How Much Money Do You Need to Start a Brewery?

by Aaron Marquis; Updated September 26, 2017
close-up of a woman drinking a bottle of beer

The brewing industry is a booming sector of the alcohol market in the United States. According to the Brewers Association, micro-brewers, also called craft brewers, in the United States experienced a 12 percent increase in sales and a 11 percent increase in volume during 2010. Starting your own brewery, however, requires ample financial capital. Depending on the size of your operation, you may need $500,000 or more to get your brewery up and running.

Licensing

To open a brewery, your state requires that you obtain a brewing license or permit. The United States monitors alcohol manufacturing and distribution at the federal and state level. If you do not obtain the necessary brewing permits for your brewery, you risk large fines and possibly jail time. Licensing requirements vary by state, but typically require the brewery owner to fill out paperwork, undergo an inspection by state officials and pay a license fee. The license fee might cost thousands of dollars in some states. For example, the Texas Alcohol and Beverage Commission charges more than $3,000 as of 2011 for a brewer's permit every two years.

Equipment and Supplies

Brewing beer requires not only the necessary ingredients, but also the brewing tanks and fermentation equipment for creating the beer. Brewing tanks are large steel containers that cost anywhere between a few thousand dollars to hundreds of thousands of dollars. For example, three large brewing tanks for a small microbrewery operation might cost $200,000 new as of 2011. Additionally, the cost for the barley, hops, yeast and flavoring ingredients for your beer varies depending on your batch size. For instance, you might spend a few hundred dollars on yeast, the enzyme that breaks down your other ingredients, for each batch.

Commercial Space

Most states will not allow you to operate a brewery out of your home. Zoning restrictions typically require brewers to operate out of commercial buildings zoned specifically for alcohol manufacturing. So, you must rent a commercial space large enough to house your brewing operation. Depending on the location of the space, its age and its size, your monthly rent might equal a few thousand dollars. Additionally, you must usually sign a commercial lease of a year or more. If you sign a one-year lease for $3,000 per month, you need at least $36,000 in your first year to cover rental costs.

Other Costs

In addition to the basic costs required to operate a brewery, you must budget for selling your beer and any miscellaneous costs that might pop up. To sell your beer, you have to develop a relationship with a distribution company in your geographic area. Distribution companies sell your beer to retail businesses and liquor stores for an upfront fee or a percentage of your profits. If you want to bottle your beer instead of putting it in kegs, you must pay a bottling company for its services.

About the Author

Aaron Marquis is a University of Texas graduate with experience writing commercials and press releases for national advertising agencies as well as comedy television treatments/stories for FOX Studios and HBO. Marquis has been writing for over six years.

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