Mid 2017 Update

Middle of the year update. 2017

It is that time of year when you get a nasty wake-up call realizing that we’ve reached the middle of the year. Not too long before the descent towards the summer holidays start and that you will probably make it through another year.

The second half of this year is going to be a bit of a challenge and probably a planned go-slow. At this point it looks as of this year is going to be more of what we went through last year. 2016 was a tough year due to our equipment upgrade combined with half of the team tied up in serious exam preparations and finishing off specializing in Orthopedics. This year work commitments and a somewhat unpredicted 6 month work stint overseas by half of the team is set to complicate things.

It may be challenging, but at this point of the business it is not necessarily a bad scenario. Being spread thin on the ground and running a very lean operation helps one figure out what works; what doesn’t; where you can improve; how to improvise when you do not have the resources and time others have and it forces you to make decisions and move on.

To some extent it also offers you an outside view. You have the opportunity to learn from what others are doing because you are not fully consumed by your own endeavors. Not depending on the business for your livelihood it allows you to take the long view, experiment, be flexible, play for time and to postpone things if not entirely comfortable with anything.

So… what have we learnt so far:

The local beer industry is becoming a bit more crowded; consumer tastes are changing and the depressed economy is squeezing the general consumer. It has an effect on sales and everyone is feeling it.

To a large extent we are seeing more of the same from new breweries.

Beer quality is steadily improving.

Too many people still see brewing as an easy way to make money. (Oh boy, are they wrong!!)

Some people are dropping HUGE amounts of money on marketing, venues and equipment. (With the slowdown in our economy it is going to be interesting to see when funders and investors would start demanding returns on their money or would like to cash out.)

Some breweries are not really in it to make beer or for the advancement of good quality independent, small batch beer. They are simply building brands and/or businesses to sell and cash out… sort of in a leveraged buy-out way.

Too many people still make and sell beer on paper only… selling all the beer you can make on a 100L system is easy; selling all the beer you make on a 500L system is a whole different story; moving into the 1000L+ range in our market will land you in a whole world of hurt if you do not have deep pockets and experienced staff.

…and on that note… where is Gallows Hill heading in the foreseeable future:

At this point we are sticking to our core business of producing unique Pale Ales and India Pale Ales, but we are going to turn it up a notch in some respects.

More and more breweries are heading towards being more local. Small breweries are set to become more ingrained in their communities… growler sales, bottle sales for home consumption and being a place to meet up for a drink, a snack and a chat while stocking up on your favorite tipple will become part of our urban fabric. With that we are getting to the point where we will finalize our tap room planning and will be opening in the not too distant future.

With our own direct point of sales our product offering is also set to change… for more on this you will simply have to wait.

What is in stall for the immediate future…

First up will be the Woodstock Winter Beer Festival on 1 July. It is set to be a cozy event to enjoy good winter beers offered by a small group of local breweries. Gallows Hill will have our Winter Seasonal on tap - Stride Wide Barrel Aged Porter - as well as a keg conditioned India Pale Ale.

For the rest of the year we will be filling barrels, planning for 2018 and steadily keep the Pale Ales & India Pale Ales ticking over while one of our team explores the beery wonders of England.


It is not the size of your brew house…

There is one thing that many start-up breweries and wannabe brewers simply do not get.

The actual size of your brew house is not the determining factor, but actually how you operate the system you have.

Careful planning and management of the process can make immense differences in how much you can produce.

Over-sizing your HLT or adding an in-line water heater results in less waiting time.

Combine that with an under-back or dedicated whirlpool vessel and you can increase your production from 1 or 2 batches per day to 3 or 4 batches per day.

For roughly 30% to 50% extra investment in equipment you can increase your output volumes 300%
(That is assuming you can sell all of the beer…)

To get your thoughts going, have a look at the following sites for some inspiration:
Portland Kettleworks
Ss brewtech


Mid 2016 Recap

Finally it is beginning to feel like winter in Cape Town with short days, rainy and cold weather. With that we have also made it through half of the year. As always we are not exactly where we wanted to be, but looking back it actually went OK. So far it has been a good, interesting and challenging year.

