Views: 5 Author: Site Editor Publish Time: 2022-08-09 Origin: Site
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
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.
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.
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
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.