How much would it cost to start a brewery?

Just wondering if anyone has estimates on what it would take to start a brewery? This would be everything except the realestate/building needed. So, all the equipment including the stuff needed to bottle and keg along with all the equipment needed to brew.

How much start up capital would a person need to turn this into a reality?

Somewhere between $50,000 and $5 million.

Is this a micro or a brewpub? What's the system capacity, and the annual production capacity? What state - do you need a full liquor license?

Micro. Say something like Flying Dog brewery in Frederick, Md or Mountaineer Brewing Company in Martinsburg, WV.

If you are smart about picking a location with cheap available labor and easy to get trucks in and out, you might be able to start a place that can grow to Flying Dog size for something like a quarter million, this is assuming used equipment. You would be starting with something around 30 barrel brew length and with room to add more tanks as you grow.

In this lending environment, expect to have 20% of that lined up as equity capital before you even try to talk to a bank.

And how long does it take a brewery of that size to create a batch of beer? Is it the same as homebrewing, or is there equipment that can speed up the process?

The same processes that are available to homebrewers are available to craft brewers of that size. Brew day will be longer as it obviously takes longer to lauter and bring to a boil those quantities. If you are brewing you can brew two batches in a very long day. If you can brew around the clock you can get 6-8 per day. Then you have to expand.

Craft brewers are more likely to take advantage of fermentation temperature control, cold conditioning, fining, filtration, and force carbing which can speed up the time from brewday to market.

cokronk said:

And how long does it take a brewery of that size to create a batch of beer? Is it the same as homebrewing, or is there equipment that can speed up the process?

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First thing.. partner with someone who intimately knows the processes involved... That way, you'll reduce the number of wrong turns....

I remember Vinnie Cilurzo of Russian River saying 1.5 million a few years ago, so I'll say 3 million, today. Botteling lines run $25,000 and up, Brewing equipment another $65,000 and up depending on size, Fermentation and bright tanks another $3,000 each, then there are bottles, labels, cardboard shipping boxes and sixpack carriers, brewery swag, utility costs, travel and costs for professional organizations, clubs, GABF, etc. $30,000 and office overhead, add another $60,000 or more.

You should have enough capitol to run your brewery, pay utilities and wages for two years without any profit earned, until you can get name recognition in the industry.

I often thought I could do it for $250,000, but the enterprise would have been a Nano, too small for a production brewery and without any more "seed" money I'd be stuck at maxed out production with no hope of expansion without floating a loan and working for the bank.

Good Luck!

cokronk said:

Micro. Say something like Flying Dog brewery in Frederick, Md or Mountaineer Brewing Company in Martinsburg, WV.

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So maybe 10,000 bbl/year to start out? I'd say $1 million, minimum.

remilard said:

In this lending environment, expect to have 20% of that lined up as equity capital before you even try to talk to a bank.

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That would be very generous. We were looking at 25% up front, and that was before the crash.

Are brewpubs generally the cheapest way to go? Less licenses and equipment needed?
(Sorry to hijack the thread)

So how would everyone raise that kind of money? Short of having uber rich parents or already being a millionaire, I don't see anyone having 1mil-3mil to drop on opening a brewery.

Investors, bank loans, etc...?

cokronk said:

So how would everyone raise that kind of money? Short of having uber rich parents or already being a millionaire, I don't see anyone having 1mil-3mil to drop on opening a brewery.

Investors, bank loans, etc...?

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A good business plan may attract some investors. Bank loans if you are willing to put up everything you own as collateral and have a fat down payment.

Well, to blow a good idea, I was thinking that kickstarter may be worth a chance.

I have a local brewery that's doing a good business. I might see if I can go hang out with those guys over a few weekends. I've already talked to the owner and head brewer, his right hand man, and his right hand man and they all seem like good people.

Kurtamous said:

Are brewpubs generally the cheapest way to go? Less licenses and equipment needed?
(Sorry to hijack the thread)

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I have to think that they are, but then you're generally stuck needing to deal with a restaurant and a brewery. I have no interest in dealing with food, but would be interested in just the brewing aspect. Also, less money to be made in a brewpub because you're customers all have to walk into the place as opposed to being able to bottle and distribute.

year and years of you working the job you hate and are trying to get away from and saving pennies for your dream. Then investors.

