How to Start a Brewery Business

Starting your own business is incredibly rewarding, and launching a brewery might just be the most fun way to do it. That said, we can’t emphasize enough the importance of careful planning, market research, and securing financial investment before getting into it.

With that in mind, we’re going to walk you through the most important steps in launching your own brewery in this article, from making a business plan all the way to launching, advertising, and growing the brewery.

We’ll be answering questions about the profitability of brewing, what costs are associated with starting a brewery in the first place, the different business structures you could go with, and some success stories to help you along the way. Don’t worry if you’re a bit limited on the financial side because we’ll also discuss how to start a brewery business with no money!

The brewery industry is thriving, especially if you’re looking to start a business in California, where the market is both vibrant and promising. The first step is creating a business plan that outlines your entire approach to launching your brewery startup.

Step 1: Make a Business Plan

A well-crafted business plan is indispensable, regardless of what business it is you’re starting. It’ll be your roadmap, and though it can be a bit overwhelming to set it all up beforehand, it’ll help guide you later on with what decisions to make at what point. In a nutshell, it’s an outline of your business goals, strategies, and financial projections.

It doesn’t help with guiding only you (and your partners, if you have any), It also helps you secure funding from investors who’ll be able to see the potential in your business plan document. When you have your plan laid out, after launching your business, you’ll have a good yardstick to measure your progress against.

Brewery Business Plan

Now that you understand why a business plan is important, here’s a guide on how you can make a thorough plan for your brewery startup:

Executive Summary: A concise overview that should capture the essence of your business plan. Include a brief description of your brewery, its unique selling proposition, target market, financial projections, and the team behind the venture.

Market Analysis: Make sure you fully understand your target market, industry trends, and competitive landscape. Identify your ideal customer, their preferences, and purchasing habits. Analyze the strengths and weaknesses of your competitors, and find the opportunities that differentiate yourbrewery.

Business Description: What is your brewery’s concept, mission, and vision? Explain what types of beer you will produce, your brewing philosophy, and any unique features or experiences you plan to offer as well.

Organizational Structure: Describe the legal structure of your brewery (e.g., sole proprietorship, LLC, corporation). The roles and responsibilities of key team members and their qualifications are also defined here. Business structure is covered in more detail in a later section.

Operations Plan: Detail your production process, including your brewing equipment, sourcing of ingredients, quality control measures, and distribution channels. What are your plans for packaging, branding, and marketing?

Marketing and Sales Strategy: Your marketing and sales strategies to reach your target market and generate revenue go here. This includes advertising, PR, social media marketing, partnerships, and events.

Financial Projections: Get detailedfinancial projections, including income statements, balance sheets, and cash flow statements. Your startup costs, revenue streams, and expenses should all be forecasted here.

Funding Request: If you are seeking external funding, which we recommend you do, include a funding request section outlining the amount of funding needed, how the funds will be used, and the terms of repayment.

Appendices: This area is to include any supporting documents, such as resumes, permits, licenses, contracts, and market research data that may be important for the reader(s).

We’d also like to emphasize that a business plan is a living document that can be updated and revised as your business evolves. Use this general template as a guideline and adjust/update it as needed.

Step 2: Select Your Brewery Type and Determine Cost

Cost is understandably a big concern when it comes to starting your brewery, and the type of brewery you choose will significantly impact this cost. This includes your initial startup cost, operational costs, and more. Generally, a lower cost means lower capacity as well.

For example, if you go for a nano-brewery, you’ll have lower startup costs but expect limited production capacity as well. Conversely, a large-scale brewery will eat up a lot of initial capital investment, but you’ll get economies of scale that smaller startups don’t have.

Making this decision will be a lot easier once you define what sort of startup you’re aiming for. Will it start small and scale up gradually, or do you have the capital to go big and benefit from economies of scale right away? Understanding the costs involved in each of these brewery types will help you make better decisions about the financing, equipment, and staffing that follow.

What Is The Best Business Structure For a Brewery?

The business structure you choose has far-reaching implications for liability, taxation, and ownership. It’s one of the most critical decisions when you’re just starting out. In this section, we’ll cover the most common structures considered for breweries; sole proprietorships, limited liability companies (LLCs), and corporations.

A sole proprietorship is the simplest and least expensive structure to form, and that’s usually what a lot of startups go for. However, easy as it is, it comes with its caveats. Sole proprietorships don’t offer much liability protection, meaning you’ll be personally responsible for the business’s debts and liabilities. This is risky, especially in brewing where accidents or product liability issues aren’t uncommon.

A better option is an LLC, which is a balance between the simplicity of a sole proprietorship and the liability protection of a corporation. With an LLC, all members get limited liability, which means you’re shielded from personal responsibility for the business’s debts. LLCs are also flexible in terms of taxation; they can be taxed as sole proprietorships, partnerships, or corporations.

