Opening a Brewery: What You Need to Know

via AmericanCraftBeer.com

Many beer drinkers and brewers have had the idea to start their own brewery. It’s always fun to think about and speculate what kind of beer you’ll specialize in, what your tasting room will look like and how extraordinary it will be to share the fruits of your labor.

But the truth is that opening a brewery is hard work…

The Beginning:

Opening a brewery requires dedication, long hours, and tough decisions – no exceptions. As a former brewer and someone who writes about the industry, I have the pleasure of sampling many of the new beers being released by start-ups around the country. Craft beer is supposed to compete with the macro brands on quality but unfortunately, 40% of the beer in the market today is mediocre at best.

Breweries are opening up all over the country that are run by inexperienced, unmotivated and underfunded individuals. Building a brewery, or even saying you are, is the cool thing to do these days but very few understand the risks and dedication that it requires. I know professional brewers who have spent their entire careers in the industry and are still not ready to make the leap into a brewery start-up.

Experience:

I’m not saying that you need a formal brewing education or prior brewery experience if you’re going to be in charge of sales but if you want to call yourself the Head Brewer, you must have worked in a brewery or have, at the very least, a brewing education. Homebrewing does not count and the lack of a proper background will come back to bite you in the long-run and drastically influence the quality of the beer you produce.

It is also crucial to build a strong team. Even if you are a master brewer with a lifetime of experience, you’ll be weak in other areas such as sales or marketing. Be honest about your strengths and weaknesses in order to fill the gaps of what your company needs. 

Money:

Most likely, unless you have an angel investor, you will be tight on cash. 

Brewing is an industry that requires a lot of overhead (i.e. equipment, branding/marketing, tasting room/space, etc.). I can tell you from experience that if you cut corners at the beginning of your process, you will be constantly trying to dig yourself out.

It takes about $1 million to start a functioning brewery and if you don’t want to take my word for it, listen to the founder of Modern Times.  The article states, “there are all kinds of ways you can compromise quality, sacrifice worker safety, put off crucial purchases, make yourself inefficient, and worsen the consumer experience that will save you money.”

Many people argue that nano breweries cost far less than the $1 million I’m proposing but unless you plan on keeping your day job while brewing in your free time, a nano brewery is not a cost effective or long-term plan. In the beginning, Sam Calagione brewed all day, every day in order to keep his dream of the Dogfish Head brewpub alive. He also had very little time to focus on other matters for his company.

Lastly, many breweries decide to use crowd-funding sites to raise money for their brewery, but it’s essentially panhandling for your company and I do not believe this is the best use of your time. Raising money is difficult and can be a full time job in itself but that doesn’t mean you should take the easy way out by asking strangers to donate $50 in exchange for a t-shirt.

Location:

Maybe the area that you’re living in doesn’t need any more breweries. Cities such as San Diego, CA and Portland, OR have a lot of breweries and enough product differentiation and innovation in their markets. If opening a brewery is your dream then you should be willing to look outside of your immediate area if it’s saturated. There are still large parts of this country that desperately need good beer!

Dedication and Commitment:

There were no screaming fans or groupies when I left my night shift at Stone Brewing Co. at six in the morning… so if you’re looking for fame, look elsewhere. This is an industry where great people create phenomenal beer and there is no substitution for hard work.

If you’re dedicated to building a great company and willing to make hard decisions, committed to the quality of the product and able to listen to the people you surround yourself with (see: Experience) you will be able to build a great brand. Get ready to put your social life on hold and start making some tough decisions.

Putting it All Together:

Starting a brewery shouldn’t be easy and although it can be fun, that alone, shouldn’t be the goal. You have the ability to build something great that will (hopefully) stand the test of time – an institution (regardless of how large) on which consumers can rely and ultimately enjoy.

And if you remain patient, stay dedicated and trust your experienced team, there’s no reason your brewery should end up in the 40%.

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