Making it Work: Starting / Expanding Your Brewery

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Making it Work: Starting / Expanding Your Brewery Mark Benzaquen, Craft Services Email: mark.benzaquen@firstkey.com

Overview Where Do I Begin? Brewery Building Space and Structural Considerations Brewery Layout Considerations Sizing Brewery Equipment Packaging Line Design Environmental Concerns

Where Do I Begin? Establish clear brewery vision Brewpub or Commercial Brewery? Produce ales, lagers, or both? Consider short-term and longterm goals Marketing & Sales Plan Define Brand Portfolio How many and what type of beers will be made at any given time Desired Packaging Format(s)

Where Do I Begin? Equipment Real-Estate & Construction Costs Equipment Delivery, Installation & Commissioning Financial Plan Professional Fees (Engineering, Architect, Legal, etc) Marketing & Sales Expenses Labour (Direct & Indirect) Start-Up Supply Costs First-Order Estimated Budget: $500,000 - $25,000,000

Brewery Building Real Estate Considerations Brewpub or Commercial Brewery Greenfield vs. Brownfield Own vs. Lease Zoning By-Laws (Municipal) Environmental Compliance Requirements Other Considerations: Ample Parking High Foot Traffic

Brewery Building Brewery Space Considerations (Commercial Brewery) Internal Floor Space 1.00-2.75 sq ft./hl/year; Min. start-up size ~5,000 sq. Ft. Internal Vertical Height Dependent on cellar tanks size(s) Opportunities to build outside

Brewery Building Brewery Structural Considerations Floors, Walls & Ceilings Floor load strength = 405-605 kg/m 2 Floor finishes: Washable (tiles, epoxy) with 2% slope toward centre of drains Walls & Ceiling finishes: Washable and Mould Resistant (RFP, Tiles, Paint), Closed-pore insulation recommended Drainage 4-6 diameter drain piping Circular drains (4-6 diameter) and/or curved-bottom trench drains (6 10 wide grating) Good size catch basin recommended Bewery Ventilation Set up to maintain positive pressure in brewery environment Sized to ensure brewery air refreshed min. 4 times per hour Air conditioning for humidity control recommended

Brewery Building Expanding Existing Brewery Identify Space and structural restrictions Opportunities for process improvements Capacity bottlenecks Plan to phase-in expansion project over time Factors to consider Product quality risks Opportunities to build outside Ongoing production demands

Brewery Layout

Brewery Layout Milling & Grain Handling Brewing Fermentation / Aging Filtration Bright Beer & Conditioning Packaging Goal Establish good material and operational work flow, while allowing room for future expansion Warehousing

Brewery Layout Goal Establish good material and operational work flow, while allowing room for future expansion

Brewery Layout Goal Establish good material and operational work flow, while allowing room for future expansion

Brewery Layout Considerations Keep hot areas separate from cold

Brewery Layout Considerations Keep dry areas separate from wet areas Malt storage, handling and milling areas are dust explosion hazard areas

Brewery Layout Other Considerations Number and location of Loading Docks Good truck accessibility

Brewery Layout Other Considerations Location of Non-Brewery Areas Non-Operational Functions - Visual Aesthetics and Brewery Tours

Production Equipment - Sizing Factors To Consider Space Availability and Structural Limitations Basis: 5-year sales volume forecast per brand Types of Beers (% Ales vs. % Lagers) Define mode of production operation Manpower resources, number of shifts per day Equipment Configuration

Production Equipment - Sizing Production Capacity Design Capacity Theoretical maximum output if brewery operates at same level for all 12 months/yr. Unrealistic as it does not account for seasonality of beer demand Operating Capacity Theoretical maximum output on an adjusted basis based on fluctuating demands throughout the years (i.e. Seasonality)

Production Equipment - Sizing Calculating Brew house Design Capacity Ultimate Beer Sales Volume (e.g. Year 5) 5,000 HL Beer/Yr Shrinkage (10%) 500 HL Beer/Yr Total Production Volume 5,500 HL Beer/Yr Monthly Volume 1/12 of annual volume # of brews per day (3-vessel system) 4 brews/day (24hr) # brewing days per week 5.4 days/wk. # weeks per month 4.3 wks/mo. Design Capacity Estimate (Total Production Volume / (12 months/yr) / (wks./mo.) / (brew days/wk) / (brews/day) = 5,500 / (12 months)/(4.3 weeks/mo. )/(5.4 days/wk)/ (4 brews/day) = 4.9 HL / Brew 5 HL/Brew

