How To Start a Brewery: An Expert Guide

For many entrepreneurs, opening their own brewery is the ultimate food and beverage industry dream. 

But the brewery business comes with stiff competition: There were more than 9k breweries in the US as of 2021, and with craft beer still trending, that number is sure to continue to rise. 

This makes for a saturated market and an overwhelming amount of options for consumers. In order to attract customers, brewery owners have to consistently produce exceptional products to stand out. 

Below, industry experts share the steps for opening up a thriving brewery:

• Do your homework 

• Choose your concept and start planning

• Find your location

• Secure your licensing

• Secure your funding 

• Hire key staff

• Plan your branding and marketing 

• Ready the back of house: Menus and equipment
  
  

How To Start a Brewery Business

1. Do Your Homework 

If you're a first-time entrepreneur or new to the brewing industry, doing your due diligence before taking the dive is vital, according to successful brewery founders. 

"Do as much homework as possible," says Adam Romanow, the founder and CEO of Castle Island Brewing Co. "The more prepared you can be, the less your lack of experience will work against you."

Romanow recommends reading books and articles on the topic; talking to brewery owners, managers, and employees; and speaking with buyers who decide what beer is sold in liquor stores. It can also be helpful to tour other breweries and speak with people in your neighborhood to gauge their interests and needs. 

The journey from homebrewer to professional brewer is the heartline of the industry, and it's really what keeps things creative and interesting, says Dan Carlson, the co-founder and head of marketing at Redemption Rock Brewery. 

But, Carlson says, learning about professional brewing is pivotal before going all-in on a brewery. He says the best way to learn is to shadow a professional brewer, if possible, which takes some relationship-building. 

"Other options include enrolling in brewing school or taking a job at a brewery. Any opportunity to be around brewery operations in some respect, whether through brewing tech, packaging, or logistics, will be a huge help." 

2. Choose Your Concept and Start Planning

When it comes to starting a brewery, entrepreneurs first need to decide between two main avenues before getting specific with their business plan. 

Romanow says there are two main paths: creating a manufacturing brewery, or building a taproom or brewpub.

A manufacturing brewery:

• Is not open to the public for on-site consumption 

• Manufactures and packages beer for distribution in bars, restaurants, and liquor stores 

A taproom/brewpub:

• Majority of sales are direct-to-consumer on-site 

• Sells to-go beer in addition to on-site consumption 

When it comes to the differences between on-site models, Romanow says a taproom serves exclusively beer while a brewpub has a restaurant component with food service as well (though he notes those lines have become blurry, particularly post-pandemic).

Founders can also work toward combining the two: Romanow's brewery started with exclusively manufacturing, added a taproom after 18 months of business, and opened a second location five years later with a full kitchen for food service.

Once you've done your research and determined the path you want to take, you'll need to write up a business plan as you would for any other business. Using software, or a template like this, to plan can be helpful.

Note: Breweries measure the size of their business in barrels (1 barrel = 31 gallons of beer). A local craft brewery might house 10 to 30 barrels, while a large, national manufacturing facility can have thousands. 

3. Find Your Location

"Location, location, location applies to breweries, too," says Anderson Brewing Consultation founder Chris Anderson. I think it's probably the most important piece.

While location might be less important if you're taking the manufacturing-only route, if you're hoping to open a taproom or a brewpub, proximity to foot traffic or busy urban areas will be important. Anderson says the harder it is to get people in the door, the better your beer will need to be to draw them in. 

Different business models also demand different qualities from a location: A manufacturing brewery needs a more industrial neighborhood where large real estate is available and noise or odors wouldn't bother residents. Because manufacturing requires heavy, large equipment and barrels of beer, only certain locations would allow for the operation. 

For a taproom or brewpub, you can find smaller outposts closer to city centers that will ensure a steadier flow of foot traffic. 

Carlson notes that the decision on location is about more than just your business; it's about bettering your community at large. 

"Craft breweries and gentrification often go hand in hand, whether it's intentional or not," he says. "When envisioning a brewery and scouting locations, I think it's important for ownership to figure out what they can do to contribute to and support their neighborhood."

4. Secure Your Licensing 

"It sounds a little counterintuitive, but [licensing] is actually the first place to start so you can make sure you can legally operate a brewery in the building you want to occupy," says Romanow. 

