar, with W.C's. There is a level beer cellar and spacious two bedroom owners flat over the first floor.

TRADE
No trade is warranted or sold.

ACCOMMODATION
Public areas
Open plan bar area with seating to accommodate up to 24 customers. There is a games area with pool table and a separate dart throw. Dual aspect windows overlook the High Street with dual entry doors.

Bar servery comprises of wooden counter top with back shelving and bottle fridges with glass canopy over.

Rear lobby providing access to separate ladies and gentlemen's W.C's.

Ancillary areas
Office area with internal stairs to first floor living accommodation.

Domestic kitchen.

Level beer cellar with useful storage beyond.

Owners' accommodation
Internally accessed only comprising lounge with double aspect windows over the High Street, two double bedrooms and family bathroom.

External
Fronting the property and immediately adjacent to the High Street is a paved area for loading and unloading only.

Currently under a pavement licence external picnic style benches provide some seating.

Panelled wooden gates provide access to the enclosed rear courtyard with large storage barn of brick construction under part tiled and corrugated roof providing ample storage options.

Thanks for that one. I hadn’t come across it during my search, and I only found one listing for it now I have actively looked, with just a rental number. I have found a number of other pubs that could be workable too... it’s just working out where to put the brewery. One idea could be in the commercial kitchen if big enough as it should already be set up for drainage and extraction. Or maybe building a specific brewery off to the side (if it has land). Of course we would need to figure out planning permission before buying it if that were the case.

 

[Lex]

Traditionally pubs served beer and then the gastropub came into being and now everyone's jumped on the bandwagon. But even in the 60s and 70s and 80s, you could usually get something to eat to soak up the beer: crisps, nuts, a stale pork pie or a doubtful cheese roll. I mentioned the Square and Compass in another thread as it was one of my favorites before it became infested with Londonite second-homers, they only served pasties, but they were amazing pasties. You'd go to the pub just for the pasties. If I had a pub I'd have one pot a day: chilli or curry or some kind of stew, and bread, just for those who are hungry.

We are a bit wary of any food really, but it it has to be it has to be. That could be a good idea, something like that and some snacks.

 

[Lex]

Also you need to realise in the UK many pubs are tied if not to a brewery to a chain and will not be able to order from you, how many will vary hugely from area to area but round me I think its less than 1 in 5 pubs that can order from whoever they want. After you have the correct planning permission there are alot of other hoops to jump through, first registering with HMRC but there's also trading standards & environmental health to name a few. If you have the planning you won't get rejected for any of the others but theres alot more work you have to do.

We are happy to do the work, but we need to make sure the idea is viable before investing all of our savings into it. And we are both very unfamiliar in this territory.
Our hope is to have a tap room and get most of our clients that way. We are happy to brew to sell to pubs, but as you say the tow issue is definitely something that’s different that we have to be aware of. But the dream is to get people to the premises, even if it’s a pub garden or to-go beer to start until the pandemic is more under control and we can all congregate again.

 

[Lex]

You might try making a phone call to one of the suppliers of complete breweries. I understand Geterbrewed do breweries of about the size you want. They may well be able to help you with the other technicalities, or at least point you in the direction of someone who can.
https://www.geterbrewed.com/brewiks-equipment/

Excellent advice. I will definitely be following up on that. Thanks.

 

[Northern_Brewer]

I'm reminded of a version of the old saying - the fastest way to a small fortune is to start with a big fortune and open a microbrewery.

It's tough out there - really tough. There's going to be a lot of established breweries making good beer going bust in the next 12-18 months, in fact I saw a 10bbl one only today that, despite making some great beer and winning a bunch of awards and being a bit of a local "name", was only selling around £3k/week (so ~10bbl/week wholesale, in fact a bit less than that as there was some tap/direct sales) before Covid and is now up for sale.

Devon and Cornwall were high on the list at one point! We love the Falmouth Sea Shanty Festival and the country there is amazing. The locals can be a bit iffy with non locals though right? Can they handle an American?
We need a place with enough craft beer drinkers to make the venture viable.

