Ultimate Guide to Starting a Craft Brewery in 2021: Everything You Need to Know

According to a Brewers Association study, craft beer's consumer bas has been steadily growing over the past decade. According to the study, the percentage of individuals above 21 years of age that enjoy craft beer has grown from 35 percent in 2015 to 44 percent in 2020. This number is predicted to go upwards during 2021 and the coming few years.

The erstwhile humble craft brewery serving fresh beer has now evolved into a booming commercial industry. Craft breweries continue to grow in popularity as artisan beers have become something of a novelty. Opening a craft brewery can be a lucrative business option for those looking to start a venture in 2021. 

With the craft brewery industry thriving and popularity expected to go only upwards from here, the opportunity is ripe at the moment to start a new craft brewery of your own. However, it's easier said than done. The business requires a keen understanding of the craft (pun intended) with the skills to navigate several legalities and technicalities. Here's an ultimate guide to starting your own craft brewery in 2021. 

Understand the Craft

The first step towards starting your own brewery is to understand the craft. You cannot dive into a business without knowing the basics and expect it to succeed. Therefore, it's imperative to get some experience in the industry first. This can be done through tending a bar at a taproom, shadowing a professional brewer, or meeting up with experienced personnel at a brewery to understand how the ball rolls. 

The more hands-on experience and knowledge you have about the industry and brewing, the quicker you will be able to learn how to manage the show. This will help you gain the trust of your staff and any potential investor you might approach to seed your venture. Moreover, understanding the trade will clarify what you want your business model to be. 

Zero in on a Business Model

Speaking of business models, you need to envision your craft beer business in your head and visualize what you expect it to be. Before you can even start planning your brewery business, you need to have a clear end goal and refine your business idea around it. The first step in this direction is to choose a business model. The Brewers Association for Small and Independent Craft Brewers has a handy guide for those starting out. 

The association classifies the craft beer industry in six distinct models - microbrewery, brewpub, taproom brewery, regional brewery, contract brewing company, and alternating proprietor.

• Microbrewery: This brewery produces no more than 15,000 barrels of beer annually and sells over 75% of the yield off-site. These days, microbreweries with on-site taprooms or restaurants are becoming more popular. 
• Brewpub: This restaurant-brewer sells a quarter or more of its beer on-site, with the restaurant business being a significant part of operations. The beer is primarily brewed for sale in the restaurant or bar and is dispensed directly from the storage tanks.
• Taproom: Taproom is the same as a brewpub except that there's no food service or restaurant business. 
• Regional brewery: These are pretty straightforward and refer to breweries that produce between 15,000 to 60,00,000 barrels. 
• Contract brewing company: This is a brewery that engages the services of another brewery to produce its beer. In this system, the main brewing company handles marketing, and distribution, while the brewing and packaging of the beer are left to the other brewery.
• Alternating proprietor: This is a system where a licensed brewer rents a shared brewer to produce beer. Unlike contract brewers, alternating proprietors own the complete process from record-keeping to formula approval.

Research Your State Alcohol Laws

In the US, the alcohol industry is regulated by the Alcohol and Tobacco Tax and Trade Bureau, TTB for short, at the federal level. To start a craft brewery, it's essential to get familiar with and abide by the beer industry's federal laws and regulations. However, these laws and regulations are just the foundation, and state laws are the main thing you should know about. It's advisable to consult a professional attorney to guide you through the chasm of legal technicalities and formalities prevalent in your state.

Most states follow the three-tiered system, which separates the producers, distributors, and retailers. In most states, laws are flexible, providing an opportunity for brewery business models like brewpub and taprooms to thrive by merging the producer and retail tiers in a single premise. These flexible frameworks vary from state to state, and it would be best to look into the laws of your state to avoid having to change business direction mid-stream.

You'll also need to research state laws about breweries in your location to determine what permits and licenses you will need to run a brewery, brewpub, or microbrewery in your state. 

Decide on the Brewing System

Once you've decided the nitty-gritty of the business model, the next step is the crux of the matter - the actual brewing. You will need world-class equipment and facilities to sustain yourself in the business. Remember that upgrading or buying new equipment later is more complex and expensive than having a great setup and physical location from the get-go.

For the brewing equipment, consider factors like size, number of vessels, heat source, country of manufacturing, and engineering origin. Since it will be the core of your business, it's imperative to do due diligence and research about vendors who specialize in quality brewery equipment like ABS Commercial brewing systems. ABS Commercial is a brewery and parts outfitter operating out of Raleigh, North Carolina, supplying parts certified to ASME, CU & UL standards, wherever applicable.

You'll need to factor in the available space within the brewer, the scope of expansion, the type of beer you'll be producing, production levels, and equipment material. This will help you pick the equipment that best suits your requirements and limitations. 

Figure Out the Finances

Lastly, after sorting out everything from the business model to infrastructure, you'll need funds to get the business up from the ground. Determine your costs like license fee, deposits or rent for the brewing facility, insurance, brewing and bottling equipment, ingredients, wages, and a lot more. Once you have a rough idea of how much it will cost to get the business going, you can then compare with the funds available to you and plan to cover up gaps, if any. 

Above listed steps will get you and your brewery off the ground, but the most important step is still left. You will need to define a brand identity with a unique logo and name to stand apart from the competition. 

You'll need to market your business using tools like an intuitive website, online marketing, social media, and more. You're now equipped with the knowledge required to start your craft brewery in 2021. When you do, don't forget to have us over for a tasting session.