Starting your own liquor brand can require preparation. Spending thousands monthly and losing money for years requires planning.
Initial Investment
Overall, equipment and machinery can cost up to $200,000 or more. Rent varies by region and location. Leases range from under $1,000 to over $80,000 monthly. Retrofitting space takes additional budget.
The process of creating a business plan provides a roadmap and can help raise capital. Profits depend on distribution deals and retail pricing. If a $40 bottle of spirits nets $20 for the distiller, lower costs can mean higher returns.
Initial costs range from $13,000 to $33,000 for rent and equipment. Necessities include fermenters, a boiler, cooling system, and a transport vehicle. Design and recipe development also require investment to create quality, unique spirits. Bottling services range from inexpensive to nearly $20 per case.
Licensing and Costs
How much does it cost to start a small distillery? To legally distill at home, you must first apply for a Federal Distilled Spirits Permit. The permit requires a fee, in addition to regulated inspections of your distillation equipment and facility.
Costs to start range from $13,000 – $33,000. You’ll need to rent a distillery space. Additional expenses include insurance, distilling equipment, and a transport vehicle.
Thoroughbred Spirits Consultants says $3-5 million minimum. Tasting rooms are expensive but can mean large profits later.
There’s potential for profit. You may receive 40-50% of the eventual retail price. So if your spirit sells for $40, you may get $18-$20.
How profitable is a distillery? Creating a business plan provides a roadmap. It can help raise capital. Virtual distilleries contract production without owning stills. Profits depend on deals and pricing. If a $40 bottle nets $20, lower costs mean higher returns.
Overall startups range from $50,000–$200,000+. Licensing mandates extra fees and inspections. Costs accumulate rapidly, so realistic planning prevents losing money. Growth potential exists for brands with good distributors and reception.