A lot of people see running a brewery as a dream job, and in an age where craft beer sales are still rising, it’s surprisingly viable as a business proposition as well. If you’ve ever asked yourself “Should I open a brewery?” this article will help you sift through the pros and cons.
Of course every entrepreneurial project has its downsides as well as its benefits, so what are the ins and outs of operating a brewery, and is it right for you?
Table of Contents
Should I open a brewery?
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The perks
Let’s start off by exploring the positive reasons why you should consider starting a brewery, of which there are many, including:
Low barrier to entry
Some industries require founders to have a lot of capital at their disposal before they can even think about getting started. But setting up a brewery is surprisingly affordable, especially if you are aiming for a very small scale production run.
The equipment needed for basic brewing in modest volumes only requires one or two thousand dollars of investment, which also means that you don’t have to risk too much of your hard-earned cash if you want to take this on as a side hustle before turning it into a fully fledged business if it takes off.
Potential to scale with demand
As mentioned earlier, beer sales are growing globally, and the craft sector is especially buoyant, so when you want to scale your operations, there should be an avid audience of customers out there ready and eager to support you.
In fact the variety that is inherent to the craft beer market means that there is always demand for new brands, different beers and fresh tastes, so whether you want to stick with classic styles or go rogue, your hand won’t be forced by concerns about being too narrow in the niche you target.
Impressive profitability
You might assume that running a brewery involves working within narrow profit margins, but again the opposite is true. Beer is inexpensive to brew, and average margins of around 40% can be achieved if you are able to build a stable brand.
Coupled with the aforementioned affordability of getting started, it’s easy to see why so many thousands of small breweries have cropped up in the past decade.
Early-stage adaptability
Assuming that you choose to make beer solo to test the waters, buying and operating your own equipment in a spare room or garage, then it’s more than possible to put a pause on production in this context without incurring significant costs.
So if life or your day job get in the way of your ambitions to open a brewery for a period of time, it’s easy to resume again when things settle down.
Global appeal & opportunities
One of the reasons that beer sales are so stellar is that this is a product which is sold internationally in a huge number of contexts.
From high end restaurants to the sun-drenched fields of music festivals, good beer has a place almost everywhere. And if you crack the retail market, you’re set for life.
Pitfalls
Running a brewery isn’t just pure profit and a shot straight to the big time, so you need to remember the following sticking points before diving in:
Competition
Because there are so many other brewery brands and beers out there, it can be difficult to gain traction and get your products noticed, without some serious marketing know-how and not a small degree of luck.
Repetition
Brewing beer is a mixture of science and art, although it’s more the former than the latter, which means you could get bored of needing to oversee the same processes painstakingly, day after day.
Of course eventually you will move on to hiring others to deal with the actual brewing while you run the business side of things, but depending on where you want to get started, this could make or break your decision to open a brewery.
Lack of loyalty
Very few beer brands manage to secure loyal customers for life, and this tends to be a privilege preserved for the products of multinational brewing corporations, not small craft-focused start-ups.
Importance of iteration
You’ll usually need to spend a bit of time getting to grips with the brewing gear and adjusting your recipe and processes to achieve the end product that you are hoping for, so you need to be happy to fail frequently on the road to success.
Administrative complexity
Running your own business, whether it is a brewery or any other type of organization, involves a lot of admin. From issuing invoices and paying taxes to handling marketing and providing customer support, these things can be overwhelming at first, and will require expert assistance as your company grows.
Final thoughts
If you have weighed these pros and cons and still think that becoming a brewer is the path for you, there has never been a better time to get into this industry.
If you’ve had second thoughts as you answer the question “Should I open a brewery?,” it’s probably wise to step back, sleep on it and consider other entrepreneurial options to see if there is a better fit out there.
