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You started as a humble home brewer with a kit that cost less than US$300. Now, you are considering making your hobby into your life’s work. With there being over 9,000 breweries operating just in the US as of 2021, you would assume that starting one is simple, right? In theory, it is, but you have to ask yourself one thing first: how much does it cost to start a brewery? You’re going to need to make a large investment of $100,000 or more. Let’s take a look at what starting a brewery will cost, as well as some of the factors that increase the overall price. That way, you know exactly what you will need when starting your own brewery.
Table of Contents
- How Much Does It Cost to Start a Microbrewery?
- How Much Does It Cost to Start a Craft Brewery?
- How Much Does It Cost to Start a Large Brewery?
- Factors to Consider When Planning on Opening a Brewery
- How Can I Save Money When Starting a Brewery?
How Much Does It Cost to Start a Microbrewery?
When it comes to figuring out the cost of starting a brewery, you must first figure out the size of the business. Most people begin with a microbrewery, which is a small-scale brewery that produces beer in smaller batches and uses traditional brewing methods. The focus here is on the high quality of the beer, not churning out millions of barrels in a single year. Typically, microbreweries produce around 15,000 barrels of beer, which may be ideal for serving your region.
Other microbreweries may produce a very small amount of beer, around 31 gallons (that’s a single barrel) to begin, which has an estimated start up cost of around US$50,000. If you aim to produce around 217 gallons (or 7 barrels), the start up cost leaps to around $500,000.
How Much Does It Cost to Start a Craft Brewery?
Although the term “craft brewery” and “microbrewery” are often used interchangeably, there is one main distinction: Craft breweries prioritize quality and flavor over mass production, and they often experiment with different ingredients and brewing techniques to create unique, distinctive beers. They typically have a strong emphasis on local sourcing and community involvement and often promote their products as artisanal or handcrafted.
If you plan on brewing craft beers from scratch, sometimes producing strange flavors or trending beer styles, then you may consider yourself a craft brewery instead of a microbrewery.
On average, craft breweries have a slightly higher start up cost than microbreweries—around $100,000 to $2 million, though the initial investment can be much higher. A craft brewery that plans to distribute 30-barrels (930-gallons) is going to cost around $1 million to start.
Here is a fascinating take on running a craft beer brewery, including the cost and other behind the scenes insight (Warning: Language):
How Much Does It Cost to Start a Large Brewery?
Do you want to give Molson Coors a run for their money? In 2020, the Molson Coors Beverage Company’s Annual Report stated that they sold around 71.7 million barrels of beer throughout the world during that fiscal year. Imagine how many breweries and brewing systems are operating at a single time to produce that kind of beer! For reference, a medium-sized commercial brewing company may have a 30-barrel (930-gallon) system that churns out around 15,000 barrels per year. A 100-barrel (3,100 gallon) brewing system can produce 100,000 barrels or more.
The larger the brewery, the bigger the system you are going to need, and that drives up the costs exponentially. If you plan on running a commercial brewery that mass produces beer, the upfront cost may be anywhere between $350,000 to $2 million or more.
Factors to Consider When Planning on Opening a Brewery
Now that you have seen the numbers, it is time to consider what goes into the overall cost of starting a brewery:
- Size and Location
- Brewing Equipment
- Marketing, Branding, and PR
- Bottling and Distribution
- Licenses and Permits
- Miscellaneous Recurring Costs
Let’s take a look at each of these factors in more detail.
Size and Location of Your Brewery
If you want to build a brewery that brings in money, you are going to need to establish a brewhouse. Unfortunately, your basement or garage is not going to work. Local government zoning limits where you can put a brewery, even when it comes to retail space. You are going to need to check in with the local government to see where a brewery can go. From there, you may end up needing to purchase a plot of land, an existing building, or enter into a lease.
The cost of this part of your endeavor can be difficult to estimate, as your region and location are going to change how much real estate costs. If you choose to construct a brewhouse from the ground up, be prepared to spend far more than you would renting. Yet, it can be hard to find a space for rent that matches your vision.
Generally, the cost of retail rent ranges between $10 per square foot to $30 per square foot annually, though there are some neighbors in the world that may cost as low as $6 per square foot per year.
So, let’s say your microbrewery is around 3,000 square feet, you may end up paying $30,000 to $90,000 in rent per year.
Brewing Equipment Costs
Beyond choosing the location and size of your brewery, the next great expense is your equipment. Most breweries go on one of the following routes: three-barrel brewery (3BBL), seven-barrel brewery, or fifteen-barrel brewery. By determining the initial size of your brewery, you can estimate how much you are going to need to secure the proper equipment. Also, it is important to consider your future goals, because you do not want to purchase equipment that your brewery will outgrow within a few months or years.
