The process of how to open up a brewery is similar to how to start a wine business, a bar, or a restaurant. It has shared qualities with opening the best brunch places, starting a beer garden or opening a sports bar, or the process of how to open a wine bar.
In this BinWise blog post, we’ll walk you through some of the key points of how to open up a brewery. This post will be followed by a series on the same subject. If you’re reading this and you think, “Huh, what about everything else that comes up with the practice of opening a brewery?” Have no fear, we’ll get there!
Opening a Brewery
Opening a brewery involves the usual work of opening a restaurant or bar business. On top of that work are the decisions and plans specific to how to open up a brewery. On the BinWise blog, when we spoke about opening a winery, we talked about things like:
... and so much more in the complete winery guide.
Opening a brewery has many of the same facets going into how to open up a brewery. You’ll need staff, inventory, an inventory program, a business plan, brewery cleaning supplies, information about beer expiration, a brewery license, and brewery management software. You’ll need a brewery manager who can keep all those moving parts together–that might be you, as the owner.
All those parts go into opening a brewery. From your inventory to your order management system, there’s plenty to keep track of. A good place to start is the cost to open a brewery.
Cost to Open a Brewery
So, how much does it cost to open a brewery? Well, it’s not a small number, but the potential profits even it out. The cost to open a brewery starts at $250,000 and can get higher depending on size, location, and specific plans. It can easily get into the millions of dollars. It’s important to secure your funding as soon as possible. That may come from you directly, from a business loan, or from investors.
On the other side of the cost analysis of how to open up a brewery is the profits you can work toward. The profit margin percentage on beer brews is between 74% and 92% on average. You can expect a high profit margin from your taproom and the beer you sell through retailers. Your beer on tap will bring in great profits.
The equation to find your potential profit is:
monthly sales x profit margin = profit
For example, if your sales average $60,000, and your profit margin is 7%, your profit would come out to $4,200 a month. Of course, it’ll take a few years before your profits go toward something substantial outside operational costs and paying employees.
How to Open a Craft Brewery
The process of how to open a craft brewery is very similar to how to open up a brewery. Some of the key differences between the two are:
- A craft brewery is an independent brewery, while a brewery is often part of a larger business.
- Craft breweries tend to make their beers in small batches. This leads to seasonal brews and limited editions.
- Craft breweries need more work with branding and marketing, creating a business brand, and understanding the importance of branding. They’re a small business, so small business marketing is a necessity.
Those differences make the process of how to open a craft brewery more intensive in some ways, but well worth it. It’s a business you can pour your passion into. If you’re opening your own brewery, odds are you’ll lean toward a craft brewery.
"Key Takeaway: A brewery is a business you can pour passion into alongside every glass of beer you pour."
Frequently Asked Questions About Opening a Brewery
Learning how to open up a brewery comes with plenty of questions. Our answers to these frequently asked questions will give you further insight into the process of opening a brewery. When you start the journey to open a brewery, this information–and additional information from the BinWise blog–will help you along the way.
Is Owning a Brewery Profitable?
Yes, owning a brewery is profitable. The gross profit margin on different brews ranges between 74% and 92% in general. Yes, there are costs associated with opening and operating a brewery, but the profit potential is through the roof. It goes even higher when you consider the operational efficiency you can achieve, and what else you can sell.
The best way to boost the potential profit margin of your brewery is to open a taproom and offer snacks and even meals. Your menu types can depend on the types of beer you make. You can have seasonality in business in your brewery, with different beers at different times of the year. It’s best to do food pairing options–similar to a wine pairing–with your brews.
How Much Investment Is Needed to Open a Brewery?
The average investment you should secure for opening a brewery rests around $500,000, with a little wiggle room. The starting costs of a brewery can be as low as $250,000 or as high as several million dollars. $500,000 is a good amount to get you started, and you can budget further as your brewery business grows.
Is It Hard to Start a Brewing Company?
Starting a brewing company isn’t harder than starting other types of businesses, but it’s not easy. It’ll take money, passion, time, a strong business plan, employees and partners you rely on, and a love of beer. That’s a tall order, but with those factors, you can start your own brewery.
Can Anyone Start a Brewery?
Yes, anyone of legal drinking age can start a brewery. That typically applies to most businesses, although some can be started when you’re younger. Beyond the age factor, if you have the drive, funding, and plans to open up a brewery you can start a brewery.
What Equipment Do You Need to Start a Brewery?
The extensive list of equipment you need to start a brewery includes:
- A pilot system
- Brewing systems
- Fermentation tanks
- Brewing accessories
- A bottling system
- A heat source
- Safety equipment
- A kegging system
- Date labels
- A first aid kit of the correct size
- Bar rags
- Food grade cleaning supplies
- Restaurant POS system support
- Chemical safety data sheets
- Paper plates
- Table service essentials
- An oven range
- Ventilation systems
- Food prep surfaces
- Food prep equipment
- Cutting boards
- Mixing bowls
- Food processors
- Storage containers
- A kitchen display system
- An order management system
There’s only one item we left off this list. It’s less of an equipment item, and more of a product: your beer ingredients! Your ingredients will take up space on and in this equipment when you start your brewery.
Opening a Brewery: Brewing Up a Beer Business
Learning how to open up a brewery and following the steps can be a long process. If you’re looking for a lasting business with a unique selling proposition, it’s a good idea to dive into your brewery business plan. When you’re ready to open the doors, come back to BinWise. BinWise Pro, paired with the BinScan mobile app, eases the process to take inventory.