From the start we knew this will be a challenging year. The main contributing factors were the following:

Dialing in a brewing system ten times bigger than our previous one is quite an interesting process.

With a much bigger system comes all sorts of complications to other tasks that used to be pretty simple. The coordination and details surrounding ingredient orders, bottle orders, screen printing, tag printing, tag assembly and bottling itself moves up a couple of orders of magnitude.

With that comes the financial implications. Each batch is quite an investment and cash flow is a bitch to say the least. (It is at this point where I have huge respect for the big boys skillfully managing this complex thing called “cash flow”; and I am VERY glad that we are pretty small and have not over-invested in our operation.)

Juggling a brewery with demanding day jobs and young families is no easy task. Adding the fact that one of the owners is busy completing final exams in orthopaedic surgery makes the juggling even more tricky.

Very similar to 2015 we had another burglary at our brewery in the last month. The brewing operation was lucky as it did not loose any items. Our distribution partner on the other hand was not so lucky and lost quite a bit of dispensing equipment. Once again we had to beef up security and fork out some unplanned cash in the process.
We know our building is in a gritty part of town, but the lack of respect for other people’s property and possessions in this area… actually it applies to our whole country… is a problem. Combine that with a strained police force and a legal system that cannot cope, then you have a mess of a situation. By the way…If you are reading this and one of those people who say our crime problem is because of poverty, the wealth gap or the previous political system, etc. I suggest you stop reading.

It is not!!

It is because of a lack of respect for others; a huge drug problem in our province; a failing education system; empty promises from politicians; a lack of consequences for offenders and in general a failing state where our taxes are not spent properly.
Anyway… Enough bitching for now. We will just get through this as all South Africans do. Guess we have all become hard-asses in this country. Make a plan and move on…

Now back to beer…

We are glad to have our new brewhouse running. The whole setup is not perfect yet and we have not quite found our rhythm on the new kit, but the beer is progressively getting back to where we want it.

To recap on beers so far brewed on the new kit.

Batch 1 was a single hop APA with Cascade. The young beer was not what it should be. Our temperatures were a bit off and it seems like the pH was not where we wanted it. Now… After a number of weeks in the bottle the beer has lost it’s green edge. It is good, but not up there with what we would like it to be.

Batch 2 was a more aggressive beer. IPA with Apollo, Columbus, Centennial & Cascade.
With this one we hit the temperatures spot on and the gravities were exactly as intended. The pH is still a bit out of whack and it had a slight affect on the hop flavour, resulting in feint phenol flavours coming through. The pH also messed with hop utilisation and the flavour combinations a bit. The beer is good, but it can do with a little tweaking. The longer it stays in the bottle the better it seems to be getting. Not perfect, but at least it does not suck.

APA Cascade + IPA Apollo, Columbus, Centennial & Cascade

Batch 3 is the latest one - a single hop Black IPA with Centennial hops. We hit the temperatures & gravities spot-on and the pH was back to normal. So far it is tasting good from the fermenter - hop character is good and the roasted grain notes are minimal, as it should be.

Black IPA - Centennial

Slowly but surely sales are also stabilising and getting back to normal. Soon we can put more momentum into expanding our footprint.

The next couple of months will be tricky with work and study commitments, but after that we can focus on summer and the usual end of year beer craze. For the last two years all the breweries with decent following and good beers could not keep up. Two weeks into December many beers were out of stock. This year is set to be no different…

For now we would like to say thanks to everyone for their support and patience so far. It is great to hear when people enjoy our beers. We take our beer personal. Hopefully we will bring you many more beers to enjoy.


