Cost to start Nano Brewery?

I Was trying to figure out the cost to start a nano brewery. Anyone know?

How big of batches does a nano brewery usually do? 50 gallon?

Cost of boil kettles? Fermentors?

I know there are permit and rental fees. Lucky for me I know the people that run the permits office in my county. So I think I could pull some strings to get those permits.

I was doing an amateur search for kettle and fermentors. Three 50 gallon kettles would be about $675 a piece and depending on which way I went with the fermentors they would range from $1000 to $1500 for a 50 gallon fermentors.

I was just thinking if I put away the $3000 I have in a trust fund or whatever kind of fund my friend told me about, that increases at 7% a year for the next 23 years. It would be a little over $12,000 Then when I'm 50 I could start my own nano brewery.

FYI, I'm joining the military so I figure when I retire from there I could start a nano brewery.

Just I thought.

Feel free to tell me it's gonna cost a hell of a lot more. Or just throw me some words of wisdom.

I can't comment on the cost of a nano brewery, but my profession is in the financial world and the purchasing power of $12,000 today is not going to be the same in 27 years. I am all for putting money away into investments (I would be weary of a fund that guarantees 7% annual return for 23 years) but you have to realize that inflation/the economy will play a part in your plan.

Just trying to help a fellow brewer out.

Besides local county permits you need to comply with brewing state & fed req'ts to get the appropriate licenses, and then taxes, etc.
It apparently is a lot of paperwork and probably a $1000 or more a year in fees (just an estimate).

The Pale Horse said:

I can't comment on the cost of a nano brewery, but my profession is in the financial world and the purchasing power of $12,000 today is not going to be the same in 27 years. I am all for putting money away into investments (I would be weary of a fund that guarantees 7% annual return for 23 years) but you have to realize that inflation/the economy will play a part in your plan.

Just trying to help a fellow brewer out.

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My wife just got into the financial game. She told me about the 7% annual return. So......yes I am weary.

I just read an article on probrewer.com that said its gonna take a lot more than that.

I just found a nano brewery 6 miles from my house. Hopefully I can get some insight from them.

Yeah, someone local that has done the deed is the best possible source.

Kmcogar said:

My wife just got into the financial game. She told me about the 7% annual return. So......yes I am weary.

I just read an article on probrewer.com that said its gonna take a lot more than that.

I just found a nano brewery 6 miles from my house. Hopefully I can get some insight from them.

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If you have a Nano 6 mi from your house, you may be better to collaborate with him vs starting a new. One reason is the competition and marketing is better with 2 vs 1. While 50 small micro nano's sounds cool, 15 years from now will weed out the ones who just want to play Brewer.

PS, guys who have started Nano's on here previously have stated 2 BBL Minimum, 7 is optimal to start. For a good read go to HBHoss. He started small (Like 10 gallon small) and he has a 7 BBL system he got from another Nano that WENT OUT OF Business. Still hasn't gotten to the 7 BBL system after 3 years. But he was starting low cost, and has only recently started to really put some serious $$$ down.

https://www.homebrewtalk.com/f51/nanobrewery-build-137400/

For the licensing and permits side of costs ...
Not sure about Maryland ... but here in Michigan it would look like this ...

Even though you might only be running 6 barrels (or whatnot) as a nanobrewery, under Michigan law you’d be a “Microbrewery” ... which is for up to 30,000 gallons of production per year.

The regulatory body at the State level, the Michigan Liquor Control Commission (LCC), is what provides the retail/wholesale license, and as far as production the Federal government requires a TTB License (Tax & Trade Bureau).

The background check requires fingerprinting (and costs) and be submitted to the LCC.
(If the local municipality requires local police input, then that may also be required.)

If the LCC’s investigator assigned to your case finds out that the municipality requires it ... then both the Health Department (usually from the County) and often the local Building department have to sign off on the building and your setup and provide that to the LCC.

Changes or modifications from the Health Department and the Building Department approvals add up to more costs ... sometimes significant costs ... and sometimes modifications (costs) that seem to be quite arbitrary depending on which Health Department representative and Building Department rep’s little fiefdom you’ve landed in.

Oh, and in Michigan you actually have to have a Food Service License with an associated Food Handler Certification (and pay for any associated course and textbook).

Locally the City Council might be involved ... who may arbitrarily treat your request as if they think they are reviewing for a Class C (because you have the ability to sell samples in Michigan due to recently loosened regulations allowing you to actually “sell samples” ... btw: a loophole big enough to drive a beer truck through) and can be very sticky about things like whether your operations would cause them to exceed the number of alcohol sellers they allow in the municipality etc. Zoning of course also affects all this.

You must apply for the required permits from the Michigan State Department of Agriculture.

Then when ALL of the reports, paperwork, documentation, fees and approvals are in the hands of the Liquor Control Commission, only THEN will they process your Application for License.

Other assorted items in Michigan...

Can not be w/in 500 feet or church or school without special permission
Criminal background checks ... alcohol records are not good ... other than that, it is somewhat arbitrary ... offense, how long ago, and whether on parole/probation, total offenses on record etc are all factors.
Btw, any Principal of 10% or more must be fingerprinted.

