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How to start a craft brewery?

How to start a craft brewery?

There are many beer lovers around the world who want to open a craft brewery, which requires more than a love for craft beer, it also requires a lot of financial investment and patience. In this guide, we’ll cover the key steps to help you start a craft brewery.
Table Of Contents

What is a craft brewery?

Annual production does not exceed 6 million barrels of beer (approximately 3% of annual U.S. sales). Under the rules of alternating ownership, beer production is vested in the brewery. Less than 25% of craft breweries are owned or controlled (or have equal financial interests) by members of the beverage alcohol industry who are not themselves craft beer manufacturers.
20 bbl brewing system

Research a brewery business plan

  • Executive summary: Explain your brewery’s business goals. Include a mission statement and a brief overview of your location, employees, and leadership team.
  • Company Description: Describe details related to your brewery concept or brand. Include a description of your local market and target customers.
  • Market Analysis: Share your market research and how you plan to stand out among nearby breweries. Conduct a separate competitive analysis to investigate your competitors and determine how to offer different and better products and customer experiences.
  • Organization and management: Identify your key team members and other people you plan to hire. Include a list of suppliers and describe the products they provide to the brewery. You will also identify your brewery’s business entity or legal structure in this section. You can choose an entity such as a sole proprietorship, LLC, or corporation.
  • Services and Products: In this section, describe your beer and any food products in detail. You may also want to include a sample brewery menu here. Be sure to highlight other products you wish to sell, such as retail items.
  • Marketing and Sales: Discuss your strategies for building your customer base. You can also use this section to outline your pricing plan and how the cost of your product affects your price structure. Prices should be competitive but still profitable.
  • Financial: Create financial projections for the brewery, including a balance sheet, business cash flow statement, and income statement for the first five years of operation. If you plan to seek financing, you need to outline how much money you need and how you will use the money. To be safe, you may want to underestimate your income and overestimate your expenses.
  • Appendices: Include any relevant documents or forms that you did not include in the previous sections.

Facility and equipment costs

location and building

The location and building you choose for your small brewery will have a significant impact on your startup costs. Factors to consider include square footage, rental or sale price, and any necessary renovations or improvements. Keep in mind that small breweries often need specialized infrastructure, such as reinforced floors and proper ventilation.

brewing equipment

Investing in high-quality brewing equipment is crucial to producing top-notch beer. The size and type of equipment you need depends on your production capabilities and the style of beer you plan to brew. Key components include kettles, fermenters, heat exchangers and cooling systems. Be prepared to spend $50,000 to $500,000 or more on brewing equipment, depending on the size of your operation.

Other necessary equipment

Too to brewing equipment, you’ll also need a variety of other items such as kegs, bottling or canning equipment, storage racks, and quality control tools. Don’t forget to budget for essentials like glassware, faucet handles, and cleaning supplies.

Labor cost

The size of your team will depend on the size of your microbrewery and your specific needs. You’ll need at least a skilled brewer, support staff, and sales and marketing staff. When calculating labor costs, be sure to consider wages, benefits, and any required training.

Main equipment for craft breweries

Craft brewery equipment is a worthwhile investment. Brewing equipment is the heart of your operation, and choosing the wrong equipment or installing it improperly can have a significant impact on the quality, consistency, and overall success of your beer.

Purchase brewery equipment

Purchasing brewery equipment is a complex process that requires careful consideration. You can choose to purchase new equipment from the manufacturer or choose used equipment from another brewery. While buying new equipment can give you peace of mind, it can be expensive. Used equipment is a more cost-effective option, but requires due diligence to ensure the equipment is in good condition and meets your needs.

Basic craft brewery equipment

  • Kettle
  • Boiler
  • Fermentation tank
  • Filter
  • Cooling system
  • Oil storage tank
  • Keg
  • Bottling or canning equipment
  • Refrigerate
  • Pipeline
  • Cleaning tools
brewing equipment

Brewery equipment installation

After purchasing the equipment, the next step is to install it. The installation process is critical and it is vital to ensure it is done. Improper installation can lead to equipment failure, safety hazards, and many other problems.

When installing your device, consider the following:

  • Layout: Equipment layout is crucial to the brewing process. Consider, placement of equipment, and the workflow required for each piece of equipment.
  • Electrical and Plumbing: Your equipment requires electrical and plumbing connections to operate. Make sure you have qualified professionals to install the necessary electrical and plumbing connections.
  • Ventilation: Proper ventilation is essential for safety and maintaining consistent temperatures during the brewing process. Make sure your installation has adequate ventilation.
  • Safety: Brewery equipment can be dangerous if installed. Make sure your installation complies with safety regulations and that all equipment is installed.

The Cost of Opening a Craft Brewery

Also to the cost of the brewing equipment and ingredients you need, the cost of opening a brewery can vary depending on the type of brewery, location, size of the brewery, production capacity, and staffing needs. Whether your brewery offers catering will also have an impact on your start-up and operating costs. The cost to start a brewery ranges from $500,000 to $1.5 million. Even a microbrewery or very small business costs at least $250,000 to start. For larger breweries with more diverse craft beer offerings, start-up costs can be as high as $2 million.

FAQ

Q: What are the average startup costs for a small brewery?

A: Small brewery startup costs can vary, depending on factors such as location, size, and equipment.

Q: How long does it take to start a small brewery?

A: The timeline for starting a microbrewery can vary depending on factors such as location, licensing requirements, and equipment delivery times. On average, it can take anywhere from 6 months to 2 years to get up and running.

Q: What is the profit margin for a small brewery?

A: Profit margins for small breweries can vary, but industry averages suggest between 5% and 20%. Factors that influence profit margins include production efficiency, pricing, and marketing strategies.

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Get a turnkey solution for brewery equipment
If you plan to open or expand the brewery, you can contact Micet Craft directly. Our engineers will design and manufacture brewery equipment according to your brewing process. Of course, we will also provide you with a complete turnkey solution. Also, if you plan to expand the brewery, we will provide you with customized solutions.

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