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Starting a Microbrewery: How to Start a Craft Brew Business in Australia
Australian support and awareness for craft brews is at historically-high rates. This is lucky news for aspiring microbrewery owners. The market has clear demand for new and exciting tastes from indie brew businesses. When starting a microbrewery in Australia, you’ve got a good chance of success, especially if you approach starting your craft brew business with solid knowledge and planning.
Read on for a complete overview of the tax and accounting requirements for setting up a craft brew business in Australia. You’ll learn the unique licensing, permit, and tax requirements for craft brew businesses, and how to create a successful business plan.
Need help on getting the accounting and tax set up for your buiness? Give James a call directly on 0404 530 563 or email me at [email protected] for a FREE 30 minute consultation on the next steps. You will walk away with three actionable steps to make you profitable, improve your cashflow or fix you tax.
What’s Required to Start a Microbrewery in Australia?
There are many similarities between any startup and a microbrewery in Australia. Any new business should start with a comprehensive business plan. Under any conditions, you meet multi-industry requirements for legally registering your business name and obtaining a tax file number. However, there are some unique requirements for licensing, excise tax, and product labelling that are unique to craft brew businesses.
The specific requirements for craft beer industry in Australia include:
- Obtaining a Producer/Wholesaler’s License from the Office of Liquor, Gambling, and Racing
- Determining and paying applicable excise tax rates
- Following regulatory requirements for beer labelling via The Australian and New Zealand Food Standards Code
In addition to these mandatory requirements for craft brew businesses, there are several other requirements which apply if you intend to serve beer on-premises to members of the public in a pub setting. You may choose to:
- Obtaining a Microbreweries drink on premises license
- Authorisation for trade shows or events
- Obtaining a Responsible Service of Alcohol (RSA)
- Completing Licensee & Advanced Licensing Training
Each of these licensing requirements are discussed in-depth below, along with insight about typical costs and requirements.
Create a Micro Brewery Business Plan
An effective microbrewery business plan will encompass both general planning and market analysis, and elements of business plans that are specific to the craft brew industry. The business plan is an opportunity to document your intentions for technical brewing, sourcing beer ingredients, branding, marketing, and complying with all applicable laws.
There are over 600 independent, registered craft brew businesses in Australia, according to the Independent Brewers Association (IBA) . A new craft brew business opens every six days. There’s growing demand for craft brew products among Australian locals. However, there’s also fierce competition. A successful, comprehensive business plan is the first step toward a successful microbrewery business.
What Goes into a Business Plan?
You can begin drafting your business plan using a f ree, online template or create your own document from scratch. In general, every business plan for a craft brew business or microbrewery should include the following information:
- Goals & Objectives
- Microbrewery summary
- Market research
- Regulatory requirements
- Financial analysis
Perform Market Research
There’s more to a successful craft brew business than great-tasting products. Market research is a valuable activity for all new craft brew businesses to understand the industry, competition, and customers. Recommended areas of market research for any new business in Australia include:
- Business Location
- Local Community
In addition, it’s wise to work to develop a deeper understanding of the craft brew business climate:
- Research the microbrew indusry
- Connect with successful craft brew entrepreneurs
- Improve your technical brewing knowledge
Research Regulatory Requirements
The business plan should involve thorough research and documentation of all applicable regulations to produce, sell, distribute and label craft beer products. In addition, your regulatory requirement research should include comprehensive look at tax requirements. The regulatory requirements for craft brewers are discussed later in this article. However, these are an overview, not a definitive guide to regulatory compliance.
It’s up to you to stay informed on all applicable laws and adjust your business plan when legal requirements change. A business plan should be a living document, and craft brew entrepreneurs should be aware that laws can change quickly.
Perform Cost Projections
Budgeting and financial forecasting is a crucial part of business plan creation for microbreweries and any other small business. After all, your business needs a solid financial plan to succeed in a competitive craft brew marketplace. The Small Business Development Corporation offers numerous free tools online to guide aspiring business owners through financial planning activities. Your cost and financial analysis should include:
- Startup Costs
- Accounting fees
- Real estate
- Sales forecasts
- Expense projections
- Cost of goods
- Cash flow projections
Register Your Business
For a comprehensive discussion on taxes in Australia, read this article.
An Australian Business Number (ABN) is a free, 11-digit number from the Australian Government’s Business Registration Service. This number is not used for taxes, but it used to create a unique identifier for your business in the community. An ABN is used to:
- Business identity in ordering and payments
- Avoiding pay as you go tax
- Claiming goods and service tax credits
- Claiming energy grant credits
- Getting an Australian domain name
If you are starting an enterprise, such as a microbrewery, you are entitled to an ABN . To help work out which business structure will work best for you click here .
There are a few simple requirements to register for an ABN. Generally, the Australian Taxation Office (ATO) will review an ABN application within 20 days.
An Australian Business Name, or ACN , is the official name of your microbrewery. First, check name availability o the free ASIC search function . If the chosen name is available, you can nationally register your business name.
The cost of registering your business name with ASICs is $36 for one year, or $85 for 3 years. The ACN application is approved within 2-5 days, depending on the payment method used during registration.
ACN registration is not the same as a trademark. It also does not entitle you a domain name. Before you submit an ACN application, it’s wise to verify availability. Use IP Australia search to make sure you’re not going to infringe on any registered trademarks. Applying for a Trademark with IP Australia costs $520 and involves a multi-step application process with a final answer within 13 weeks. A web registry service search can reveal potential domain name availability and costs.
Tax File Number
A Tax File Number is a unique identifier issued to businesses and individuals by the ATO. Generally, the free application for a business TFN can be completed during the same application process as an ACN and ABN.
Licensing and Permits
This license be obtained from the Office of Liquor, Gaming, and Racing. The license permits craft brew businesses to sell product to other licensees, sell product to the public, and conduct product tastings. It is not the same as a permit to serve beer or food in an on-site pub, but it can permit you to serve samples to customers during a brewery tour.
Retail takeaway sales to the public are subject to specific hours under this license, unless you apply for extended trading hours. This license permits trading between:
- 5am-10pm Monday through Saturday
- 10am-10pm Sunday
There are specific information requirements to submit an online application for this license . You will need to submit a floor plan, any applicable local counsel approval, requested trading hours, and contact information. Costs vary according to the Liquor Fee Schedule, however the application and processing fee for small microbreweries is generally $385 .
An extended trading hours application can be made to extend Sunday hours from 5am to 10pm. Licensees are subject to a 6-hour daily closure requirement, even with an extended hours permit. However, special applications can be made to temporarily or permanently exempt your brewery from the 6-hour closure requirements if you can demonstrate benefit to patrons and a plan to sell alcohol safely to the Liquor & Gaming NSW.
Responsible Service of Alcohol Training
Responsible Service of Alcohol (RSA) training and certification is required for all owners and staff prior to applying for the Product/Wholesalers License. RSA training from an approved provider and valid NSW cards are an ongoing requirement for all staff of the microbrewery. A RSA refresher course must be completed every five years. The costs of training vary by provider, but $140-160 is average.
Licensees and managers of microbreweries are required to undergo two additional training courses to obtain and maintain a Product/Wholesalers license under the 2018 Liquor Regulation .
Licensee Training & Advanced Licensee Training
You can verify your training requirements on the Liquor & Gaming NSW website. However, both types of training are generally required for licensee applicants after September 1, 2018. Complete training through an approved provider to obtain this competency. Some fully online options are available. Costs and time commitment can vary depending on the provider you select, but you can expect to pay approximately $350 for each competency and spend 6-7 hours per class.
Microbreweries and Small Distilleries Authorisation
The Liquor & Gaming NSW is currently piloting a trial programme for a special type of drink-on-premises authorisation for microbreweries and small distilleries. This permit allows craft brew businesses to sell products to the public for consumption on-premises in the context of a restaurant or pub, not just tastings. There are some qualifying criteria, including a patron limit of 120 guests and providing food service in addition to beer.
This application can be completed simultaneously with a new application for a Producer/Wholesaler License. Licensees are subject to limited trading hours, including:
- 5:00am-midnight, Monday through Saturday
- 10:00am-10:00pm, Sunday
There is no cost to apply for this license through August 31, 2020. According to the Liquor & Gaming website, there are plans to reevaluate this licensing pathway during 2020 to potentially refine the program and expand requirements.
Industry Liquors Show and Producers Market Authorisation
Selling liquor at a tradeshow, food show, or another event generally requires a special authorisation from the Liquor and Gaming NSW. Selling craft brew at an event with 2,000 or fewer people requires a Limited License for Trade Fairs , which can be obtained by an individual with valid RSA credentials. If attendance is expected to exceed 2,000, you will need an individual application for a Large Scale Commercial Event. Costs range from $165-$650, depending on attendance.
The application for a Producers/Wholesalers license requires local notices . These notices must be lodged either prior to application, or within two days of filing a Producer/Wholesalers license application.
- public consultation ? site notice;
- police notice; and
- local consent authority notice.
Prepare to Pay Taxes
Want an easy way to ensure you never run out of cash to make a tax payment? Have a read of our simple solution to this all too common problem.
Australian business tax requirements are administered under the ATO, and in some cases, state revenue offices. It’s important to understand your requirements to avoid penalties and any tax concession rates.Your tax liabilities are likely to include:
- ATO company tax rate ? currently a base rate of 25% for 2021-2022
- Capital gains tax, paid as part of income tax on any asset disposals
- Goods & services tax , and any applicable GST tax concessions
- Payroll tax
- State & territory tax responsibilities, if applicable
In addition, craft brew businesses are subject to ATO excise tax rates for alcohol, which are subject to update on February 3, 2020. These tax rates are calculated based on litre of alcohol (LAL).
Create Systems for Records-Keeping
Systems of record (SOR) for business and tax records are a responsibility to pay proper tax rates and tax advantage of all possible concessions. Your systems should include a centralised method to securely store, track, and retrieve records for:
- Tax invoices
- Wages and salaries
- Purchase records
Not only do you need to capture these records, you need to meet legal requirements to retain information. In general, records must be retained for 5 years .
Pre-packaged beer and alcohol must comply with all legal requirements for labelling. Beer sold in Australia l is subject to labelling laws from the following authorities:
- Food Standards Australia and New Zealand
- Department of Agriculture and Water Resources
- State and Territory Food Regulations
- Australian Competition and Consumer Commission
- National Measurement Institute
- Alcohol Beverages Advertising Code Scheme
Failure to comply with all applicable requirements for labelling can result in serious consequences, including product recall or prosecution. There are historical examples of prosecution and fines imposed against craft brew businesses for non-compliance with labelling, including labels which were deemed misleading or false under the ACCC.
Mandatory Label Information Includes:
- Product Description ( Standard 1.2.2 )
- Volume Statement ( National Trade Measurement Regulations )
- Alcohol Content ( 2.7.1 )
- Standard Drinks Statement ( 2.7.1 )
- Country of Origin ( ACCC )
- Supplier & Packer Name and Address ( 1.2.2)
- 10C Refund Statement ( Australian Beverages Council )
- Best-Before Date ( 1.2.5 )
- Pregnancy Advisory ( DRIS )
- Lot Identification ( 1.2.2 )
- Sulphites & Allergens ( 1.2.3 )
- Other Use of Ingredients ( 1.3.1 , 1.3.3 , 1.4.4 , 1.5.1 )
Legal Requirements for Non-Mandatory Label Information:
- False Claims ( ACCC )
- Responsible Marketing
- Health Claims
- Nutrition Claims ( 1.2.7 )
- Low Alcohol
The following labelling elements are generally helpful. When applicable, any standards are linked.
