Why Downsizing Could Increase Your Brewery’s Profits

Early in 2018, Natty Greene’s Brewing will be heading into a new facility to brew its beer in Greensboro, North Carolina. Usually, when a brewery moves into a new place it means an uptick in volume production.

But not for this veteran brewery. The move is for downsizing the number of tanks they have — from 42 of various sizes to just a dozen — while decreasing their overall capacity by almost half from 30,000 down to around 15-16,000 starting in 2018.

For co-founder Kayne Fisher, it’s a circle that is almost complete from when the brewery started as a brewpub in 2004. And more in-house sales will help translate into larger margins as well.

“We feel like we’ve paid it forward to transition from a product — being the brewpub — to a brand,” he said. “When we got into the production side and really started getting into it we created a brand. We’ve paid a lot forward to create that brand. And as we branched out by adding sales reps and more packaging and more inventory, raw materials … there’s a huge cost to it. So it got to a point where it was a wash.

“We have established the brand, we’ve established a really strong core of beer in our own state and where partnerships are strong. So let’s focus on that and then let’s bring it back to the on-site sales work where the margins are better.”

The North Carolina brewery has looked across its state and Fisher said the “Asheville Effect” has really made their brewery take notice and change gears from a production facility that shipped out beer from Washington DC to Savannah, Georgia to now focusing on North Carolina consumers with a core set of beers while allowing the new taproom that will open in the early summer to be able to be flexible with styles.

“Back then, we weren’t getting into it for attachment,” Fisher explained of when the brewery started to become a production facility in 2006. “When you started seeing these breweries in Asheville … with a tasting room that had a food element or food trucks, outdoor spaces, bands, dogs, families … they were really getting [people with] attachments to these brands through their site.”

“Bigger is not always better. Our whole goal is to get back to fun,” he added. “That’s why we got into this industry. This isn’t a hobby. This is our livelihood. This is our passion. And we’re passionate about the industry — but more importantly — about the beer and how fun it can be.”

Fisher feels is consumers go away with a good experience, it will lead them to their brand when they go grocery shopping or go to another establishment.

“So that’s kind of the circle that we’re not complete right now on the brewery side but when we get to the new place in June , we will be,” he said. “And so we’ll have that circle complete.”

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