Production Equipment - Sizing Calculating Brew house Operating Capacity Ultimate Beer Sales Volume (e.g. Year 5) 5,000 HL Beer/Yr Shrinkage (10%) 500 HL Beer/Yr Total Production Volume 5,500 HL Beer/Yr Peak Month Factor 12% of annual volume # of brews per day (3-vessel system) 4 brews/day (24hr) # brewing days per week 5.4 days/wk. # weeks per month 4.3 wks/mo. Operating Capacity Estimate (Total Production Volume x (Peak Month Factor)/(wks./mo.)/(brew days/wk)/(brews/day) = 5,500 x (.12) / (4.3 weeks/mo. )/(5.4 days/wk)/ (4 brews/day) = 7.5 HL / Brew 8 HL/Brew

Production Equipment - Sizing Brew House Capacity - Vessel Configuration 3-Vessels Mash Tun, Brew Kettle, Whirlpool Brew Volume 35 HL 50 HL # of Vessels 3 3 # of Brewing Hours per Day 24 HRs 24 HRs Brews/Day 4 Brews 4 Brews Days/Week 6 Days 6 Days Weeks/Month 4.3 Weeks 4.3 Weeks Loss 10% 10% Beer - Peak Month Volume 3,251 HL/mo 4,644 HL/mo Annual Beer Sales Volume 32,508 HL/yr 46,440 HL/yr 4-Vessels Mash Mixer, Lauter Tun, Brew Kettle, Whirlpool Brew Volume 35 HL 50 HL # of Vessels 4 4 # of Brewing Hours per Day 24 HRs 24 HRs Brews/Day 6 Brews 6 Brews Days/Week 6 Days 6 Days Weeks/Month 4.3 Weeks 4.3 Weeks Loss 10% 10% Beer - Peak Month Volume 4,876 HL/mo 6,966 HL/mo Annual Beer Sales Volume 48,762 HL/yr 69,660 HL/yr

Production Equipment - Sizing Brew House Capacity - Vessel Configuration 3-Vessels Mash Tun, Brew Kettle, Whirlpool Brew Volume 35 HL 50 HL # of Vessels 3 3 # of Brewing Hours per Day 24 HRs 24 HRs Brews/Day 4 Brews 4 Brews Days/Week 6 Days 6 Days Weeks/Month 4.3 Weeks 4.3 Weeks Loss 10% 10% Beer - Peak Month Volume 3,251 HL/mo 4,644 HL/mo Annual Beer Sales Volume 32,508 HL/yr 46,440 HL/yr 4-Vessels Mash Mixer, Lauter Tun, Brew Kettle, Whirlpool Brew Volume 35 HL 50 HL # of Vessels 4 4 # of Brewing Hours per Day 24 HRs 24 HRs Brews/Day 6 Brews 6 Brews Days/Week 6 Days 6 Days Weeks/Month 4.3 Weeks 4.3 Weeks Loss 10% 10% Beer - Peak Month Volume 4,876 HL/mo 6,966 HL/mo Annual Beer Sales Volume 48,762 HL/yr 69,660 HL/yr

Production Equipment - Sizing Calculating Fermenting/Aging Operating Capacity Ultimate Beer Sales Volume (e.g. Year 5) Shrinkage (6%) Total Production Volume 5,000 HL Beer/Yr 300 HL Beer/Yr 5,300 HL Beer/Yr Peak Month Factor 12% of annual volume Vessel Residence Times Lagers (includes filling, ferm + maturation + emptying + cleaning): Ales (includes filling, ferm + maturation + emptying + cleaning): Average residence time (assuming 50% lagers and 50% ales): 22 days 15 days 18.5 days Number of tank turns per month 1.65 turns/mo. Estimated Operating Capacity (Total Production Volume) x (Peak Month Factor) / (# Tank Turns/mo.) = 5,300 x (12%) / (1.65 turns/mo.) = 386 HL 400 HL (total working volume)

Production Equipment - Sizing Fermenting/Aging Tank Farm Capacity - Factors To Consider Size and Number of Tanks More Small Tanks Floor Space Flexibility Process & Material Efficiency Fewer Lager Tanks Floor Space Flexibility Process & Material Efficiency

Packaging Equipment - Sizing Factors to Consider: Define primary packaging format

Packaging Equipment - Sizing Factors to Consider: Define secondary packaging format

Packaging Equipment - Sizing Factors to Consider: Returnable Bottles or One-Way Glass Pasteurized or non-pasteurized Est. 5-year sales volume forecast per packaging format Define mode of packaging operation Manpower resources, number of shifts per day Select filling speeds and calculate # of shifts/week