Corporations are the most complex and the most formal of business structures, but they also come with the highest level of liability protection. If you’re aiming for a smaller startup for now, a corporation is likely overkill for your needs. Shareholders are not personally liable for the corporation’s debts. One downside of corporations is double taxation, meaning the corporation pays taxes on its profits, and then shareholders pay taxes on their dividends.

How Much Does It Cost to Start a Brewery?

The cost of starting a brewery depends on a number of things, namely the size, location, equipment, and how much production capacity you’re aiming to achieve. With an idea about the common costs, you’ll be able to get a reasonable estimate of what the whole expenditure will look like. Nevertheless, remember to take these estimates with a grain of salt and not rely solely on them.

Brewing equipment is your first and foremost investment, without which you can’t really operate the business. The equipment has options for both smaller, more affordable setups for nano-breweries and large-scale systems for commercial breweries.

Costs vary depending on the brand, capacity, and features of the equipment. For small scale setups, expect to pay between $5000-$15000 for basic equipment. For larger setups, the price range generally starts from $100000 for a brewhouse and goes up from there depending on your specific needs.

The cost of acquiring or leasing a suitable location for your brewery will probably be the biggest expenditure when starting out, especially in urban areas with high commercial real estate prices. When selecting a location, make sure to look beyond just the price before deciding to close on it.

Next are your licenses and permits. These can vary wildly depending on where exactly you start, since most localities have their own fees and application processes. Generally, these are the permits you’ll need to start with (though you may need more depending on your location):

• Federal Alcohol Tax and Trade Bureau (TTB) Permit: $2,000 – $5,000
• State and Local Permits: $500 – $5,000 (depending on the state and local regulations)
• Zoning and Land Use Permits: $500 – $2,000
• Environmental Permits: $500 – $5,000 (depending on the environmental impact of your brewery)

From there on, the costs will be entirely dependent on how you want to run your business. Things to keep in mind are the costs of ingredients, hiring qualified staff, including brewers, production assistants, and sales personnel, and marketing and advertising expenses. Each of these are a necessity for your brewery, but can be adjusted in order to save costs where needed.

You’ll have a lot of opportunities to save money along the way, so make sure you’re keeping an eye out for them. For example, consider leasing brewing equipment instead of purchasing it outright, look at marketing channels that maximize value, and get ingredients as strategically as possible. You can also get funding through certain grants or loans to help alleviate some of the financial burden. This is discussed in detail in a later section.

How Profitable Is Brewing?

Profitability for any business depends on a large number of factors. For breweries, these include location, market demand, efficiency, and your branding. Many breweries have achieved substantial success and profitability, but many more have faced challenges and struggled to even maintain financial viability.

The most important of these factors for a brewery is market demand. Lately, there has been a shift towards craft beers and specialty brews from customers which has seen many specialty breweries get increased sales and revenue.

The craft beer market in the United States has seen double-digit growth in recent years. That said, this niche still has a healthy amount of competition which can often get intense. Your ability to constantly adapt to changing consumer tastes and preferences will help you become and remain profitable.

What Brewery Makes the Most Money?

Anheuser-Busch InBev is hands-down one of the largest and most profitable brewing companies in the world. Their success comes from a lot of different places, which include their massive portfolio of well-known brands (Budweiser, Corona, Stella Artois, just to name a few), a strong presence across the globe, and operational efficiency that makes sure they can fulfill the intense demand for their brews.

What Are the World’s Largest Brewery Companies?

There are almost as many breweries out there as there are stars in the sky, but only a couple of these stars shine bright enough to be labeled the largest in the world. The first of these, as we just talked about, is Anheuser-Busch InBev. As the definitive largest brewing company in the world, Anheuser-Busch InBev owns almost all of the most iconic brands out there, including Budweiser, Corona, Stella Artois, and many more.

Heineken is another giant, known for its eponymous beer brand. They’ve been a major player in the global brewing market for a while, and if you watch soccer at all, you’re likely very familiar with their marketing. The company has a strong presence in Europe and is expanding its reach into emerging markets. Their commitment to quality and sustainability has been the biggest factor in their global success.

Coming in from Japan, Kirin Holdings is a conglomerate and a leading brewing company in the Asian market, with a focus on the Japanese and Chinese markets in particular. Kirin has a pretty wide range of beer brands, but also dabbles in other beverages and food products. Though it doesn’t have the global presence of the earlier two we discussed, it’s still a big player in its own markets.

Another large brewery, from Denmark, is Carlsberg; a global phenomenon with most of its presence focused in Europe, Asia, and North America. The company is known for its flagship Carlsberg brand that you’re probably most familiar with, but also has other brands that include Tuborg and Kronenbourg.

Last but not least, there’s Molson Coors Beverage Company, a Canadian brewing company that came out of a joint venture between Molson Coors Brewing and SABMiller. Molson Coors is the name behind a number of popular brands in North America, including Coors Light, Miller Lite, and Molson Canadian.

