Archive for April 2013

Day 598: Reflections on 4th semester

April 27, 2013

Alrighty, it’s time to take a look back at 4th semester courses.

The Brewing Industry: This course is central to the overall program. Jason Fisher pulls no punches in laying a great big reality check on us. Want to open a brewery? Get yourself a million dollars. (Or better yet, 1½ million.)  Contract brewer, bricks & mortar brewery or brewpub–what beers should you be brewing (or not brewing)? What are your key metrics? What is your competitive edge? What are your distribution channels? Will you make any money? The only problem with this course is that we needed to hear this stuff way earlier in the program–2nd semester if possible.

Brewery Management: Mike Arnold is a highly organized hard-nosed businessman who just happens to make beer, and he passes on a lot of essential info about running a business: step-by-step instructions for how to incorporate; how to avoid expanding before you’re ready to expand; several tax-saving loopholes; whether to lease or buy; basic accounting; critical path planning; making and pitching a business plan (to real brewers and bankers). The only problem I had with this class was that Mike’s instructions for assignments were either verbal–leading to misunderstanding later on–or the written instructions were vague.

Beers Sales & Promotion: During the first half of the semester, there was too much abstract marketing theory, and not enough practical examples. For instance, instead of just talking about proper store set-up, perhaps we should also have seen photos of good and bad examples of store layouts. Ditto good branding versus bad branding, or good use of social media versus bad use of social media. Then during the second half of the semester, our major assignment was to plan tours of the Teaching Brewery during the college’s Spring Open House. However, that involved event planning, which had nothing whatsoever to do with sales and promotion. This class needs a major re-think if it is to be at all relevant to the Brewmaster program.

(Small digression: Up until this semester, we hadn’t learned anything about the Liquor Control Board of Ontario (LCBO) or the Alcohol and Gaming Commission of Ontario (AGCO). Then during the first three weeks of the fourth semester, that’s all we heard about in all three of these classes. It was a classic case of overlapping curriculum, and again emphasized that there seems to be very little oversight or coordination of what is being taught in the Brewmaster program. But I digress…)

Specialty Brewing: This semester, our big project was to brew up our very own custom-designed beer. To my way of thinking, this was too open-ended and needed a link to reality. I would suggest that every student beer has to be entered into a professional beer competition in any category except the “Open” class–in other words, students have to choose a specific style, brew to the style, and then put it up against professional examples of the same style.

Beer Evaluation and Judging: Dan MacKinnon is a really nice guy who knows his stuff. Unfortunately, the material he was planning to teach us this semester about tasting panels, statistics and reports had already been covered by Mark Benzaquen in 2nd semester’s Sensory Evaluation. In addition, this class–which largely involved trying to detect tiny levels  of off-flavours in beer–was held in a chemistry lab; the strong chemical odours made the whole tasting exercise rather impossible.

Human Resources Management: In theory, this looks like a good bet, right? If I’m a brewmaster, I should know how to manage my staff. In practice, this course concerns management on a large scale in a corporate setting. As such, it held little if any relevance to the person who is off to work at a small brewery–which is pretty much all of us.

Overall, the final semester mainly concerned the business of brewing. As a result, the material covered was a lot drier than previous semesters. I would suggest mixing some of these courses into the other semesters so the fourth semester seems a bit more lively. This would also make the 4th semester more palatable to the student who is not planing to open his or her own brewery.

Much of the work this semester revolved around group assignments. Of course this meant that 90% of the work got done by 10% of the students. If group assignments are all necessary for these courses, then this is another reason to move some of them to other semesters.

Up next: my thoughts on the overall Brewmaster program.


Day 591: Final day of the program

April 19, 2013

The last day of Exam Week started with a meeting. A few weeks ago, a couple of us Brewmaster students had been asked to discuss the course curriculum with our fellow students. This morning, we brought those comments and suggestions to a meeting with Craig Youdale, the Academic Chair of the department and Jon Downing, the Teaching Brewery Brewmaster. We have already seen changes made to the first year of the course, some of which may have been due to our comments last year, so we hope that the comments and suggestions made this morning will have a similar effect on the second year of the course, and on the program overall.

The meeting ran long, so I was actually very late for my final Creative Writing class–only got there in time to hand in my  portfolio.

And then it was time for the final final exam….errr… last final exam, in Sensory Evaluation.

And that was it for the Brewmaster program.

Done. Finished. Over. Completed. There is no more. Woo-hoo!

Contrary to the title of my blog, it’s not quite 600 days since I started–due to a change in the structure of the spring semester this year, we are finishing one week earlier than originally planned… but “591 Days to Brewmastery” doesn’t have the same ring as “600 Days”, does it?

So what now for this new “brewmaster”? First–and most important–it’s time for a cold beer!

(Okay, let’s admit it–just about any time is a good time for a cold beer. But I digress…)

Over the next few days, I’ll post some reflections on second semester, and some thoughts about the Brewmaster course overall.

Day 589

April 17, 2013

Two more exams today.

First up was Sales & Promotion. Pretty straightforward mix of multiple choice, short and long answer.

Then Brewery Management–a mix of multiple choice and short answer, plus one long question that involved rounding off hectolitres of beer for purposes of excise taxation. (Long question: I hate it when you think you’ve got the proper way to solve the question figured out, then right after the exam is over, someone mentions the proper way to do the question. D’ohh!)

