From Grain to Glass: Starting a Brewery

Here are the most important aspects of starting a brewery:

1. Licenses and permits — Before you can begin brewing, you’ll need to apply for a Brewer’s Notice with the Alcohol and Tobacco Tax and Trade Bureau (TTB). This process involves background checks, and extensive documentation, and can take several months to complete. Also, each state has its own requirements for breweries. This often includes a state liquor license, which can vary significantly in terms of requirements and costs depending on your location. If you plan to sell beer directly to consumers at your brewery, such as in a taproom or via takeout, additional state and local permits may be required.
2. Get grants — There are a few grants to help you start your business such as the Brewers Association (BA), Texas Craft Brewers Guild Membership Grant, and Washington Department of Agriculture Relief and Recovery Grant.
3. Find equipment — Choose high-quality brewery equipment such as brewhouse, fermentation tanks, kegging systems, canning and bottling lines, and cooling and cleaning systems. 
4. Niche and specialties — Stand out with a special offer such as local ingredients, organic or eco-friendly brewing, non-alcoholic craft beers, and community and social themes.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.

Step 1: Decide if the Business Is Right for You

Pros and Cons

Starting a brewery, like any business, has its pros and cons. You need to carefully weigh these to decide if the business is right for you.

Brewery Industry Trends

Craft beer has been booming for years. It holds the largest share of the beer market in the US.

Industry Size and Growth

• Industry size and past growth — US breweries earned around $33.6 billion in 2023.((https://www.ibisworld.com/industry-statistics/market-size/breweries-united-states/)) Overall beer sales in the US crossed $117 billion in 2023, with craft beer leading the sales at just under $29 billion.((https://www.brewersassociation.org/statistics-and-data/national-beer-stats/))
• Growth forecast — Globally, the craft beer market was valued at $130.4 billion in 2023 and is predicted to grow further by 9.2% per year through 2032.((https://www.imarcgroup.com/craft-beer-market)) 
• Number of businesses — More than 9,500 breweries (mostly craft) are operating in the US as of 2024. These include microbreweries, brewpubs, and others.((https://www.ibisworld.com/united-states/market-research-reports/breweries-industry/))
• Number of people employed — US breweries employ around 129,000 people.((https://www.ibisworld.com/united-states/market-research-reports/breweries-industry/))

Trends and Challenges

Trends

• Growing consumer demand for cans and bottles over draft beer due to a spike in pandemic-driven at-home consumption
• Having an in-house taproom, outdoor spaces, and food menus are now seen as essential
• Innovative beers containing added ingredients, such as CBD oil or medicinal mushrooms, are gaining strength
• IPAs are perpetually popular, accounting for as much as 40% of the craft beer market, and the cloudy New England IPA has suddenly become ubiquitous

Challenges

• The introduction of new flavors and variants in craft spirits is likely to hamper beer sales
• Intense competition in a saturated market 
• Environmental challenges such as water and air pollution 

Popular Brewers

These were the top brewers in the US((https://www.brewersassociation.org/association-news/brewers-association-releases-annual-craft-brewing-industry-production-report-and-top-50-producing-craft-brewing-companies-for-2023/)) in 2023:

1. Anheuser-Busch Inc
2. Molson Coors
3. Constellation
4. Heineken USA
5. Pabst Brewing Co
6. Diageo
7. D. G. Yuengling and Son Inc
8. FIFCO USA
9. Kirin-Lion
10. Boston Beer Co

Consumer Spending

• Average consumer spend — An average American adult spends about $105 annually on beer consumed at home. ((https://www.statista.com/statistics/255473/us-consumer-expenditure-on-alcoholic-beverages-by-category/))
• Potential customer base — The legal drinking age in the US is 21 years old. More than 60% of Americans aged 21 and older say they drank alcohol in 2023, and about 37%% preferred beer.((https://news.gallup.com/poll/509501/six-americans-drink-alcohol.aspx))
• Average prices — The average price of a bottle of beer is $4.75 in the US.((https://www.expensivity.com/beer-around-the-world/))

Price Differences Across the Country

• More expensive — A case of beer is most expensive in Alaska at $33.62, followed by Wyoming at $28.78, and Hawaii at $24.17.
• Less expensive — It’s least expensive in Illinois, South Carolina, and New York, all at under $17.((https://finance.yahoo.com/news/cost-beer-every-state-230021972.html))

What Kind of People Work in Breweries?

• Gender — 89% of brewers are male, while 11% are female.((https://www.zippia.com/brewer-jobs/demographics/#gender-statistics))
• Average level of education — 64% of brewers hold a bachelor’s degree.((https://www.zippia.com/brewer-jobs/demographics/#degree-level-types))
• Average age — The average age of a brewer is 46.5 years old.((https://www.zippia.com/brewer-jobs/demographics/#age-statistics))

How Much Does It Cost to Start a Brewery?

The startup costs for a brewery range from around $160,000 to over $1 million. Brewing equipment and other equipment are the largest expenses. The high-end includes having a kitchen in the brewery so that you can have a taproom with a food menu. If you’re willing to start out small with a microbrewery, you might be able to launch for $80,000, but that’s with bargain-basement prices for all your key equipment.

