Cost Analysis of Starting a Microbrewery
The level of funding required to start and run a brewery can vary; some brewers insist that an investment of at least $1m is necessary so as not to compromise on quality and safety, while other microbreweries have achieved success with initial startup costs of around $250,000. As a general rule, starting a microbrewery costs around $300,000 – 350,000. This likely includes a mixture of new and used equipment, possible non-union labor, and a lot of personal elbow grease.
Factors Influencing Brewery Start-Up Costs
There are a myriad of factors that will dictate how much it costs to set up your microbrewery including how much you intend to produce, your location and what equipment you buy. Below is a list of the integral equipment you’ll need.
- Waste water disposal certificate from pollution control board.
- Fabricated equipment quality certificate from third party inspection (loyds, SGS, etc.)
- Water quality testing certificate from quality control labs (SGS, etc.)
- Quality Control (QC) certificate of finished beer from govt.
Considerations for Brewery Size and Profitability
This size of brewery typically means that you will be producing more than 3000 hectolitres of beer but less than 400,000 hectolitres. Therefore, there is a large range that you can fall into. However, on average, you will certainly require more than $400,000 for the most basic of expenses.
Key Steps in Establishing a Microbrewery
You can independently control your brewery and produce specialized craft beer of different flavors. Here’s a complete guide on how to successfully set up a microbrewery business. When it comes to a brewing business, there are many factors that influence the amount it will take to start a successful business, factors such as where you are going to start the business, the type of business brewery you want to start, the size of the brewery you want to open, your target market and, of course, the state of the economy when you intend to start a business.
Profitability and Cost of Ownership
Owning a brewery can be a highly profitable venture. The profitability of a brewery largely depends on various factors. For a small brewery, it is realistic to expect an annual income of at least $40,000.
Advice for Brewery Success
Keep a few tips in mind when you’re doing so. Know your market as intimately as possible to ensure you can properly position your company. Consider the scale of your operations. This will affect the cost of utilities, the number of products, the distribution logistics.
Recruitment and Skills for Brewery Operations
You’ll need talented brewers. One of the first things was to search for an experienced brewer. “I knew quality beer was going to be key,” Julian Wright says.
Considerations for Brewery Funding
Experts recommend working in an established brewery for a while before starting your own brewery business. Completing formal training programs are an excellent way to advance your skills and credentials if you have the resources and finances available to do so.
Start-Up Capital Requirements
How much capital is required to start a brewery? The cost of opening a brewery could cost around $250,000 but could reach up to $750,000 for a small one, which first-time brewers generally prefer. A medium– scale brewery, on the other hand, can cost around $1.5 million at start-up. The cost of starting a brewery is made up of four major expenses. These include equipment, location and construction, permits and licenses, and marketing.
Business Plan and Expansion Considerations
Here is a sample Microbrewery business plan template. Beer is one of the drinks that is generally consumed in most parts of the world, except for a few countries. This is why most people who venture into the beer production business start microbreweries because it requires very minimal startup costs than when compared to a standard brewery.
Legal and Insurance Considerations
One of the essential elements of being able to set up your own microbrewery is getting access to business funding and then being able to obtain specialist microbrewery insurance at competitive rates. You also need to consider getting public liability insurance for visiting members of the public if you offer brewery tours, host events/talks, or have a taproom.
Cost Variances and Average Start-Up Estimates
On average, craft breweries have a slightly higher start up cost than microbreweries—around $100,000 to $2 million. A craft brewery that plans to distribute 30-barrels (930-gallons) is going to cost around $1 million to start.