- Responsible Drinking Message ( DrinkWise )
- Barcode ( GS1 )
- Recycle Logo ( Planet Ark )
- Ingredients List ( 1.2.4 )
- Nutrition Information Panel ( 1.2.8 )
Protect Against Liabilities
It’s costly to scale your passion for craft brew beyond a home hobby to a microbrewery business. It’s even costlier if you fail to protect your new business from the various liabilities. An estimated 87% of small and medium-sized enterprises (SME) believe a liability could put them out of business. The smartest time to protect your business is before you’re facing a claim.
The production, manufacturing, distribution, and sales of craft brew can introduce a number of liabilities, including the possibility of exposure via property, employees, products, or customers. Insurance coverage should minimise your financial risks if you experience an unexpected event such as property damage, a product recall, or an on-site injury.
- Property & Asset Insurance
- Public & Products Liability Insurance
- Workers Compensation Insurance
- Commercial vehicle insurance, if applicable
Australian business tax liabilities are more than complex than paying a simple 27.5% on profit. There’s many concessions available, especially to small business owners. It’s a risk to profitability to either underpay or overpay your taxes to the ATO and local territories. Protecting your business against tax liability requires strong systems for records-keeping and knowledge of liabilities. For many aspiring microbreweries, working with a small business tax specialised accountant is the best way to avoid risk exposure through tax mistakes.
A trademark is used to distinguish your business and products from other businesses. Trademarking your business name, logo, and craft brew names can protect your brand from competitors and copycats. Researching the trademark process on IP Australia can provide insight into the benefits of trademarking your name, brand, and beers. It’s possible to manage your own trademark applications, but many new microbrew businesses choose to work with a trademark attorney on this process.
Knowledge is a Launchpad to Microbrewery Success
If you’ve got a solid stash of craft brew recipes and some technical knowledge of brewing, you’re at a huge advantage for starting a microbrew business. When craft brew knowledge is coupled with knowledge of the business and legal requirements for Australian business, you’re in a nearly-unstoppable position. Creating a business plan should involve a heavy investment into researching the industry, your target market, and all applicable requirements for licensing, labelling, taxes, and records-keeping.
You can protect your business against liabilities and risks by partnering with an SME consultant who specialises in craft brew startups. JD Scott & Co is the leading resource for Australian accounting, advisory, and tax help for fledgling microbrew businesses.
Got a Questions?
We're always happy to have a chat. Feel free to contact us via the contact link below, or call James directly on 0404 530 563.
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Black Hops Brewery Co Business Plan
Torgeir Aleti (né Watne)
This paper explores the business models adopted by craft breweries in the state of Victoria, Australia. The brewing industry is undergoing dramatic changes in many countries, with increasing numbers of craft breweries challenging the traditional duo- or oligopolies of major corporations in niche markets. So far, little research has addressed the craft beer industry and this paper is one of the first to actually focus on the breweries and their owners. The underlying assumption in this study is that craft beer entrepreneurs are driven by some form of entrepreneurial passion. Building upon the foundation of a typology of entrepreneurial role identities related to passion, this paper investigates how different objects of passion influence the business models that craft brewers choose to operate. The paper reports initial results from an on- going research project.
Within the last 20 years, the number of breweries in Australia has grown from 11 to almost 150. The new entrants to this market are ‘craft breweries’: small, independent and traditional breweries, which differentiate their products on taste and ingredients. The products they offer are often not ‘standard’ commercial lagers (e.g. VB, Fosters, Budweiser, Heineken, Carlsberg), and many consumers have little knowledge of, and experience with, speciality ales. From a consumer socialisation perspective, this study investigates how craft brewers educate their consumers about their products in the state of Victoria, Australia. Based on in- depth interviews with the business owners, we examine craft brewers as sources of influence – or socialisation agents – within a boutique industry. The results indicate that the craft brewers position themselves as experts and as such may be an important socialisation agent.
The Geography of Beer
Brewing has been an important part of Wisconsin’s culture and economy since the first settlers arrived in the early 1800s. Like much of the country, Wisconsin brewers experienced a spatial shift in accordance with the industry’s technology. Starting with many brewers each serving local markets, developments in beer preservation, packaging and transport allowed certain Wisconsin brewers to seize opportunities for expanded market areas. The enlarged economies of scale achieved by these larger brewers provided a competitive advantage that slowly put smaller operations out of business. By the mid-20th Century, brewing had largely become a national enterprise with fewer local or regional players. Though its market share remained limited, the craft brewing movement represented a reversal of this trend, both nationally and in Wisconsin. Like the early brewers who had settled the state, these new Wisconsin breweries were focused on achieving an economy of scale by developing a local market of consumers.
Diego M. Coraiola , Bill Foster , William Foster
We present an exploratory analysis of historical narratives and data covering 200 years of beer brewing in the Canadian province of Ontario. These data are used to illuminate the process of collective identity emergence in established organisational fields. We argue that established fields are typically littered with identity remnants from ancestral organisations and related institutional configurations that can facilitate the successful emergence of new collective identities. In our analysis we first show how multiple identity elements fell by the wayside as the beer brewing field matured and settled on a corporate path. We go on to detail how some of these identity elements were subsequently recovered during the recent decades which marked the successful emergence and proliferation of craft beer brewing. Our study has implications for research on collective identity and organisational legacy, and we stress the importance of taking a historical lens for understanding present day phenomena.
This case was written by Dr Grace Khoury, Birzeit University. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was made possible by the co-operation of Taybeh Brewing Company.
Stephen S Holden
Sorry, preview is currently unavailable. You can download the paper by clicking the button above.
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How to Craft Your First Brewery Business Plan
Starting a brewery
According to the Brewers Association , there were 6,372 breweries in the U.S in 2017, with microbreweries making up 3,812 (approximately 60%) of this total. A standard brewery produces beer in large quantities, normally more than 15,000 barrels per year. A microbrewery, which is also known as a craft brewery is a smaller operation, which produces less than 15,000 barrels per year. Microbreweries are generally owned by individuals because of the small scale. Owners of microbreweries produce beer in distinctive flavors and use a different technique than conventional breweries.
Although microbreweries are smaller in size than traditional breweries, they still require a significant amount of planning and money to get started. Entering the brewery industry requires a lot of investment because the beer industry is heavily taxed. However, there has been a new tax code that provides two years of tax relief for American brewers . Creating your first brewery business plan is essential to increase the likelihood of success of your brewery or microbrewery. Your first brewery business plan is a useful tool to help you to secure funding and to efficiently operate your brewery or microbrewery.
Download a Brewery Business Plan sample below to get started:
You should take the following first steps before crafting your first brewery business plan:
Research the brewery industry by reading all the information that you can find. Case studies, books, and articles all provide useful tips about what it takes to operate a brewery business.
Connect with other brewers who operate successful breweries and ask as many questions as possible. There is nothing like getting first-hand information about the pitfalls to avoid when starting your brewery business.
Brainstorm names for your beers and research whether the names have been trademarked. This step is important to prevent you from wasting money on marketing and promotional materials only to find out that you are not permitted to use the name.
Most brewers have a passion for making beer, however, this passion may not sustain a thriving business if they fail to plan for every eventuality in starting and operating a brewery or microbrewery. The questions below will help you to clarify your vision if you are planning to start a brewery, microbrewery, or craft brewery:
- Have you made a commitment to find out every federal and state law in the very heavily regulated brewery industry?
- Will you choose a production brewery or a brewpub ?
- How will you differentiate your brewery from all the others?
- What types of drinks will you brew? Are you going to focus on just ales or will you include other drinks, for example, lagers?
- Are you thinking of opening more than one location?
- What will your distribution network and channels look like?
- Are you going to concentrate on selling your drinks in your own bar ?
Crafting your first brewery business plan
You can start your brewery or microbrewery business plan from scratch or you can download this sample below: Brewery Business Plan Sample Downloadable Link
The following sections should be included in your business plan irrespective of whether you are starting a traditional brewery, a microbrewery, or planning to sell craft beer:
An executive summary – The executive summary of your first brewery business plan is an overview, which provides an outline of the key points mentioned in the rest of the document.
Goals and objectives – The goal section informs the reader about where you plan to take your brewery business and your objectives specify how you will achieve your goals.
Company summary – You should provide details of your brewery company in this part of your brewery business plan. The company summary should include your history and what makes you unique. It should also highlight any accomplishments and awards that your beers have received.
Company ownership – It is useful for investors to know as much as possible about the person or people behind the brewery business. Use this section to describe your experience and qualifications for operating a brewery. Ensure that you focus on the strengths of each joint owner and how they will use their expertise to ensure the brewery is a success.
Market analysis – In this section of your brewery business plan, provide the reader with an overview of the brewery industry. You should state facts and figures about the growth and popularity of beers on a national and local level. Additionally, you will need to provide information about the demographics of the area where you will be selling your beer. Lastly, you must explain the reasons for the growth in beer sales and provide evidence to suggest that this trend will continue in the future.
Strategy and implementation – Use this section to explain how you will grow your brewery business. Provide advice about your sales strategy by giving details about the number of salespeople you will employ and the commission that will be paid. This section should also include information about whether you intend to provide discounts for wholesale customers. Sales forecasts – You should provide details about your sales forecast for a minimum period of three years. Investors need to have an idea of how they will recoup their money and this section will give them details about how you believe your brewery will perform.
Management – This part of your brewery business plan will give details about the personnel that will be required to operate your brewery. You should list all the members of the management and non-management team, including the salary you intend to pay. At the end of this section, you should provide the total that you expect to spend on payroll .
Financials – The financial aspect of your brewery business plan goes into detail about the important numbers that investors will review to make a decision about whether to fund your brewery. The financial section of your brewery business plan should include a break-even analysis, profit and loss forecast , and projected cash flow.
Appendix – Use the appendix of your brewery business plan for supplementary information that could not be expanded on in the body of the document. For example, you could include a full breakdown of your personal plan and the general assumptions that you have made in relation to certain financial forecasts.
How to start a brewery
After you have researched and spent time creating your business plan for your brewery or microbrewery and you have received the relevant funding, take the steps below to start your business:
- Find a location
- Select your equipment
- Obtain funding
- Renovate your premises
- Get insurance
Choosing a location for your brewery or microbrewery is one of the most important decisions you will need to make. The ideal scenario is to start your brewery or microbrewery business in the area that you would like to serve. You need to consider whether the area of your choice has premises with enough space, the appropriate zoning, access for raw materials, and customer access.
The type of equipment you use can make or break your brewery or microbrewery. You could decide to go with a new customizable system to make your craft beer. However, this could take a considerable amount of time and might delay the opening of your brewery. Alternatively, you could buy a used system but you may face issues if the system breaks down and the seller does not provide support. The following are some necessary equipment when operating a brewery or microbrewery:
- A mash system – If producing at least 1000 liters of beer per batch, you will need a mash system that includes an electric steam generator, mash tank, lauter tun , malt mill machine, heat exchanger, and a wort pump.
- Fermentation systems – You will need a fermentation tank, cooling pump and equipment for adding yeast as part of the fermentation process.
- Filter systems – To get rid of sediments, you will require a filter pump and a diamite tank, which also improves the quality of your beer.
- A cooling system – A refrigeration machine and a large liquid tank are necessary to get your beer cool and to avoid bacteria growth.
- Controls – Controls are required for your refrigerator and you will also need a master controlling board for your pumps and all electronics to ensure the safety of your microbrewery.
- Cleaning and sanitation – An alkali liquor tank, a washing pump and a large tank are necessary for your sterilizing solution. This equipment should be used to sterilize your microbrewery’s equipment.
- A bottling/kegging tap – You must have a pump to keg your beer and a bottling plant if you intend to bottle your beer.
