My Draft Syndicate Brochure - Comments Please

[Dave Parry]

Some of you may have seen my recent thread talking about the beer duty implications of sharing a brewery and distributing the product for domestic use only. Having got clearance from HMRC that this is exempt as per their Excise Note 226 Para 4.4, I am now going to see if I can drum up support here in Shrewsbury to see if there is demand for this sort of thing.

I have created a mini brochure to promote it and would love to get your feedback on it please.

Thanks

Dave

 

[DrGMc]

I really like the brochure and it all looks very professional - I wish you lots of success with it

 

[RichardM]

At the prices you are suggesting I can't see the point. If I was a new home brewer I could buy my own kit for less than £1000 and brew once a month for a similar amount to the monthly membership fee. If I am an existing home brewer why would I want to join? I all ready have the kit and don't want to spend a £1000 just to brew with some mates

 

[Sadfield]

All feels very different to the idea floated on the other thread, with drumming up support, £20000 investment and plans for 100 syndicates. Not the shared kit between friends.

 

[Dave Parry]

@Sadfield the 100 figure was flying a kite really. My main goal is to do one. This one.

The investment has been that all along. The SS Brewtech nano costs £13000, plus chiller plus FV plus mini kegs and maybe some room fit out costs. If it can be done for less, the surplus is refunded.

@RichardM you are absolutely right. We can all choose to brew how we want. Some people like sharing in the cost of a rally car or a racehorse or a yacht. Some go it alone on a smaller scale. There’s room for everyone.

My goal here is to see if there are enough people like me who would fancy giving this model a try, or whether most brewers quite like the 20L version, all to themselves.

I’m not suggesting this because it’s cheaper, or even necessarily better beer. Just for me it seems more fun to share and to have access to some cool kit.

All thoughts welcome, thanks. There’s no wrong answer to this. A resounding No is also a successful outcome - I’ve got my answer then either way.

 

[Dave Parry]

I really like the brochure and it all looks very professional - I wish you lots of success with it

Thanks @DrGMc.

 

[MickDundee]

At the prices you are suggesting I can't see the point. If I was a new home brewer I could buy my own kit for less than £1000 and brew once a month for a similar amount to the monthly membership fee. If I am an existing home brewer why would I want to join? I all ready have the kit and don't want to spend a £1000 just to brew with some mates

This. Add to that £15 for the ingredients for a 10L brew. Depending on style, I can do a 20L brew for half of that or even less. If you’re buying in bulk there’s not a chance in Hell it’ll cost £15 for 10L even if you’re making beers with 300g hops in every time.

 

[RichardM]

@Sadfield the 100 figure was flying a kite really. My main goal is to do one. This one.

The investment has been that all along. The SS Brewtech nano costs £13000, plus chiller plus FV plus mini kegs and maybe some room fit out costs. If it can be done for less, the surplus is refunded.

@RichardM you are absolutely right. We can all choose to brew how we want. Some people like sharing in the cost of a rally car or a racehorse or a yacht. Some go it alone on a smaller scale. There’s room for everyone.

My goal here is to see if there are enough people like me who would fancy giving this model a try, or whether most brewers quite like the 20L version, all to themselves.

I’m not suggesting this because it’s cheaper, or even necessarily better beer. Just for me it seems more fun to share and to have access to some cool kit.

All thoughts welcome, thanks. There’s no wrong answer to this. A resounding No is also a successful outcome - I’ve got my answer then either way.

The people who take part in syndicates to own racehorses or rally cars are probably doing it because they don't have the money to buy their own.
I am far from convinced that you will get enough local people to sign up. But good luck to you and do report back on your progress

 

[Dave Parry]

This. Add to that £15 for the ingredients for a 10L brew. Depending on style, I can do a 20L brew for half of that or even less. If you’re buying in bulk there’s not a chance in Hell it’ll cost £15 for 10L even if you’re making beers with 300g hops in every time.

I must stress this is non profit. If it costs less then the monthly amount will be less. You make a fair point that the way it is written this implies it will definitely be £15 per brew.

I have never bought ingredients for 200l brews so was erring on the safe side. I will clarify that wording. I pay £15-£30 for a 20l brew at Maltmiller depending on the recipe. There’s bound to be savings when buying in bulk. I don’t want people signing up just because it’s cheap beer though otherwise they won’t like it when we choose to do a heavily hopped recipe.

I don’t mind addressing all these points; that’s why I asked for feedback. I am feeling a bit as if the groundswell of opinion is that this is daft though. There seem to be more people picking holes in it than supporting it.

