How Much Does it Cost to Open a Brewery? [Brewery Startup Costs]
How Much Does it Cost to Open a Brewery?
This past decade has been huge for the world of craft beer. With just four ingredients — water, malt, hops, and yeast — and a trip to the local brewery equipment store, just about anyone can begin brewing their own batch of beer. Well, those four ingredients, some brewing equipment, and a brewery to house the entire operation!
The brewery industry quickly gained momentum when craft beer was popularized in the early 2000’s. Since then, it’s continued to grow steadily with nearly 9,000 breweries in operation in the U.S. in 2020 (that’s up from just 1,400 in 2006). Brewery-hopping and craft beer trading have become hobbies, attracting crowds of beer connoisseurs to breweries around the world to try exclusive batches.
As long as they keep making beer, people will continue flocking to breweries to share a drink with their friends and family. For budding brewmasters, that means it’s always a good time to begin laying groundwork towards opening your own brewery. Here’s how much it costs to make your brewery dreams come true, along with the business planning tips you’ll need to attract a thirsty crowd.
Average Restaurant Startup Costs
Depending on the specifics of your restaurant — where it’s located, how big it is, what format it takes, and what’s on your menu — the cost of starting a restaurant can vary pretty drastically. On average, the startup costs of opening a new restaurant as of 2021 is $275,000.
Average Cost of Opening a Brewery
Similarly, the cost of opening a brewery can also vary depending on those aforementioned factors, with one primary difference — it also includes all of the brewery equipment you need to malt, mash, boil, ferment, and package your beer.
Even microbreweries or small operations cost at least $250,000 to open. For larger breweries with more varied craft beer offerings, startup costs can reach as high as $2 million. On average, the cost to start a brewery is in the range of $500,000 to $1.5 million.
Brewery Opening Cost by Square Foot
Due to the oversized nature of brewery equipment, you’ll need to find a substantial space within which to operate your brewery — especially if you decide to open a taproom so customers can enjoy your brews on-site.
Whether you’re building from the ground up, converting a different type of restaurant or retail space into a brewery, or renting out a vacated pre-existing brewery, you can expect to pay between $10-30 per square foot.
As a final step, use the Restaurant Opening Calculator to gain a more accurate estimate of all the costs you’ll encounter, with all the varying factors that your business will include.
RESOURCE Restaurant Opening Calculator
This calculator lays out some of the fundamental financial costs of opening a restaurant, so you can start planning and bring your dream restaurant to life.
Brewery Startup Costs to Expect
Before you begin calculating costs, take some time to map out your restaurant business plan to ensure you’re allocating funds appropriately. Brewery costs vary depending on the specifics of your operation, but these are the averages you can expect.
A Breakdown of Brewery Startup Expenses
Follow this checklist to help plan and manage your budget while opening your brewery.
1. Utilities
Each year on average, all of the breweries in the United States combined spend about $200 million on energy alone. For individual breweries, expect to pay between $5 - $6.60 per barrel of beer on electricity.
2. Location
Due to local government zoning regulations, you can’t open your brewery in just any available retail space. Most states have designated zones for the industry. To ensure you aren’t wasting any time scouting in restricted areas, check with your local government before this step. Or enlist a restaurant industry realtor who is already an expert on local regulations, zoning, permits, and available properties.
Once you’ve determined potential locations for your brewery, outline your space requirements. For example, opening a microbrewery requires a fraction of the space that opening a standard sized brewery with a taproom does. Factor in all of the space you need to store and operate your equipment, as well as the space you need for your staff to comfortably work before making any final location decisions.
3. Brewery Interior Design
What atmosphere do you want to cultivate at your brewery? Is it going to be a relaxed, chill place where people can go on laid back dates or small group hangs? Or do you want to open a brewery with a taproom that doubles as the hottest new party spot in town? Will guests be able to take a tour of brewery operations, or will it be a more “behind the scenes” style brewing area?
The interior design and layout will dictate how people spend time there and the overall atmosphere that’s created. When designing the layout and floor plan of your brewery, ask yourself guiding questions such as:
Will you have a taproom?
If so, how many guests will you host at a time?
Is the brewery the only place where you will be brewing your beer?
Will your brewery double as an event space or venue?
How much space needs to be allocated for brewing equipment?
How much space needs to be allocated for customer seating?
Will you have table games like shuffleboard or ping pong?
Will you offer other perks like board games or cards?
Will you have arcade games or a photo booth?
Many breweries choose to include activities since they make for ideal event spaces. If you’ll be hosting weddings or other events, think about how to design a space that’s either on theme, or neutral enough to be decorated for each event.
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4. Brewery Equipment
Equipment is generally the biggest cost you’ll encounter when opening your brewery. According to Leonard Kolada, founder of Smokehouse Brewery Co., small capacity brewing equipment (1 barrel, which produces 320 twelve ounce beers) can typically be purchased new or used for $100,000 or less. But you can expect to pay up to $1 million for a much larger 30-barrel brewing system (which produces 9,600 twelve ounce beers).