You should have already projected your brewery’s or microbrewery’s startup costs during the business planning process. You can choose several different routes to fund your brewery or microbrewery, including a conventional bank loan, private investors, or a Small Business Administration (SBA) loan. According to profitableventure.com your brewery’s or microbrewery’s startup costs should include the following:
- Business registration fee – $750.
- Legal expenses for securing licenses and permits – $1,300.
- Marketing and promotion expenses for the grand opening – $3,580.
- Business consultancy – $2,500.
- Permits, insurance and licenses – $5,000.
- Building or renovating your microbrewery – $200,000.
- Equipment for the brewery – $150,000.
- Office equipment – $15,000.
- Website – $700.
- Miscellaneous – $5,000.
The start-up costs for a medium-sized brewery is about $750,000. This figure includes staff pay for the first three months of your business. The start-up costs for a microbrewery ranges from $250,000 to $500,000. A large brewery will require start-up capital of around $2.5 million. Due to the significant investment required for starting breweries and microbreweries, it is critical that you understand your financials to have a realistic projection of when you will break-even and start generating a profit.
It is necessary to hire expert contractors to renovate your premises in order to operate an efficient brewery or microbrewery. Whether you have bought or leased a property, you will need people with the appropriate experience and skills to ensure that your brewery or microbrewery has:
- The suitable ventilation to cope with a large amount of steam that will be produced during the process of making your beer.
- Proper drainage to effectively deal with thousands of gallons of beer.
- Quality flooring to withstand the wear and tear and that can hold up under the high acid content of spilled beer.
Like any other business, your brewery or microbrewery will need to be covered by different types of insurance. The various types of insurance you will need to protect your brewery or microbrewery includes:
- Equipment breakdown coverage.
- Product recall coverage.
- Crime coverage.
- Market valuation coverage.
- Workers Compensation.
Time to start brewin’!
Crafting your first brewery business plan will take a significant time investment, however, this process is necessary for you to decide whether you want to turn your passion into a business selling beer that people love.
Once your business is up and running, why not give Deputy a try to take care of all your scheduling, tasking, timesheet, and internal communication needs. To learn more about employee management software and how it can benefit your business, click on the button below to begin your free trial:
Important Notice The information contained in this article is general in nature and you should consider whether the information is appropriate to your needs. Legal and other matters referred to in this article are of a general nature only and are based on Deputy's interpretation of laws existing at the time and should not be relied on in place of professional advice. Deputy is not responsible for the content of any site owned by a third party that may be linked to this article and no warranty is made by us concerning the suitability, accuracy or timeliness of the content of any site that may be linked to this article. Deputy disclaims all liability (except for any liability which by law cannot be excluded) for any error, inaccuracy, or omission from the information contained in this article and any loss or damage suffered by any person directly or indirectly through relying on this information.
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How to start your own brewery
Craft a career in designing and brewing beer..
In this guide
What skills, knowledge or requirements do I need to start a brewery business?
Courses and qualifications to consider, equipment and software needed to start a brewery business, what business structures do i need to consider before starting a brewery business, do i need any legal documents written up before i start operating what about online legal services, where to find legal services and documents, how much should i charge my customers, how do i build my customer base, frequently asked questions.
How to guides
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If you have some experience of home-brewed beer, you'll know that crafting to the right taste requires a lot of patience and a deft hand. Apply the same skills to your own brewery business and you might make a barrel load.
Keep reading to learn what you need to know about starting your own brewery.
As mentioned, running a brewery requires skills in designing and brewing beer. Many of your days will also be spent managing accounts, interacting with the hospitality industry, working out transport and logistics, and marketing your brand. Some brewery owners even leave the actual brewing to their employees.
The brewery business is a tough one, and you will need to maximise efficiency and invest in tools that will help you brew the best product. Some skills you'll need include:
- Communicating your brewer's story and mission effectively.
- Attention to details such as mathematical measurements, recipes, time management, proofreading newsletters, tracking inventory and pulling bad beer.
- Strict adherence to protocols and standards of practice.
- Proficiency in computer skills and brewery management software.
Read more about how to market your small business .
You can find accredited courses from registered training organisations like The Institute of Brewing and Distilling and Brewery Training Australia . The typical cost of a course is around $3,500. The courses available include:
- Certificate III in Food Processing (Micro-Brewery)
- Certificate III in Food Processing (Brew Pub)
- Certificate III in Hospitality
- Certificate IV in Competitive Systems and Practices
- Certificate IV in Food Processing (Brewery Operations).
TAFE NSW Ultimo offers a Certificate III in Food Processing (Micro Brewing) for 44 weeks. There's a NSW Smart & Skilled Fee-Free Traineeship available for this course. TAFE South Australia offers a similar course with the chance to become an apprentice for up to 12 months.
You may also want to consider an apprenticeship to gain hands-on skills in the industry. Or you could kick things off with an online course .
The startup costs for a brewery business can get quite expensive. However, if this is a field you are certain about, you should invest in quality equipment. You will need:
- Fermentation vessel
- Bright beer tank
- PDL bag filter unit
- Glycol tank
- Controlling unit
- Mobile pump for CIP & transfer
- Double station keg rinser
- Bottling machine
- Cooling systems or storage
- Waste management system.
Besides the equipment you will need to brew beer, you should also consider hiring a graphic artist for your brewery logo and labels, a photographer to help with marketing and even an accountant to help manage the business. Consider hiring a consultant to inform you of the current market and to conduct market research in advance of opening up in a new territory.
Create a business logo
If you are looking to protect your personal assets, you can choose to apply as a partnership business or a company. In a partnership, two or more people act as co-owners of the business. They share the income, losses and debts. The partners can act on behalf of each other in the business. If you want to limit your liability, you might consider a company structure. A company is a separate legal entity. Shareholders act as decision-makers who share in the company's financial responsibilities.
Once you have established your business structure, you can register with the Australian Securities and Investments Commission (ASIC), get an Australian Company Number and apply for an Australian Business Number (ABN). You'll also want to trademark your beer brand and name, get permission from the Australian Tax Office to manufacture alcohol, apply for a local city planning permit or development approval and a building permit.
Drawing up legal documents before you start operating will help your business run smoothly. Some of the key legal documents you'll typically need include:
- Australian Government Brewery Licence. This licence is a prerequisite to manufacture beer for commercial purposes legally.
- Liquor Licence. The kind of liquor licence you'll need depends on your business operation and how you sell the liquor. Some of the licences to consider are a commercial hotel licence if your brewery has an on-site tavern, a subsidiary on-premises licence if your brewery runs a cafe or restaurant as well, and a producer or wholesaler licence.
- Brewery distributor agreement. This document outlines the terms and conditions between a brewery business and its distributor. The agreement states that the brewery agrees to brew beer and sell it to the wholesaler who pays for it. The brewery is obligated to make a saleable product and the wholesaler is obligated to sell it. It is essential to know your state laws before writing up this document.
- Wastewater agreement. You will need to get written approval from your local or state council if your brewery business discharges trade wastewater.
- Employment agreement . Having a legally-sound employment agreement in place is crucial to protecting your business. The employment agreement sets out the employee obligations, the term of employment, their working hours, remuneration review and benefits.
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Does your company belong in this list?
Your brewery business will have various avenues for selling your craft beer. Significant routes for sales include packaged beer sales, keg sales, taproom beer sales, taproom growlers and bottle or can sales, events, tours and merchandises. Each avenue has a price of its own. Selling beer through a taproom means considering the additional cost of it to the brewery set-up.
When selling beer to distributors or retailers, take into account the core and special ingredients, staff per batch, canning per batch, and packaging and warehousing per batch. Then add to that the cost for tax and your overhead costs to arrive at a total cost, to which you can add a percentage for your profit margin. There are no set sales prices to fit every brewery business.
Your running costs will include bank fees, wages, consulting and accounting , contractors, freight and equipment hire, delivery, business insurance , IT, software subscriptions, marketing, fuel, rent, maintenance and services.
Ready to get set up with Square?
There are a number of effective ways you can win customers for your brewery. These include:
- Create a website that produces quality content on crafting beer and the brewery business to appeal to your audience's curiosity.
- Invest in learning SEO for your blog, as this is how people will find you.
- Build awareness and your brand's image online via social media platforms.
- Strategise the photos and videos you post so that you actively engage in personal relationships with clients.
- Provide your social following with something that is uniquely your brand. For example, pairing recipes with the different beers you brew, pairing songs with drinks, or sharing advice for home brewers.
- Take advantage of any ways to personalise how you engage with your audience. This can help to boost the loyalty of your clientele.
You may also want to consider working with tour guide businesses . Provide tourists with an exclusive, behind-the-scenes look at the craft beer scene, and introduce them to the history and techniques in crafting locally made brews and beverages. Don't underestimate the power of word-of-mouth and short reviews on Google to help drive more business.
What is beer brewing?
Simply put, beer brewing is the practice of brewing water, starch, yeast, and hops in order to produce beer. This is not the entire process; you'll also need to ferment the end product, which is followed by a period of conditioning.
How long does brewing beer take?
Crafting beer is a process that typically takes one to two months. The beer will need to ferment in the beer brewing kit for at least two weeks or longer, depending on the type of beer, followed by two weeks of bottle conditioning. Production of barrel-aged and sour beers can take years.
What's the difference between fermenting or bottling in plastic or glass?
There is no difference in the quality or taste as the beer will ferment and carbonate the same way. Glass bottles will last a lifetime, excluding cases of breakage. Comparatively, plastic will last a long time if well cared for, but aggressive cleaning will scratch plastic surfaces and plastics left in harsh conditions will degrade.
Patricia Camille is a writer at Finder. She regularly writes about books and her literary insights at Camillea Reads where she has gained experience in SEO and digital marketing. Patricia has a Masters in Sociology and a Bachelor of Arts in Journalism and Mass Communication. When she is not reading, you’ll find her playing Animal Crossing or out on a long walk.
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Lessons learned opening our brewery business
It’s been almost a year now since Eddie, Govs and myself put our love of beer to the ultimate test and opened our own brewery business, Black Hops.
As per our manifesto of being ‘the least covert operation in brewing’ we documented everything along the way, through blog posts, podcasts and our book Operation Brewery . The book was our warts and all account of our journey from craft beer drinkers to brewery owners. We wanted it to be the ultimate ‘how to’ manual on starting up a craft brewery on a budget.
But the book was finished before we opened the brewery, and we’ve learned a lot of important lessons since. Here are some of the top ones.
Making beer is expensive
As casual beer drinkers we often wondered what went into craft beer prices. Now that we’re fully fledged small-scale brewers, we can safely say that making good, fresh beer is definitely an expensive exercise!
Beer is a scale game, which means the more you make the cheaper it gets. If you want unique beer, brewed locally it comes at the cost associated with producing at a small scale. All of our beers are brewed using premium ingredients from quality suppliers, to make sure we achieve a consistent taste and quality that is reflective of our brand. We’re happy to pay more to make sure we get it right.
We have a small setup, so making (and particularly packaging) beer is expensive, but we have a lot of flexibility over what we make, hence the ‘core range’ of 9 beers.
For a full cost breakdown of our cartons and kegs, as well as the ingredients we use, check out this previous blog post .
As well as the cost of ingredients, selling our beer onsite at the brewery also incurs costs around labour, packaging and labelling, excise and overheads. It’s frightening sometimes to look at our monthly expenses and see just how much we have to make just to break even. We have been somewhere around break even most months, but every month is a strong effort to cover our costs.
A lot of the costs we estimated before opening were underestimated.