You’ll need a handful of items to successfully launch your brewery business. Here’s a list to help you get started:

• Kettles and kegs
• Barrels
• Boilers and cooling equipment
• Canning equipment
• Storage tanks and refrigeration equipment
• Kitchen equipment

Startup Costs	Ballpark Range	Average
Setting up a business name and corporation	$150–$200	$175
Licenses and permits	$1,500–$3,000	$2,250
Insurance	$100–$300	$200
Business cards and brochures	$200–$300	$250
Website setup	$1,000–$3,000	$2,000
Location security deposit	$5,000–$10,000	$7,500
Site preparation	$20,000–$50,000	$35,000
Brewery equipment	$100,000–$1,000,000	$550,000
Other equipment such as canning equipment and kitchen equipment	$25,000–$50,000	$37,500
Initial inventory	$10,000–$25,000	$17,500
Total	$162,950–$1,141,800	$652,375

How Much Can You Earn From a Brewery?

Breweries generally use the half barrel, which represents 100 cans of beer as the primary sales metric. The profit margin for a brewery is often around 25%.

If you’re able to sell 1,000 half barrels per year at the average price of $4.75 per can, you’d have $475,000 in revenue and more than $118,000 in profit. As your brand gains recognition, you might sell 5,000 half barrels in a year, resulting in annual revenue of $2.4 million and a nifty $590,000 in profit.

What Barriers to Entry Are There?

There are several barriers to entry for starting a brewery. Your biggest challenges will be:

• Startup costs — Brewing large batches requires major equipment
• Space — Once sales tick up, you’ll need a warehouse or open space
• Competition — Craft beer is a crowded marketplace

Step 2: Hone Your Idea

Now that you know what’s involved in starting a brewery, it’s a good idea to hone your idea in preparation to enter a competitive market.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an Opportunity

Research other breweries in your area and see what kinds of beers they produce, their prices, and which products do best. Based on this info, consider how your brewery might stand out. You need a unique concept that will fill a gap in the market.

What? Determine Your Beer Types and Taproom Experience

First, determine which beers you plan to produce. This should be based on what’s trending, what you’re good at, which flavor profiles you prefer, and what you come up with through experimentation. Will you have a taproom? Will you serve food as well? If so, research dishes and meals that pair well with your brews.

How Much Should You Charge for Beer?

The average price of a craft beer in a bar or taproom is $6–$8, while the average price of a packaged beer is $1–$2. Including all costs, you should aim for a profit margin of about 30%, but this will be dependent largely on the rental cost of your location. Good locations with a lot of space are going to be expensive, so your margin will be lower. 

Once you know your costs, you can use our profit margin calculator to determine your markup and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify Your Target Market

Your target market will depend on the concept you choose, but the market for locally brewed and craft beers generally tends to be younger, around college age. You can reach a younger audience on a site like Instagram or TikTok.

You could also target older professionals looking for a high-end beer, use local and organic ingredients to create a more adult flavor profile, and reach out to potential customers on Facebook and LinkedIn.

Where? Choose Your Brewery Location

If you plan to have a taproom, a good location will have high foot and road traffic and be close to restaurants, clubs, and cinemas. Trendy areas that attract young craft beer drinkers would be ideal, though expensive.

If you’re not planning to have a taproom, it might be wise to find a warehouse outside the city, where rents are much cheaper and spaces larger. The more square footage you have, the more revenue you can bring in and you can always add a taproom down the line.

You can find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe. When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Brewery Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better
• The name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “beer” or “brewery,” boosts SEO
• Choose a name that allows for expansion: “Apex Brewing Company” over “Belgian Ale Brewery”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Brewery Business Plan

Here are the key components of a business plan:

• Executive summary — A brief overview of the brewery business plan, summarizing key points such as the business concept, goals, and financial projections
• Business overview — Detailed information about the brewery, including its mission, vision, location, legal structure, and founding date
• Product and services — Description of the brewery’s beer offerings, potential expansion into merchandise or events, and any unique selling points
• Market analysis — Examination of the craft beer market, target demographics, and trends, highlighting potential opportunities and challenges
• Competitive analysis — Evaluation of other breweries in the area, their strengths and weaknesses, and how the new brewery plans to differentiate itself
• Sales and marketing — Strategies for promoting and selling the brewery’s products, including pricing, distribution channels, and marketing campaigns
• Management team — Profiles of key team members, emphasizing their skills, experience, and roles within the brewery
• Operations plan — Details on the day-to-day operations, production processes, equipment, and facilities required to run the brewery efficiently
• Financial plan — Projections of the brewery’s financial performance, including startup costs, revenue forecasts, and profit margins
• Appendix — Additional documents or information supporting the brewery business plan, such as resumes, permits, and any relevant research data

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!

Choose Where to Register Your Company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states offer real advantages when it comes to breweries.((https://www.zippia.com/advice/most-breweries-states/))

If you’re willing to move, you could really maximize your business! Keep in mind that it’s relatively easy to transfer your business to another state.

