So I had the chance to do something really cool recently. As i have been talking about a lot recently is wanting to start my own bar. Well i got to sit down with a Master Brewer who works for 1766 Brewing company. following is the final project i wrote for the interview. I hope you all enjoy it as much as i did!
For this project I chose to focus on 1766 Brewing Co. 1766 is as its name states, a brewery that produces a variety of different beers. However, it is split between that and a restaurant while also distributing to a few local areas. The owner of the company, Dave Sanborn, owns several businesses to include: a construction company, 1766 brewing and the restaurant, and The Last Chair.
Unlike most micro-breweries, 1766 is split between two locations: The Brewery 5 NH25, Plymouth, Nh and the restaurant 1766 Brewing Company 61 Main St, Plymouth, NH. The brewery focuses on brewing the beer and distributing it directly to the downtown location and The Last Chair. Although they do distribute small amounts elsewhere, this keeps the production costs low and profits high.
The Brewery started several years ago as Sublime Brewing but due to some copyright issues they were forced to change the name. 1766 as a company brand was founded in 2017 when they opened the brewery location next to The Last Chair. They tapped into the rich history of Plymouth NH to drive the company forward. 1766 being the year of the first Plymouth town meeting, the company decided what better way to celebrate the history then by naming it accordingly.
As a bartender myself, I had the privilege of working for the company for a short while where I got to know most of the staff including the owner Dave. I chose this company for that reason along with the fact that the General Manager is my best friend of 10 years. I had the privilege of meeting with the man behind the scenes who I have previously never met. Craig Yergeau is the Master Brewer at 1766 and has been a brewer for 6 years. The following will be a brief synopsis of what we covered in our meeting.
The process from idea to beer. Throughout his day to day life, Craig is always looking for the next idea for his beer. These ideas come from foods he may have had or even other craft beers along the way. Once he has a general idea of the taste he wants, he will ask others if it sounds good. After it is establish and he knows what he wants, he uses a program called Beersmith which is designed to help create flavors. This program will generate a list of ingredients needed to reach the desired flavor. The rest is up to the imagination, whether it’s adding more of this or less of that.
Once the taste is established and the ingredients list is produced, it’s time to place the order. Craig will have to call their distributer (of whom I will not mention) and place the order of exactly what he needs. Once the order is received they begin what is called “the brew day”. This is where Craig goes to work in creating the end product. The actual brewing process takes roughly 8 hours and this consists of adding the direct materials at the appropriate time throughout the process. This is important because adding, let’s say the hops at the wrong time in the process will dramatically change the end flavor. After everything has been added with precision and boiled to a very exact temperature, it’s time to separate the yeast then carbonate. This portion is the fermenting process which depending on the beer can take a few days. Finally once the yeast has fermented then separated and the beer is carbonated it’s time to keg the beer and the process is complete.
In regards to the accounting and job order costing, for 1766 it is quite simple. Because of their size and the quantity of product produced, they are able to use a simple excel spreadsheet that has the equations embedded so all they have to do now is punch in the numbers and the sheet does the rest. He had mentioned the wide variety of programs out there that can do this, but again due to the nature of the product it would be an unnecessary waste of money.
Now how this process relates to ordering the direct material, well really, it doesn’t. The reason they use this is to track the cost of everything they purchased and how much they use as a form of receipt for the accountant they have. Whereas Craig is the one placing all the orders and making all the beer, he finds it easier and more efficient to hand count the material on hand and order accordingly. However, because each beer is different and requires different material, they typically do not order more then they need for the specific batch. This means once that batch is done, theoretically there will be no materials left.
The service engagement. To reiterate, the beer idea is born, or they received an order. The ingredients list is made and immediately ordered. Once arrived, the brew day begins utilizing all materials ordered. Once completed the beer is kegged and sent to their own restaurant where it is inventoried and severed. Because of this, the brewery’s work in progress inventory is not of the individual material but instead the actual beer sitting in the fermenter fermenting. Lastly, the finished goods are shipped immediately which states the turnover is immediate and the service engagement is complete.
After discussing the actual process of making the beer and how the direct materials are inventoried, we briefly touched on labor and overhead. This conversation was a quick one. Labor is tracked through a payroll which is basically where Craig sends the GM his hours and it is logged. As for overhead, the building and property is all owned by Dave and not rented by the brewery. As Craig described, basically Dave just takes from his accounts and pays whatever needs to be paid.
This all led to my final question and that is, how is the selling price determined? In response, because the beer is made and sold right from their own restaurant, they can basically price it however they’d like. However, pricing it too low will end in them losing money and to high will stunt sales. So they have a price tier system in place of low, medium, and high. Each beer is determined by how long it takes to make, how high the alcohol by volume (ABV) is, and a few other minor variables.
In conclusion, I walked away from this meeting with something in mind. Based off of the meeting and what I knew about the company from working there, I can see now that they operate in a state of controlled chaos. Now some may look at this and shutter in fear of failure, but I don’t see it that way. I see a company that has adapted to their ever changing environment and found a process that works for them. So to them I say keep doing what you’re doing, there is no need to fix something that is not broken.