Step 3: Secure Funding and Necessary Licenses

By now, you probably have a good idea about the type and size of brewery you want, and the costs associated with it. Next is getting funding to make that happen. Initially, the funding needs to cover the startup costs of your brewery, including equipment, real estate, ingredients, and marketing. If you’re coming up short in this department, we recommend considering a combination of the following options:

Personal Savings: If you can manage it, self-financing will get you the greatest amount of control over your business.

Loans: Banks, credit unions, and small business administration (SBA) programs all offer loans for startups. The detailed business plan you made earlier will help increase your chances of approval here.

Investors: Find investors that might be interested in your startup and seek funding. Ideally, you’ll want someone that already believes in your brewery concept and is willing to invest in your business.

Grants: Research and apply for government grants or industry-specific grants. They’ll be the initial financial support your brewery needs.

Getting Licenses and Permits

The licensing and permitting process is complex no matter what it’s for, and unfortunately, it’s the same for brewery businesses. If you want to operate your brewery legally, you’ll need these licenses and permits:

Federal Alcohol Tax and Trade Bureau (TTB) Approval: Get a federal permit from the TTB to produce and sell alcoholic beverages. This will require you to submit a number of forms and documentation, including your business plan and financial information.

State and Local Permits: In addition to federal approval, you will need to get state and local licenses and permits. These requirements will change depending on your location, so research the specific regulations in your area.

Zoning and Land Use Permits: Make sure your brewery location complies with zoning regulations and land use restrictions. Again, you may need to obtain permits for construction, occupancy, alcohol sales, and possibly environmental concerns as well.

How to Start a Brewery With No Money

This might sound a bit ridiculous at first, but it is indeed possible, though it’s certainly not going to be easy. The first step is to use your personal networks to get loans, investments, or in-kind contributions from friends and family.

At the same time, find experienced brewers or industry professionals and request mentorship and support from them. They’ll help you avoid the growing pains of a new brewery. Further, make sure to look at crowdfunding campaigns, government grants, or small business loans as options.

Starting with no money of your own, make sure you’re purchasing second hand brewing equipment, building or modifying equipment yourself, starting with homebrewing, or exploring barter arrangements with suppliers or service providers.

Grants for Starting a Brewery

Securing funding is no easy task for a brewery, but you do have options. One example is the Brewers Association, which has supported over 100 brewery projects since 2015. The challenge is finding these grants in time and applying for them with a well-made application. If approved, they can change the trajectory of your entire business.

To find these grants, always search government websites, industry publications, and online grant directories. The Small Business Administration (SBA) is a good example that has a variety of loan and grant programs for small businesses, including breweries.

Step 4: Pick a Location and Get Your Equipment

The success of your brewery hinges on having it conveniently located for your customers. As long as it is easily accessible, you can rely on a certain amount of footfall to always be visiting the location. When choosing a location, verify that the location complies with zoning regulations for commercial use, particularly for alcohol production and sales. Research local zoning laws and obtain necessary permits.

Assess the availability of essential infrastructure in the region too, including water, electricity, and transportation facilities. You need a reliable supply of all three for brewery operations.

Getting Brewing Equipment

Whether you buy new or used, you need to make sure the equipment you get is high-quality. If you go for brand-new, purchase it from the best reputable brands. A better deal from a lesser known brand might hurt you later down the line if the quality isn’t up to the mark. The same goes for used equipment, as long as you’re getting a good deal on it since it’s secondhand.

Step 5: Create a Menu

Your menu may well make or break your brewery. It’s the one thing that’ll attract and retain customers if your quality backs it up. When making your menu, make sure it reflects your brand, highlights your signature crafts, has (some) variety, offers food pairings, and if possible, also includes seasonal variants. If you put your heart and soul into the menu, you can get a unique selling proposition for your brewery right there.

Step 6: Launch, Advertise, and Grow!

If you’ve made it this far, you’ve come a long way! By now, you should’ve secured funding, obtained licenses and permits, chosen a location, acquired equipment, and created a menu. All that’s left now is to launch your brewery and start attracting customers. To begin, generate buzz around your brewery’s launch and get people excited about the opening, especially in your target market. An awareness ad campaign may help tremendously with this.

For the event itself, we recommend hosting a grand opening with live music, food vendors, and special promotions to get trials. Once people try your brews and like them, you’ll have returning customers. Share updates about your brewery, upcoming events, and new beer releases all along the way on the brand’s socials. From there, it’s all about monitoring, measuring, and improving your brewery.

Turn Your Brewery Dreams Into Reality

As exciting as it is to start your own brewery business, it requires careful planning, dedication, and strategic execution. By following the steps mentioned above–creating a solid business plan, picking the right brewery type, securing funding, and handling all the details from location to equipment–you’ll be well on your way to turning your brewery dreams into reality. Just remember to be adaptable, patient, and disciplined!