How to Start a Microbrewery Business in UK USA (Business Plan)

Do you have these questions in your mind?

  • How to start a microbrew business?
  • How much does it cost to start a microbrew business?
  • What qualifications do I need to start a brewing business?
  • What is the standard operating procedure in a microbrew business?


In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.

Table of Contents

Why start a Microbrewery business?

With a worldwide sale of $700 billion, beer is one of the most favorite & loved drinks in the world. Millions of people consume beer to refresh themselves with everyday problems and satisfy the taste buds of millions!

 

A microbrewery is an independently owned and operated small-scale brewery that produces beer, typically on a regional or local level; these micro breweries emphasize having high-quality, locally sourced, and innovative craft beers.

 

Beer is a significant part of modern culture & is profitable; congratulations on your decision to start a microbrewery business. 

Market Insight: According to Brewers Association, approximately 8,000 microbreweries were operating in the United States in 2021, producing a total of 25.9 million barrels of beer, representing a 13.3% share of the overall beer market by volume.

Types of Microbrewery Business Models 

There are several different business models that a microbrewery can operate under:

 

  • Brewpub: 
    A brewpub is a restaurant and brewery combined, where customers can dine and drink beer brewed on-site. These businesses typically sell their beer only in their establishment.
 
  • Brewery taproom: 
    A brewery taproom is a space where a brewery sells its beer directly to customers, often in the form of pints or growlers (large containers that can be filled with beer and taken home). These businesses may also offer tastings and tours of the brewery.
 
  • Production brewery: 
    A more extensive production brewery focuses on producing and distributing beer to other establishments, such as bars, restaurants, and retail stores. These businesses may also have a taproom or tasting room on-site.
 
  • Contract brewing: 
    Contract brewing is a business model where a company contracts with another brewery to produce its beer. This model can be a good option for those who are just starting and don’t yet have the resources to invest in their brewery equipment.

 

 

Alternatively, a microbrewery business can also complete their sales in one of these three ways:

 

1. Three-tier system: 
The brewer sells to a wholesaler who sells to a retailer who sells to the consumer.

2. Two-tier system:
 
The brewer acts as a wholesaler and sells to the retailer who sells to the consumer.

3. Direct sales:
The brewer sells directly to the consumer via carry-outs or sales from an on-site taproom or restaurant.

microbrewery business

Is the Microbrewery business the right choice for me?

Pros of a microbrewery business

  • Scalable
  • Little Startup Cost
  • Simple Business Model
  • High Margins
  • Flexibility
  • Sell Almost Anywhere
  • Passive Income
 

Cons of a microbrewery business

  • Crowded Space
  • Lack of Health Benefits
  • Taxes
  • Repetitive Work
  • Customer Trust
  • Harsh Learning Curve
  • Minimal Physical Activity

The following are the six main elements when planning for your new microbrewery business:

1. Calculate the startup costs for a brewery.

2. Select the name, layout, and logo of the brewery.

3. Write a business strategy.

4. Purchase all necessary equipment for your business.

5. Requirements of law.

6. Making financial projections.

microbrewery business

How much does the Microbrewery business make?

The average revenue of a microbrewery, is between $350K to $750K, with a profit margin on beers and ales around 45%.

Luckily, with a brewery, you can strike a lucrative balance between the profits of your taproom and brews.

You'll need to possess the following abilities:

- Brewing-related scientific knowledge and familiarity

- Business awareness and broader management abilities

- Analytical and decision-making abilities

- Team-building and leadership abilities

- Communication skills

- Planning Skills

- Good time management

- Teamwork and interpersonal abilities

- The ability to prioritize and handle tasks

- The capacity to think quickly and creatively

- Attention to detail

- Self-motivation

- A flexible attitude toward work

- The courage to challenge conventional wisdom

- Solid IT abilities.

Investment required to start a Microbrewery Business

A microbrewery’s starting cost can be anywhere from $500K – $1 million, depending on the location and number of equipment you choose to buy.