Choose Your Business Structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your brewery will shape your taxes, personal liability, and business registration requirements, so choose wisely.

Here are the main options:

• Sole proprietorship — The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General partnership — Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) — Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corporation — Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corporation — This refers to the tax classification of the business but is not a business entity. Either a corporation or an LLC can elect to be an S Corp for tax status. Here, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number or EIN. You can file for your EIN online, or by mail/fax. Visit the IRS website to learn more. Keep in mind that, if you’ve chosen to be a sole proprietorship, you can simply use your social security number as your EIN.

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund Your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans — This is the most common method, but getting approved requires a rock-solid business plan and a strong credit history.
• SBA-guaranteed loans — The Small Business Administration can act as a guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants — A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital — Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
• Friends and family — Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding — Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal — Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a brewery. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Brewery Business Licenses and Permits

Starting a brewery requires obtaining a number of licenses and permits from local, state, and federal governments.

As a brewery, you’ll need to register with the Alcohol and Tobacco Tax and Trade Bureau and submit a Brewer’s Notice, as well as obtain a liquor license from your state.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your brewery as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability — The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business property — Provides coverage for your equipment and supplies.
• Equipment breakdown insurance — Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation — Provides compensation to employees injured on the job.
• Property — Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto — Protection for your company-owned vehicle.
• Professional liability — Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP) — This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business.

Essential Software and Tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many businesses. It’s a good idea to use industry-specific software, such as Ekos or BrewNinja to manage inventory, staffing, accounting, and production.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, FreshBooks, and Xero.
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences of filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop Your Website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech savvy, you can hire a web designer or developer to create a custom website for your business.

However, people are unlikely to find your website unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Local SEO — Tailor your website’s content with keywords that resonate with craft beer lovers, enhancing your online visibility. Regularly update your Google My Business and Yelp profiles to strengthen your local search presence if you plan to open a taproom.
• Social media campaigns — Utilize Instagram and Twitter to engage followers with visuals of your brewing process, unique flavors, and exclusive behind-the-scenes content.
• Online store and merchandise — Launch an e-commerce platform allowing fans to purchase your beers and branded gear, and book tours directly.
• Distinctive branding — Develop a strong, memorable brand identity for your products to ensure they stand out both in retail environments and online.
• Seasonal and limited releases — Generate excitement with limited edition brews to draw customers into trying new products.
• Email newsletters — Keep your community engaged and informed about new releases, events, and updates through regular email communications.
• Beer blogging — Create content about the inspiration behind different brews, pairing tips, and industry trends to educate and entertain your audience.
• Brewery tours and tastings — Offer educational tours and tasting events to showcase the intricacies of your brewing process and product range.
• Community events — Organize events like beer festivals and live music nights to create vibrant, memorable experiences for your customers.
• Local business collaborations — Partner with nearby restaurants and retailers to feature your beer and foster cross-promotional opportunities.
• Loyalty rewards program — Implement a loyalty program that rewards frequent customers with perks such as discounts and exclusive access to new releases.
• Influencer partnerships — Collaborate with local influencers and craft beer bloggers to expand your reach and enhance your brewery’s credibility.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your brewery meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your brewery could be:

• Barrel-aged for premium taste
• Eco-friendly brews made with local & organic ingredients
• The coziest and most welcoming taproom

Networking

You may not like to network or use personal connections for business gain but your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a taproom, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in breweries for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in beer. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a brewery would include:

• Master brewer
• Marketing lead
• General manager
• Bartenders and waitstaff (if you have a taproom)

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn or Facebook. You can also use free classified sites like Jobs and AngelList. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Brewery — Start Making Money!

Beer is always in demand, and the craft beer craze shows no sign of slowing. Almost every bar carries local craft brews for good reason — people like to try them. Starting your own brewery can make for an exciting and fun lifestyle, and you might share a beer with all kinds of people in your own little pub! There’s no reason you can’t tap into this booming market. 

Now that you have the knowledge to start a brewery, you’re ready to take the first step in your entrepreneurial journey. The right knowledge will be crucial to your success, so you might want to bookmark this page. Happy brewing!

FAQs

Can I start a brewery from home?

It’s illegal to make beer for sale from your home in the United States. You need a brewery that has all the proper licensing at federal, state, and local levels.

How can I learn to brew my own beer to sell?

There are many online guides to brewing your own beer, but your best bet would be to contact a local brewer for advice. You’ll just need to convince them to help you even though you may become a competitor!

Who is world’s largest brewer?

Anheuser-Busch InBev is the world’s largest brewery. They have over 600 beer brands and sell in over 150 countries.

How much space do you need for a brewery?

As a general rule, you need a little over two square feet per barrel that you produce annually. It really depends on how much you want to produce.

How long does beer take to ferment in a brewery?

It takes one to two weeks for the beer to ferment. The whole process of producing beer takes three to four weeks.

What are the skills and experience required that will help me to to open a brewery?

You don’t have to have much experience to open a brewery. You can easily research brewing techniques. You also should do plenty of research to learn the business side of things.