How to Start a Craft Beer Brewery
- Feb 26, 2022
- 125
- tiantai
Understand the cost, location and your business goals before opening your own brewery.
Tips to opening a craft brewery
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
You’re with friends at your favorite craft brewery enjoying some tasty ales when it hits you: Why not turn your love of great beer into a profession and start your own brewery?
If you’re serious — and not just buzzed — understand that it takes a lot of planning, money and patience to make this dream a reality. Starting a small business is already difficult, and breweries are highly capital-intensive businesses that come with additional legal and permitting requirements.
But with sober planning, creative financing and tenacity, you could create your own neighborhood watering hole. Here’s some advice to get you started:
How Much Do You Need?
with Fundera by NerdWallet
How much does equipment cost?
How much you’ll pay for brewing equipment ultimately depends on the size of your brewery and whether you buy new or used. You can purchase brewing equipment with the smallest capacity (1 barrel, which is 31 gallons of beer, equal to 320 12-ounce beers) for $100,000 or less if you buy it used, or pay up to $1 million or more for a brand-new, 30-barrel system (equal to 9,600 12-ounce beers), says Leonard Kolada, founder of Smokehouse Brewing Co. in Columbus, Ohio.
Your brewery needs essential equipment: kettles, kegs, boilers, bottling and canning lines, conveyors, cooling systems, storage tanks, fermentation tanks, filters and beer-labeling machines, piping and tubing, refrigeration equipment, cleaning equipment, waste treatment systems and tap handles.
Although you can get the cheapest equipment for reasonable prices, if you purchase equipment with less capacity and your brewery turns out to be a big success, you can run into problems because the system will be difficult and costly to modify, says Kolada, who recommends taking a more conservative approach when crafting your budget.
“If you’ve done your homework and details, and you think your project will cost extra, I would highly recommend that you up that by about 50%, just for the unforeseen, and see if your business plan would still work under that scenario,” Kolada says. Check out Nerdwallet’s best options for equipment financing.
Location and construction
Of course, your brewery also needs a home. The monthly cost of rent depends heavily on your location and the size of the building. You may need to come up with the first month’s rent plus a security deposit for the landlord when you sign a lease. And you’ll also probably need to do construction on the building to get it fit for the brewery.
“You have to consider plumbing, electric needs, if the ceilings are high enough — you may have to tear out existing concrete slabs and re-pour them so the water drains properly — there’s a whole laundry list of things that goes into it,” says Kolada, who added that as a general rule of thumb, you should take your equipment costs and, double them, and that’s what you’re going to spend on construction for your building.
Rob Sama opened a 25,000-square-foot brewery in Chicago in spring 2016 called Baderbrau. He said the tricky part in starting a brewery is determining the right size and capacity.
“On the one hand, you have to plan for growth or you’ll get stuck,” Sama says, “but if you overbuild, you can end up with a monthly debt payment your sales don’t support.”
Although Sama is starting out with a 25,000-square-foot facility, he says the building will have 5,000 square feet of empty space for future fermentation tanks. “When you calculate costs, you need to calculate the costs of nonproductive floor space as well,” he says.
Other costs and issues
The cost of flooring is often overlooked, Sama says. A good composite floor that will withstand impact shock, temperature shock and acid from beer will cost upward of $10 per square foot, according to Sama.
“You will spill beer on the brewery floor when you’re brewing,” Sama says, “so if you have, say, a 100-barrel tank sitting there, you don’t want the cement underneath to erode away and have your tank topple over.”
Then there are the necessary permits and legal requirements. You’ll need to apply for a federal brewing permit with the Alcohol and Tobacco Tax and Trade Bureau. Although the application doesn’t cost anything, it’s usually takes four months to process, according to Matthew Cordell and Derek Allen, who have advised several startup breweries in North Carolina for legal firm.
Derrick
Sales Manager
[email protected]
Tiantai Beer Equipment
Tips to opening a craft brewery
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
You’re with friends at your favorite craft brewery enjoying some tasty ales when it hits you: Why not turn your love of great beer into a profession and start your own brewery?
If you’re serious — and not just buzzed — understand that it takes a lot of planning, money and patience to make this dream a reality. Starting a small business is already difficult, and breweries are highly capital-intensive businesses that come with additional legal and permitting requirements.
But with sober planning, creative financing and tenacity, you could create your own neighborhood watering hole. Here’s some advice to get you started:
How Much Do You Need?
with Fundera by NerdWallet
How much does equipment cost?
How much you’ll pay for brewing equipment ultimately depends on the size of your brewery and whether you buy new or used. You can purchase brewing equipment with the smallest capacity (1 barrel, which is 31 gallons of beer, equal to 320 12-ounce beers) for $100,000 or less if you buy it used, or pay up to $1 million or more for a brand-new, 30-barrel system (equal to 9,600 12-ounce beers), says Leonard Kolada, founder of Smokehouse Brewing Co. in Columbus, Ohio.
Your brewery needs essential equipment: kettles, kegs, boilers, bottling and canning lines, conveyors, cooling systems, storage tanks, fermentation tanks, filters and beer-labeling machines, piping and tubing, refrigeration equipment, cleaning equipment, waste treatment systems and tap handles.
Although you can get the cheapest equipment for reasonable prices, if you purchase equipment with less capacity and your brewery turns out to be a big success, you can run into problems because the system will be difficult and costly to modify, says Kolada, who recommends taking a more conservative approach when crafting your budget.
“If you’ve done your homework and details, and you think your project will cost extra, I would highly recommend that you up that by about 50%, just for the unforeseen, and see if your business plan would still work under that scenario,” Kolada says. Check out Nerdwallet’s best options for equipment financing.
Location and construction
Of course, your brewery also needs a home. The monthly cost of rent depends heavily on your location and the size of the building. You may need to come up with the first month’s rent plus a security deposit for the landlord when you sign a lease. And you’ll also probably need to do construction on the building to get it fit for the brewery.
“You have to consider plumbing, electric needs, if the ceilings are high enough — you may have to tear out existing concrete slabs and re-pour them so the water drains properly — there’s a whole laundry list of things that goes into it,” says Kolada, who added that as a general rule of thumb, you should take your equipment costs and, double them, and that’s what you’re going to spend on construction for your building.
Rob Sama opened a 25,000-square-foot brewery in Chicago in spring 2016 called Baderbrau. He said the tricky part in starting a brewery is determining the right size and capacity.
“On the one hand, you have to plan for growth or you’ll get stuck,” Sama says, “but if you overbuild, you can end up with a monthly debt payment your sales don’t support.”
Although Sama is starting out with a 25,000-square-foot facility, he says the building will have 5,000 square feet of empty space for future fermentation tanks. “When you calculate costs, you need to calculate the costs of nonproductive floor space as well,” he says.
Other costs and issues
The cost of flooring is often overlooked, Sama says. A good composite floor that will withstand impact shock, temperature shock and acid from beer will cost upward of $10 per square foot, according to Sama.
“You will spill beer on the brewery floor when you’re brewing,” Sama says, “so if you have, say, a 100-barrel tank sitting there, you don’t want the cement underneath to erode away and have your tank topple over.”
Then there are the necessary permits and legal requirements. You’ll need to apply for a federal brewing permit with the Alcohol and Tobacco Tax and Trade Bureau. Although the application doesn’t cost anything, it’s usually takes four months to process, according to Matthew Cordell and Derek Allen, who have advised several startup breweries in North Carolina for legal firm.
Derrick
Sales Manager
[email protected]
Tiantai Beer Equipment
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