How to Start a Brewery? Brewery Business Checklist

Brewing beer often begins with a home-brewing kit and slowly ferments into a passionate hobby. Being able to convert this hobby into a career is an intoxicating prospect for many, but it takes far more than hopes and dreams to bring it to a head. In order to professionally brew beer, and just as with any business venture, you need to be passionate about it without forgetting the bottom line. 

Owning and operating a brewery undoubtedly has its fun parts, but there are steps you must take and bitter challenges you will face. When running a business revolving around alcohol production, you need to be aware of federal and state regulations that take many forms, from local laws and ordinances to get the required licenses.

If you take these steps with care, you put yourself in a great position to master the details of opening and running a brewery.

1. Master Your Magical Elixirs 

First and foremost, you need to spend time concocting some unique brews. Beer consumers likely already have their preferences, so you should know how to make popular standards like pilsners and lagers. Knowing them will also help you gain financial backing, as it shows potential investors you’re realistic and plan to sell a stable product. 

You also need to know not only your market and competition, but you’ll have to explain what makes your brews special and different. Beyond perfecting the standard beers, it’s a good idea to see what specialty varieties have historically sold well in the market. For instance, pumpkin ale may be selling well at the moment, or perhaps it sells consistently during a particular season. So why not try brewing your own pumpkin brew to capitalize on a trend? Also, to distinguish yourself from the competition, consider bringing a unique beer to market that only your brewery can make. Just remember to keep your creations within reason, as successful beers are successful because they cater to market tastes. With that in mind, do your homework and find out what brews have failed and why. 

2. Build Some Buzz for Your Brews 

Pun permitting, it is essential to generate good marketing buzz and build a fan base before your doors open. In fact, federal law prohibits you from selling homebrewed beer. This gives you a great opportunity to build word-of-mouth following before opening a real brewery. 

The beer business thrives heavily on word-of-mouth, so start building your following now. Take advantage of family, friends and social media to get the ball rolling. Provide samples to influential online bloggers to help build some online cachet. Plan and promote beer-sampling events in the region you plan on opening your brewery by contacting local stores or restaurants that cater to your market. If you build your following now, your beer lovers will come when you’re ready to open your brewery. 

3. Learn the Business 

Follow the lead of other successful breweries. How did they get their start? How do they maintain their success? You can take tours of other breweries in your region and study how they operate, or simply read their stories online by searching on Google or reading the “About Us” sections on their websites. You should also purchase books on the brewery industry written by founders and experts. 

It’s also never too early to start conversations with restaurant owners, publicans and liquor-store buyers in order to get an idea of how you should price your product. Profit margins on beer vary according to how it’s sold, whether it’s through a tap or in a bottle. You might be able to sell your beer directly from the brewery and increase your profits, but this is considered illegal in some jurisdictions. As always, check local laws in your jurisdiction for any potential restrictions that might curb your ambitions. 

4. Know the Culture 

As someone who is already passionate about brewing beer, you will most likely already have a good foothold in the beer culture of your local area or state. You should know who your competitors would be, why they are or are not successful, and how you fit within this ecosystem. People want something to connect to, and culture gives them a sense of ownership, community and pride. The most marketable aspect of creating a culture with your brewery is that people love to introduce others to the culture they’ve discovered. This means more clientele and repeat customers.  

5. Take Care of the Basics 

Now that you’ve laid the groundwork and learned the business, you need to address the basics of starting a business. These include picking a company name, creating a business plan, securing startup capital, forming your entity and filing a trademark for your brewery name. Additionally, as new breweries launch all the time, the competition for names of individual beers is cutthroat. Therefore, you should also file trademarks for each of your beers as soon as you’ve selected their names and logos. 

6. Lease a Location 

Breweries are different than wineries. Wine is routinely judged based on which region it comes from, but beer doesn’t live in the past. So when picking a location for your brewery, there is no defined territory. This is advantageous because you can choose a location where you won’t be losing clientele to your competitors. When considering your location, you want to be accessible to your customers, whether you’re making retail sales to walk-in customers or wholesaling to restaurants and bars. Lastly, in order to complete the licensing process, you will likely need to first have your location secured. 

7. Get the Equipment 

This is where it can get pricey. Gone are the days when home-brewing kits will suffice. Brewery-grade equipment can be extremely expensive, so start with buying high-end, but pre-owned microbrewery equipment. The essentials include kettles, kegs, steam-operated brewing systems, a fermenting machine, and hot and cold storage tanks. There are websites where you can purchase used equipment. Just make sure to account for every final detail when purchasing equipment, especially used equipment. This checklist for purchasing used tanks is a great example. 

8. Lock Down Solid Suppliers 

Finding trustworthy, punctual and reasonably priced suppliers is pivotal to avoiding headaches and financial losses. Suppliers in the brewing industry are vendors who will deliver hops, malt, liquor treatments, adjuncts, labels, chemicals, etc. The Brewers Association provides a list of all the suppliers you could ask for.

9. Protect Your Recipe 

Though it’s suggested to have any employee that is integral to the success of your company sign an agreement for a fixed term of employment, it is particularly crucial to enforce a non-compete and non-disclosure agreement upon your head brewer. That person singlehandedly holds the recipe to your success. If they leave without signing a non-compete agreement, they can share your recipe, which will do way more than ruin your batch. The head brewer’s agreement (and for good measure, everyone else’s) should state that the beer formulae are “Trade Secrets.” 

10. Apply With the TTB, State and Local Authorities 

The Alcohol and Tobacco Trade and Tax Bureau (TTB) requires all breweries to apply for a license with them. Simply put, without TTB approval, you cannot operate. New breweries must submit Brewer’s Notice and Brewer’s Bond, and the TTB will then need to authorize everything about your operations, including beer labels, recipes and almost the entire spectrum of how you will run your business. This is a long and unavoidable process that typically takes between 6 and 12 months. Beyond the TTB, a brewery needs to apply for a state wholesaler’s license as well as all licenses required by the municipality the brewery will operate in. 

No one says it’ll be easy. It’ll likely take time and a lot of hard work. But by following these 10 steps with just the right amount of determination, you can take your brewing aspirations from flat to full-bodied. When you do get your operation running, remember, start small and only expand with the demand. Craft breweries typically run on self-distribution for the first few years to gain proper representation and placement, and only hand their product over to major distributors once the demand increases. So roll up your sleeves, throw some elbow grease and grist into it, and get drunk on the profits.


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