 

Some of the expenses that may incur when starting a microbrewery include the following:

 

  • Brewhouses, fermenters, kegging equipment, and other brewing equipment can be expensive.
  • Ingredients such as malt, hops, yeast, and water can vary depending on the beer produced and the brewery’s location.
  • Cost of renting or leasing a space for the brewery.
  • Cost of hiring employees
  • Cost of obtaining the necessary licenses and permits
  • Cost of marketing and advertising

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Qualification, Training & Certifications required to start a Microbrewery Business

Qualifications, skills, training, and certifications may be necessary to start a microbrewery business. 

 

Some of the key considerations include:

 

1. Education: 

In a microbrewery business, having a background in science, engineering, or a related field is preferable. In addition, knowledge of brewing, chemistry, and microbiology principles can be beneficial. 

 

2. Training: 

Training programs such as hands-on brewing courses, online resources, and workshops focused on the business side of running a brewery can be helpful. 

 

3. Certifications: 

In this business, brewers may obtain professional certifications such as the Certified Cicerone or the Master Brewer Program offered by the Institute of Brewing and Distilling. 

 

While no specific qualifications or certifications are required, having a solid foundation in brewing principles, business management, and marketing can benefit this industry.

Market insight: The UK beer industry now has a turnover of almost £9 billion thanks to the increase in small and microbreweries that produce craft beer.

Checklist of Microbrewery equipment

To operate a microbrewery plant, here are some essential items:

  • Tanks made of steel
  • Machines for Filtrating Fermentation
  • Machines for Refrigerating
  • Thermal exchangers in boilers
  • Filtering beer
  • Controller-equipped electric cabinets
  • Pipes and any related valves, pumps, or motors.
  • Alcohol dispenser
  • Kegs and Kettles
  • Boilers and filters
  • Production lines for bottles and cans
  • Cooling systems
  • Tanks for storage
  • Fermentation vats
  • Appliances for cooling food
  • Cleaning tools
  • Beer tap handle
  • Equipment for labeling beer
microbrewery business

Microbrewery Business SOP 

The brewing process for most breweries throughout the day is similar to the Microbrewery business.

 

Here are the steps that make up the brewing process:

 

1. Milling

Beer making starts with the milling of brewing grains. Types of malted barley are mixed and crushed into a coarse grist, neither too coarse nor too fine.

 

2. Mashing

It involves mixing milled grain with water and methodically heating that mixture. It allows the breakdown of starch in the grains, which converts into sugar. These malt sugars feed the yeast during fermentation time.

 

3. Lautering

Lautering separates the mash into a clear sugary liquid called wort and spent grain. The separation is done using either a lauter tun or a mash filter.

 

4. Boiling

The sweet wort is boiled evenly and intensely to ensure its sterility. The boil may last between 50 and 120 minutes. During the boil, brewers add bittering and aromatic hops that give beer its bitterness, flavor, and aroma.

 

5. Fermentation

The chilled wort is pumped into tanks for fermentation. Brewer’s yeast turns the wort into alcohol and carbon dioxide. The kind of yeast used and the fermentation temperature determine whether the final product is an ale or a lager beer.

 

6. Filtration and Conditioning

After fermentation, the beer is chilled and allowed to settle. Filtering is meant to stabilize the beer’s flavor, but not all beers go through filtering.

 

7. Packaging

The finished beer goes into bottles, cans, and kegs from the conditioning tanks. The beer is now ready to leave the brewery. Secondary fermentation may continue to offer natural carbonation.  

Here is a list of the people you need to hire to run your microbrewery business:

1. Brew Master

2. Assistant Beer Master

3. Microbiologist Accountant

4. Bar Manager Waiters

5. Bartenders

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Legal challenges you might face when starting a microbrewery business

Significant legal challenges you’ll face when opening a microbrewery:

1. Federal Brewer’s Permit:
This permit allows a brewery to have a restaurant on the premises and allows an unlimited amount of beer to be produced.

2. State liquor license:
It entitles you to sell alcoholic beverages to consumers.

3. Brewer’s Bond:
It is necessary for breweries to operate and guarantees that your brewery will pay all federal, state, and local taxes.

4. Operating Agreement:
This document outlines all of the LLC’s policies and procedures (Limited Liability Company).

5. Insurance (Such as a property, liability, and casualty):
Required for the protection for damage compensation.

6. A retailer’s license:
This enables you to sell additional goods on your property, such as clothing and accessories.

microbrewery business

Buy an existing business or franchise model or start from scratch

Buying a Microbrewery franchise of a recognized brand is a good idea; however, it is expensive also. 

