Wednesday, May 2, 2012

Location, location, location?

There has always been that old adage about business, "Location, location, location."  Personally, I've seen firsthand how this can work both to the benefit and the detriment of a business.  During my first management job in the restaurant business, the city was kind enough to change a few things about the intersection and road layout around our restaurant.  What previously was an easy to get to location, suddenly became a pain in the ass to get into.  Our sales literally were cut in half.  We never really bounced back, and at present the business no longer exists there.  Two out of the three businesses there have since closed, and nothing has managed to either flourish or meet previous levels of business.

Keep in mind, the location didn't change, just how to get to it.  It is still across the street from the busiest mall in town, a movie theater, and one of the better neighborhoods.

On the flip side of things, a good location can make all the difference to how well a business does.  If you put a bar across the street from a ballpark, it's a good bet that you can draw some decent business during the season if you know your customers.

Since the little dream of starting a brewery began to grow inside my head, the question of location has been an important (and recurring) theme.  For the sake of argument, and assuming the wonderful laws of Tennessee change making higher gravity brewing a more viable option, lets assume my friend Dave and I found the brewery in Knoxville, TN.  As the city has grown in the last 30 years people have moved farther West along I-40.  West Knoxville is the high dollar, nicer part of town.  North Knoxville is somewhat spread out and multi-cultural. East Knox is by and large the bad part of town after dark.  Downtown has undergone an awesome revitalization in the past ten years, but the "good," area is tiny, and not cheap. Outside of the immediate downtown area, and depending on which way you travel, you end up in some bad neighborhoods pretty quick.  South Knoxville is traditionally the poor white side of town (also where I grew up, and live now).  Up until recently, I lived in West Knoxville where I have worked for the last 15 years or so.  I moved back across town to save a huge chunk of money on rent, live in a bigger place, and have a yard for my dog to enjoy.  At this point, you're wondering why the hell I am giving you a geography lesson on my hometown - bear with me.

Everyday, I look at buildings and locations and consider their viability as a location for a start-up brewery.  West Knox makes sense because the people there have money, and in general have more funds to spend on craft beer.  The abundance of movie theaters, restaurants, and shopping mean that many locations near I-40 would place the brewery close to where people already frequent.  The downside to this is, real estate is not cheap.  There is a certain old tire shop here in town, on a busy road, with great access that would make a great location. It's huge.  There is plenty of room to expand in it, to build a taproom, a barrel room, add fermenters, whatever.  Last time I checked, the purchase price was $2.4mil.  Somehow, I don't see that kind of capital being available right off the bat.  Granted, it's not exactly the small sort of thing you think of when you think start-up brewery.  Another location, a bit closer to town (and to where Dave lives) would probably work, but the parking and truck access are horrible.

To bring things back around... I now live in South Knoxville.  Real estate is cheaper on this side of the river, and frankly there are plenty of places you could set up a brewery.  The amount of money people in the area have to spend is a bit lower.  The primary bridge that brings people into the area is currently undergoing a complete rebuild, and likely won't be finished for 2-3 years.  Not really an issue with our current timetable, but something to consider.  While out running the other evening, I found a 2 story building about 10 minutes from downtown.  It's on a quiet street, right next to a neighborhood store.  Decent truck access, and easy to find.  Surprisingly, not near a church (you can throw a rock and hit one around here).  

So my question is, where would you go?

West Knox - higher rent, smaller location, but higher initial foot traffic and visibility?  
South Knox - lower rent, smaller location, but out of the way and potentially fewer visitors?

Feedback is very much appreciated, and thanks for reading all the way through this behemoth of a post...


  1. Sounds like Downtown or slightly west of town are where you want to be. Starting up, maybe have the brewery south of town. Get your beer in bars and if you're bottling in the package stores then open up a tasting room in a choice location. While having the tasting room at the brewery may seem ideal it might not be the best option for you $$ wise right now.

  2. Kinda my thoughts. Downtown would probably cost as much as West Knoxville for anywhere you'd want to be.

    Tasting room would likely only be open till 9ish anyways most days, so probably wouldn't be an issue for a while. More tasting, less bar to hang out in...

    Upside of being South would be being a destination rather than a stop-off.

    (Reply copied from Google + post)

  3. No offense to South Knoxville but look to where development is trending. Halls/Powell, Lenoir City/Loudon or my best suggestion Happy Hollow (or Holler as the locals say).
    The real growth for craft beer in Tennessee is going to be local. Brew pubs and public houses have got to be our best option. We can't compete with North Carolina for developing craft breweries.
    The future of craft beer will be taking it back to the days before prohibition, distribution and regional breweries. The market is saturated with Sierra Nevada's and New Belgium's.
    Remember: Support your local brewery!