So, you have made the decision to start a home brewery? Congratulations! You are about to start this rewarding task of brewing beer, which is as old as humanity itself. Indeed, most of the top breweries started as home breweries and grew with time. We must say that it is a rewarding challenge, but how do you go about it?
To help you out, this guide takes a closer look at the US home breweries in numbers and further outlines the seven most important steps to follow.
A Closer Look at Home Brewing in the US
Before looking at the main steps involved in building a home brewery, it is important to appreciate that the journey you are taking has been trekked by many. Between 2012 and 2017, the number of craft brewers in the United States rose from 2,420 to 6,266. The number grew by an additional 4% in 2019 and is expected to continue with an uptrend in the coming years.
The numbers we have highlighted do not include microbreweries that make less than 15,000 barrels of beer every day. If you want to join this craft beer community, it is a welcoming one and looks forward to enriching the drinking tradition through healthy competition. So, here are the nine main steps to follow:
Step One: Determine the Preferred Business Model
If you want your home brewery to be successful, the first step is determining the preferred business model. Will you be running a brewpub, taproom, or pairing delicious menu items, with your beer?
Before getting started with your brewery plan, it is crucial to determine the main objective. Your entire plan and adjustments along the way are all supposed to be geared towards achieving the main objective. As you draw the goals of your business, it is paramount to appreciate that every state has its own alcohol requirements.
The best way to draw good objectives is by drawing a business plan for the home brewery. Remember that a business plan is not a permanent document. Rather, you can use it as a starting point to get the brewery off the ground and change it along the way as the brewery grows. For example, the plan can help you target making something such as 5,000 barrels of beer every year. Then, you can change the target to 30,000barrels/year in the subsequent years.
Step Two: Understand the Legal Requirements of Setting a Home Brewery
In the US, alcohol production, distribution, and sale are shaped by federal and state laws. At the federal level, alcohol production is overseen by Alcohol and Tobacco Tax and Trade Bureau.
While the federal laws provide the baseline for what you need to know, they mainly act as the foundation. The state laws have the finer details of how the beer business is run by brewers. At this point, you might want to consider bringing an expert to help make the business legal and avoid getting into conflict with the law.
The alcohol laws in the https://www.nytimes.com/2020/01/17/opinion/prohibition-anniversary-100.html. But after the 21st Amendments of 1933, states were given liberty to determine how they would repeal the prohibition laws in their jurisdictions. The effect was a 3-tiered system that separates producers, distributors, and retailers. Most states are still using the system in the US.
The 3-tiered model provides the framework on how to model your beer enterprise. Investigating the alcohol laws can help you to avoid the need for major changes along the way, especially if you need to expand the brewery.
Step Three: Get the Licenses and Permits
The next step is ensuring that you have the right structure for your enterprise. The two main business forms are sole proprietorship and limited liability company (LLC). A sole proprietorship is the simplest form of business, implying that you are solely responsible for its liabilities.
Suppose you are targeting to get some protection of your assets or growing the enterprise rapidly. In that case, it will be a good idea to select a limited liability company (LLC) as opposed to a sole proprietorship. With an LLC brewing business structure, your liability to the business is only limited to the shares you hold in it. This implies that if the worst comes, such as bankruptcy, no one can come for your personal assets to meet the business’s liability.
Once you select the preferred business format, the next thing is paperwork and licenses. Depending on your state, the business might require you to file for several permits. For example, if your business name is Triple-G and the name of your beer is Tripple-3, you might be required to file for different permits. The good news is that the process is pretty straightforward by filing a “doing business as” (DBA) certificate.
Make sure to carry further research on the laws that guide breweries in your location.
Step Four: Define Your Business Brand
If you are targeting to grow your brewing business, it is prudent to think about the brand and make it known. In the beer industry, people associate with specific brand personalities. Think of it this way. Your brand is the identity of the company in public. Therefore, you want to ensure that it embodies some of the best attributes.
To define your brand, start by thinking about the targeted customers. Here are some crucial things to help you define your brand:
- What personality do I want my brand to have?
- Who is the target for my beer?
- What can make my beer more appealing than what competitors have?
- What is the most important part of my target clients’ experience?
The answers you get to these questions can help you define your brand. If you want to expand on the brand in the coming years, the efforts should be based on these ideas. To put it differently, your business name, company logo, website, and tap house décor, among others, should all grow from the brand concept developed at the beginning. Therefore, put a lot of effort into the brand from the beginning and let it evolve with time.