Some of the realities of expansion…

Scaling up a brewery - actually any business - is not a linear affair. To make ten times more beer may take just about the same time on brewing day, but apart from that everything else shifts a couple of orders of magnitude or more…

Something as simple as quickly popping into the homebrew shop to buy a couple of kilograms of malt you forgot about ordering simply isn’t an option anymore. You need bags full of malt for this one day only, plus you need a good flow of ingredients for upcoming brew days. The same applies to yeast, hops, bottles, labels, etc. Getting everything to the brewery on time requires coordination, planning and sometimes even a bit of luck.

The brewing part is easy. Brewing on a bigger system quickly becomes the norm. It is different, but you quickly find a new rhythm. Mashing still takes about an hour; transfers & sparging can take a little longer; boiling is the same; cooling takes a little longer… Different, but not too different or unfamiliar. Once the cooled, hopped wort is in the fermenters and happy yeast is turning the sugary liquid into beer the real “fun” starts…

Packaging, conditioning, storage, distribution, sales, accounts receivable; ordering more ingredients & materials for upcoming batches…

What used to be a couple of hours to get beer into bottles becomes a rather well planned, full day of hard manual labor filling bottles; capping them; tagging / labeling; gluing & packing cases; and finally stacking packed cases.

It is on these days that you somewhat envy the big boys with shiny, advanced, automatic fillers & cappers… But at the end of the day the sense of achievement and satisfaction is much better the hard way. It feels good to have created something. Something that you and others can enjoy. A simple concoction of water, barley, hops and yeast… This simple product which is an essential part of the civilized world we know… Just imagine this world without beer !!

With the beer going to market and sales picking up the “real fun” is set to start…

Let’s assume the beer is well received and there are no major problems. Gradually sales will pick up and then (hopefully) the whole setup is bound to gain momentum. At that point I predict (and hope) the following situation will unfold… as described by Tony Magee from Lagunitas… Running the brewery will become like being chased down the road by a pack of rabid dogs. In addition to being chased like this, managing cash flow in the business will be like falling down a seriously long flight of stairs while blindfolded. On top of that we will have to add managing people… And we all know managing people is similar to herding cats!

I am pretty sure we are in for an interesting, entertaining, fun and informative ride with our little brewing adventure…

Bring it on !!


Expansion

Expanding a bootstrapped sideline business is a tricky and challenging affair. Despite the challenges it is actually a rewarding and fun experience.

On top of that it is also a serious learning process. Learning involves a little bit of everything… From plumbing and electrics all the way through to financing and taxes.

Since we have been building Gallows Hill Brewing Co at our own pace (we intend to stick to this going forward) and not always with the same exuberant fervor as others, I have decided to put in more effort to document and share our journey. Pretty sure there will not necessarily be weekly or more frequent updates, but there will definitely be more effort being put into documenting our expansion and progress with the brewery.

You may be wondering where we are heading with the brewery… As a start, let’s clarify what is important to us:

The brewery is a serious business, but it is by no means a “get rich quick” scheme. (Anyone getting into the beer business with that in mind should seriously reconsider their position.)
We aim to build the business in a manageable way into a sustainable small endeavour that suit our lives. Those lives involve young families and serious day jobs. Juggling all the responsibilities will be no easy task. We have to accept that this juggling may result in things at the brewery not always going as planned or at the pace originally intended.

We are local. Our operation is based in a gritty part of town undergoing a slow revival. Despite the issues of crime in our area we intend to stick it out and be part of building up our bit of the city. Breweries all over the world are contributing to uplifting rundown neighborhoods and derelict industrial areas.

In South Africa alcohol producers are too easily painted with a tar brush and depicted as the source of evil in our society. We accept that the country does have an alcohol abuse problem, but the mass consumption market is not really the market we are aiming for. Breweries, bakeries, butchers, green grocers, etc. are essential components of a properly functioning society. In our opinion a world without good quality beer is not worth living in.