Not to be a smart ass, but asking a question like "How much does it cost to start a brewery?" is like asking "how much is a car?" or "how many is a duck?"

This is a brewery


and so is this


There's a lot of space in between.. I would imagine that most microbreweries start with the latter while dreaming of the former, and work in that direction a step at a time.. gaining knowledge, customers, recognition, equipment, and skill along the way..

Just like a plant.. It starts as a seed.. then you plant it, water it, nourish it, prune it, and do other things to foster it's growth... business ventures are the same way...

bruin_ale said:

I have to think that they are, but then you're generally stuck needing to deal with a restaurant and a brewery. I have no interest in dealing with food, but would be interested in just the brewing aspect. Also, less money to be made in a brewpub because you're customers all have to walk into the place as opposed to being able to bottle and distribute.

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Or a brewery with a restaurant on premises. Of course, the restaurant would have to draw business on it's own. But that's sort of the plan. But I guess Dogfish Head does have off premises ale houses that server it's beer and food.

r8rphan said:

Not to be a smart ass, but asking a question like "How much does it cost to start a brewery?" is like asking "how much is a car?" or "how many is a duck?"

This is a brewery

and so is this

There's a lot of space in between.. I would imagine that most microbreweries start with the latter while dreaming of the former, and work in that direction a step at a time.. gaining knowledge, customers, recognition, equipment, and skill along the way..

Just like a plant.. It starts as a seed.. then you plant it, water it, nourish it, prune it, and do other things to foster it's growth... business ventures are the same way...

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I did mention a size.

Financing can be done a lot of ways but it is extremely difficult to get any financing if you don't have the ability to put a significant chunk of your own money where your mouth is.

If you have a home with reasonable equity you may be able to pledge your home as collateral or take out a second mortgage against it, although you can see the obvious risks involved. The same goes for retirement assets. You can often make withdrawals but not only are you depleting your retirement assets you are likely paying substantial income tax and penalties for taking it out (depending on your age).

Once you can pool together a good chunk of your business needs from yourself, family, friends and any other early investors, you can either try to find more local investors or head to a bank or the SBA for a loan. There are pros and cons to both avenues.

Not only do you need the money for the business, but you will also need personal funds to pay for your living expenses.

Another thing to keep in mind is that you'll need enough capital on hand to run the business - with no revenue stream - for the month or so from startup until you sell your first case of beer. For a medium-size micro like yours, that will easily be six figures.

Plus the fact that in these times banks are still really terrified to make loans. Nobody is borrowing nowadays, much less doing startups.

I just finished a business plan for a 80-100 seat brew pub with a small kitchen and a 5 bbl brew house on premise. We came up with a minimum of $550,000-750,000. This did not include bottling lines. We were planning on brewing and selling the beer on premise. No distribution license which is another huge headache. In Ohio you must have a distributor. Which eats up a ton of profits. The licensing you need in Ohio is an A1 and an A1A license. A1 allows you to make beer the A1A allows you to serve that beer on the same premises. Each of these are approx $3950 each per year. After talking with banks...they want you to have a minimum of 20-25% capital up front and have some type of collateral for the rest. You can leverage the price of the equipment but that doesn't cover it all. I would have to put my house up against the business but I didn't have enough equity in my home yet. So I was looking at borrowing money from family and friends which was very risky for me. I didn't want to put all my friends and families money at risk. It's a tough business to get into.....it costs a lot, theres a lot of risk and a crap load of work...expect to work 80-90 a week for the next 5 years.

buckeyebrewer said:

It's a tough business to get into.....it costs a lot, theres a lot of risk and a crap load of work...expect to work 80-90 a week for the next 5 years.

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Boo to that shyte, I don't even work that much in a month. I'll stick with homebrewing.

If I person were to have land and such, are there regulations stopping some one from setting up shop in say in a large building they build and pay for themselves? I mean, sure, you'd have to get all the licenses and permits, but if you were just to start expanding your brewery operations from say, doing several (3-4) ten gallon batches in a week to be able to do 10 10 gallon batches in a week? I know in VA at one point, you didn't need to deal with a distributor, then you did, and now you may not.