Here is a breakdown of what each brewery setup needs:
For many startup breweries, the 3BBL system is most common. This basic setup is cost-effective, as it churns out enough beer to keep your growing customer base happy without costing too much to build and maintain.
This setup requires:
- One 120-gallon hot liquor tank
- One 140-gallon brew kettle
- A 120-gallon mash tun
- A single stage heat exchanger
- 12 kW heating system
- 1/2 Horsepower water and wort pumps
- Control panel for monitoring your tanks and pumps
- Three jacketed fermenters, 3BBL size
- One jacketed brite tank
- Basic jacket control module
- 3 Horsepower glycol chiller
The typical cost of this equipment is between $50,000 and $65,000, depending on the quality of what your purchase.
Opting to start a mid-range brewery right off the bat? Then you are going to need equipment that provides greater efficiency, so you can produce more beer. You will need the following:
- One 290-gallon hot liquor tank
- One 340-gallon brew kettle
- A 275-gallon mash tun
- 60 kW heating system
- 3/4 horsepower wort and water pumps
- Control panel for monitoring vessel temperatures and the pumps
- Brewhouse platform
- Automated flow meter and strike valve
- Dual-stage water and glycol heat exchanger
- Automated hob back/wort grant combo tank
- Three 7BBL jacketed fermenters
- A 7BBL jacketed brite tank
- Advanced jacket control panel
- 5 horsepower glycol chiller
The total cost of starting a brewery with all this equipment is around $85,000 to $100,000 or more.
When you want to make loads of beer, you need a facility that can keep up with that demand. A 15BBL brewery will be using technology of the highest quality, as well as a larger size than 3BBL and 7BBL setups. Here is a list of what purchases should be made for a fifteen-barrel brewery:
- One 800-gallon hot liquor tank
- A 725-gallon brew kettle
- A 509-gallon mash tun
- A 145-gallon brew kettle
- 1 Hp water pump
- 3/4 Hp wort pump
- 30 Hp low-pressure steam boiler
- Automated wort grant
- Advanced control panel for controls, including rake motor controls
- Brewhouse platform
- 20 BBL cold liquor tank with pumps and built-in control
- Single-stage heat exchanger
- 9 Hp glycol chiller
- Five 15BBL jacketed fermenters
- Two 15 BBL jacketed brite tanks
- Advanced control panel for the jackets
This setup will cost between $225,000 and $250,000, though the cost of some equipment may be more, due to new technology and quality.
Cost of Furnishing the Taproom
If you don’t plan on serving any alcohol or food out of your brewery, then this cost may not concern you. However, even if you want a small tasting room for an intimate group of people, you are going to have to furnish it. The estimated cost of a taproom and all the furnishings varies greatly, because the size and the amenities that you need are going to be unique to your business (as well as the space available). If you want to serve food, for example, you are going to need a fully fleshed out kitchen.
Typically, furnishing the taproom is going to cost around $4,000 to $15,000, but the cost may be more or less, depending on the materials, aesthetics, and brands used.
Marketing, Branding, and PR
Did you know that the top five brewing companies in the US spend about $1.6 billion on advertising per year? Yeah. It’s that important.
You are going to want to advertise your brewery, even before it is completed to generate a high level of interest. When the doors open, you want people walking through. Building a brand and then marketing yourself is another cost you need to take into account, even if it does not immediately impact your investment. Developing a comprehensive branding and advertising plan, including social media, logos, packaging, and outreach can range from a couple thousand dollars to millions, depending on the company you select. You could attempt to do everything in-house, but you should consider how much time this would take.
POS and Other Tech
Once you start getting hundreds of customers and orders over the phone or internet coming in, the idea of writing out invoices and receipts by hand is going to give you heartburn. As such, you are also going to need point-of-sale equipment and some bookkeeping software to make your life easier. Most POS systems are relatively straightforward in terms of cost. You have the equipment and software, which ranges from free to $2,000 outright, followed by monthly or yearly subscriptions. The cost of that subscription varies, depending on the services you need, number of POS stations required, and more.
Bottling and Distribution
Since you are starting a brewery, allow the assumption that you are going to be canning or bottling the brews and selling them to customers via your storefront or shipping. In that case, you are also going to need canning and bottling equipment, which was not included in the equipment lists above.
For even a small microbrewery, an efficient canning line will cost between $65,000 and $135,000.
Licenses and Permits
If you want to be an entity that can legally operate and sell alcohol and food, then you will need to apply for various permits and licenses. What you need is going to vary by state and region, so be sure to do your research on the requirements.
Oftentimes, you will need a business license, which costs $25 to thousands of dollars; an Alcohol and Tobacco Trade Bureau (TTB) license, which is free; a restaurant license to sell food, which costs anywhere from $100 to $1,000; and a liquor license, if you want to build a taproom. The price of a liquor license varies dramatically, costing you anywhere from $3,000 to $400,000.
