How Much Does it Cost to Start a Brewery?
Breweries are among the most robust and exciting businesses to start. Although COVID-19 has disrupted many industries, the alcohol industry has remained profitable throughout 2020 and into 2021. Brewery startup costs vary depending on location, size, and the type of (and how much) beer or ale you plan to brew.
Suppose you love craft beer and want to turn your favorite pastime into a profitable business. In that case, you’ll probably have questions like:
- How much money do you need to start a microbrewery?
- What are the initial beer brewery setup costs?
- What is the overall cost to start a brewery?
In this post, we’ll discuss the advantages of opening a brewery, the startup costs for a brewery, and small brewery equipment prices. We’ll also share a range of financial tips. So, budding brewery enthusiasts read on to find out how much to start a brewing company with and more.
Why Open a Brewery?
In 2019, although overall U.S. beer volume sales dropped by 2%, craft brewer sales increased by 4% in volume. Rental dollar sales of craft increased by 6% to $29.3 billion, accounting for over 25% of the U.S. beer market.
People love craft beer. There’s something unique about seeing how a product is created. As a result, many microbreweries showcase their brew spaces to craft-loving fans, creating a memorable experience for beer lovers.
Additionally, brewing beer combines art and science. There is a lot of passion involved in crafting your own unique beer, from brewing to bottling and branding. Once the patrons of your brewery see how much work goes into the process, they are likely to support your brand and your business journey. And then once you develop strong brand imaging, you’ll end up with lifelong customers.
Although microbreweries can harbor high startup costs, the alcohol industry is relatively recession-proof and can be wildly profitable for savvy entrepreneurs.
Equipment and Product Costs
How much does it cost to start a brewery? To correctly answer this question, we need to consider equipment and production costs.
Again, the price you pay for brewery equipment depends on whether you buy new or used and how big your brewery will be. Small capacity brewing equipment (1 barrel that holds 31 gallons of beer) will cost $100,000 new, or less if you purchase second-hand equipment.
However, if you want to start a colossal brewery, you can pay close to $1,000,000 for a new 30-barrel system. Next, you must factor in the cost of brewing essentials such as kegs, fermentation tanks, canning and bottling lines, storage tanks, beer labeling machines, tap handles, waste treatment systems, and refrigeration equipment.
So how much does it cost to start a microbrewery? According to Wired UK, you can set up a microbrewery for as little as $70,000. However, they estimated these costs based on renting your equipment instead of buying brand new machines and apparatus.
Facility and Construction
When calculating how much to start a brewery, your monthly rent will depend on your building’s size and location. Plus, you’ll probably be asked to cover the first month’s rent and a security deposit when you sign the lease with your landlord.
You’ll then have construction costs, which can be substantial as you convert the building to make it suitable for brewing beer. You’ll need to consider electrical needs, plumbing, and whether the ceilings are high enough to house fermentation tanks. As a general rule of thumb in the brewing industry, you should double your equipment costs to estimate how much you’ll spend on construction for your building.
Other Costs to Consider
When pondering: ‘How much does it cost to start a brewery?’, you may overlook certain fees. For example, you’ll need a decent composite floor that’s able to withstand temperature shock, impact shock, and acidic spillage from beer. These can cost over $10 per square foot.
Unfortunately, beer spillage is a natural byproduct of the brewing process, and specialist flooring is necessary to protect the cement from eroding due to the beer’s acidity. Additionally, you’ll need to purchase all the required permits and legal documentation to brew beer in your state. Although most of these permits are free, they often come with a long processing time. Since time is money, you must factor this wait time into your budget.
Tips for Financing Your Brewery
There are many ways that we can help you to finance your first brewery or microbrewery, including:
The SBA provides financial assistance for SMEs that are struggling to raise capital. As an official SBA partner, we can help you access their funding quickly and efficiently.
Merchant Cash Advance
Cut out lengthy processing times by applying for a capital cash advance via our website.
Quick access to capital could speed-up the process of starting your craft brewery.
Work with L3 Funding
When you work with L3 Funding, securing finances for your business has never been easier. By completing four simple steps, you can be approved for the merchant funding you need. Contact us today to learn more about our services.