 

[Dave Parry]

The people who take part in syndicates to own racehorses or rally cars are probably doing it because they don't have the money to buy their own.
I am far from convinced that you will get enough local people to sign up. But good luck to you and do report back on your progress

I know this isn’t mass market. It’s not going to be for everyone. Maybe only one in a thousand people are interested and can justify lending that amount of money to a hobby like this. That’s the point of asking for feedback on here though. These are all excellent points and are very helpful. Thank you everyone and keep them coming.

I will definitely keep you all up-to-date on progress. This is an “open source“ idea. I claim no proprietary rights to it. If we can find a formula that does work then anyone else is free to copy it.

 

[kelper]

Can you find any other brewing syndicates and get their advice? You will need legally-binding contracts and insurance for the equipment and possibly personal insurance. find a boozy solicitor - can't be difficult! Good luck.

 

[Clint]

What if someone wants out?

 

[Dave Parry]

Can you find any other brewing syndicates and get their advice? You will need legally-binding contracts and insurance for the equipment and possibly personal insurance. find a boozy solicitor - can't be difficult! Good luck.

Yes I work with a number of solicitors in my day job and have a good template to start from. Will definitely get the kit insured etc. All part of the monthly cost.

 

[Dave Parry]

What if someone wants out?

The draft Ts & Cs I have allow for someone to get out if another person wants to come in to take their place. It stresses that this is not an investment so the price paid can’t be higher than the original stake (and is ideally the same but it’s up to the seller if they want to accept a lower price).

If someone leaves unilaterally and just stops paying the monthly amount then they don’t get the initial ‘loan/stake’ back and stop getting a share of output. We make their space available and refund them the stake if someone else pays in.

 

[samale]

I think your idea is great on paper but brewing on that scale requires a lot of time and effort. I personally wouldn't see the point. I would rather brew myself. Have you any experience brewing to this scale. The cleaning alone would be a full days work, it would be a very long brew day unless you mash over night. Your going from hobby brewing to commercial scale. I understand two friends going into brewing sharing the cost of equipment but not to that numbers. It could lead to a lot of head ache

 

[Dave Parry]

I think your idea is great on paper but brewing on that scale requires a lot of time and effort. I personally wouldn't see the point. I would rather brew myself. Have you any experience brewing to this scale. The cleaning alone would be a full days work, it would be a very long brew day unless you mash over night. Your going from hobby brewing to commercial scale. I understand two friends going into brewing sharing the cost of equipment but not to that numbers. It could lead to a lot of head ache

Good point. I do not have any experience brewing on this scale and you're right - I may grow to hate my hobby! I suppose in part it depends who is in the syndicate and do enough people share the load? There is a danger it all goes well to start with then people lose the novelty and it become a chore so fewer and fewer people do the work. I have spoken to a 200L commercial brewery run by 4 people and it has started to go that way with them - although some of the faff is the bottling which we would minimise by kegging. It's still a long brew day including clean down. I've just started mashing on a timer during the night on my 20L set up and am interested to see how that goes.

 

[-Bezza-]

I read this as something of a good idea but a very tough ask. You're looking to invest in some top-quality equipment that comes at a price, even divided across all those people. Have you thought about a 5-person syndicate using a Braumeister as an alternative. Up-front costs would reduce to around £500 each which is probably more palatable.

Some suggestions and questions from me:

- People are naturally very cynical, especially when it comes to money. I would suggest giving a bit more detail behind the numbers within the document, i.e. how have you arrived at £1,000 and £15.
- Are there any opportunities to make back some money on the investment. For example, could you loan the equipment out to others for a fee, e.g. tapping up local pubs to borrow the equipment (under supervision)? I would like to think that wouldn't cause tax issues for the syndicate.
- Do people still get the beer if they don't help out on brew day? How do you make sure you're not getting stitched up in doing all the work?
- Who owns the equipment and where is it kept? How are costs of insurance, maintenance, powering the thing, water etc etc being funded?
- What happens to all the equipment for the rest of the month?
- Might be worth seeing if there is a way you can communicate the overall value a little better. I think that's the thing people are struggling with slightly, where they have made comments above. Over the course of 2 years, I've got 240l of beer that's cost £1,360. How would £3.22 per pint sit with people and how do you tell them about the value in that?

 

[jceg316]

I worked at a homebrew centre a few years ago where they had a few large homebrew kits people could rent out and make their beer on. Most the kits were something like 50 litre vessels, designed to make 35 litre batches. People paid a lot of money for monthly "rent", then on top of that paid for ingredients. I didn't understand why anyone would fork out that money when they can do it at home for way cheaper. If space is an issue it still would had have been more worthwhile to do a stove toppers kit.

They had a 200 litre kit which was mainly used by breweries just starting out wanting to make pilot brews, sell to some local bars, get feedback etc. before they scale up to their own premises.

