When it comes to starting a brewery, you need to have the right funds. This guide breaks down the average cost to start a brewery.
Have you got a taste for brewing craft beer? Are you thinking of opening your own brewery business? There’s nothing like starting your own company, but it’s not all straightforward.
Before you turn your passion into a profession and invest in a startup craft brewery, it’s good to learn about how much it will cost and how you can finance it. Read on to explore how much it will cost to start a brewery and what you need to fund your enterprise.
Construction and Building Costs
The cost of starting a brewery depends largely on the construction and building costs associated with the process. Building costs can range widely, but may include the cost of land, building permits, labor, equipment, and even environmental considerations.
Depending on the size and complexity of a brewery, a single location can cost as much as several million dollars. Smaller breweries may choose to forego a dedicated brewery building and instead rent space or take advantage of collaborative brewing options.
Depending on the size and scope of the brewery, the equipment costs like these beer cans for sale can range from tens of thousands to millions of dollars. For example, for a two-barrel brewery, the total cost, including building and equipment costs, can reach around $70,000.
To save money, some breweries opt for used equipment or lease other types of brewing equipment, which can significantly reduce costs. For a larger brewery, like a 50-barrel brewery, costs can reach up to $950,000, with $400,000 being the approximate cost of equipment alone.
Licensing and Permit Fees
The cost of licensing and permits can greatly vary from state to state, and even from city to city. For example, acquiring a beer manufacturer’s license could cost thousands of dollars depending on the city or state you are in.
In addition, breweries will need to apply for federal, state, and local permits and licenses in order to operate legally. Local brewers might even need additional authorizations and permits in order to serve their beer.
Capital to Reinvest Back Into the Business
Depending on the size and scope of the brewery, the initial capital needed can range from a few thousand dollars to hundreds of thousands of dollars. This is in addition to the ongoing costs of ingredients, labor, suppliers, leases, repairs, maintenance, and taxes, just to name a few.
As the brewery progresses and needs to expand, it can require even more capital to reinvest back into the business to keep up with market trends and demand. Without proper investments, a brewery may not be able to sustain its momentum and could eventually fail.
Operational costs may include the cost of hiring key staff members, such as a brew master; the cost of ingredients; and costs associated with utilities, business insurance, and sales taxes.
If the brewery is located in an area where licensing fees are required, these must also be accounted for. Taken together, these costs can quickly add up, and starting a brewery can be a costly undertaking.
Learn How Much It Would Cost to Start a Brewery
The cost to start a brewery can vary greatly depending on size and setup. While it’s expensive up front, the potential to turn a profit is there with the right plan and a good product.
If you’re interested in starting your own brewery, research your options, create an action plan, and jump in! The breweries you love today were started just like yours.
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