How We Started A Six-Figure Craft Brewery [From Croatia]
Hello! Who are you, and what business did you start?
HI! We are Davor and Matija from Varionica, a craft brewery from Croatia.
We opened our brewery seven years ago and are one of the craft brewing pioneers in Croatia. Our first beer was a Pale Ale, a refreshing and hoppy beer that remains our most popular and best-selling product to this day. Pale Ale started the Croatian craft beer revolution, so it is no surprise that it remains so popular. Our customers are food and drink lovers who aren’t afraid to try new and exciting things.
We started by renting a small brewery outside of Zagreb and by the end of 2019. After that, we opened our new brewery with a much larger capacity and modern brewing equipment in Pisarovina near Zagreb. We started our business with only 22 30-liter steel KEGs, which we drove around in an old Opel Astra, and now we are producing roughly 40.000 liters of beer per month.
What's your backstory and what inspired you guys to start a brewery?
We started brewing 12 years ago in college as a hobby. We always loved to travel, and on our travels, we discovered that there are many different and interesting beer styles. Since we couldn’t buy any of them in Croatia, we decided to make them ourselves.
We made a million bad decisions and a million good ones, so it is difficult to rule just one. However, the most important lessons for us were never to give up and always keep adapting.
Neither of us had done anything similar in the past, and come from very different business backgrounds, so this was very new to us. We started brewing on a small self-made homebrew system and quickly fell in love with the hobby. We started experimenting with different ingredients and techniques, and soon enough, we were producing once a week.
The beers we made were better and unlike any other on the Croatian market at that time since you could only buy bland industrial beer at home, so we started to fantasize about opening our own brewery. Our friends and family loved our beers from the start and supported us from the beginning, but the biggest push for us was when we got great feedback from bar and restaurant owners on one tasting session in Zagreb. At that moment, we knew we had to make this beer business happen. So we quit our jobs and opened our brewery.
Take us through the process of creating your first brews.
Before our Pale Ale became commercial, we produced and polished it many times on our small homebrew system.
A lot of trial and error happened before we got the results that we wanted. Today we still make pilot batches on a small 40-liter system before making 2000 or 4000 liters of beer on a commercial scale.
We create everything in-house from scratch - from beer recipes to label designs and photoshoots of our product. We’re very happy to make everything ourselves because we believe that is the best way to tell our story to the consumer.
Describe the process of launching and opening the brewery.
Since there were a small number of breweries in Croatia at that time, the paperwork was a headache for us and it took us almost a year to prepare everything for production.
We rented an existing brewery and financed everything to start working ourselves. In the first year, we only sold draft beer, so our product was only available in a small number of bars. Since it was difficult to get the old brewery going and produce quality beer there, we spent most of our time improving our product and not focusing on marketing.
We realized that nobody would buy our beer if they didn’t know about it or couldn’t find it. So we opened social media accounts on Facebook and Instagram and a web page to get the news out to as many people as possible. We also took a $20,000 loan and invested in a bottle filler that enabled us to package our beers in bottles and send them all around Croatia. Soon we were getting noticed, and we couldn’t keep up with the demand.
It was then that we decided that it was time to open our own brewery with a larger capacity. We bought some land outside of Zagreb, designed a brewery, drew up a business plan, and applied for non-returnable EU funding, which we got one year later. After that, there was nothing else to do but get to work and build a brewery. We bridged the rest of the financial construction with our own money and a loan from the bank.
Since launch, what has worked to attract and retain customers?
Leaping faith and building a new brewery with modern equipment and larger capacity was definitely the best decision we made to expand our business. Modern equipment allows us to do more in less time with the same amount of people. For instance, our first bottle filler had a filling capacity of 300 bottles/hour and was operated by three people, while the new filler has an output of 3000 bottles/hour and is also operated by three people. Spending less time behind the machines cuts your costs and gives you more time to concentrate on other things.
The timing to expand our production wasn’t perfect because we opened a brewery with four times larger capacity just six months before the pandemic started. Closed the bars and restaurants meant losing our customers because, at that time, 90% of our sales were to the HORECA segment. We knew we had to make drastic changes if we wanted to survive, so we put all of our efforts into opening a webshop. We managed to put it up in less than two weeks, offering the beer directly to our customers all around Croatia with free shipping. The first version wasn’t polished to perfection and still had some bugs, but that didn’t matter. It was essential to get it going and get the beer to our customers ASAP. We made a fun campaign called “Stay at home and have a beer” to promote the new webshop, and it was a huge success! Since then, we polished it, and things are running very smoothly with a slow but steady increase in sales. Facebook photo.
Our second decision to fight the effects of the pandemic was to get our beer to the retail stores. This wasn’t going as fast as we wished for since the extensive retail systems were overwhelmed with panic shoppers stocking up on toilet paper and flour. After intense negotiations, we managed to enter all the larger retail stores in Croatia, so our beer was once again available to our customers all around Croatia.
How are you doing today, and what does the future look like?
Luckily things are getting back to normal in the HORECA segment, and everybody is full of optimism. People are getting back into the bars and are enjoying excellent beers with friends again.
In 2020 and 2021 we won many medals and recognitions in globally renowned Beer and design competitions like European Beer Challenge, A'Design Award, and Craft Beer Marketing Award, which helped us spread the word about our beer worldwide.
We started exporting beer to the UK, Germany, and we’re planning to export to Switzerland, Spain, and other countries very soon. Our most significant order was delivering 420,000 bottles of beer for Beer52, the UK’s most prominent beer subscription platform.
Usually, we have around 12 different beers on rotation, but we’re planning to purchase some new tanks and widen our portfolio till the end of this year. Also, we listened to our customers asking for bigger bottles, so we’re introducing half-liter bottles very soon to quench the thirst of our thirstiest customers.
Through starting the business, have you learned anything particularly helpful or advantageous?
We made a million bad decisions and a million good ones, so it is difficult to rule just one. However, the most important lessons for us were never to give up and always keep adapting.
What platform/tools do you use for your business?
We developed a custom brewery management software that helps us organize everything that goes on in the brewery. For the rest, we use classic tools like MS Office, Woocomerce for our webshop, Mailchimp for our newsletter.
What have been the most influential books, podcasts, or other resources?
Some books that we read in the beginning were: How to Brew, Brewing Classic Styles, Radical Brewing, Brewing Better Beer, Brew Like A Monk.
We like to listen to Podcast inkubator.
Advice for other entrepreneurs who want to get started or are just starting?
Keep pushing your thing but be prepared to adapt to new situations.
Where can we go to learn more?
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
