How to Start Your Own Brewery: 10 Important Steps to Take

Americans do love their beer, and the fact that the U.S. beer market is now a $114.2 billion-sector proves that.

Although big brands still rake in most sales, more consumers have taken a liking to craft beers too. This sector accounted for 24% of the total beer sales in 2018, or an impressive $27.6 billion worth of sales.

No wonder that the U.S. is now home to more than 7,000 craft breweries! And about a thousand more will join the bandwagon this year.

If you’re one of these potential beer makers, it’s best you learn how to start your own brewery ASAP. With quite a big competition to face, you’d want to be offering your products earlier than the rest.

Ready to get your very own brewery up and running soon? Then keep reading, as we’ve listed all the steps you need to take to make your beer-making business work!

1. Choose Your Brewery’s Market Segment

The first step on how to start a brewery is to choose among the six classifications of U.S. breweries. By knowing which segment your business will likely belong in, you’ll have the best odds of success. This’ll also help you have a clearer picture of how much your overhead expenses will be.

Here’s a quick overview of the craft beer industry’s market segments:

Microbrewery

Start a microbrewery if your aim is to produce 15,000 barrels of beer or less per year. Microbreweries also sell at least 75% of their products offsite. If you want to sell some of your drinks onsite, be sure to include the cost of building a taproom in your expense list.

Brewpubs

These are resto-breweries selling at least 25% of their products onsite. Some states also allow brewpubs to sell spirits and wine, so check your state laws.

Taproom Breweries

These are like brewpubs, except for the restaurant part. They can also distribute their products for sale to off-site stores.

Contract Brewing Company

This kind of brewery actually outsources the beer manufacturing process. The contract company would only be responsible for marketing, selling, and distribution.

Alternating Proprietor

This is the “partner” brewery of a contact brewing company. Alternating proprietors share actual brewing responsibilities, as well as record and tax keeping. They also approve the formula and label behind every brew.

Regional Brewing Company

These brewers are larger than microbrewers, producing up to 60,000 barrels per year.

2. Prepare Your Finances for a Huge Equipment Investment

How big you want your brewery (as in how much beer you want to produce) will influence your equipment costs. The more barrels of beer you’re aiming for, the higher your capital investments.

The good news is, you’ll find both new and used brewery equipment. Some of these include boilers, kettles, kegs, storage and fermentation tanks, and filters. Don’t forget cooling machines, refrigeration systems, and labeling-machines.

3. Get to Know the Federal and State Beer Laws

Federal and state laws govern the alcohol industry, including the craft brewery segment. However, state laws can vary widely, so be sure you understand and abide by your state’s beer and alcohol laws.

4. Decide Which Legal Structure Best Describes Your Brewery

Starting a brewery involves choosing a legal business structure. If you’re going at it solo, then choose the “sole proprietorship” structure. This gives you all the rights — and responsibilities — to the brewery.

A general partnership structure, on the other hand, is a business shared by two or more people. You’ll have fewer individual responsibilities, but you’ll also have fewer rights.

If you want a greater level of protection, a Limited Liability Company maybe your best choice. This structure offers limited liability benefits similar to that of corporations.

5. Find a “Home” for Your Brewery

A craft brewery, no matter how small, would need a large space for all the equipment. Majority of the space would be for your “laboratory”, but you still need ample space for on-site selling.

Aside from adequate floor space, the ceilings should also be high enough to fit your large tanks. The plumbing should be in perfect condition, especially the waste disposal system. Don’t forget that your brewery needs excellent heating, ventilation, and air conditioning too.

And of course, you want your brewery to be in a good location, with high traffic. Bonus points if you secure a lease on a property with parking space for your patrons.

6. Finalize Your Recipes, Labels, and Packaging

Before you can even acquire permits and licenses, you already need final recipes. You also need formal documentation of your equipment and facilities. The government also requires you to supply information on beer labels and packaging.

7. File All the Necessary Trademarks

More than half a million small businesses in the U.S. open every month. This is why you should register your brewery’s trademarks as soon as you can. Otherwise, you may lose your business name and beer names to another craft brewery.

Start by applying with the United States Patent and Trademark Office (USPTO). You can submit both your brewery’s and beers’ trademarks at the same time. Just be sure your products will get released 36 months from the time you apply for the trademark.

8. Acquire Your Brewer’s License and Other Applicable Licenses

Apply for your brewery license from the Alcohol and Tobacco Trade and Tax Bureau (TTB). This can take months though, as the TTB will first run a check on your proposed operations first. It’ll also review your recipes, labels, and your facility’s sanitation and condition.

The TTB also needs to see your liquor license, Brewer’s Notice, and Brewer’s Bond. Send in the documentation of your business insurance coverages as well. Providing the TTB complete requirements may help speed up the licensing process.

Aside from the Brewer’s license, you’d also need a wholesaler’s license from your state. You may also need a taproom license either from your state or local municipality to sell beer on-site.

9. Think of “Early-Beer(d)” Marketing Promos

People love free stuff, and science backs that up. So, use this to your advantage when creating hype around your soon-to-be-open brewery! Offer “early bird” customers free tastes of your beers on tap to whet their appetites.

Any other discount, such as a “buy 2 get 1” offer, would be a great promotional tactic for your new brewery. Or, you can at least give them a taste of something off of your brewpub’s menu. You can visit this website for more promotional ideas for your craft beers.

10. Share Your Craft and Your Beer with the World

While you may be a local craft brewery, that doesn’t mean you can’t tell the entire world about it. In fact, you’d want a global presence, especially if you want to get in listicles like “The Best Craft Breweries in the U.S.”

That’s why you should start making your presence known online as soon as you can. Set up a website right after you get the green light on your brewery’s trademark application. Even if you aren’t open yet, you can already share the good news about your beers.

Tell people about your exact opening date, where they can find you, and what they can expect. Be sure to include details about your promos – that’ll make them look forward to your opening!

Follow All These Steps on How to Start Your Own Brewery on the Right Foot

There you have it, your ultimate guide on how to start your own brewery. Don’t skip any of these steps, as all of them play an important role before, during, and after your opening day. Follow this guide to the T, and you’ll be one step closer to becoming the next master craft brewer.

Need more business, marketing, or productivity advice to jumpstart your brewery’s sales? Then bookmark our site’s Small Business Articles section! We’ve got more tidbits of entrepreneur wisdom to share you with you.

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