Being a bootstrapped, small scale & amateur brewing operation (none of us studied fermentation sciences or went to brewing school) we will surely make a number of mistakes along the way, but our eternal strive will be to produce high quality beer our way. We are going to be honest about our products and we take everything about our beer and brewery personal. It is part of us. Due to running our brewery the bootstrapped way, some things we do will be a little unconventional.

The brewery is self-financed! We have no big financial backing or external investors at this point. It is simply a case of investing our own resources and income from our day jobs into the business. We are lucky to be able to do it this way. On the one hand it adds a certain amount of pressure to make it work and forces you to work smart and to make compromises in certain areas. On the other hand it gives us the freedom to do whatever the hell we want to. We do not have a banker or other investors breathing down our necks drooling for payback or returns on the investment.

We have day jobs and young families. On the one side we have two doctors and a little one who is not even six months old. On the other side we have a chef, a structural engineer and a 3 year old toddler. The doctors have crazy & haphazard working hours. My work can be sporadic, often riddled with deadlines, travel, corporate bullshit and having to manage people and projects across the country and around the globe. On many occasions family commitments and work demands forces brewery related tasks and plans to play second fiddle or to take a rain check for a couple of days. Having the brewery is a creative outlet for all of us. It keeps us sane to some extent, I think.

We are still fairly young. Even if we are completely on the wrong path and it does not work out, we will be OK. There is still a lot of life and living left. At least we hope so, right!

Back to where we are heading…

As a start. We are going to make beers that we enjoy drinking. At the moment that is to a large extent Pale Ale, India Pale Ale, Porter, Stout and Barrel Aged Beers.

Variation will probably be the norm. The perfect beer is something we haven’t brewed yet. Maybe we can get there… One day…

We are not in the game of pushing high volume, low flavour beer. We will also not participate in the price war game.

Pay to Play” is unethical and wrong. We will not do it.

Our initial growth will be fairly slow… This is largely due to demands from our day jobs for the next 6 to 8 months, but also because we would prefer to ramp up gradually. There is still a lot of learning and figuring out required.

This is probably a good time for a bit of a recap…

After a burglary mid 2015 - that cost us quite a bit of stainless steel kit - we got to the point of having to decide between plodding along as we were doing at the time, or taking it more seriously and expand the business. After a lot of deliberation, arguments, back-and-forth, etc. we decided on a brewhouse size, selected an equipment supplier and decided on a broad outline of how we planned to run things.

By a stroke of luck I tracked down a guy in our big-ass firm (one of the perks of working for a Fortune 500 multinational) running a small brewery in New Zealand with his best mate. After a couple of emails we learnt a lot from like-minded folks who’ve gone through a similar situation and managed to track down the actual manufacturer of the equipment we were going to buy through a middle-man. With a slight setback in time, scoring about 30% off the equipment cost and getting the opportunity to customize our brewhouse for very little additional cost, we pushed the button on the manufacturing of our new brewery.

Late in 2015 our 3 main brewing vessels arrived. Unpacking was a bitch in the scorching Cape Town summer heat.

Thanks to our bootstrapped approach the expansion is not a case of simply unpacking a couple of containers or crates, and paying a guy to fit the jigsaw together. We had to do it all ourselves. Sourcing all the additional pieces to turn 3 main stainless steel vessels into a functioning brewery is a mission. It is a real bitch when you factor in the generally poor service provided by most South African firms. It takes quite a bit of time to pin down good suppliers with who you can build a relationship and then work together to build a business. (More about that on another day)

Where we stand now there are a couple of small items still missing and a bit of tweaking that needs to be done before we can move into full steam production. At least we managed to run the necessary testing required, proper initial CIP and passivated the tanks.

This was followed by our first big kit brew day. Surprisingly the brew day went pretty smooth. Obviously there were a couple of process related issues. Mostly in terms of timing and a minor boil-over incident… Gladly nothing that cannot be sorted with some better planning.

At least we can confidently say we are now in the home stretch before we start brewing again in earnest.

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