Optimize Your Brewery Size for Business Success

Optimize Your Brewery Size for Business Success

Writing down your plans is when building a brewery becomes a real endeavor. The steps you take next will determine the success or challenges of your venture.

Building a brewery is a feasible and achievable project. Choosing the right size and business model is crucial for ensuring the brewery’s success and reaching profitability. State laws offer historical flexibility, and the premium beer market is strong. Set your budget, develop your model, and execute it meticulously.

We will explore various possibilities, discussing the advantages and disadvantages of different models. By the end, you may find a starting point for your next step.

Categories: Nano, Micro/Taproom, and Brewpub

State laws vary greatly.

However, I will provide general guidelines on three possible setups.

With some research, phone calls, and possibly consulting with a professional, you can easily find answers.

Option 1 – the Nano Brewery

Nano breweries are defined as breweries that produce from ½ barrel to 3.5 barrels per batch.

Even 3.5 barrels are quite small for production brewing.

These are often the choice for experienced homebrewers who want to take their craft to the next level without running a large operation or incurring debt. From this perspective, it makes perfect sense.

Nanos are advantageous because:

They require a smaller initial investment compared to microbreweries and brewpubs.

They involve less physical labor.

They are small enough to attract less scrutiny from regulatory agencies such as state authorities, ATTB, and city/county inspectors.

They provide an opportunity for proof of concept.

Possible drawbacks include:

Inefficient processes.

Being too small to meet demand.

Not being able to engage in wholesaling.

Insufficient retail business to generate profits.

If run as a side job, it can consume all of your free time.

ACE nano brewery

Option 2 – the Micro Brewery

A microbrewery is primarily a production facility with brewhouses ranging from 7 barrels up to approximately 30 barrels in capacity.

Its goal is to build a brand, expand its reach significantly, and establish a legacy.

Many states permit microbreweries to operate taprooms, which may or may not require food service. Retail sales maximize earnings and foster brand loyalty in a highly competitive market.

Microbreweries offer the following advantages:

(Small microbreweries) They require a smaller initial investment compared to brewpubs.

They can operate largely out of the public eye, focusing on craftsmanship and streamlining operations.

They have less concern for retail expenses, taxes, and customer service.

They can cover large regions across state lines.

Possible drawbacks include:

Insufficient retail sales to achieve profitability.

Being too small to meet demand.

Struggling to establish a strong distribution network.

Requiring continuous capital for expansion.

ACE microbrewery

Option 3 – the Brewpub

Brewpubs gained prominence in the 1980s and peaked in the 1990s. While microbreweries existed, it was brewpubs that dominated the independent brewing scene.

A brewpub is a microbrewery attached to a restaurant. The restaurant offers full-service and should attract customers based on the quality of its food as well as its beer.

Brewpubs have the following advantages:

They can generate significant daily revenue.

They are appealing to families.

They showcase the brewery, often with glass windows.

They offer the potential for a diverse business enterprise, including retail, wholesale, food and beverage, and merchandising.

Possible drawbacks include:

High startup costs.

Requiring a large staff, leading to higher payroll and tax liabilities.

Being high-risk, high-reward, as both the beer and food must be of top quality.

Incurring substantial debt and facing high overhead costs just to open the doors every day.

ACE brewpub

Conclusion: A Real Eye Opener

There are valid reasons to build a nano brewery. If that’s your passion, go for it. If you have capital and resources, a small or larger microbrewery might make more sense.

I’ll be honest with you. Based on my experience, I had time to make beer and enjoyed it, but I had no time to waste.

There is an argument against nanobreweries: unless it’s purely a hobby and a way to joyfully pursue your dreams, the time commitment outweighs the benefits.

Reach Out to Us

ACE can assist you with any challenges, big or small. Brewers need support and input. It is an artistic craft honed over years in the brewhouse. It is also an exceptionally specialized business.

Today’s brewers face unique problems that require a fresh perspective. I’ve walked in your shoes and know the victories and struggles of the brewing life.

Reach out to us. No problem is unsolvable.

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