With craft brewery numbers on the rise, it could be time to consider opening a brewery of your very own. But there are a lot of things to consider before diving in – market saturation, your personal industry experience, and overall cost are just a few of the major considerations.
We’ve broken down some industry numbers on the craft beer scene and talked to experts in the field to ask about what they wish they knew before opening their own breweries.
Brewery Opening & Closing Statistics
The Brewer’s Association reports that there were 4,522 microbreweries in the US in 2018, up from 3,933 in 2017. In 2018, 123 microbreweries shut their doors, leaving the industry success rate at about 83%. Craft breweries appear to be here to stay, and not just a passing fad.
Microbrewery Openings and Closings 2010-2018
In the same report, the Brewer’s Association found that while overall beer sales by volume were down by 1% in 2018, craft brew sales grew by 4%. This tells us that beer drinkers are becoming more discerning and, with a rise in regional breweries becoming more in-demand, passionate about supporting local brewers.
Craft Brewery Industry Statistics
Additional statistics from the Brewer’s Association Report:
- Retail dollar sales of craft beer topped off at $27.6 billion in 2018, up 7% from 2017. This means craft beer sales now account for 24% of the total beer market.
- Contract breweries, microbreweries, brewpubs, and regional breweries produced over 25.9 million barrels of beer in 2018.
- Regional breweries have seen the most growth in the past 10 years, indicating that more and more people are preferring to “drink locally.”
- Vermont has the most breweries per capita with 11.3 breweries per 100,000 adults age 21 and over; Georgia and Alabama tie for last place at 1.1 per capita.
- Be active on social media: 62% of millennials are more likely to become loyal customers if they interact with your brand online.
- Offer flights and specials: Millennials have less disposable income due to lower wages and increased student loan debt.
- Get involved: 67% say they are more interested in support a brand that gives back to the community.
How Much Does it Cost to Start a Brewery?
Start-up costs can vary greatly depending on the size of your brewery, whether you want it to be a beer-only or a brewpub, and location. Incfile estimates that it will cost between $250,000 and $2.5 million to open a new brewery, considering the following costs.
- Brewing equipment (anywhere from $100,000 to $1 million) like kegs, kettles, boilers, bottling or canning lines, labeling machines, fermentation tanks, storage tanks, and more.
- The lease or rent on your space.
- The amount of build-out you will have to do in your new space, including things like plumbing, flooring, electrical updates, building a bar and/or kitchen, decorations, fixtures, furniture, and more.
- Licenses to serve and brew alcohol, serve food, and possibly more, depending on your location.
- A brewery POS system to help you track inventory, manage staff, control loyalty rewards, and more.
How to Start A Brewery: Advice from 4 Founders
We asked four brewery owners to tell us what advice they would give to someone who wants to break into the industry, and what they wish they’d know before they started their business.
- Brad Cooper, founder and head brewer at Steam Bell Beer Works in Midlothian, VA
- Steve Seto, founder of HolyCraft Brewery in San Francisco
- Scott Roth, president and founder of Three Notch’d Brewing Company, four locations across Virginia
- Dan Schwarz, co-founder and CEO of Lift Bridge Brewery in Stillwater, MN
Get to Know the Craft Beer Industry
Cooper: Spend time beforehand getting to know other people in the craft beer community. Spend time at local breweries and pick the brains of anyone working there, from the guy scrubbing the toilets to the owner of the business.
Create a Brewery Business Plan
Seto: Have a really solid plan and try to factor as many bumps in the road as possible. Things never go exactly how you plan them to but having a really solid plan and sticking to it helps when problems do arise.
When we first started our company we had tons of issues relating to timing, equipment failure, and technology issues. This occasionally translated to issues with our client base. I can’t stress how important it is to be ready for anything and to be prepared for the worst. Business for us today is much smoother operationally and it makes all the difference in the world.
Get Industry Experience Before Going Out on Your Own
Roth: The number one thing I recommend to anyone who is starting a business is to make sure that they have experience in the industry first. Getting behind a bar at a taproom, spending time shadowing a pro-brewer, meeting with an executive at a brewery to understand the financials – the more hands-on experience you have as an owner, the quicker you can diagnose problems, gain the trust of your staff, and for those looking for capital a background in the space will be necessary to entice investors.
What I Wish I Knew Before Opening a Brewery
Cooper: I wish I had gotten my own financial house in order. My previous career was in the mining industry and I knew I wanted to make the change. I was in the middle of getting some personal debt paid off while simultaneously planning to open a brewery.
One day I was fired from my job (for bringing homebrew to coworkers) and instead of seeking out another job, I chose to throw all of my efforts into opening a brewery. On several occasions, during startup and opening, I had to forego a salary to pay for something for the business and I began a game of “Which bill can I stretch out this month?”
Seto: There are many things I wish I knew before HolyCraft started, but the biggest thing would be the cost of distribution and packaging. Distribution in the beer world is pretty complex and costly, as is packaging. Having an idea of all these separate costs from just the beer making and sales alone would have been far helpful.
As HolyCraft grew we could no longer self-distribute out of the personal cars, as demand was too much. The cost of a distributor and their willingness to help also plays a big role in one’s consideration. Not always are the results positive, and knowing that would have helped us better to plan around these situations.
Schwarz: Make sure you have a solid business plan and good corporate documents. They are important to properly set in place and complete so everyone involved knows what the road map is and how you handle any disagreements should they arise.
Roth: This may not apply to many others, but we began our own distribution company and I wish I had spent more time in that space before getting into that business. We have ultimately grown that company very nicely, but we made a ton of mistakes early on that could have been avoided if I had known what I know now.
5 Ways to Make Your Brewery Tasting Experience Stand Out
For a guest, one of the best parts of visiting a new brewery is a tasting, where they can sample everything you have to offer. Here are five tips on how to make your brewery’s tasting experience stand out from the pack.
1. Hire the Best Beertenders
The real make or break of an entire tasting relies heavily on your “beertender.” You want someone knowledgeable about your beers and the industry as a whole who has a friendly and social personality. A great conversation with a beertender will create a positive experience and many lifelong customers.
2. Have Something Special on Tap
Having a specialty selection that guests can’t get in bars or liquor stores is a great way to bring them into your taproom. Hold brewery-exclusive tastings of small, experimental batches or invite guests in to taste a seasonal brew a couple of months before it’s released. Don’t forget to promote!
3. Give People as Many Options as Possible
Offer anyone who’s completed a tasting a discount on a flight or half-pours. Maybe they didn’t find anything they really loved in the first round, so give them as many opportunities as possible to find their favorite.
4. Establish Your Brewery’s Feel
Do you want to run a brewpub and offer full meals or are you going for more of a “hanging out in the basement playing pinball” vibe? If you aren’t sure exactly which direction you want to go in, take a look at the demographics in the area you want to open and what the other nearby breweries are doing. Figure out what is missing and how you can fill that gap.
5. Let Guests Bring the Experience Home
The limited-edition brews you have on tap will bring guests in, so let them bring that part of the experience home. Offer special growlers or mixed six-packs so they can bring their favorites back to share with friends and family. This lets them share their tasting experience with others and creates free word-of-mouth advertising for you.