We have brewing costs including Excise, core ingredients, special ingredients, bottles, cans and packaging, water and keg rental. Then there’s running costs like bank fees, wages, consulting and accounting, contractors, events, freight, cold room and forklift hire, insurance, IT, bad debts, subscriptions, phones, travel, marketing, fuel, office expenses, printing, rent, maintenance and services, License and other things that come up randomly.
As we continue to expand our operations things won’t be getting any cheaper either. Sure at scale, beer is cheaper to make but getting there is an expensive process. To distribute beer around Australia and sell into bottle shops we’ll need to factor in costs around things like storage, transport costs, profit margins, packaging, launch events and potential breakage. The further our beer goes, the more it costs to get there.
This is an expensive and complicated business to run, which we probably didn’t have much of an appreciation for when we started.
Cashflow is a constant challenge
Not only is it expensive to make beer and run a brewery business, it’s also very challenging cash flow wise.
We pay for almost everything when or before we use it; wages, rent, ingredients, excise, transport, the list goes on. But in a lot of cases we don’t get paid for kegs until long after they leave the brewery. We’ve had more than one instance of bars going out of business and owing us thousands of dollars. Sometimes it can take months of time and effort to chase up bad payers before we finally get paid.
We are getting on top of accounts receivable by mandating direct debit for new venues and not selling beer to people who don’t pay, but that just creates a bigger sales challenge – more on that later.
The Taproom at the brewery also helps enormously with cash flow. Without that, we would have no chance of running a cash flow positive business.
We are also going to be selling beer online soon, which will help with cash flow. Just last week we put up 40 cartons of our new Pale Ale, and sold them all within 2 hours, so that is a promising sign.
Suffice to say, that cash flow is something that we are conscious of on a weekly, if not daily basis.
Shit breaks and stuff goes wrong
When we decided to get our equipment direct from China (the first from this manufacturer in Australia), we knew we were taking some risks. But we really didn’t have a choice and also figured that the significant savings in dollars would make the risk worth it. We expected some things to break and they did.
Related : From China to Burleigh, Craft Brewery Equipment Delivery & Setup
Related : Chinese commercial brewing equipment, six months on
Here’s a quick list of things that have broken:
- During setup, our plastic welder we used to weld the Glycol pipes burned itself alive when we left it cranked up to max heat (the Chinese instructions saying not to do that, didn’t help us too much). The supplier sent another one so no big deal, it just slowed us down a bit.
- A few months after opening, our Glycol pump seal blew out and we lost a whole tank of Glycol. It cost thousands of dollars in repairs and Glycol alone. We filled the tank with ice from Coles while we waited for the pump to be fixed and managed to save all the beer we had fermenting.
- After opening, Govs made a habit of not leaving his babies (tanks) alone for more than a few hours at a time. After a few months, once things settled down, he decided to take a work trip for 2 days. The day after he left, one of the solenoids for one tank stopped working and no cooling fluid made it into the beer. We tried our best to save the beer, even delayed the decision of whether to keep it until after we’d bottled hundreds of cartons and kegged it. In the end we dumped the whole batch, costing thousands of dollars. We’ve since put a whole new system in for handling the Glycol piping (costing tens of thousands of dollars).
- The motor in the Lauter was upgraded, it didn’t have enough torque. Not urgent but had to be fixed.
- The Mill has broken twice. The first time we had an electrical issue, the last time we accidentally tipped it over and smashed the motor, whooooooooops.
- There were also some smaller things like the keg washer element melting, temp probes being faulty and the CIP pump didn’t have RCD installed.
There are probably more things but these are the main ones that come to mind. All in all, we’ve had a pretty good run with equipment once the brewery was set up, but it is something we have to be conscious of all the time, particularly with things that can affect entire batches of beer.
Selling beer is not easy
Another big lesson for us is that selling beer hasn’t been as easy as we thought. We didn’t struggle to sell our first contract-brewed batch of Eggnog Stout back in 2014, so we thought it would be that easy to sell our beer once we opened.
This is far from the case. Like cash flow, sales is something that we talk about every single day and probably gets more attention in the business than anything else.
Big pubs haven’t been easy. Tap ‘real estate’ is hot property, and the major brewers have most of them locked down through setup incentives with the venues and other discounts.
We’ve seen great support from smaller independent venues but we haven’t had much luck at all with the bigger venues.
We only have 1 full-time staff member and that’s Kris our sales guy and we are constantly at venues, doing events, or planning how to get our beer out there to more venues.
Sales is constant and our motto of “Always Be Closing” has gone from fun to “Actually guys, we literally do have to always be closing….”
Related: Don’t ask for craft: how you can drive beer choice at your local
Running a brewery is a lot of work
While running your own brewery is probably most beer lovers’ idea of ‘living the dream’, the truth is more a case of blood, sweat and beers! Yes we enjoy the occasional after (before, or during) work beverage, but it’s earned by everyone working for it. And when we aren’t working, we are thinking about it. Since launching we’ve sent 95,500 messages on the Black Hops Slack messaging app. That’s 130 messages a day for 2 years straight! There’s very rarely a period of more than about an hour between the hours of 7:00am and 11:00pm where there aren’t messages flying back and forth in the Black Hops Slack group.
We’ve had to hire people too, we just couldn’t do all the work ourselves. I was supposed to work 1 day a week, in reality I’m not far off full time. Eddie and Govs are full time. We’ve hired people to work the bar, to bottle the beer, for sales, for brewing and for admin. And outside of that, we’ve hired a lot of services for things like accounting, legal, town planning, design etc. We try where possible to do things ourselves but we can’t do everything. This obviously costs more money and puts more pressure on finances and cash flow.
To put it bluntly, there’s a shitload of work involved in getting our beers flowing through taps, into bottles and cans and down people’s throats!
Yes there’s the perks, like showing up at venues and sharing our beer love with the patrons. But for every event attended and beer sunk, there’s 101 other things to get done.
I for one, was way off in my expectations of how much work this was going to be.
Every authority has us in their sights
Before we opened the brewery, we dealt with a crap load of bureaucracy and jumped through a heap of hoops to ensure we were compliant with industry and government regulations. But if you thought we could breathe easy once we launched, well, wrong.
We’ve had visits from police, liquor licensing, council members, council staff, food and beverage departments, disgruntled neighbours, had audits from the ATO and more. Pretty much every group and authority you can think of has us in their sights.
We’ve managed to stay out of trouble and we’ve been very careful to not break the rules. If we do, we are constantly watched and will end up in hot water.
It’s not a major concern but it’s something we have to be very conscious of. For example, anyone playing basketball next to the taproom (we have a few hoops set up there) could trigger a noise complaint which would be investigated by licensing or council.
If we process an order at 6:01pm, those records can be sent to licensing and we can be in breach of our license.
If people are parking across driveways, council could be called in.
The list goes on.
Profitability is a constant challenge
I’ve talked about cash flow and how expensive beer is to make, but let’s dig into finances more. We obviously want to be running a profitable business. If we aren’t, then we are in a position where we need more money from investors, and retain less equity for ourselves. Or worse, we can’t raise money and the business fails.
We were able to have our first profitable quarter in the final quarter of 2016, which was only our second quarter in business. That was very encouraging, but maintaining profitability has not been easy, particularly since costs continue to go up and those are the 3 busiest months of the year.
Here are our major avenues for sales and how we go about trying to make each one profitable.
- Packaged beer sales: Bottling beer here on our manual 4-head machine is very expensive and time consuming. It’s almost impossible for us to package beer here and sell it to venues at a decent margin. We are working on this by going into canning with the release of our Pale Ale cans coming next month.
- Keg sales: It’s not a huge margin but if we can sell a keg for $270 and get paid reasonably quickly, we can make some money on kegs. We do have to sell a lot though, and as we mentioned before, sales is a constant challenge.
- Taproom beer sales: At our Taproom, we can sell beers for $8.50 each which means making close to $1,000 on a keg (eventually). Since we aren’t paying the overheads of a restaurant or bar, and the taproom was a small additional cost to the brewery setup, this is a very good margin for us. Without our Taproom, we’d really struggle to make a profit. Actually we simply would not be close to making a profit. We try to staff it ourselves every week so we don’t have to pay staff, so we can retain as much of the margin in the business.
- Taproom growlers and bottle / can sales: While it’s hard for us to make money by selling into bottle shops, we can do quite well if we sell the beer directly at our Taproom in takeaway packs. For example, we will be selling our Pale Ale 12 pack cartons for $46 which leaves us a reasonable margin on a beer that is well priced for the customer. We also sell beer in squealers and growlers with better margins because there are no packaging costs for us.
- Events and tours: While we aren’t doing any specific events at the brewery, we do run tours and charge $20, which includes a quick talk about the brewery and a tasting paddle. We also occasionally do offsite events and functions, which make us a bit of money too. We are looking into doing more paid sessions where we educate locals on various aspects of beer.
- Books and merchandise: We sell our book, Operation Brewery, as well as merchandise like Black Hops shirts for a reasonable margin. The books cost us about $9 directly (not including all the time and money and effort which went into writing it!), and we sell them for $20. The shirts cost around $13-$16 and we sell them for $30. We don’t make much on this, but it keeps ticking over.
Our big focus right now is smashing the launch of our pale ale , starting to sell beer interstate and being able to consistently sell more kegs. If we don’t sell enough kegs, it means we don’t operate at 100% of our capacity which means our effective costs are a lot higher.
Transparency has worked
To make an impact in business, sometimes you need to do things a bit differently. We’ve always been savvy in taking advantage of unique PR opportunities, such as partnering with games giant Activision to make the world’s first Call Of Duty beer.
As mentioned already, our book Operation Brewery laid out our formative story for all to see and learn from. And since then, we’ve continued to share our ongoing journey through podcasts, blog posts and getting out there, sharing our love of beer and our stories at venues that stock us. We’d like to think that this no bullshit, no agendas approach has helped us build respect and trust within the beer community.
Another plus in staying transparent is that it’s lead to plenty of interest in and coverage of what we do, very little of which we’ve had to actively chase. Since we’ve opened the doors we’ve received exposure from many places from local press outlets, to beer-specific publications and mainstream media like newspapers and TV stations.
This is effectively free marketing and when our marketing budget is virtually zero, it’s nice to have some effective marketing that doesn’t cost us anything.
The Taproom wins
As already discussed, the Taproom ( aka Black Hops HQ ) has played an important role in keeping us profitable. But equally as vital, it offers visitors a fun, local place to hang out, share a yarn and make new friends over the time honoured tradition of sinking a few beers.
Since we opened the doors last year, we’ve steadily built a regular clientele, many of whom are locals appreciative of drinking good beer within walking distance of home. We’ve made some good friends and met a lot of interesting people, and it’s this sense of mateship and community that has been one of the most rewarding parts of doing this.
It also gives us a great audience to chat with whenever something new is happening and gives us a vehicle for immediate feedback on all of our beers.
It’s hard to imagine owning a brewery without having the Taproom, both financially and also just from a day to day fun standpoint.
It’s not all bad
We didn’t really want this list to be totally negative, but it sort of ended up that way. The truth is, there are lots of positives as well, but they are all things we knew about before opening.
When you think of opening a brewery, all that comes to mind is beer on tap, hanging out with mates, living the dream.
For sure, there’s been plenty of that. It’s a lot of fun, we’ve hung out with a lot of great people, and we’ve enjoyed our fair share of beers. We feel like we are building something good for locals and feel like we are working towards something that will be valuable to us too.
It just hasn’t been easy, and in this post we wanted to make sure we set a realistic expectation for others going into it.
If you’d like to delve more into beer and business, check out our Ambassador group which is now close to 500 members. If you have any questions about our lessons learned, feel free to ask below.
