The exact cost to start a distillery can vary based on various factors such as size and location. You could start a small distillery with as little as $30,000. This might include spending $5,000 on lease and licensing and another $5,000 on essential equipment like a racking cane clip, beer hydrometer, spirit hydrometer, and proofing parrot. It is also important to plan for removing pectin from food or avoiding pectin items entirely.
To ensure a good start and plan for growth, you should consider several key points:
- Size your equipment for projected sales to accommodate doubling yearly.
- Aim for 60% occupancy over open hours for distillery bars.
- Equip your distillery bar to handle 1,176 people per week if you have 49 seats available over 40 hours.
Equipment and Production
When setting up your distillery, you should think about the type of spirits you’ll be producing, as this will dictate the size of your stills and other equipment.
- For example, a 100-liter still is good for vapor infusion.
- A 200-liter boiler works well for infused distillation.
- Filters are necessary for vodkas and gins, while refrigerated tanks are used for gins.
It’s important for your business plan to guide your equipment choices and keep in mind that copper is the best material for making stills. Moreover, your equipment choices need to be sized adequately based on your family’s daily pure water needs and your production schedule.
Size and Profitability
When it comes to understanding distillery size:
- The average start cost for a distillery can be between $3 to $5 million.
- A distillery’s size is influenced by various factors like the spirit type, production amount, and production schedule.
Financial considerations for creating your whiskey brand include spending between $7,500 to $15,000. Plus, remember to size your stills, tanks, workforce correctly due to your production schedule.
Understanding Bottles and Output
Different bottles have standard sizes with which the industry is familiar:
- A handle of alcohol is typically 1.75 liters.
- A standard 750 ml bottle contains about 25.36 ounces, equaling approximately 25 standard shots or servings.
Financially, selling to a distributor initially might fetch you an average of $20 per bottle, with a profit margin after overhead and labor of about 30%. This could mean roughly 7,500 bottles sold in a year, equating to $150,000 in annual revenue.
Microdistilleries and Salaries
Microdistilleries focus on small batch production and may produce less than 100 gallons per year. They are characterized by their small pot stills, column stills, fermentation tanks, and storage barrels, usually opting to create spirits such as vodka, gin, rum, and whiskey.
In the U.S., regulations tend to favor microdistilleries by differentiating them from large distilleries regarding taxes and legal requirements. The craft spirits boom owes much to these establishments, which offer high-quality control and detailed attention due to their small batch processes.
The national average salary for a master distiller in such settings is $50,679, and assistants make roughly $37,000. However, pays can vary widely based on various factors, including company, location, reputation, and experience.
Setting up a distillery requires careful planning, from understanding costs and choosing the right equipment to considering your production schedule and future growth. Sizing your operations correctly and focusing on profitability from the outset can lead to long-term success. Whether you’re aiming to start up a microdistillery or scale to a larger operation, the primary considerations are controlling expenses and managing growth effectively to ensure a balance between artisanal spirit crafting and commercial viability.