Romanow says there are three levels of licensing: federal, state, and local. The levels need to be completed sequentially, starting with federal and working your way down, rather than all at once. 

The Alcohol and Tobacco Tax and Trade Bureau (TTB) oversees federal licensing and would be the first place to start. Depending on your location, state and local licensing requirements will vary. 

5. Secure Your Funding 

While the cost of opening a brewery will vary depending on which business model you're pursuing, funding will be required regardless. 

Carlson says that a small-scale operation that's only brewing a couple of barrels with a bare-bones taproom could be opened with a budget within the thousands of dollars.

For a larger facility that will also be distributing its beer, Carlson says it will likely cross the million-dollar threshold. 

Anderson agrees, saying he often tells clients to aim for raising $1m, though he warns them that they should raise an additional 30% on top of if they want to play it safe. 

Raising $1m, though, is not an easy feat. Particularly in the present-day market, which Romanow says is particularly hard as debt is expensive and investors are skittish about investing in breweries as they usually take longer for a return on investment than other business models (though it's worth a shot if you feel this is the right investment type for your business). 

He says that the most relied-upon funding resources for the brewing industry are small-business loans through the SBA or loans from community banks. He also notes friends and family are a common, helpful source of equity, as is bootstrapping with your own savings if possible. 

Setting Up a Brewery 

As far as the timeline: Romanow says two years is a conservative guess if you're starting from scratch and still need to fundraise, find a location, obtain licensing, and build out your space and restaurant if needed. 

Once you have the main components of your future business in place, you can begin refining the plans for your brewery:

1. Hire Key Staff

What's one thing every brewery needs? Beer. That means unless you yourself are an expert at brewing, your first hire should be a professional brewer who can oversee beer production. 

While it can be tempting for beer super fans or homebrewers to set out on their own, the beer industry is highly competitive and customers expect a top-tier product out of the gate.

"Consumers aren't really willing to pay for and drink your learning curve," says Carlson. 

If you bring the professional brewing experience to the table, but lack the business prowess, finding a staff member who can handle business operations is imperative. 

And, if you're hoping to build a brewpub with a full restaurant, you'd need a chef and front-of-house staff to make it happen. 

Whatever your plan, always look to fill in the gaps of your own knowledge when building out a team. 

"Business is complicated enough as it is, let alone a brewery in a heavily regulated industry," says Romanow. 

2. Plan Your Branding and Marketing 

When it comes to marketing, Romanow advises founders to take it seriously: I would argue it's the most important thing to be considering. There are more than 9k breweries in the country, and marketing and branding is your No. 1 tool for standing out from the crowd.

Carlson agrees, saying successful breweries will have websites that can tell customers about your beers and when and where they can find you, social media marketing, and ideally some fun, unique, engaging content to differentiate yourself from your competitors. 

All marketing and branding work should be done with your target customer in mind (so, if you don't know who that is, spend time thinking about a buyer persona). Next you can begin working on marketing and branding strategies. 

3. Ready the Back of House: Menus and Equipment 

Depending on the business model you're pursuing, you'll need to obtain equipment and begin building out your menu offerings.

For equipment, brewing requires highly specialized equipment, which can include:

• Kettles 

• Kegs 

• Boilers

• Bottling and canning lines

• Cooling systems

• Storage and fermentation tanks

• Waste treatment systems

• Piping and tubing 

The cost of the equipment required to support the brewery model you choose would be baked into your budget and accounted for when raising funds. 

Another important component of a brewery that has any on-site taproom or brewpub is a menu. You'll need to think about both the beer menu (what you want to manufacture and have on tap) and food, if you're planning to offer it. 

Try to hone in on a specific vision: Do you want small bites and appetizers only to accompany beer in a taproom setting? Are you hoping to have a fully operational restaurant within the brewery? Or perhaps a to-go counter setup where customers can pick up and pay for their food before sitting at picnic tables outside?

Romanow says menu planning is another great time to tap your network and ask for advice: A good starting point can be simply mirroring a bar, brewery, or restaurant menu you admire. 

Ultimately, your brewery will be a unique, one-of-a-kind recipe just like your beers. There is no one-size-fits-all business advice, but by doing your homework, speaking with other founders, and clarifying your vision, you can ensure you're prepared for anything. 

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