Brewmaster Class of 2013

Brewmaster Class of 2013 and cask of grad beer

Although most of us have one exam left, a few students have to leave early in order to start new jobs, so they have already written the last exam. Yes, this was their final day. It seemed like an appropriate time to gather in front of the Teaching Brewery for a quick snapshot with Brewmaster Jon Downing and our cask of graduation beer (“The Fox Sleeps in the Barn” Niagara Peach Lambic-Style Sour Brett Ale).

The cask will be tapped this evening. Luckily for all concerned, our final exam is not until the day after tomorrow.

Day 588

April 16, 2013

Exam Week.

First up was Human Resources. Relatively straightforward and short, just 40 multiple choice questions.

Next was Beer Industry. This exam featured a mix of multiple choice, short answer and long answer, and was “open book”–we could bring in notes, reference books, a laptop connected to the internet, a smartphone Angry Birds exam app–anything we wanted. As always with an open book exam, you’ll generally do well if you know the material well enough that you only have to fact-check an item or two and you have relatively well-organized notes. Open-book exams are big trouble for the people who have to look up all the answers.

Two more exams tomorrow, so time to get studying! No time to even have a beer or write a blog entry. (As you can see, I lied about at least 50% of the last sentence. And possibly more.)

Day 584

April 13, 2013

I shed a tear/For I have no beer/What a wretched fate/To cogitate

As you may have guessed, the last day of lectures started in Creative Writing with a brief look at poetry.

In Human Resources, we ended the semester with the process of union-labour contract negotiations and the collective agreement. (I thought it was highly symbolic that my pen ran out of ink near the end of the lecture. I went through almost a dozen pen refills over the past two years while taking notes.)

And in Sensory, my group presented the slide show of our taste results that I had put together yesterday; we then listened to the presentations of other groups.

And that was it. Done. Completed. Finished. Nothin’ left.

Oh, except for five exams next week.

(Cue ominous music)

duh Duh DUHHHH!

Day 583

April 13, 2013

Last Friday a team of six of us presented two beers to the Sensory Evaluation class and gathered data on what they tasted. Tomorrow we have to hand in a report outlining our results and make a class presentation.

Today I received the finished report from one member of the team and used its data to make up a basic PowerPoint slide show. I then emailed the file to another member of the team to make it look nice and professional.

Woo hoo! No more homework!

Day 582

April 12, 2013

The second-last day of lectures.

As usual, Mike Arnold started Brewery Management with a warm-up discussion: Cans versus bottles. Cans are lighter, and give the beer better protection from light. Bottles can have lower environmental taxes in Ontario (if they are refillable), are cheaper per unit, have labelling flexibility, and give expensive beers a higher pereceived value than cans. However, one possible issue with cans is the presence of BPA, an estrogen mimic, in the inner liner. At the moment in North America, contact with BPA is allowed for food products that are pH neutral or acidic, but not for foods that are alkaline. (Beer is acidic.) However, who knows if this will change, and if it does, how quickly that change will be made.

On to today’s main topic. You’ve started up a brewery, you’ve made some beer, and now, for whatever reason, you decide it’s time to get out of the game. What is your exit strategy?

The first step is to get a valuation of your company. The easiest (and most expensive) way is to get a professional evaluation. However, there are a number of cheaper ways of estimating how much your brewery is worth.

  • If your brewery is a publicly traded company, simply multiply the number of shares by their worth. If your company has 2.8 million shares worth $1.60 each, that would be a valuation of $4.4 million.
  • A useful rule of thumb is to simply multiply the last year of production by $200/hL. If you produce  22,500 hL per year, that would give a valuation of $200/hL x 22,5000 = $4.5 million
  • Another rule of thumb is to multiply your brewery’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by 5. If your EBITDA was $3.7 million, your company would be worth  $18 million.
  • Another rule of thumb is simply to calculate 60% of your gross sales.
  • Or you can compare your brewery to other similar-sized breweries that have recently been sold.

Okay, you have an idea of what your brewery is worth. Now you need to find a buyer.

  • You can use a business broker–they exist for the express purpose of matching sellers to buyers, but they will charge a hefty commission.
  • Some real estate brokers are also taking on this role.
  • You may be able to find a buyer through your local trade association
  • You may be able to track down someone who isn’t interested in buying a brewery and then putting thir own name and brands into it, but rather wants to take over your operation as it is (including personnel, trademarks, recipes, etc.).
  • Your staff may be interested in buying you out and taking over operations
  • Or, if you can’t find a buyer, you may be forced to simply liquidate the operation.

So, let’s assume you’ve sold your brewery. Now what? (Assuming you’re not retiring to a Caribbean island with your  money.) If you’re still interested in brewing, you may not be able to re-enter the market immediately if you signed a non-compete agreement with whoever bought you out. Those usually last 3-4 years, and usually only apply to the marketplace your old brewery services; if you are interested in starting over an don’t want to wait, you could move to a new market and start fresh.

Or you could become a paid advisor–the consultant who arrives, solves a problem and then moves on.

Hmmm, is there any way of skipping right from school to the Caribbean retirement with scads of money?



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