Brief overview of how to open a craft brewery
So, you've decided to embark on the exciting journey of opening your very own craft brewery. Congratulations! But where do you start? In this brief overview, let's break down the essential steps to help you navigate through the process with confidence.
What are the legal requirements for opening a craft brewery?
Before you start brewing your first batch of beer, you need to ensure that you comply with all the legal requirements. This includes obtaining the necessary permits and licenses from federal, state/province, and local authorities (city hall and regional district). The Alcohol and Tobacco Tax and Trade Bureau (TTB in the US and CRA in Canada) regulates the production of alcohol at the federal level, while each state or province has its own set of regulations. In this article, two brewery owners (one in Canada and one in the US) describe how they meet the legal requirements for opening and running a brewery.
Federal Excise Information
Excise Canada measured our brew vessels and audits our grain purchases and productions. We report our production in hectoliters at the beginning of every month for the previous month. We record each keg fill for every product on a spreadsheet for backup. Revenue Canada can use these to compare our grain purchase vs production vs sales. We don’t have to have a flow meter. Revenue Canada allows you to round down to the nearest hectoliter for each production run. So if we say produce 9.5 x 50 liter kegs from a 5 barrel that is 475 liters. Revenue Canada allows you to round down the production to 400 liters or 4 hectoliters. All the individual runs are rounded down to the hectoliter added together at the end of the month and reported to Revenue Canada. As long as we maintain records of each production run they seem to be happy. As long as your grain purchases, inventory on hand and sales all jive you shouldn’t have an issue.
Kristle said:
Our beer is taxed at 2 levels, federal (TTB) and state (NJ ABC in our case). It’s taxed at the federal level when it is put into the serving vessels. It is taxed at the state when it is sold. It is taxed at $3.50 per barrel federally and $.12 per gallon at the state level. For our level of production, we are required to file quarterly federal excise taxes. The excise tax report is coupled with a Brewery Operations report and include production, sales, waste/loss and ending inventory figures and then roll the inventory forward to the next month. NJ requires us to file every other month. We have to report sales in gallons. There is a similar process of reporting beginning inventory, sales, returns, waste and loss. We get taxed on sales less loss.
This is how liquor is reported for taxation. In order to open your doors, your brewery will need authorization from the provincial or state liquor board, permitting from the local city hall, and authorization from food safety inspector. Typically in the course of getting your business license from city hall, the list of requirements will become clearer.
How do you create a business plan for your brewery?
A well-thought-out business plan is crucial for the success of your brewery. It should outline your business goals, target market, competition analysis, marketing strategies, and financial projections. A solid business plan will not only help you secure funding but also serve as a roadmap for your brewery's growth. This interview with a successful brewery owner provides many details on how to start your brewery including floor plans and budget and this brewery startup cost estimator will help provide you with some numbers.
What equipment do you need to start a brewery?
Setting up a brewery requires a significant investment in equipment. You will need brewing kettles, fermenters (with BREWHA, the kettles are combined with the fermenters saving space, money and providing perfect chemical-free sanitation), a cooling system, kegs, bottling equipment, and more. The size of your brewery and the type of beer you plan to produce will determine the specific equipment you need. Quality equipment is essential for producing high-quality beer. Complete the form on this page and we will send you a detailed quote for brewery equipment and supporting information on equipment needed for your brewery.
How do you market your brewery?
Once your brewery is up and running, it's time to spread the word and attract customers. Develop a strong brand identity that reflects the unique characteristics of your brewery and beer. Utilize social media, local events, and collaborations with other businesses to create buzz around your brand. Offering brewery tours and tastings can also help attract customers and build loyalty. In this video, brewery owner Randy Calley describes how they designed their brewery to create an attractive atmosphere and how they promote serving the freshest beer. And in this video, brewery owner Josh Evans describes some of the ways they market their brewery in their community and make aware winning beer.
What are the key factors for success in the brewery industry?
The brewery industry is highly competitive, so it's important to focus on quality, consistency, and innovation. Brew high-quality beer that stands out in the market and consistently meet customer expectations. Stay ahead of trends and experiment with new flavors and brewing techniques to keep your offerings fresh and exciting. Keep engaged with your community (in this video Mark and Doug describe ways to start and keep a brewery successful. And this article provides more key criteria for brewery success as submitted direct from other brewery owners.
By following these key steps and staying dedicated to your craft, you'll be well on your way to running a successful brewery. Cheers to your new venture!
For stories on how a few of our customers approached the opening of their breweries, see the following pages:
James Calley Brewpub (Tulsa, OK)
3 Dogs Taproom (White Rock, BC)