FOLLOW OUR JOURNEY
We have been openly sharing our craft beer journey since we brewed our first beer in 2014. If you’d like to get our updates, please jump on our email list below.
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Planning Your Brewery
Whether you’re an experienced homebrewer, an established pro brewer or someone who has never made beer before grain and grape is here to help you build a profitable business in brewing., what type of brewing business works.
There are several proven ways of building a commercial brewing business. Here’s what’s proven to be profitable using a Braumeister 50, 200 or 500.
We’ve provided a brief overview of each type of business, the overall numbers and examples of working breweries that you can chat with or visit!
Brewery tap house - brew multiple kegs at a time and serve direct to public.
If you wish to make a living from being a brewery owner then the brewery tap house is a well proven business model and our most popular type of Braumeister commercial customer.
A typical brewery tap house is focused on selling beer direct to the public and has no in-house kitchen to reduce setup costs.
Very limited food is usually provided to keep happy customers onsite either by partnering with nearby take aways (eg https://www.facebook.com/Innernorthbeer/ ) or a visiting food van or a behind the bar pizza oven ( eg https://www.facebook.com/WestsideAleWorks/ ) or similar micro kitchen.
Most sales retail margins are at full keg value (typically ~$900 /Keg revenue) and because multiple kegs are produced at a time, labour costs per keg are significantly lower than for a Nano brewery. This means that with a careful site selection the initial investment does not need to be massive to build a profitable business within typically 6-8 Months from signing a site lease.
Typically around $80-$120K all up including Braumeister 200 or 500 with 2 x Speidel 625L stainless glycol temperature controlled pressure fermenters, glycol chiller, kegs and beer serving equipment.
Equipment setup and processes:
- Wort production – Braumeister 200, 500 or 1000
- Fermentation – Speidel 625L conical pressure fermenters or lower costs Speidel 330L dished fermenters.
- Fermenter temperature control – Kreyer Chilly Max glycol chiller with Kreyer Fermflex for tank individual tank control.
Braumeister Breweries (Tap house/Brewpub) https://www.facebook.com/Innernorthbeer/ https://www.facebook.com/WestsideAleWorks/
Brewery Restaurant / Cafe / Brewpub - Food and Beer service (Have kitchen)
If you’re into food and beer and want to provide a great sit down food and beer experience then a set up from the Brewery Taproom is the Brewpub, or Brewery Restaurant.
This type of business requires more capital investment as a commercial kitchen is required and of course requires more labour with food as well as beer is produced and served onsite.
Our customers have established great businesses with focussed menus such as snacks and pizza ( eg https://www.bojakbrewing.com.au/menu ) to full restaurant menus (eg https://www.copperheadbrewery.com.au/menu-1) or something in between (eg https://www.sheppartonbrewery.com.au/menu)
Sales retail margins are at full keg value (typically ~$900 /Keg revenue) and because multiple kegs are produced at a time, labour costs per keg are significantly lower than for a Nano brewery. Initial investment above the brewery taproom will depend on the scale of kitchen and level of service offered and is usually at least double that of a brewery taproom only, so careful planning is required.
For the brewery component, typically around $80-$140K all up including Braumeister 200 or 500 with 2-4 x Speidel 625L stainless glycol temperature controlled pressure fermenters, glycol chiller, kegs and beer serving equipment.
Add to this the kitchen and food service part of the business which doubles the required investment at least.
Braumeister Breweries (Restaurants / Brewpubs) https://www.copperheadbrewery.com.au/gallery https://www.facebook.com/sheppartonbrewery/ https://www.facebook.com/bojakbrewing/ https://www.facebook.com/captainblighs/
Production Brewery - packaging and selling beer offsite
If you just want to make great beer and distribute to as many customers as widely as possible, then consider packaging beer as part of your business. Grain and Grape has quite a few breweries packing beer in bottles and cans as part of a Brewery Taphouse or Brewpub business, and a smaller number doing production only.
Producing, packaging and marketing beer to be sold offsite to other retail distribution requires a good investment in bottling or canning equipment and very significant effort to sell and distribute this packaged beer. Medium and large breweries do this very well and at lower costs than most small brewers are able to.
That’s why packaged beer for small breweries is most often done in conjunction with a taproom or brewpub business where packaged beer can be sold onsite for full retail margins to visiting brewpub customers, instead of at reduce wholesale margins to a beer distributor or retailer.
We do have a handful of regional production-only Braumeister breweries though such as https://www.ozhoney.com.au/brands/taverners-boutique-brewery/.
A good example of a combined brewpub and production brewery is IronBark Hill Brewhouse, which is a winery, brewery and hospitality venue with a significant investment also in beer canning equipment.
Typically around $120-$160K including Braumeister 500 or 1000 with several Speidel stainless glycol temperature controlled pressure fermenters, glycol chiller, kegs and beer serving equipment. Add to this the beer bottling or canning line which may double this investment.
- Wort production – Braumeister 500 or 1000
- Fermentation – Speidel 625L and 1200L conical pressure fermenters.
- Fermenter temperature control – Kreyer Chilly Max or Kreyer Quantor glycol chiller with Kreyer Fermflex for tank individual tank control.
https://www.facebook.com/IBHBrewhouse/ https://www.facebook.com/bojakbrewing / https://www.ozhoney.com.au/brands/taverners-boutique-brewery/
Nano Brewery - Brewing one or two 50L kegs at a time!
If you have the outlet to serve and sell beer direct to the public by the glass, then you can generate profits by brewing single 50L batches as part of a retail business (eg cafe, small bar or restaurant) Although the labour required to brew 5 kegs is approximately the same as brewing one keg, if you’re selling by the glass this type of business has shown still to be profitable.
These breweries use the Braumeister 50 brewhouse and with Speidel 60L conical fermenters (glycol temperature controlled) or lower cost plastic fermenters.
Why the Braumeister 50?
Professional brewers regularly tell us that using the Braumeister 50 produces very consistent batches time after time. It can store 10 different mash profiles allowing recipes to be precisely controlled using the best automated multi step mash. It also enables you to accurately produce pilot batches which can be easily scaled up to a Braumeister 200, 500 or 1000 batch size.
Sell all beer at full retail value ~$900 /Keg
Typically around $10K all up including Braumeister 50 with 2 x Speidel 60L stainless glycol temperature controlled conical fermenters, glycol chiller, kegs and beer serving equipment.
- Wort production – Braumeister 50 Plus
- Fermentation – Speidel 60L conical fermenters or plastic homebrew fermenters with an
- Fermenter temperature control – Icemaster G40 0.7Kw glycol chiller (for Speidel stainless fermenters) or a fridge or coolroom.
A Nano brewery setup is just like a large hombrew system but usually using all stainless high quality equipment designed for continuous use. Wort is produced in a Braumeister 50 so that full 50L kegs can be produced for every batch. Conditioned clear beer is kegged directly from the stainless fermenters then carbonated in the keg.
Example Nano brewery commercial customers:
Other business models that work!
Accommodation / brewery.
Very good beer margins – sell all beer direct to live in customers!
Braumeister Breweries (Accommodation) https://www.facebook.com/sowandpiglets/
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Business Plan- Microbrewery
- Thread starter junji
- Start date 16/9/08
Help Support Australia & New Zealand Homebrewing Forum:
Hello.. Just wondering if anyone here ever written business plan for setting up a microbrewery or if i can obtain some good info on it? I am doing a course at university where i was required to write up a business plan. One of my group member was from America and he was saying how microbrewery/craft brew is taking off in America, so we decided to write up a biz plan on setting up microbrewery. I've read the previous thread on the paperwork and stuff which was very useful. Wondering if anyone else had more good information.. Thanks in advance John
Autumn Leaf Brewery
Inspectors Pocket Brewery
junji said: Hello.. Just wondering if anyone here ever written business plan for setting up a microbrewery or if i can obtain some good info on it? I am doing a course at university where i was required to write up a business plan. One of my group member was from America and he was saying how microbrewery/craft brew is taking off in America, so we decided to write up a biz plan on setting up microbrewery. I've read the previous thread on the paperwork and stuff which was very useful. Wondering if anyone else had more good information.. Thanks in advance John Click to expand...
Beer soaked philosopher.
Screwtop said: Have written lots of BP's, used to use an AU application which incorporated the WP and Spreadsheeting called Maus Masterplan. Plenty of templates around these days. The basics of all businesses are similar, if you want to write a startup you will need to do more work on space requirement costs and your crossover point will be further out. AHB should be a good source for surveying market segments :lol: Screwy Click to expand...
will be watching this space with great interest.
I brought a book called Handbook of Brewing, the chapter on micro brewing gives equations for sizing the brewery based on local beer consumption patterns, number of seats in a restaurant and other factors. There are also sections on QA, product selection, marketing and more. Good general book on brewing but this chapter alone makes it worthwhile for anyone wanting to start a micro. Handbook of Brewing Edited by Fergus Priest and Graham Stewart Second Edition CRC Press ISBN-13: 978-0-8247-2657-7 Worth every cent MHB
Haven't got it myself but came across this book at abebooks, amazon and a few others: "The Microbrewers' Handbook" By Ted Bruning (2007) The Microbrewers' Handbook written by Ted Bruning until recently editor of What's Brewing guides you through all the practicalities of starting up your own microbrewery. Sounds like it could be worth a peek. Hopper.
junji said: Just wondering if anyone here ever written business plan for setting up a microbrewery or if i can obtain some good info on it? Click to expand...
Cheers everyone for information! If this business plan sounds good, I might even think of starting one...haha I do need a brewmaster...
The Dogfish Head business plan has been published on the net in the past. Sam Calagione's book Brewing up a Business has some useful information in it too.
ahhh...i found a nice templete on microbrewery! Thanks again everyone for your contributions! I guess I have to do some researching on OHS regulations and excise tax stuff...at least Ive got something to work with now... http://www.referenceforbusiness.com/busine...brewery-v2.html If I get a good mark for our biz plan, I shall post it up here..haha
junji said: ahhh...i found a nice templete on microbrewery! Thanks again everyone for your contributions! I guess I have to do some researching on OHS regulations and excise tax stuff...at least Ive got something to work with now... http://www.referenceforbusiness.com/busine...brewery-v2.html If I get a good mark for our biz plan, I shall post it up here..haha Click to expand...
Another US book that might be handy - The Brewer's Association Guide to Starting your own brewery by Ray Daniels. It's on Amazon but surprisingly pricey. Hopper.
HoppingMad said: Another US book that might be handy - The Brewer's Association Guide to Starting your own brewery by Ray Daniels. It's on Amazon but surprisingly pricey. Hopper. Click to expand...
Doctor's Orders Brewing
Following up on this topic to see how you were going junji. Here is a great link to some food for thought on starting a business. linky link . Whilst a lot of it seems common sense it is nice to see it come from a brewery that has been there and done that. The Three Floyds microbrewery business plan also appears to be pretty good. Doc
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Planning Process for Starting a Brewery
Anyone can opt to do the planning process for starting a brewery, you don’t have to engage a Town Planner. However, what you will find after reading this article and listening to our podcast segment related to the topic, that it’s a fairly complicated process and can be a very time consuming thus costly process if you’ve never trodden the path before.
To put it simply there are 4 main stages of getting planning approval and ultimately your liquor licence to legally produce and sell alcohol at your brewery’s site, and they are:
- CONCEPT/SITE SELECTION
LIQUOR LICENSING APPROVAL
Concept & site selection – planning process for starting a brewery.
To go to a Town Planner with a site or location first, might be jumping a step ahead. Ideally they like it when brewers go to them in the beginning with a concept of what they want.
So this is essentially the very first step in the whole planning process and that is understanding what type of brewery you are looking to open.