Packaging Equipment - Sizing Volume Assumptions Year 1 Year 2 Year 3 Year 4 Year 5 Total Volume HL/yr 14,500 18,560 23,757 30,409 75,000 600 ml bottles HL/yr 5,800 8,352 11,878 16,725 45,000 50L/20L Keg Draft Volume HL/yr 8,700 10,208 11,878 13,684 30,000 Bottle Volumes / 100 bpm HL/Yr 5,800 8,352 11,878 16,725 45,000 Weekly Production - Peak (12%) HL/Week 162 233 331 467 1,256 Bottle Content L 0.6 0.6 0.6 0.6 0.6 Weekly Production Bottles 26,977 38,847 55,248 77,790 209,302 Rated Filler Speed BPM 100 100 100 100 100 Actual Packaging speed BPM 75 75 75 75 75 Weekly Machine Time Hrs 6 9 12 17 47 # of (7hr) Shifts Per Week 0.9 1.2 1.8 2.5 6.4 Bottle Volumes / 40 bpm HL/Yr 5,800 8,352 11,878 16,725 45,000 Weekly Production - Peak (12%) HL/Week 162 233 331 467 1,256 Bottle Content L 0.6 0.6 0.6 0.6 0.6 Weekly Production Bottles 26,977 38,847 55,248 77,790 209,302 Rated Filler Speed BPM 40 40 40 40 40 Actual Packaging speed BPM 30 30 30 30 30 Weekly Machine Time Hrs 15 22 31 43 116 # of (7hr) Shifts Per Week 2.1 3.1 4.4 6.2 16.6

Packaging Equipment - Sizing Define speed for rest of packaging line equipment Packaging Line Speed Balancing: V-Curve Profile

Packaging Line Design

Packaging Line - Design

Packaging Line - Configuration Packaging Line Design - Factors To Considerations Space Availability For: Equipment Material placement and staging Operator and maintenance access to machines Future expansion and additional future packaging options (E.g. Multi-packs, shrink wrap, trays, etc.) Material, Product, & Operator Flow Avoid operator crossovers Fork lift access & clearances to bring in & take away materials Level of Automation

Utilities Steam Boilers High Pressure vs. Low Pressure Systems Recommend: Boiler systems with high turn down/start-up ability Boiler water treatment & condensate return systems Refrigeration Refrigerant: Glycol vs. Ammonia Systems Outdoor vs. Indoor Systems Single Large System vs. Modular/Expandable System Energy Savings Strategies High efficiency boilers and refrigeration systems Motors with variable frequency drivers (VFDs), LED lighting, Heat/Energy Recovery Systems

Environmental Concerns Water Supply About 6 HL water consumed per HL of beer produced Recommend min. brewery water supply = ~30 gpm at ~60 psig Water Treatment Recommendations: Water Conditioning - Ion exchanger and/or water softener Water Filtration Sand Filter and/or activated carbon filter Water Savings Strategies Non-Rinse Sanitizers CIP Water Collection/Pre-Rinse Tanks Grey Water Recovery Systems

Environmental Concerns Waste Water 4HL waste water per 1HL beer produced High solid and organic load - BOD, COD, TSS Large variability in Temperature and ph Waste Water Pre-Treatment Strategies Retention Tank with ph adjustment system Biodegestors (Aerobic and Anaerobic) GOAL: Avoid as much solid waste as possible from going into sewer. Collect and send it to 3rd party

Environmental Concerns Waste Water 4HL waste water per 1HL beer produced High solid and organic load - BOD, COD, TSS Large variability in Temperature and ph Parameter Unit Raw Brewery Wastewater Composition COD mg/l 2000-6000 BOD mg/l 1200-3600 TSS mg/l 200-1000 Temp o C 18-40 ph 4.5-12 Waste Water Pre-Treatment Strategies Retention Tank with ph adjustment system Biodegestors (Aerobic and Anaerobic) GOAL: Avoid as much solid waste as possible from going into sewer. Collect and send it to 3rd party

Environmental Concerns Brewery Solid Waste Composition & Disposal Strategies Co-Product Possible Intended Uses Estimated % Make-Up Spent Grain Cattle feed 78.7% Malt Dust Cattle feed 0.0% Biodegradable Sweet water Animal feed 1.5% Spent Hops Cattle feed; soil amendment 6.8% Cold Trub Cattle feed 0.7% Spent Yeast Soup Companies/Bakeries; animal feed 9.7% Spent DE Pig feed; soil amendment 2.3% Other Packaging Material Local Recycling Program 0.3%

Environmental Concerns Emissions Include noise, vibrations and air-born contaminants Brewery emissions are non-toxic Most brewery emissions odorless except for Volatile Organic Compounds (VOC s) Emission Mitigating Strategies Vapor condensing systems Foam traps Activated charcoal filters in air handling systems

Any questions?

Thank you! www.firstkey.com Mark Benzaquen, Craft Services Email: mark.benzaquen@firstkey.com