How I started a brewery – Powderkeg Beer

With a government report in 2015 suggesting that Britain was a brewing powerhouse, it’s no wonder there are so many Start Up Loans backed brewers.

We spoke to John Magill, founder of Powderkeg Beer, to find out what it took to get started and grow his Devon-based brewery.

What inspired you to start a brewery business?

Starting Powderkeg Beer wasn’t really a leap at all. It was a five-year plan that took eight years in the end – but it was worth the wait.

I had wanted to be my own boss for years, but wanting to open a brewery came from a combination of things. Firstly, I had been working in good but uninspiring ‘executive’ jobs for about 10 years, and I wanted to feel more positive about my work. Secondly, I had a degree in Microbiology that was just going to waste. I also wanted something I could start that didn’t rely on me living in a city. Plus, I have always enjoyed a beer…

John Magill, founder of Powderkeg Beer brewery

What made you make the switch from office job and into the world of brewing? 

I was never comfortable in offices! I felt I couldn’t be myself – there was an ‘ideal employee’ mould I was supposed to fit into – it felt like it was robbing me of my personality. I wanted my work to bring the best out in me, not stifle me. I could see the potential for owning my own business and doing things on my own terms.

What was your past experience of brewing beer (if any!)?

I had a degree in Microbiology so had a good scientific background, but I wanted to know the industry before starting up – there’s a lot more to running a successful brewery than making beer. As such, I started at the bottom, spending four years as a trainee brewer and Business Development Manager at a small local brewery and then two further years in a Head Brewer role. Only then did I feel confident enough to go it alone and actually start a brewery business.

What did you use your Start Up Loan for?

It is very capital intensive to start a brewery business at a commercial level. If you cut too many corners, you’ll struggle to make good beer.

The Start Up Loan was an essential part of a package of around £180,000 I raised to buy equipment, find premises and get started.

Did you have any market research?

My real market research was the eight years I spent learning the industry, speaking to people and watching trends. I did some final research among around 50 local venues, but it was more qualitative than quantitative – statistical significance is hard to achieve on a small scale and the figures can be misleading. I’d also warn that it’s easy to convince yourself of success when discussing things with potential customers in principle – but making the sales is much harder in reality.

How do you find customers for your beer?

Initially, it was tapping up old contacts. Then it’s a case of building reputation. We started by targeting the local ‘darlings’ – those venues that have a strong local profile we could piggyback onto. From there it has been a case of hitting the phones, pounding the streets and some direct marketing. Higher-margin direct sales are pretty much essential in the early days, you’ll struggle to build a strong brewery business if you’re only selling at wholesale prices.

What is Powderkeg’s USP?

We’re pioneering modern, world-influenced beer in Devon. We like to think we’re different in every way. When we started it was very much a brown bitter county – and it still is really, but we’re chipping away. Combined with modern branding, and taking advantage of new packaging methods, we’re a completely novel offering for the area.

What has been the best thing about being your own boss?

Honestly, it’s a double-edged sword, but the freedom to make decisions and put things straight into action is great. You’re only accountable to yourself. That said, I’m probably tougher on myself than any of my previous bosses were.

What was the main challenge in starting your business?

To initially get going it was definitely finding the funding, without giving too much away when the business was worth very little. It took a lot of convincing, some very complicated spreadsheets and a lot of time. Once we got going…it just got harder!

What does the future hold for Powderkeg Brewery?

Who knows? I think flexibility is the key to success.

We’ll no doubt have fun with the beers – our ‘Drink Tank’ line of limited edition brews will launch in the next couple of months and we also plan to start a quarterly ‘Thinkers and Drinkers’ night where we’ll invite all of our newsletter subscribers, suppliers and other interesting people for a night of beer and a talk from someone with something intriguing to say.

Ultimately, we have no plans for world domination – we just want to make good beer, make a living and enjoy life.

Published on 15 June 2016

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