How much does it cost to start a brewery?

It costs on average between $500,000 to $1.5 million to start a brewery. Larger breweries can cost close to $2 million to start, while starting a microbrewery can cost around $250,000.

Here is a breakdown of the costs of starting a brewery:

• Utilities

You can expect to spend $5 to $6.60 per barrel of beer on electricity when operating a brewery.

All of the breweries in the United States spend a combined $200 million dollars on energy each year.

• Location

This cost varies widely depending on many different factors, such as:

• Do you plan on renting, leasing, or purchasing the space for your brewery?

• What area are you starting your brewery in? (city, town, rural)

• What state are you going to be operating your brewery in?

• What is the scale of your brewery business?

• Are you going to have multiple locations or just one?

For these reasons, it's hard to give a solid figure on the costs in this area. However, they are likely to be high, so plan your budget accordingly.

• Brewery equipment

Here are some common items to research for cost in this area:

• Fermenters, boiling equipment, and brew kettles

• Test strips, meters, stock pots, and portion scales

• Walk-in refrigerators for beer keg storage

• Bottling and packaging tools including growlers, and beverage shippers

• Keg tapping, dispensing, and serving equipment

• Safety gear and other essentials for safety

You can purchase small capacity brewing equipment, which includes one barrel that produces 320 ounces of beer, in new or used condition for $100,000 or less.

However, if your brewery is going to be larger in scale, say a 30-beer barrel brewing system, you can expect to spend somewhere around $1 million for your essential equipment.

• Development and organizational costs

• A business license - $25 to $7,000

• Employee Identification Number (EIN) - free

• A liquor license - $3,000 to $400,000

The liquor license expense depends on your brewery's location and the size of your place of business. There are other costs in this area that differ from state to state, so be sure to research any applicable licenses and permits you might need to start a brewery in your state.

• Professional services

There is a lot of planning, preparation, and tasks you must complete to open a brewery. This includes:

• Hiring staff

• Making sure your business complies with local and federal regulations and laws

• Applying for various permits and licenses

• Marketing your new brewery business

Because of the vast amount of things that need to get done, you might consider outsourcing some of these tasks to a third-party industry expert, this includes professionals like:

• Accountants

• Lawyers

• Brewery consultants

• Marketing professionals

• Recruiters

Costs for professional services can vary, depending upon your brewery's specific needs, however, most new brewery owners can expect to spend somewhere around $50,000 on professional services.