I was talking to a person that has brewed beer for a long time and him and his wife make and sell mead.

cokronk said:

I mean, sure, you'd have to get all the licenses and permits, but if you were just to start expanding your brewery operations from say, doing several (3-4) ten gallon batches in a week to be able to do 10 10 gallon batches in a week? I know in VA at one point, you didn't need to deal with a distributor, then you did, and now you may not.

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Sure, but on that scale you wouldn't be able to pay a brewer, let alone amortize your startup costs. Brewing and packaging ten batches a week would be, conservatively, 60 man-hours. At $30 a case, your *gross* income would be $1200 a week. By the time you paid the bills, you'd be able to pay a single employee maybe $8 an hour at the absolute most.

cokronk said:

I was talking to a person that has brewed beer for a long time and him and his wife make and sell mead.

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If he doesn't have a liquor license, he's committing a felony, which probably isn't the best way to start a business.

cokronk said:

If I person were to have land and such, are there regulations stopping some one from setting up shop in say in a large building they build and pay for themselves? I mean, sure, you'd have to get all the licenses and permits...

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Owning the land and building would just reduce the amount of start up capital you need. But you would still need to outfit the building to be suitable for use as a brewery. And you would have to check if the land (assuming that you own it already) is zoned for commercial (I think thats the one) use.

The only businesses that have a higher failure rate than retail, are restaurants.. I would classify a pub as a restaurant, only with more regulation and higher fees...

Not an easy industry to be successful in, especially in this economy....

The 'best' way, short of winning the lottery or having a rich uncle IMO, would be to just keep your day job and slowly expand your home brewing operation...

In some states, you can get around all the licensing, inspections, regulations, zoning and what not, by starting a 'private dinner club'... and it's even less restrictive if it's barter based...

If you're dead set on brewing for profit, that's the direction I would go... That way, you can 'support' yourself with your day job, then devote your extra time (which you'd be spending running a business anyways), just trying to break even as you 'expand'...

It's when you have to 'live off of your hobby' that it becomes tough and the fun disappears... better to ease into that if you can...

The down side is that once you start getting a little demand going, you'll probably spend all your brewing energy meeting that demand, then you'll be wistfully watching pallets of beer leaving your house, wishing there was some left for 'you'...

BTW, bottling is not a necessity in the beginning stages.. you can sell 'kegs' to restaurants and bars and pubs... as well as do the booth thing at area events.. even with cornys... The necessity is 'customers'.. and good book keeping habits....

Okay interesting discussion I didn't see addressed an issue that I myself thought of. I don't want a "brewery". I want some
Equipment and brew enough to support it. I make 50k and want to sustain that with me and maybe a friend doing it. It seems that with minimal equipment all expenses and everything and maintain a good income could be done but where would I be looking? I've seen used kettles and stuff from small breweries that go for like 3000, so if I were able to pay the 3200 a year license in my state and go from there and not be destitute I'd be happy (hell if I could afford the license and just make it for friends I'd do that)

I look at it like this... Every time I do a 10G batch, I save 'at least' $100 over what it would cost me to buy craft beer (that I would not enjoy as much) from the store...

Equipment gets paid for pretty fast like that..

to the OP.....Just go for it!

Make what you want for yourself and make it happed. as Yoda says...there is only DO no TRY.
hah....druck!
I want to open my own brewery and am close to doing so, BUT when I'm ready I"m going In All in or nothing!

a10t2 said:

Sure, but on that scale you wouldn't be able to pay a brewer, let alone amortize your startup costs. Brewing and packaging ten batches a week would be, conservatively, 60 man-hours. At $30 a case, your *gross* income would be $1200 a week. By the time you paid the bills, you'd be able to pay a single employee maybe $8 an hour at the absolute most.



If he doesn't have a liquor license, he's committing a felony, which probably isn't the best way to start a business.

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He does, he's totally legit. I think he even mentioned teaching brewing courses at the local college.

iparks81 said:

to the OP.....Just go for it!

Make what you want for yourself and make it happed. as Yoda says...there is only DO no TRY.
hah....druck!
I want to open my own brewery and am close to doing so, BUT when I'm ready I"m going In All in or nothing!

