Choose the Right Brewery Size for Your Business

Building a brewery becomes real the moment you write it down. The steps you take next determine the success or struggles of your venture.

Building a brewery is a viable, achievable undertaking. Choosing the right size and business model is key to seeing the brewery succeed and profitability within reach. State laws have historic flexibility and the premium beer market is strong. Set your budget, build your model and execute with detail.

We’ll go over a range of possibilities, discussing the benefits and drawbacks of the different models. In the end, you may have found a starting point for your next step.

3 Categories: Nano, Micro/Taproom, and  Brew pub

State laws vary wildly.

I will offer general guidelines however on 3 possible set-ups.

With a bit of research, some phone calls and perhaps some head-to-head with a professional, answers are within easy reach.

Option 1 – the Nano Brewery

Nanos by definition are breweries that brew from ½ bbl to 3.5 bbl per batch.

Even 3.5 bbls is quite small for production brewing.

These are often the choice for expert homebrewers who want to take it to the next level but don’t want to run a big operation nor carry debt. From this perspective, it makes good sense.

Nanos are good because:

• They are cheaper to start than micros and brewpubs.

• Require less heavy lifting.

• They are small enough to get less scrutiny by regulatory agencies: State, ATTB, City/ county inspectors

• Provide chance for proof of concept

Possible drawbacks:

• Inefficient processes

• Too small to keep up with demand

• Wholesaling is not possible

• Not enough retail business to make a profit

• If run as a second job, suck up all of your free time

DEGONG nano brewery

Option 2 – the Micro Brewery

A micro-brewery is primarily a production facility with brewhouses from 7 bbls up to about 30 bbl capacities.

Its goal is to build a brand, spread it far and wide, create a legacy.

Many states allow the micros to run a taproom, which may or may not require food service. The retail sales maximize earnings and build brand loyalty in a hyper-competitive market.

Micros are good because:

• (Small micros) They are cheaper to start than brewpubs.

• Operations are largely out of the public eye, able to focus on craft and streamlining

• Worry less about retail expenses, taxes, and customer service.

• Cover large interstate regions.

Possible drawbacks:

• Not enough retail sales for profitability

• Too small to keep up with demand

• Difficult to get good distribution

• Must have continual supply of capital for expansion

DEGONG micro brewery

Option 3 – the Brewpub

The brewpub first came to prominence in the 80’s and first peaked out in the 90’s. There were micros around but it was brewpubs that seemed to make the preponderance of independent brewers.

A brewpub is a microbrewery attached to a restaurant. The restaurant is full-service and should draw customers on the merit of its food in addition to the quality of its beer.

Brewpubs are good because:

• They can generate large amounts of daily cash.

• Are attractive to families.

• Showcase the brewery, usually through glass.

• Offer the potential for a varied business enterprise: retail, wholesale, food, beverage and merchandising.

Possible drawbacks:

• Very expensive to start-up

• Require a large staff, payroll, and tax liability

• High-risk, high reward as the beer and the food must be top quality

• A large debt load with highest overhead just to open the doors each day

DEGONG brewpub

Conclusion: A Real Eye Opener

There are valid reasons to build a nano. If it is your jam, go for it. If you have some capital and resources, a small or larger micro could make more sense.

I will be honest with you. From my experience, I had time to make beer and relished it. I had absolutely no time to waste.

There is an argument to be made against nano: short of a hobby and way to joyfully revel in your dreams, the time commitments outweigh the benefits.

Reach Out to Us

DEGONG can assist you in all of your challenges, large or small. Brewers need support and input. It is an artisanal craft, refined by years in the brewhouse. It is also an uncommonly specialized business.

Today’s brewers have puzzles that need a fresh perspective. I’ve walked in your shoes. I know the victories and struggles that come with the brewer’s life.

Reach out to us. No problem is unfixable.