But back to your question about COSTS ... of course, pretty much all of the above have associated fees and costs ...
I don’t have a list of what the exact fees and costs are in specific, but the above is the framework that creates your fees, costs for licensure for a Microbrewery (or "Small Winemaker") in Michigan in any case.
Maryland could be similar.

Kind of reviving an old(er) thread but I would love to do this too. There isn't anything like this in my community. I found this blog today from Hess, http://hessbrewing.blogspot.com/2009/12/complete-guide-to-opening-brewery.html

Another example of a cool Nano that I am aware of is Worth brewing company. I think they were featured on the third or fourth BrewingTV episodes. I just checked their website recently. They are brewing on a ten gallon Sabco and have been doing so since 2005. Wonder what kind of living he makes - I think it is a husband/wife team.

Be cool to see several mom and pop type Nano-breweries in every town! My $.02

It is very hard to make a "living" just on a Nano. Run the math and look at your COGS (Cost of Goods Sold), your product rate and your selling price. You can make a small profit, but you should plan on a second source of income. It just is very difficult to generate enough cash flow with a Nano to show a decent profit. The hardest part is getting the sales end, since it is tough to get a distributor to take on a Nano.

There is a dealer who sells nano-brewery equipment - you can find them with just a little google searching. They have an interesting write-up about starting small. In a nutshell, they say they will sell you equipment that's smaller than 7 barrels, and it's less expensive to buy it used. Here's why - EVERY brewery that starts with less than 7 barrels either goes out of business and sells their equipment, or they upgrade quickly to something larger. Good food for thought.

By the way, if you look at an average rate of return on investment from 1900 to today (this includes the Great Depression) it's over 7%. Clearly you can't expect that in any single year, or even a couple of years. But it's certainly a reasonable goal over 20 years.

From what I understand there are two basic brewery models. One is a production brewery and the other is a brewpub. What I would think would make sense is the latter. I haven't crunched numbers yet. I am just starting work on a business plan for a nano brewpub that may or may not ever actually open. Once I get a more concrete idea of what is viable or not I will decide. Of course just like all the other brewing "tire kickers" out there what appeals to me is the relatively small start-up cost of a nano brewpub. Just real simple calculations using the Worth Brewing Company as a model he says he produces 67 barrels per year. If all that were sold at his pub in pints at $4/pint that is $66,464 in beer sales. This is on a ten gallon Sabco. Even a one barrel brew house would triple the production so now we're talking about $198,000 in sales at $4/pint. He is open three nights a week but brews between 200-250 batches of beer per year, so that is a lot of brewing for one guy with a "real job" on the side. Not saying he has a real job on the side, but a lot of folks tend to remark that you can only do a nano if you actually have a real job on the side. I know there are expenses of course that need to be figured in so it's not all profit.

I could be see how a one man brewpub operation on a three-barrel system could be profitable or at least viable. We're talking close to $600,000 in beer sales at $4/pint. Not saying it wouldn't be hard work and that there are not a lot of other numbers to crunch, etc., but I could see my town really eating this up (drinking it up) if a nano brewpub were to open up especially in the right location.

For a more positive spin on nano viability check out https://www.homebrewtalk.com/f14/micro-pico-nano-brewing-systems-350723/

New; if you work that $600k out to pints per hour (350 days @ 12hr./day) it comes to 35 pints per hour. That is pushing a lot of beer through a brewpub. And you would be working 12 hours per day; oops, guess you have to hire a bar tender to cover while you are brewing. Also remember that your costs will be pretty high because of the small scale you will be buying ingredients at. Make sure to figure in your federal, state and local taxes and your dram shop insurance.

Yeah I hear ya. I worked it out to 411 pints per day 365 days/year after my last post. That's a lot of serving, glass washing, etc. Just got a little excited there.

It would be cool to figure out how to make a nano pub work. I think I might be able to convince my wife to work for free. At least she is almost done with an education in accounting, so there's my (our) accountant, server, assistant manager, etc.

The kids - we'll just farm them out to every babysitter in town until they barely know who we are anymore.

Seriously though the cost of living here is super high compared to Iowa so the comparison to Worth is sort of apples to oranges. We'd have pay at least one of us fairly well to continue our less than extravagant lifestyle here.

Cromwell said:

There is a dealer who sells nano-brewery equipment - you can find them with just a little google searching. They have an interesting write-up about starting small. In a nutshell, they say they will sell you equipment that's smaller than 7 barrels, and it's less expensive to buy it used. Here's why - EVERY brewery that starts with less than 7 barrels either goes out of business and sells their equipment, or they upgrade quickly to something larger. Good food for thought.

Click to expand...

Not going to get into the cost question, or a debate on nanos, but that guy clearly just wants to sell bigger systems because small one's aren't as profitable.

Nanos just haven't been around long enough for that many to have failed. In fact, I can't think of a single 3bbl brewer that has packed it up. People who upgrade typically keep their system for pilot or small-batch brewing.

On top of that, most of his assumptions about the Nano model are wrong. The nano has two big things going for it: low barrier to entry and the ability to sell 100% of your beer at retail thanks to tasting room laws. Selling 110 pints at $4 apiece is much better than selling your 1/2 bbls for $150.