Step Five: Get the Numbers Right
You are starting a home brewing, and tracking profits will be very important. However, you have some way to go before getting profits can start flowing. Before getting there, you need to think about the costs when starting the home brewery. Here is a list of some of these costs:
- Permits, licenses, and bond fees.
- Rent for your business (might not be applicable if the facility will be located on your property).
- Insurance costs.
- Cost of brewing equipment.
- Cost of bottling equipment.
- The ingredients required for beer making.
- Cost of basic infrastructure.
- Cleaning supplies.
- Installation costs.
- Wages for your brewing staff.
After getting the actual picture of the cost for starting your home brewery, compare it with the amount you already have. If there is a financing gap, consider sourcing them elsewhere to fill the gap. Also, remember that some additional costs might arise along the way, and prepare for the unknown.
Step Six: Build Your Home Brewing Infrastructure
The facility and equipment you select will determine the brewing capacity in the coming years. Therefore, it is paramount to get it right from the beginning. At this point, we can break the focus on infrastructure into two crucial items, the location, and brewing equipment. So, let us look deeper into each of them:
Home Brewing Location
The location you select for your home brewery can make or break it. For most people, what runs through the mind when they consider brewing is locating the facility within the precincts of their homes. So, do you have enough space? Here are some of the main factors to consider when selecting a location:
- Access for unloading supplies and loading products.
- Ample space for storing your products.
- Rent or mortgage for the facility (if you will be renting the property).
- Does the room have enough space for serving guests?
One of the most important lessons that you can learn from the successful brewers in the US is that you need to get a location that provides room for growth. If it is too small, the need for growth might require you to relocate the facility, resulting in additional complexity and costs.
Home Brewing Equipment
The equipment you select will be so crucial for the success of your home brewery. Although they can be expensive, it is advisable to go for the best equipment because they determine the quality and quantity of beer from your brewery. Indeed, the equipment cost is likely to take up the largest percentage of your home brewery budget.
Make sure to factor in space availability, the nature of beer you will be producing, and targeted production levels when selecting brewing equipment. You might also want to compare buying new and used equipment depending on the available resources. Here are some of the pieces of equipment that you require for your home brewery
Boilers.
Kettles.
Kegs.
Cooling system.
Fermentation tanks.
Kettles.
Bottling and canning line.
Storage tanks.
Refrigeration facility.
Beer tap handles.
Cleaning equipment.
Beer labeling system.
Step Seven: Set Up Your Packaging
After brewing and fermenting your beer, the last step is the packaging. This can be broken into several stages, bottling, and packaging. So, will you be bottling or canning your beer? Depending on your setting, you might want to cane/bottle the beer on your own or hire another company to do it.
Bottling or Caning: Which is the Better Option?
Bottling is the most preferred option, but the trend is changing in favor of cans. Some purists argue that bottles help to keep beers’ tastes original. However, cans proponents say that it helps to retain beers’ freshness and the cost is also lower than bottles.
The differences extend to flexibility. Bottles provide greater flexibility of the label, cap, and neckband to help shape the packaging design. However, cans come with additional space for design.
Here, there is no wrong choice for your brewery. So, take your time to weigh the pros and cons of using cans or bottles based on costs and the targeted clients.
Select the Packaging Design
When it comes to packaging your beer, think about the graphic designs and the material that they will be printed on. The lovely thing is that there is a wide array of label materials that you can use, including matte film, metalized film, paper, glossy film, wood finish film, and clean film. Therefore, select the material that best communicates your brand.
Unlike bottles, cans do not provide a lot of options. In most cases, brewers prefer printing directly on the beer cans or use shrink-wrapped sleeves. The sleeves provide a vibrant appearance, and many people, especially the millennials, appear to like them.
After selecting the preferred material, you can move on and pick a professional designer. Remember that you need to be very specific with the dimensions based on the bottle or can size because they are the first thing that clients see even before tasting the beer. So, you better make a great impression with the appearance.
Step Eight: Time to Share Your Beer
Once you are through with packaging, it is time to enjoy your beer. If your home brewery was for drinking at home and selling in the pub on the front yard, it is time to enjoy the great taste. For those who want to distribute their brews to other pubs, it is vital to think about the supply chain network. Marketing your beer should also be included in the final step, and you can do it directly using digital platforms such as the company website or hire a professional marketer.
Conclusion
As we have demonstrated in this post, there is no doubt that starting a home brewery is a challenging undertaking. However, it is exciting and rewarding when executed well. As long as you have a carefully thought and documented plan, adhered to all legal requirements, and committed to the task, you have a good foundation for success.
Get out and start what you love: brewing beer!