Regardless of if you’re buying new or used, the typical equipment you’ll need to begin brewing your own beer includes:
Fermenters, boiling equipment, and brew kettles
Test strips, meters, stock pots, and portion scales
Walk in refrigerators for keg storage
Bottling and packaging tools including growlers and beverage shippers
Keg tapping, dispensing, and serving equipment
Safety gear and equipment
Pro tip: buy your equipment with an eye on the future. If you’re opening a microbrewery now but plan to scale in coming years, don’t invest in pieces of equipment that your operation will quickly outgrow and need to replace.
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5. Pre-Opening Expenses
Pre-opening expenses are all the costs that incur before opening day. Depending on the specifics of your operation, this can include everything from accounting and consulting fees to marketing costs and rent.
6. Marketing, Branding, and PR
Beer makers in the United States spend roughly $1.6 billion on advertising each year. And to top it all off, 93 cents of each dollar of that $1.6 billion is being spent by just the top five brewing companies.
With the brewery world growing increasingly more crowded with each passing year, new and emerging breweries need to prioritize marketing and branding strategies in order to stand out against competing beer halls.
Here are a few brewery marketing tips:
Develop a clear brand identity that’s unique and exciting
Create original branded merchandise like keychains, koozies, bumper stickers, tee shirts, and other swag
Run engaging social media marketing campaigns
Invest in marketing tactics such as paid digital ads, creating a website, and email marketing
Partner with local businesses
RESOURCE Guide to Restaurant Social Media Marketing
Learn how to optimize your social media presence to showcase your brand, tell your story, attract new customers, and engage with your audience.
7. Brewery Startup Capital and Loans
The restaurant startup capital needed to open a brewery includes:
Opening costs
At least six months of operating costs
Emergency funds
To learn more about the financing options available to burgeoning brewmasters, here’s The Complete Guide to Restaurant Financing and Loans.
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The Complete Guide to Restaurant Financing and Loans
Whether you’re opening a new restaurant, expanding your concept, or renovating within your existing four-walls, you’re going to need capital to make it all happen.
8. Brewery Exterior Design
One popular way that breweries save costs is by reserving their indoor space for beer production and designing an exterior taproom, tasting room, and seating area for customers to enjoy their drinks.
If you decide to offer outdoor seating and to take the design of your brewery outside, prepare to spend anywhere from $1,000 to $40,000 in exterior design costs.
9. Organizational and Development Costs
Opening a brewery requires you to obtain a collection of restaurant licenses and permits before opening day. They include:
A business license: $25 to $7,000
Employee identification number (EIN): free!
A liquor license: $3,000 - $400,000 (depending on location and size of brewery)
Work with a professional to guide you through the licensing process, as it can be tricky and it can be helpful to have some hand-holding from someone who's practiced in navigating the bureaucracy in your local area.
10. Professional Services
Opening your own brewery is a lot of work. In addition to overseeing the brewing and packaging of your beer, you also need to market your brewery, apply for permits and licenses, hire staff, and ensure you’re constantly operating in accordance to local and state brewery regulations.
To help juggle all of those tasks at once, many brewery owners choose to outsource responsibilities to third-party restaurant industry experts such as accountants, lawyers, marketing professionals, and brewery consultants.
Costs will range depending on your specific needs, but new brewery owners can spend up to $50,000 in professional services during pre-opening.
11. Technology and Point of Sale
It’s official, tech has made its way into the brewery industry. Modern brewing tech tools have been designed with advanced computing and AI to revolutionize the way brewers produce and package their creations. For example, canning was once a time-consuming seven step process — now, it’s completely automated.
Brewery point of sale systems that streamline taproom operations have also emerged. Toast’s POS system is designed to improve the brewery operations experience for staff and guests, while integrating with your other restaurant tools.
RESOURCE Bar and Lounge POS Comparison Tool
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12. Brewery Food Costs + Partnerships
You may decide to offer a brewery food menu alongside your beer selections, or partner with local restaurants or food trucks to offer dining options. While many patrons don’t head over to breweries expecting a full dining room menu, offering a selection of snacks, appetizers, and shareable treats is a great way to set your brewery apart.
Just remember that if you do decide to offer a menu, you’ll need to buy a food service license (costs range from $100 to $1,000 or more).
13. Staffing and Management
Last but not least, you’ll need to allocate a fair share of your brewery startup costs to hiring staff and a management team. Breweries are specialized establishments, meaning that in addition to hiring bar and wait staff for your tap room you’ll also be hiring a roster of brewing professionals, including:
Packaging and cellarmen
Brewers
A quality assurance/quality control team
Head brewer/brewmaster
On average, you can expect to spend 30% of total revenue on restaurant labor costs.
Brewers, Start Your Engines
As long as there is water, malt, hops, and yeast in this world, people will find a way to turn them into beer. But starting a brewery takes more than the right equipment. It takes the passion of a brewmaster and the drive to continue producing high quality ales, stouts, lagers, and pilsners.
To find out if you have what it takes to break into the ever expanding world of craft beer, create a comprehensive business plan for yourself and manage your startup budget wisely.
Related Brewery Resources
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.
Katherine Boyarsky
Katherine is the cofounder of CXD Studio, a creative content agency, + a registered nurse.
RESOURCE Restaurant Business Plan Template
No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.