If you are looking to be a brewery production facility that has an ancillary tasting bar then you are going to focus primarily on industrial leaning zonings.
If it is a brewery that is a Brewpub first and foremost, and the brewing is ancillary to the principal purpose of the pub, then you will be looking for more commercial type zonings.
The issue many brewery owners find is that you can’t have it both ways. If it is going to be a pub it’s not going to be in an industrial area, that’s not going to sit well with local council.
And similarly, if it is a Production facility with more of an industrial business activity that won’t fly either with council as well as with your neighbours if it’s in a town centre, commercial type precinct.
Earlier The Better
Engaging a town planner early on in the piece will give the aspiring brewery owner piece of mind, before fully committing to a site. This way they can explore whether or not this site is feasible for what they want to do at the premises now or into the future. It also helps clearly outline if there will be any potential growing pains for the brewery if success follows.
The quicker you get planning and licensing approval, the more money you will save in the long run, having to prepare less reports to convince council that what you are planning to do at the site is appropriate.
An example could be holding costs with a tenant’s lease if not being able to negotiate a sufficient rent-free period until approval given or even worse that lease falling over and being subject to costly penalties.
A lot of those time attributed costs and direct costs associated with consultants can be minimised going through a town planner and getting you opened up sooner rather than later.
Once the concept has been established, then assistance and guidance is given by at Town Planner on looking at sites within a particular location. This might come in the form of a map showing what these zoning areas are for them to target.
This potential site locations will then be fed back through to the Town planner to either rule out for one reason or another. These sites might be constrained or impacted in some way such as being subject to planning provisions that will prevent them from what they are wanting to do.
Once the site has been decided upon and there is more confidence that it will deliver the brewery you are intending to set up, then you can start putting everything behind that site. This includes preparation of plans and documents and identifying whether it is a Development Application (DA) lodgement with your Local Council or some other planning pathway that might be available.
Complying Development Certificate (CDC)
This is quite important to know, because it is not every circumstance where a DA will absolutely be necessary, as there are other ways to avoid obtaining council consent and getting consent through private certifiers. This is called a Complying Development Consent (CDC) which is a fast-track planning approval system to perhaps gain consent for what you want to do.
However this option is not always available to aspiring breweries, as your the property needs to ticks all the boxes for the type of brewery wishing to be establish. You can read more details about this topic in our Complying Development Certificate article.
Planning & Zoning Laws
The planning system does differ from state to state in Australia. The principles of planning are still the same in regards to industrial, commercial and residential zoning and the various impacts on these zonings.
This is why our first step ‘Site Selection’ is so important because we’ve got to find a site that ticks all the boxes of what you want to do in regard to zoning and planning controls. This is because have to look at each individual site on its merits, asking questions like
- Does the site provide sufficient parking,
- Does it impact on my neighbours in regards to noise, or emissions etc.
Sensitivity Of Your Surrounds
So essentially you need to test the sensitivity of the adjoining properties to each of those things. If you are confident that you are proposing an appropriate land use for a site, and that it isn’t going to contravene any of the planning provisions. Plus it isn’t going to result in an undue impact on your neighbours. Then it is safe to say we can move past that step into preparing what is necessary for what is required for Development consent.
If that site you have selected already has a physical building on it and you only need to carry out internal modifications, then the documentation that you may need to prepare for Development consent will be a lot less. Compare this to someone who has a greenfield site looking to erect a new building or someone who is carrying out significant alterations in additions to their building to accommodate their brewery.
Building Codes of Australia (BCA)
In those circumstances they are going to need surveys of the land, drafting of plans by an architect or a drafter at the least . They are also most likely going to need advice from BCA (Building Codes of Australia) consultants. BCA is a set of guidelines which govern things like toilet facilities, food facilities, doorway whips, access for people with disabilities, entry/exit egress from the building.
So there is a lot that needs to be considered and a lot of potential hidden costs, in regards to trying to retrofit old buildings to comply with new modern day building standards. However, this is what needs to occur when you are moving into a building and use it for a new purpose.
Traffic | Parking | Landscaping
You may also need the advice of a Traffic & Parking engineer if the parking provision is not sufficient to comply with councils planning controls. You often need acoustic assessments if patron noise from the activity of the premises is going to impact on nearby residential or other types of sensitive receivers in the area.
If the site needs landscaping, you may need to hire a landscape architect and these are all things that council needs for minimum documentation for a Development application. That documentation carries with it significant costs, that’s why it’s so important early in the piece with your site selection process. By doing so, you are selecting a site that’s not going to put you into too much debt with commitments of the various types of work that needs to be done to that building to make it fit for purpose for a brewery.
Once you’ve got all that documentation together, it’s about handing it over to council and seeking their development consent. Along with the assessment of a Development Consent application, comes the neighbour notification which nearby businesses and residents get to object to if they have any problems with what you are proposing.
This can include having to provide additional information to satisfy concerns that neighbours or council might have. But the end result hopefully is a determination which is an approval for your brewery and a determination for which your brewery which carries with it a list of consent conditions for which your brewery has to operate.
Now a town planner will help navigate that whole process to make sure that any conditions that council impose on your DA aren’t onerous and that don’t prevent or limit you in a way from carrying out the commercial aspects of your business, compared to what you had intended onsite from the beginning. To a degree a lot of that should be known if you have picked the right site.
Prevent or Minimise Restrictions
An example might be, if you have picked the wrong site and you might get that far down the track and you find that council has imposed a noise condition on you. Or, they may of imposed some hours of operation condition on you which means you can only operate at certain times. It could also mean that you are subject to certain noise constraints which might be very hard to achieve because you’ve picked a site too close to residents or too close to nearby businesses that impact them at certain times of the day. An example of this, could be a nearby TAFE where students are studying of an evening and the noise of your brewery might impact that.
It’s important to point out and reiterate in regards to getting Development Consent, because it is this part of the process that will most commonly help you with having a nice clean, smooth process of consent, and one that doesn’t have you trying to operate a brewery with one arm tied behind your back.
CONSTRUCTON & OCCUPANCY
At that point in time, in NSW at least, the certification of that construction process which will include the critical stage inspections that occur at different stages of the fit out is typically managed by the private certifier. This means you can avoid going back to council at that point and once construction has finished there’s the issuing of an Occupation Certificate (NSW).
It has different names in different states, which basically says that everything has been finished and built, everything has been built according to the National Codes and Australia Standards and its consistent with the original DA and it’s ok to open up your doors for trading.
The other step of the process is the licensing approval. This is one part of the process that can be done concurrently with the DA process, but you cannot be issued Licensing Approval until you have been given Development Consent by council. Once that Development consent comes from Local Council it opens the door for the licensing authority to issue a licence to enable you to produce and sell alcohol from the premises.
That process typically takes 120 days, but there is usually a backlog, but they have a statutory period which they try to adhere to and that is 120 days. But you can lodge that concurrently with your application for Development consent, but you cannot get your liquor licence until you have got Development consent.
A word of advice from Ben at CPS Planning is to hold off on applying for your Liquor Licence until you have a feel from council that they are going to support your DA. When you have got that confidence that you are on track for approval, you can should then lodge the application with your state regulator for your liquor licensing.
To get more information on the liquor & licensing element, listen to our episode with Russell Steele from RSA Liquor Professionals.
EXPECTED TOWN PLANNER COSTS
These are ballpark figures and may only be relevant to what Ben from CPS Planning stated on our podcast episode, so do not treat them as Gospel.
For Stage 1 involving Site Selection (based off 2 – 3 sites to investigate), a Town Planner may have an upper limit or envisage fee between $3,000 – $4,000. This costs could involve site canvassing, reviewing planning controls, onsite inspection, including building surrounds and site context, having initial discussions with Local Council, and providing good preliminary assessment that the site is good or not feasible to go ahead. This cost will vary depending on how many sites are requested to investigate.
For Stage 2, the Development Consent fee depends on the size of the brewery, expected patron size, existing site vs greenfield site, amount of modifications required etc. This figure could range between $5,000 – $10,000.
In regards to expected timeframes for a brewery to receive Development Consent from date of lodgement, there can be quite a large degree of variance. The reasons for this can be the differing situation of breweries looking at doing a new build as opposed to those just looking at doing an internal fit out of an existing building in a relevant zoning use for a brewery. To add to this, it could also be due to those that are looking at trying to receive Development Consent for an area that doesn’t traditionally allow for the stated purpose of use in that zone.
In Ben’s experience, the quickest DA application he has seen was 6 months from point of preparing the DA, having identifying site to getting the Occupying Certificate and Liquor Licence to operate. The Longest is 18 months but there has been many stories of others across the industry that have taken longer.
CONCLUSION – PLANNING PROCESS FOR STARTING A BREWERY
It is safe to say, that any site will have something associated with it that you will need to overcome. There is no such thing as a perfect or ‘Vanilla site’, each having its own inherent challenges and constraints. But engaging a Town Planner at the concept and site selection stage will help you map out what those constraints potentially could be, so you know what expected costs you are in for upfront before fully committing to the site for a DA.
The most overlooked part in the DA process, is Site Selection. If you have got the right site everything falls into place. So, you might go out to look at your ideal building, and you might think wow look as these high ceilings, large floor space, old architectural features, it’s going to make a fantastic brewery, and you can picture your bar over here, brew house over there, beer garden over there.
But what you will find is, you are only focusing on the internal features of the building and not necessarily looking at what is around you. This aspect is extremely important, because what council are looking at is what kind of impact are you going to have on your surrounds, and so you need to get a really good understanding of what surrounds you, not just in land use context, but in a planning context. This includes zoning, planning controls and all the rest mentioned earlier in this article.
You need to have a good understanding of what you are proposing is going to fit into your neighbourhood and surrounds now and into the future. So if you can safely say, that what you have proposed for this site is a perfect fit for everyone around you, then you have paved your way through the whole process rather than set up hurdles for yourself along the away to overcome.
For more information on the Planning Process check out our Licensing & Government Compliance Segment on the Build Me A Brewery Podcast
Majority of information in this article has been collated from my sit-down chat with Ben Tesoriero from CPS Planning in our Part 1 Episode of the Brewery Licensing & Government Compliance segment.
Having an obsession for information, Chris found that there was a massive gap in his part of the world on how to go about starting a brewery, as well as being delivered in a way to provide a foundation for the layman to understand and act upon it.
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How to Start a Pro Brewery
business model, site selection and licensing, a clear business plan: the first step towards selecting a site and brewing system.
Sauce Brewing Co in Marrickville, Sydney has a large, Spark 20 hL distributing brewery and enough space for a bar inside as well as a relaxed beer garden.
Selecting a business model
Braeside Brewing Co’s K5 is displayed next to the bar and can supply 30 kegs a week. They also have two bright tanks serving fresh beer directly to the bar.
. Business model 1. Brew on premise
Any newly licensed brewing company and most existing venues that sell 10 kegs a week can improve their profitability by brewing.
The small brewer’s excise remission scheme and Spark’s equipment finance assist with making this happen.
From 1 July 2021 the Excise remission scheme for manufacturers of alcoholic beverages (Remission scheme) provides eligible alcohol manufacturers with a full (100%) automatic remission of excise duty, up to a maximum of $350,000 per financial year, on alcoholic beverages they manufacture and enter into the Australian domestic market for home consumption - this is approximately 100 kegs a week!
Clear differentiation from competitors, with local keg distribution and growler take aways as additional revenue streams.
Requires a compact inexpensive brewing system that is easy to install and operate (SPARK K5 or K10).
Saves capital, space and time: the compact K5 and k10 design allows brewing, fermenting and serving from tanks built above fermenters: no need for messy, expensive and wasteful kegging, bottling or canning.