Depending on your model, the drinkers are the least of your worries. Cornwall's obviously a lovely place that is the ideal place for a lifestyle business - but the pubs have been pretty much sewn up by the likes of St Austell. At one point there were more breweries in Cornwall than freehouses that were free to take their beer - obviously that's not a situation that's sustainable long-term.

I guess two big changes since you've been gone is the rise of micropubs, and the rise of gin, which with fruit cider is the (higher margin) equivalent of hard seltzer in the US I guess. Micropubs can be explained by the fact that you can rent old shop units and the like for £2-10k per month, whereas renting a traditional pub from a pubco might cost £50k+/month (either free-of-tie or £25k +wet rent in the form of the excess prices you pay on your tied beer). The early micropubs were very much places for old men to drink cheap cask beer, they've evolved into something a bit less cliquey, the good ones have realised that offering some decent gin and wine as well gets more bums on seats and can often have a 50:50 gender split. They've also got people used to drinking in non-pub environments, which has paved the way for even breweries in trading estates to have successful tap operations. Micropubs have been a bit of a lifeline for "traditional" 5-10bbl cask breweries in recent years, but since old shops tend not to have beer gardens, they've been really badly hit by Covid.

And the market has changed a lot, even in the last 2-3 years. We are now in a world where ASDA are selling pineapple milkshake beer from Black Sheep (yes, Black Sheep) at 4 for £6, and people can buy 8 cans labelled NEIPA for £9 from Tesco. It won't be giving the likes of Treehouse or Trillium any sleepless nights, but that's where people are now seeing the price points - and it's below the cost of production for small breweries.

So it's going to be really tough for traditional 5-10bbl breweries that have been making an OKish living selling mostly cask beer to the free trade. But even then they've been spending maybe 2 days a week brewing, 3 days a week selling the beer, 1 day a week delivering it and 2 days a week doing paperwork. I think those kinds of companies have a choice - either they scale up, to reduce their costs and maybe expand any swap programme they have into a full-blown wholesaling operation on the side to give publicans the choice of beer that the tickers crave, or they give up trying to sell much into the free trade, and just try and sell 2-4 bbls of beer mostly on their own premises (either on the same site as the brewery or at a micropub-type operation in town) at higher margin. I know that's a lot more common in the US than here, but we're seeing more of that.

Conversely a lot of the 0.5-1bbl part-time garage nanos that started in 2016 have come and gone, as people learn just how much work there is before you can sell just 1 pint, it's a lot of work for not much reward. Some traded up, a lot gave up.

As far as the practical stuff goes, Ted Bruning's books are a good place to start - The Microbrewers' Handbook is into its 7th edition now (beware there's a lot of earlier versions kicking around retailers), he also has written distiller's and bar owners books, it's all about the practicalities of dealing with the taxman etc. Some of the gotchas include waste water permits as brewery waste can deplete oxygen in watercourses. In the early days it was quite common to find breweries on farms as farms paid very little for water, but drink-driving laws mean that it's hard to develop a tap trade out in the sticks, you're better off finding some cheap property in maybe a less fashionable part of town that's near chimneypots and eg a rail station.

Do make lager if you're going the brewpub route - even quite hard-core CAMRA-type pubs can sell more lager than cask.

Session culture in the UK means that you do really have to do some kind of food to keep people drinking - a lot of micropubs have some kind of basic cold snacks (plates of salami, cheese, Scotch eggs etc) or basic hot food - pies and sausage rolls in a pie oven is pretty low-tech, pizzas are high-margin and you get high-temperature cookers which sit on a table-top and cook them in a couple of minutes. You'll need to get most of the food permits from Environmental Health in any case before you can make beer or serve it, so you shouldn't be afraid of food. Or the other option is to just get food trucks in on a Friday/Saturday night.

I probably wouldn't buy new kit at the moment, given the tsunami of fairly new, second-hand kit that's on its way....