 

The franchisor will benefit you will all the existing brand image, customer loyalty, advertising, market research & strategies.

 

In addition, you will get guidance from the franchisor about training the workforce & ambiance of the premises.

 

Here are a few good microbrewery franchises to inspire you:

  • Brew Zen Master Company
  • Brooklyn Brewery Company
  • AleSmith Brewing Company
  • Long Trail Brewing Company
  • Clipper City Brewing Company
 

 

Some of the more well-known microbreweries are:

 

  • Sierra Nevada: 
    Based in Chico, California, Sierra Nevada is a famous craft brewery known for its pale ales and IPAs.
  • Boston Beer Company: 
    The Boston Beer Company, which includes the Samuel Adams brand, is a leading craft brewery based in Boston, Massachusetts.
  • New Belgium: 
    Based in Fort Collins, Colorado, New Belgium is a famous craft brewery known for its Fat Tire amber ale.
  • Deschutes: 
    Based in Bend, Oregon, Deschutes is a craft brewery known for its wide range of beers, including ales, lagers, and stouts.
  • Stone Brewing: 
    Stone Brewing is a well-known craft brewery based in Escondido, California, for its hoppy ales and IPAs.
  • BrewDog: 
    Based in Ellon, Scotland, BrewDog is a famous craft brewery known for its bold and innovative beers.
  • Thornbridge Brewery: 
    Based in Bakewell, England, Thornbridge Brewery is a well-respected craft brewery known for its wide range of beers, including ales, lagers, and stouts.
  • Camden Town Brewery: 
    Based in London, England, Camden Town Brewery is a famous craft brewery known for its lagers and ales.
  • Magic Rock Brewing: 
    Based in Huddersfield, England, Magic Rock Brewing is a well-known craft brewery for its hoppy ales and IPAs.
  • Beavertown Brewery: 
    Based in London, England, Beavertown Brewery is a famous craft brewery known for its innovative and experimental beers.

 

Conclusion

Yes, a Microbrewery Business is a good idea; the profits are rewarding. However, you need to analyze your capabilities and limitations as there is no restriction to growing.

 

Remember to follow the proper procedure when brewing your beer. Try to provide customers with 12-15 types of beer to choose from.

 

Connect with your local bars and store where you will sell these beers, or if you are going for the direct approach, try to create an environment that satisfies your customer. 

 

Happy Brewing! 

Want to Save Time in your Business Launch?

  • How to Create a Business Plan
  • What is Market Research, USP, Niche & Positioning
  • How to find a suitable name for your business
  • How to create your brand image (Logo + Branding)
  • How to Register Your Business
  • How to Register for Taxes
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  • Which Payment Processing Terminal (POS) to buy
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  • How to do Sales & Marketing – Offline & Online
  • Why have a Website / Blog / Social Media
  • How to build & train your Dream Team
  • How to provide Excellent Customer Service
  • Buying an Old Business Vs Franchisee Vs Own Brand from Scratch

Handpicked inspirational Youtube videos for you

5 Tips for Starting a Brewery – YT Channel ‘American Rotary’

Brewing large in a small space — opening a craft microbrewery taproom with a small footprint – YT Channel ‘BREWHA Equipment Co Ltd’

A Day in the Life of a Brewer | The Porterhouse Group – YT Channel ‘Jobbio’

A. Customers typically pay a minimum of $10 for a six-pack of your microbrew at the end of the transaction. You could be able to support pricing that goes up to $15 per six-pack, depending on the demand for your beer and the brand’s attributes.

A. The microbrewery industry is a small but a growing segment of the overall beer market. According to a data, there were approximately 8,000 microbreweries operating in the United States in 2021, producing a total of 25.9 million barrels of beer, representing a 13.3% share of the overall beer market by volume.

A. The average revenue of a microbrewery, is between $350K to $750K, with a profit margin on beers and ales around 45%. Luckily, with a brewery, you can strike a lucrative balance between the profits of your taproom and brews.

A. The Standard Operating Procedure (SOP) for a microbrewery business are as follows :

  • Milling
  • Mashing
  • Lautering
  • Boiling
  • Fermentation
  • Filteration and Conditioning
  • Packaging
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