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Costs to Start a Brewery

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costs to start a brewery

There are a lot of costs to start a brewery and while this article won’t be able to give you specifics as they vary depending on geography and desired scale of operations, here are some things to think about.

Help from consultants may come in handy here, especially if you don’t have indepth experience in the industry, plus they can help you source deals from some of the lesser known but high quality suppliers.

Figuring the cost on the major equipment is pretty straightforward.  Most professional brewers recommend purchasing larger equipment than you think you will need.  Their justification is that brewing a 7bbls takes the same time as 20bbls and a system that has twice the capacity doesn’t cost twice as much. While this makes sense, what happens when you can’t sell what you made in the larger system?  Having too much money tied up in underutilized equipment is a quick path to going out of business, especially if you financed the equipment with debt.  The smaller your debt, the quicker your path to profitability. Used equipment is a great option but if you aren’t careful you may end up spending more money in the long run to work right.  If you find a decent used system and are handy you will come out ahead but don’t expect that used equipment to never have issues.  Budget accordingly.   If someone tells you about cheep dairy equipment as a way to save money, they do not know what are they talking about.

The real budget buster isn’t the equipment but construction and renovation costs.  Even though you can build a decent brewery on a budget, you will end up doing most the work yourself which means it will take longer to get started.  The electric, gas and plumbing is going to be expensive and unless you have good connections with contractors or can do the work yourself you are going to spend a lot of money.  Even doing the work yourself, figure at least double what you think it will cost and expect it taking twice as long to complete. The other factor to consider when doing your own construction is that a brewery is going to be held to a high standard for the plumbing and electrical so be to know what you are doing so you aren’t doing the job twice.

Most people starting a brewery worry first about the equipment.  In actuality what you need to be worried about is the brewer’s permit.  The permit by itself may not be difficult but you will need to have a location secured before getting the permit issued.  That may not sound like a problem but that means you need to purchase a building or begin renting to have that address.  Be prepared to have six to eight months of rent/mortgage money before opening your brewery.  You can get a federal brewer’s permit without the equipment as long as you can provide technical drawings.  On top of the brewer’s permit there will be additional permits such as the state & local brewing, sewer, highway access, business structure, background checks, etc.  Don’t expect the licensing process to take care of itself.  Get started on them right away.

One last bit of advice I would recommend that I have heard people talk about is having starting inventory with a year’s worth of grain. Since grain won’t stay fresh for a year, you will want to have at most two or three batches worth of each beer you’re brewing.

Starting a brewery is expensive but if you plan properly and can do some of the work yourself, the costs to start a brewery can be manageable.  Take time and don’t rush into getting started so you can plan accordingly and make the best use of your funds.