Since the dawn of the craft brewing revolution in the early 1990s, small-time breweries have exploded in popularity. As of 2014, there are at least 3,200 microbreweries and brew pubs spread around the United States. Last year alone, craft brewers produced 22.2 million barrels of beer and raked in $19.6 billion in revenue. Clearly, this is a trend that’s not going anywhere any time soon. You can cash in on the movement and build a business that’ll thrive for decades by launching your own craft brewery on the side.
Flesh Out the Business Plan
With a little ambition and planning, anyone can start a robust brewery that’s profitable more or less right out of the gate. First things first, figure out what kinds of beers you’d like to specialize in such as IPAs, lambics, stouts or lagers. Next, think about how you’ll produce your suds and whether you’re interested in selling the goods through a sit-down establishment, via other bars or through distributors. Finally, figure out how much product you’ll be realistically capable of cranking out at the outset.
Perfect the Beer Formulas
Even if you plan on hiring a brewmaster to handle day-to-day production, a familiarity with the ins and outs of brewing is a must. Get a few 5-gallon homebrew carboys and play around with recipes until you hit on four or five that are perfect. Use your friends and family as a sounding board by handing out free samples. You’ll want to make sure that your secret beer recipes are marketable before you get started. The Brewers Association is a terrific educational resource to lean on.
Obtain the Necessary Funds
Regardless of the size and scope of your operation, starting a brewery is rarely cheap. A nanobrewery that brews fewer than three barrels at a time should cost about $50,000 to establish. A 10-barrel brewery will run at least $250,000 at the outset. Setting up a bottling and packaging line will cost even more. You can use traditional credit union loans, other loans or even Kickstarter campaigns. Be sure to establish a healthy line of credit to deal with unforeseen expenses.
Find a Location & Set Up Shop
Even if you have free space in your garage, renting commercial real estate is wise. A good location has adequate floor drainage, high ceilings and reliable HVAC. If you plan on operating a brewpub or growler-filling station, you’ll need to factor in retail space as well. As for the necessary equipment, you’ll need an all-in-one brewing system that can yield at least one barrel or at least 32 gallons per batch. This will cost you at least $4,000. You’ll also need plenty of refrigeration gear.
Secure Discounts on Bulk Supplies
Before you go into full production mode, it makes sense to figure out where you’ll be getting replacement parts and input materials. Ensure that you’ve got a steady supply of grains, yeast and hops by signing long-term contracts with merchants. You can either find those vendors online or rely on local growers if you’re taking the organic route. A considerable stockpile of cleaning supplies, food-grade storage bins and glassware is a must. Use an online directory for commercial brewing supplies to find quality companies.
Get the Paperwork Sorted
Before you can sell your magical brews to the public, there are a number of legal hoops to jump through. First things first, form an LLC or other suitable corporate entity for your business and get EINs for any employees you’ll be hiring. Contact the local state liquor authorities to find out what kinds of licenses you’ll need to do business. Trademark the name of your brewery as well as any specific beers that you create. Finally, get a license from the Alcohol and Tobacco Trade and Tax Bureau.
Make a Splash at Launch Time
Planning a topnotch debut party for your new brewery is a lot easier if you’ve got a taproom or bar attached. Even if you don’t, you can still host a great event at any location provided you secure the necessary permits. Get a graphic designer to whip up some great posters and artwork to promote your launch party. Use social media and local beer community networks to get the word out. Lastly, make it clear that you’re giving away free beer and you’re sure to see a solid turnout.
Market the Enterprise Wisely
Generally speaking, great beer crafted by small-scale brewers tends to sell itself. Still, it’s best to take a proactive approach to branding, marketing and general outreach. Having your label displayed in as many places as possible helps. Sponsor a few community organizations or events and give out free promotional items like pint glasses with your brewery name emblazoned on them. While you’re at it, use viral content marketing via Twitter, Facebook and YouTube to generate Internet buzz and let the beer lover community do the work for you.
Taking It to the Next Level
While your bread and butter will always be selling beer, you can easily expand your revenue streams by branching out. Create a physical or online gift shop where you can sell t-shirts, commemorative mugs and other beer-related accessories. You could also make extra money on the side by holding classes for first-time home brewers. You might even make money by planning and hosting local beer festivals. There’s no end to the profit potential of a small-time brewery if you use your imagination.