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I just started brewing, so it's not something I'm looking to do in the next year, or maybe ever. Plus my current part time job is my photography business. That can be much less work and much less stress for much more profit than brewing and besides the cost of pro gear, I don't need a specific building and even the cost of my gear is a small fraction of what I would pay to start up a brewery. I think at last calculation I have spent just over $20,000 on gear and that's counting computers and other non photography specific devices.

It would be awesome to do, but I want to learn first and I'd definitely be partnering with people. I'd need some one to keep the books. That's one thing I can do, but I'm not the best at.

cokronk said:

I'd need some one to keep the books. That's one thing I can do, but I'm not the best at.

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Every successful small businessman I've ever known, has had a good wife working with him in his business.. Business is way better if it can be done as a team with people who are all on the same page and all committed to it's success...

That's always been my achilles heel.. the lack of a good wife/book keeper, that my friends and competitors have enjoyed... I absolutely 'suck' at the paperwork side, and would rather get a root canal than do that stuff...

The wives like being able to work at home with the kids, and the husbands are free to concentrate on the production part of the operation.... One managing the office/business side of things, and the other managing the field/sales side... Teamwork!

r8rphan said:

Every successful small businessman I've ever known, has had a good wife working with him in his business.. Business is way better if it can be done as a team with people who are all on the same page and all committed to it's success...

That's always been my achilles heel.. the lack of a good wife/book keeper, that my friends and competitors have enjoyed... I absolutely 'suck' at the paperwork side, and would rather get a root canal than do that stuff...

The wives like being able to work at home with the kids, and the husbands are free to concentrate on the production part of the operation.... One managing the office/business side of things, and the other managing the field/sales side... Teamwork!

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So are you saying you have a bad wife?

cokronk said:

So are you saying you have a bad wife?

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No, just having trouble teaching the dogs to answer the phone and use the computer...

I have had some pretty screwed up girlfriends/fiances though.. That's why they never became wifes... Still holding out for a 'good one'

ahh, this thread was a pretty good read. I wish there were more information about the topic, but I guess that is what google is for.

r8rphan said:

Every successful small businessman I've ever known, has had a good wife working with him in his business.. Business is way better if it can be done as a team with people who are all on the same page and all committed to it's success...

That's always been my achilles heel.. the lack of a good wife/book keeper, that my friends and competitors have enjoyed... I absolutely 'suck' at the paperwork side, and would rather get a root canal than do that stuff...

The wives like being able to work at home with the kids, and the husbands are free to concentrate on the production part of the operation.... One managing the office/business side of things, and the other managing the field/sales side... Teamwork!

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I know this is an old thread but since it has been brought back up... I thought the main reason to hire your wife was the income split so that your total houshold income is taxed at a lower rate, i.e. you pay less tax because instead of one person earning lots you have 2 seperate people earning less.

mattd2 said:

I know this is an old thread but since it has been brought back up... I thought the main reason to hire your wife was the income split so that your total houshold income is taxed at a lower rate, i.e. you pay less tax because instead of one person earning lots you have 2 seperate people earning less.

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Not necessarily. When the income comes back together at tax time it generally doesn't matter whether it was earned by one or two people. However, there are some exceptions.

ReverseApacheMaster said:

Not necessarily. When the income comes back together at tax time it generally doesn't matter whether it was earned by one or two people. However, there are some exceptions.

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What is your tax system based on household income? Ours in NZ is personal tax so this is what a lot of small companies do.

Just to chime in on the original topic. On the less expensive side a brewpub starting with an existing restaurant should be less than 100k with a nice 7 bbl system. If you are doing a small packaging brewery with a tasting room that could also be less than 100k, again with a 7BBL system. I've done both so I know it is possible. Friends just opened Two Rascals Brewing in Montrose, Colorado and they spent 80k on their entire brewery. So for a brewpub find a restaurant for lease. If you are opening a packaging brewery, get the landlord to build out your restrooms and plumbing. After that you won't spend that much money.

I believe that I heard Jamil state on one of the Brew Strong episodes that it was a bout a $250k start up cost for Heretic Brewing.

Now bear in mind his situation is a bit different than most of us schmucks with the dream. He was already the most established and decorated homebrewer in the nation and I'm sure getting investors and his distribution set up was far easier that it would be fro the majority of us.

Six dollars.