Your beer is presented in perfect, fresh condition, as it has not been exposed to light, heat or oxygen.
Drinkers of independent beer are a high growth, future relevant demographic.
Brewpubs are more popular with female clients than traditional pubs.
Fives times more profitable the the distribution brewing business model.
. Business model 2. Distribution brewing
Requires kegging and packaging for relatively low margin, high volume distribution, typically through third party wholesalers, distributors and retailers.
Relies on low unit cost of production via a large brewing system designed for multi batching each day up to double or quad batch fermenters.
Our smoothly welded tanks and ergonomic layout help make brewing and cleaning easier.
Selecting a business model and understanding the supply output you need is the first step.
Wandering Trout is a Craft Brewery in Mole Creek, on the scenic route to Cradle Mountain & World Heritage Wilderness.
Spark compact venue breweries are cost effective solutions to satisfy brew and serve on site business models.
Brewery Site Selection
The three tiers of brewing regulation in Australia
. federal ato manufacturers license to produce beer.
This requires a fit and proper person check on personnel and defines a bonded area within the production facility.
Excise must be paid on product that leaves this area or is consumed on site. Calibrated measurement and detailed auditable records must track each step of production and packaging between malt in through to beer out.
. State issued Liquor Licence to sell beer
Regulates hours of operation and maximum number of people permitted in the venue.
Victoria - https://www.vcglr.vic.gov.au/liquor/winery-or-brewery/apply-new-licence/apply-liquor-licence
Tasmania - https://www.treasury.tas.gov.au/liquor-and-gaming/liquor/applying-to-sell-liquor
NSW - https://www.liquorandgaming.nsw.gov.au/operating-a-business/liquor-licences/liquor-licence-types/producer-wholesaler-licence
Canberra - https://www.accesscanberra.act.gov.au/s/article/liquor-licensing-and-permits-tab-apply-for-a-licence-or-permit
QLD - https://ablis.business.gov.au/service/qld/commercial-other-artisan-producer-licence/44153
SA - https://www.sa.gov.au/topics/business-and-trade/liquor/apply/production-and-sales
NT - https://nt.gov.au/industry/hospitality/liquor-licences-and-wholesaler-registration/apply-for-a-liquor-licence
WA - https://ablis.business.gov.au/service/wa/producers-licence/17122
. Local Council planning permission for use of the land for brewing
Considers potential impact on others in the area.
As with anything, there is both an easy way and a hard way to achieve the licences and permissions required. They are critical and should be approached with prior education, forethought and respect. Remember to allow time for your licenses to be processed.
Spark assists our clients in council DA applications and decision support for licensing applications as well as produces professional layouts for submission.
Brewery design installation and startup
Brewhouse and fermentation cellar design should be related directly to your intended business model. Expansion is often more about forethought than money - by planning for success, you can make future expansion smooth and simple.
The amount of beer you can brew in a week is the same number of kegs as you have hL of cellar space.
E.g. if your fermentation cellar is 2 x 10hL (one hectolitre is 100L), your 20hL (2,000L) of cellar space will make 20 ale kegs per week.
. Brewing for serving on site
Optimise your brewery for space efficiency and good looks by dispensing your draft beer directly from serving tanks mounted above fermenters. This set up allows single batch brewing within a day. Instantaneous hot water systems and two stage (water & glycol) plate heat exchangers can avoid the need for hot and cold liquor tuns, saving capital and space.
The rule of thirds for the layout of a compact on site brewery: 1/3 of the space wet area for the brewery, 1/3 for circulation, 1/3 for serving.
. Brewing for distribution
Design for low energy costs and high output for every brewing hour.
3 or 4 vessel brewhouse configured with thermal stores for daily multi batching.
Thoughtful glycol system design to make it easy to add extra tanks as your sales increase.
Double or quad batch fermenters can be installed initially or added later.
Below is Froth Craft Brewery’s’ 25hL, utilising a much lower labour cost vs volume output, an ideal consideration for distribution brewing.
Froth Craft Brewery’s new Bunbury WA 25hl 3 vessel brewhouse with grist case.
Phil and Neil (L-R) from Burnley brewing in front of their newly delivered SPARK K500 2.0 brewhouse
Plan before you build
There are some important aspects of building fit out that are easy to include from the beginning, but expensive to have to retrofit at a later date such as wastewater treatment buffer tanks. This allows you to comply with any EPA requirements for cool, neutral pH effluent with low biological oxygen demand.
Digital controls are essential for brewing consistent, repeatable beers
Julian and Phil from Burra Brewing Co , at site discussing the build before the brewery's delivery. Spark Support our clients before during and long after the project installation.
The complete installed cost of a brewing system in operation is many times higher than the basic price of steel tanks - a control system that is well designed and locally constructed can backload a significant part of installation cost onto the equipment list (which can be financed), as all expensive electrical control hardware can be included upfront - this reduces the time and cost for installation.
Glycol and steam systems should be selected and designed to work well with your brewing system - reliability and maintainability are key once you are in operation
Critical Success Factors
Although it has been said that the crucial top three success factors in the brewing industry are selling beer, selling beer and selling beer, there are some additional things that could also be considered:.
As the heart of a comprehensive business plan, get an accurate understanding of the costs of production for your chosen business model.
Staff, power, equipment finance costs (approximately $7,000 per month for a complete 10hL brewing system) and rent can be added to a basic $60 per keg for ingredients and 100% excise remission.
You could budget on a wholesale price of $300 per keg and retail (served on tap) of $1,100. Note the breakeven sales volume that will take you into profit and ensure that your business plan directly supports you achieving that as soon as possible.
See Sparkademy for our profitability calculator and how to use it.
Give you all the details of your brew clearly at your fingertips and ensure that your superstar brewer can be busy designing your next beer, while the controls take care of making your beer correctly every time.
Spark supplies industry leading Melbourne designed and built digital controls for all of our breweries and distilleries.
Pivotal for the health of the industry as a whole, to justify consumer’s payment for and respect of our beer, a professional Quality Management based approach is needed for production. Much has been written on this and many training courses are available. A simple system need not require a prohibitively high laboratory equipment cost.
As the embodiment of what you and your work stands for, clear, bold and consistent branding is important for standing out in an increasingly crowded marketplace.
You’ll need to achieve 5 times the volume in distribution to make the same profit that you will via your own taps, so including a strong tap room in your plans gives you full margin revenue as well as a location to anchor your brand and organise consumer engagement events.
Quality reliable equipment
Real world success relies on your equipment being selected and installed in a way that ensures that it will operate reliably and can be maintained and repaired. The lowest cost option on day one is unlikely to actually end up being the lowest cost option after a year of brewing. No one with many years of experience in professional brewing, after multiple plant expansion projects, is choosing cheap equipment, for very good reason.
Steel comes in many different qualities of manufacture and finish. A well made tank will not only look good, more importantly it will be durable and easy to clean, making your brewer's work quicker and easier and safeguarding your beer from contamination from previous batches.
Our beautiful clean welds. As engineers, brewers and project managers we take equipment quality seriously and source high quality steel, fittings and digital meters.
Punters enjoy a froth at Ramblers Ale Works.
Contact us today so we can support your plan.
As our brewing industry re-fragments after a century of consolidation, there are many opportunities, with the right information and planning, it’s time to start and grow profitable brewing businesses that will be cultural assets for their region for generations..
The Home of Australian Craft Beer
Starting A Brewery Part I
March 31, 2016, by Crafty Pint
More people than ever are hoping to open their own brewery or brewing company in Australia. But turning a dream into reality isn't easy; in fact, it's bloody hard work. What's more, there are so many things to consider aside from whether you can brew a good beer and come up with a cool name for your business.
During Good Beer Week 2016 , The Crafty Pint will be hosting a brewery startup panel in the Cryermalt Trade Hub, upstairs at the Festival Hub, Beer DeLuxe Fed Square.
Register your interest for the session here
Before then, however, we thought we would revisit a topic we last addressed in a four-part series following Boatrocker's journey from contract brewer to owner of its own stainless steel.
This time around, we're doing it in two parts. On day one, we're presenting the top tips from five Australian brewers: two who have just entered the game, one gypsy brewer and two with serious miles on the clock. For part two, we've asked experts from other areas of the industry for their advice for brewers: a rep; an equipment supplier; a brewery offering contract space; a bar owner; a lawyer; and an ingredient and keg supplier.
Over the two articles, any prospective brewers will gain insight, find a few things to add to their checklists and see what those already in the industry feel are the most important factors to address. Every piece of advice over the two days comes from people walking the walk who want you to succeed just as much as they hope to themselves.
The New Brewers
Dereck hales, bad shepherd.
Dereck is the home brewer turned pro brewer who opened Bad Shepherd Brewpub with wife Diti in Cheltenham last year. His advice is for prospective brewery owners, rather than just brewers.
1. Most importantly, know what your brand is about and why your business will exist. Consumers need to understand what you’re about if they’re going to choose to try your product. It’s a cluttered market and you need to be able to stand out. Start from a point of purpose: Why do you want to run a brewery? Why are you selling your beer? For us, we believed that there was an opportunity to serve great tasting craft beer to consumers where there were no similar alternatives, in a relaxed brewpub environment matched to slow cooked BBQ smokehouse foods. And, specifically, we wanted to let people enjoy themselves and disappear from the stresses of life for a while through our product and experience. In the end, that became – “Beer. The way it should be.” For you, your purpose could be entirely different. But if you don’t know why you’re doing it, how could your consumers ever know?
2. Understand your permit and license requirements thoroughly. Local city councils, especially, can cost you critical months and even years before you get going. Zone classifications and the council’s interest in supporting your endeavour can be a huge benefit or hindrance. I’d recommend to engage local councils as you start your search for a location. Some councils are materially more supportive than others and all will still defer to zone classification rules. The more you chat with regulatory bodies before you lock anything in, the better things will be – trust me!
Here’s a quick summary of permits you’ll require almost regardless of your brewery set up and location:
- Local city planning permit / Development Approval (DA)
- State liquor license
- Building permit
- Waste water agreement
- Australian Tax Office permission to manufacture alcohol
3. Engage other breweries for advice and support. Craft beer is an exceptionally inclusive community and most other brewers will be happy to repay the support they received in getting going. There are heaps of hurdles that you just won’t know about until you get started and they can give you some direction.
4. Spend the time early on doing your sums and evaluation of your business model. Go to other breweries and read as many books on brewing / starting a brewery as well as discussions on places like probrewer.com . Research, research, research. If you’re clear on what your business plan is based upon financially, you’ll be far more eyes wide open starting your business. Oh, and in your business plan – BE CONSERVATIVE. There will always be things you hadn’t considered or expected that will come up. Cash flow is key and you need to have a war chest when you enter the ring.
5. Spend less time labouring over your perfect recipe and spend more time considering what will appeal most to your target consumer while also having a point of difference from other beers in market. If you want to brew professionally, it’s not about you. It’s about what people want to drink and why they should choose your product.
6. Lastly, don’t be afraid to admit what you don’t know and surround yourself with people that make up that knowledge or skill gap. You need to understand everything generally but you don’t need to do everything yourself. In fact, surround yourself with people that not only have that skill / knowledge but would do it better than you anyway. And for a brewery owner that may just be hiring a brewer. You’ll need to be across so many things, owning a brewery might mean you need to have someone else actually brew for you. That’s tough to hear, but it just might be necessary.
Ryan Davidson, Little Bang Brewing
Ryan (above left) and fellow brewer Fil Kemp (above right) started Little Bang Brewing out of an Adelaide garage. Earlier this year, they opened the doors to their bigger new home, where they combine brewery with bar.