What may have been good about that place is a bunch of homebrewers getting together, sharing beers, sharing recipes and ideas etc. I think that's a great idea, but getting 20 people to gather round a 200 litre kit for £1k each I don't think will work. Even with a 200 litre kit, more than 3 people attending it is enough and any more there will be people standing around doing nothing and getting very bored.

A better approach might be to get 2 smaller kits and less people. That way you can run 2 brews at the same time, more hands on time and gives you opportunities to experiment with different setups, brewing techniques etc, as well as the ability for brewers to swap homebrews. I don't think a 200 litre brewery would cost £20k, but two 50 litre breweries would definitely be cheaper. Get a bottle filler for ~£300, people can bring their own bottles to fill or if they'd rather a keg.

I really like the idea of bringing brewers together to brew, but I'm not so sure on the costs involved.

 

[Dave Parry]

I worked at a homebrew centre a few years ago where they had a few large homebrew kits people could rent out and make their beer on. Most the kits were something like 50 litre vessels, designed to make 35 litre batches. People paid a lot of money for monthly "rent", then on top of that paid for ingredients. I didn't understand why anyone would fork out that money when they can do it at home for way cheaper. If space is an issue it still would had have been more worthwhile to do a stove toppers kit.

They had a 200 litre kit which was mainly used by breweries just starting out wanting to make pilot brews, sell to some local bars, get feedback etc. before they scale up to their own premises.

What may have been good about that place is a bunch of homebrewers getting together, sharing beers, sharing recipes and ideas etc. I think that's a great idea, but getting 20 people to gather round a 200 litre kit for £1k each I don't think will work. Even with a 200 litre kit, more than 3 people attending it is enough and any more there will be people standing around doing nothing and getting very bored.

A better approach might be to get 2 smaller kits and less people. That way you can run 2 brews at the same time, more hands on time and gives you opportunities to experiment with different setups, brewing techniques etc, as well as the ability for brewers to swap homebrews. I don't think a 200 litre brewery would cost £20k, but two 50 litre breweries would definitely be cheaper. Get a bottle filler for ~£300, people can bring their own bottles to fill or if they'd rather a keg.

I really like the idea of bringing brewers together to brew, but I'm not so sure on the costs involved.

Good points about maybe having two kits half the size, or even just 1/2 the size and half the number of members.

To be clear though, I never imagined all members would be present at all brew days. I suspect a rota would be formed and somewhere around four or five people would turn up on each day. Maybe even take shifts?

I think you are right to point out that for many people space is definitely an issue. I only survived two brews in the kitchen before I was expelled! I’ve now set up happily in the garage, but not everyone has the space.

 

[Dave Parry]

I read this as something of a good idea but a very tough ask. You're looking to invest in some top-quality equipment that comes at a price, even divided across all those people. Have you thought about a 5-person syndicate using a Braumeister as an alternative. Up-front costs would reduce to around £500 each which is probably more palatable.

Some suggestions and questions from me:

- People are naturally very cynical, especially when it comes to money. I would suggest giving a bit more detail behind the numbers within the document, i.e. how have you arrived at £1,000 and £15.
- Are there any opportunities to make back some money on the investment. For example, could you loan the equipment out to others for a fee, e.g. tapping up local pubs to borrow the equipment (under supervision)? I would like to think that wouldn't cause tax issues for the syndicate.
- Do people still get the beer if they don't help out on brew day? How do you make sure you're not getting stitched up in doing all the work?
- Who owns the equipment and where is it kept? How are costs of insurance, maintenance, powering the thing, water etc etc being funded?
- What happens to all the equipment for the rest of the month?
- Might be worth seeing if there is a way you can communicate the overall value a little better. I think that's the thing people are struggling with slightly, where they have made comments above. Over the course of 2 years, I've got 240l of beer that's cost £1,360. How would £3.22 per pint sit with people and how do you tell them about the value in that?

@Bezza – Great feedback and lots of interesting questions. Thanks. I take your point about people being naturally cautious when money is involved. I haven’t had this reaction at all in my local conversations, but that is probably because I am speaking to people who know me so trust isn’t an issue. I can see that asking the forum for views when I am a stranger to them is giving me a very different set of feedback points and questions.

I am more than prepared to detail the finances completely and would intend running the whole thing on an open book basis anyway. I can’t stress enough times that this is most definitely not a moneymaking initiative, either for me or for anyone else who gets involved.

I suppose that naturally raises suspicions in some peoples mind as many people would not see the point unless it made them some money. The conversations I have had with people so far have generally been with business owning friends and the money side hasn’t really been a problem.

Thanks again for the perspective and perceptive comments. I’ll have a look at how I can present it better.