In addition to the cost of obtaining a liquor license, your business must also comply with ongoing regulatory requirements and fees, which can include alcohol taxes, health and safety inspections, and other licensing and permit fees. These costs can add up over time, particularly for businesses that serve a high volume of alcohol or operate in areas with particularly strict regulations.
The Many Recurring Costs of Running a Brewery
Many of the expenses you have seen are considered “pre-opening expenses,” or those expenses that happen all before opening day. While those purchases and investments are going to take a considerable amount of money, you must also keep that cost of operation in mind.
Estimating ongoing expenses can help you set aside a decent monetary cushion, so you can pull through when the going gets a little rough.
There are several recurring costs associated with running a brewery, including:
- Ingredients: The cost of malt, hops, yeast, and other ingredients used in the brewing process is one of the most significant recurring costs for a brewery. The average cost per beer barrel ranges between $45-$75, depending on the ingredients used, where you source them from, and how much of those ingredients you purchase at a single time.
- Utilities: Breweries require significant amounts of water, gas, and electricity to operate, which can lead to high utility bills. The average US microbrewery can expect to pay around $2,500 a month on utilities.
- Equipment maintenance and repair: Brewing equipment requires regular maintenance and occasional repairs to keep it functioning properly.
- Labor: Breweries require a skilled workforce to handle brewing, packaging, sales, and administrative tasks, which means labor costs can be a significant expense. Let’s say you hire another brewer. That person’s salary is around $45,000 a year on average.
- Rent/Lease: The cost of rent or lease for a commercial property where the brewery is located can also be a significant recurring expense.
- Marketing and advertising: As mentioned earlier, breweries need to invest in ongoing marketing and advertising to promote their products, which can include costs for social media campaigns, events, and merchandise.
- Insurance: Breweries need to carry insurance coverage for a variety of risks, including liability, property damage, and equipment breakdown.
How Can I Save Money When Starting a Brewery?
How much does starting a brewery cost? Anywhere between $100,000 to a couple million. The total you come up with for your personal business plan may be an eye-popping amount. Don’t let that get you down, though. There are ways to fund your dream of opening a brewery that do not put such a strain on the bank.
One of the best ways to secure additional seed money is to find investors. Maltsters, brewers, and other industry professionals may be willing to help you out. Otherwise, you can approach friends and family members with a passion for good beer.
Small Business Loan
Many small businesses seek out loans for a decent amount of capital. However, this method can be difficult to secure, especially if this is your first startup.
One way to get some money to fund your startup is through crowdfunding. If you don’t believe it works, here are some miracle stories for you to consider:
Aurochs Brewing Company, known for their gluten-free beer, was able to raise $150,000 through crowdfunding and was able to buy themselves brand new equipment. Similarly, Back Alley Brewing Company got $200,500 through crowdfunding and used $125,000 of it to furnish their taproom.
Used or Leased Equipment
Another option to save some money in the beginning is to buy used equipment, lease equipment, or find yourself a contract brewer. Often, when breweries are expanding or updating their brewhouse, they list their used equipment online. You could potentially shave off thousands of dollars of the cost of starting a brewery by filling your brewhouse with barely used items.
In a similar vein, contract brewing is when you use another brewery’s equipment to produce your beer. This is an option for those who want to gain some money before opening their own establishment. By focusing on building your product line, you could potentially build a loyal following of drinkers who would line up outside your future establishment’s door during opening day.
It’s Time to Budget For Your Dream Brewery
You have your water, hops, malt, yeast, and a dream to open a brewery. You are already halfway there. The cost of starting a brewery is high—around $100,000 to $1 million or more—but there are ways to secure that money. After that, the passion of you and your team will help you drive sales and gain popularity in your region. Be sure to construct a comprehensive business plan, as that is the means to your success.
Good luck, and Happy Brewing!
The cost of starting a beer brewery can vary greatly depending on factors such as location, equipment, and size of the brewery. Generally, you can expect to spend anywhere from $100,000 to $1 million or more. It is possible to start a small beer brewery with a budget of $100,000 or less, but it may require cutting some corners or finding creative solutions to keep costs down.
Some of the major expenses include purchasing or leasing a facility, equipment (such as brewing kettles, fermenters, and bottling/canning lines), ingredients (such as hops, malt, and yeast), and packaging materials (such as bottles or cans).
Starting a brewery can be profitable if done correctly, but success depends on several factors such as the size and location of the brewery, demand for its products, quality of its beer, and efficiency of operations. The craft beer industry is competitive, and new breweries face challenges in establishing their brand and competing with established breweries.
Yes, it is challenging to start a brewing company, because there are legal and regulatory requirements, as well as finances and other factors to consider. To be successful, one must have a solid plan and budget and do market research.