1. Make sure you are utterly in love with craft beer and the industry, because you're going to be working many, many, many hours for not a lot of money. If you want to get rich, seriously consider a different profession. Immerse yourself in the whole process, from recipe design to the brewing itself to marketing and distribution. All parts of the process are essential, and you should get very familiar with all of them, like right now. If you can do any of these things yourself, then you should. If you can't, then you should probably learn.
2. By all means save money, but don't skimp on ingredients or your brewing process. Save money everywhere else if you can, but keep the quality of the product sacred. Actually, make the beer that you, personally, actually like, and brand it the way you'd like to see beer branded. Make the beer that YOU would buy. That's all. Don't read a generic textbook on Marketing and Brand Identity, don't try to second guess the craft market or "premiumise" a sub-standard product. If you love craft beer then you are your own target market, and you know that we can smell bullshit a mile away. If you're a bit weird and you don't fit the mould, all the better. That said, do try to be honest with yourself, don't throw just any idea out there. Find some friends who'll give you honest feedback, whose opinions you respect, and listen to them. If you think you can do better with an idea then you probably can.
3. Get a mentor (or more than one). Find some local brewers that you respect, go to their place and buy their beers. Make yourself useful if you can (and make sure they actually want you helping), and ask them ALL the questions. Find out what mistakes they made and how they'd do things differently if they had the chance. Keep buying their beers while you listen to their answers, because that info will save you serious time and money.
4. Don't underestimate the Retail Element. Personally selling the beer you make directly to the public is awesome, and you should do it as much as possible. Here's why:
- The margin is great. It's more work, but you make great money on the stuff you sell direct. Just be careful to check your wholesale customers' retail prices for your products, and try not to undercut them; they HATE that.
- You get paid IMMEDIATELY. Here's your beer, and here's your cash. Just like that. Not in 14 days, or 30-days-from-end-of-month, or never-if-we-can-get-away-with-it. Right away. Money in the bank every time you open, it's a really good thing.
- You get to present the beer exactly as you want to, and treat it the way you'd like it treated.
- You get to meet the public face to face: best marketing ever. Tell them your story, and listen to their opinions. These wonderful people love this stuff enough to hang out in a stuffy old warehouse all afternoon. Their feedback is invaluable, and you'll probably make some good friends.
5. Here's the boring part: get to know your spreadsheets. Forecast EVERYTHING. Yes, it's an amazing beautiful industry full of love and excitement, but for Christ's sake make sure you're profitable. Figure out ALL of your costs, as accurately as possible, and when you're done add 15 percent, because you're definitely forgetting something. In all cases prepare for unexpected costs and nasty surprises, then at least if you're wrong it just means you'll make a better profit.
If you're unsure (and you can't be sure until you've got at least a few months worth of data) set the price a little higher. No one ever complained about a price drop, but it's very hard to raise prices if you suddenly discover you're not making a profit. You may want to see your six-pack on the shelf for $20 or less, but the marketplace has a funny way of settling right at the point where the big guys, with all their cash flow and economies of scale, squeeze the little guys out on price. If the beer is good, and the product is honest, people will pay whatever it costs to support you. We certainly hope so, anyway.
The Gypsy (or cuckoo)
Darren robinson, doctor's orders brewing.
Darren is one of the original gypsy brewers in Australia (although prefers the term "cuckoo"). The first Doctor's Orders beer was brewed at the then Schwartz Brewery at the MacQuarie Hotel in Sydney in 2009, since when they have been brewed Hunter Beer Co, The Australian Brewery, Young Henrys, Bridge Road Brewers, Willie the Boatman, Bacchus Brewing, Wheaty Brewing Corps, Big Shed Brewing, Nomad Brewing and Riverside Brewing.
Then there have been collaborations with some of the above plus Sixpoint, Yeastie Boys, Funk Estate, Bacchus and Atom Beers and a handful of other brews either as broader collaborations or with the Local Taphouse Ale Stars. In short, he gets about...
1. Point of Difference. You will never be able to compete with larger craft brewers or even macro breweries in all aspects of the beer industry. Your gypsy brewing company will be judged in the market based on the products you produce and the brand you build around them. You will need to work out where you fit in the industry, who your target audience is, and how you will differentiate your offerings to get your "share of throat”.
2. You’re a small business owner. You will likely be getting into this industry based off an initial vision of producing fine beverages for consumers. Producing the actual product is the focus of all new entrants to the industry and building the brand associated with it. In reality, yes, you are a producer / manufacturer but you are, more importantly, a small business owner. You will likely have a very good grasp on designing and brewing beer (on a small scale at least).
That is the easier and more exciting part. The running and managing a small business and interacting with the hospitality industry is another world and usually a different vertical to what you current / previous day job is / was. Managing accounts, debtors, creditors, compliance registrations, business activity statements, annual reports, etc on the business side. Managing the manufacturing process, the artwork, packaging, transport and logistics, marketing and events on the product side.
3. Reflection. Always be analysing and evaluating your place and your brand in the market. The industry is evolving quickly and what worked well two years ago is different to today. At the very least, have a plan for the calendar year on what you are looking to achieve and how you are going to achieve it, keeping in mind changes you need to make to remain relevant.
4. Relationships. This industry is all about relationships. Relationships for gypsy brewers are even more important as you don't have your own production facility. You are leveraging someone else's and the relationship you have with them will determine your continuing ability to utilise their excess capacity or for them to fit you into their schedules as they grow their business.
Also, the relationship you have with your accountant and how you can manage your small business. The relationship with your graphic artist and photographer (and, no, you can't do that yourself unless you are a graphic artist or photographer) to produce the look and feel of your product in the timeframes required.
5. Have a Brand Strategy. Understand what your brand is and what it means to you, but more importantly how you want it to be interpreted by your customers. Keep the branding of your products and your communications on brand. You'll be surprised what your customers remember and how they make associations between products and brands.
For the two brewers we approached who have been brewing for more than 15 years, we asked them for the top five things they wished they'd known when they were starting out.
Paul Holgate, Holgate Brewhouse
Paul and Natasha Holgate started their brewing company, Holgate Brewhouse , in the back of their house in 1999. They spent years building the business in a market that didn't understand craft beer and while starting a family and working other jobs.
They later took over a hotel in Woodend that now houses their brewery as well as a bar, restaurant and accommodation. The continue to innovate (just wait until you can get your hands on their new Flanders Red – oh boy!) and have stuck resolutely to their guns, producing every beer in house and keeping their family as their number one priority, whatever the demands of their beer business.
1. That excise wouldn’t change in a hurry.
2. That a successful business is more linked into the success of a business's marketing and branding than how good the business's beer is.
3. It’s a hard hard slog on your own… Having start-up funding to employ more people in sales in the early days is important, or, alternatively, more equity stakeholders to share the roles and burden.
4. That you’d be below the average wage earner for a long period of time.
5. That running any small business for many years requires a LOT of energy and is very draining. Make sure you’ve got the passion and energy for the long haul.
John Stallwood, Nail Brewing
John launched Nail back in 2000, five years after registering the trademark for his home brew and first commercial release, Nail Ale. Since then, he has played a key role in the development of the microbrewing industry in WA, helping get the state's brewer's association off the ground and assisting a number of other brewers.
He has also overcome a life-threatening injury after he was king hit and ended up in a coma for three weeks. After recovering, he rebuilt Nail, initially using other people's brewing equipment before, in 2012, forming Brewcorp with Feral and effectively embarking on Nail Brewing Mk III.
Here, he offers his (Feral Brewing-ribbing) advice based on what he learned when initially launching Nail in 2000 and also his more recent experiences.
Starting Nail Brewing in 2000
1. Education. Back in 2000, everyone drank lagers. I did a lot of testing at the University of Ballarat with 40 batches and had a good understanding that people liked lagers not only because of the lesser flavour, but also the light colour, lower bitterness and alcohol.
So Nail Ale was developed originally as a hybrid of lagers and traditional old world traditional craft beer. I didn’t realise that, even though the majority preferred the lager characteristics, how negative some people were to a beer not being a lager. I would get comments like: "This isn’t beer" and "You make money from selling this?" I didn’t realise that the market I was targeting was non existent and it was going to be hard to get people to try not only something different but to keep trying it. Little Creatures was a key to helping change the market. They even struggled but their Asia Pacific AIBA trophy made people realise that, although it was a different beer, it was actually very good. Beer education is still needed but it has momentum now. Crafty Pint and Brews News are great helpers here. Microbrewing.com.au [John's beer website that predates both] was a good step in the beginning.
2. Market access. Getting tap points was impossible. The big breweries were fierce back then. I was beer of the month in a pub for just three days because of the force of a big brewery. I couldn’t get Nail Ale on tap in the pub across the road from my house because of a big brewery [even though] the owners wanted it. It took six months of fighting, as I couldn’t give up having a Nail at my local. Even the late Maurice Brockwell, who Nail Red is named after and had 23 pubs, faxed the director saying put it on. It's hard today but back then it was harder.
3. Efficiency. The time you spend brewing and costs need to be evaluated to save time and add up. Sounds obvious but it's key. What's the lowest you can cut brew time, cleaning etc? [Feral co-founder and head brewer] Brendan Varis has taught me a lot here. He could be too efficient. Thankfully, I brew better beer than him.
4. It's hard. You must have passion to own a brewery. Back in 2000, people weren’t so much in it thinking it was a booming market and [there was] lots of money. The early breweries and most today struggle. The only way to succeed is never to give up... I hope. You need passion. Maybe if I knew how hard it was going to be I wouldn't have done it. I would probably be retired somewhere if I chose mining or IT considering how hard I have worked.
5. Beer is better than you think. Drinking your own beer in a pub and seeing someone else buy it is really special and [that feeling] doesn’t die.
Starting Brewcorp in 2012
Unfortunately, breweries cost money and you can't always choose the perfect start. But choosing what to sacrifice for your setup is highly important. Everything listed below is somewhat obvious and simple, yet crucial, as money is always tight.
1. Staff selection. It can be expensive to train staff not suited to the business. And it can also be very rewarding to have the right employees. More money might save you money?
2. Study your water. Not so much for the beer but the equipment. A reverse osmosis might save you money.
3. Get lab tests. A bad beer [when brewing] larger quantities can be expensive. Great beer today might not be great beer in six months.
4. Space costs money but more space is handy. Good access for trucks is also handy…
5. Take the strengths of a partner and forget their weaknesses. I didn’t realise Brendan was such a dirty brewer. I also didn’t realise why Feral is where they are today is because he is very, very good at what he does. I didn’t realise he would also become a best friend and someone I see as a mentor. Thankfully, I still brew better beer than him.
Part two of this series can be found here .
If you are planning to start your own brewing business and would like to attend the Brewery Startup panel hosted by The Crafty Pint during Good Beer Week, please head here and fill out the form . Successful applicants will receive an official invitation prior to the festival.
The Devils' New Platform
Tasmanian gypsy operation Devils Brewery has set up home in the historic Margate Train. Ruth Dawkins caught up with founder David Tottle to find out more about his beers and partnerships with local producers. read on
Who Brews Footscray Ale?
Melbourne's west is enjoying a boom in both brewing and beer venues. West City Brewing is, for now, a gypsy operation that has been enjoying success with its hoppy Footscray Ale and hopes to open a place in the west soon. read on
Canvas. Comic Strip. Can.
Following on from our look at branding in the beer industry, Ross Lewis chats to a couple of designers working on Australian breweries' cans as well as a brewery owner whose tinnies are among the most spectacular you'll see. read on
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The Crafty Pint is an independent online magazine and resource for anyone interested in craft beer in Australia. We bring an honest, old-fashioned journalistic approach to beer's brave new world, telling stories because they're worth telling not because someone is paying us to write them.
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