How Much Does It Cost to Start a Brewery?

In September, I wrote a post for Beerpulse about how I’d raised $1.25 million to start the brewery. Last week, when I asked Modern Times’ Facebook fans for suggestions on my eventual Kickstarter video, a few people were like, “Whoa, whoa, WHOA there, Mr. Moneybags, what do you need a Kickstarter campaign for seeing as you already got all that sweet, sweet money? Eh, Lord Bountiful?”

It may sound ridiculous, but it never occurred to me that anyone would think $1.25 million was a huge sum given the task at hand. If you found it in a suitcase, yes, it would seem like a lot, probably because you’d start thinking about how much coke you could buy with it. If it were your annual salary, then yup, that’d be a lot too, even though you’d probably have an absurdly distorted sense of your own relative wealth and deny it like a jerk. But if that’s all the money you have to start a 30 bbl brewery, then no, that is not a lot of money.

Can you start a 30 bbl brewery for less? Absolutely. There are all kinds of ways you can compromise quality, sacrifice worker safety, put off crucial purchases, make yourself inefficient, and worsen the consumer experience that will save you money.

That statement may make it sound like I have unreasonably high standards, but trust me, I do not. Some perspective: there are many, many new breweries that have smaller brewing systems, smaller buildings, and smaller ambitions that have raised a lot more than $1.25 million. And spent it all. And needed more. The difference is that most people won’t tell you how much money they raised, so you don’t get to question their fundraising choices.

My general approach to start-up expenses is pragmatic. I don’t care if something is used or looks like shit or isn’t hyper-efficient from the get go. Initially, the brewery just has to function well enough to make beer that meets reasonable standards for quality while being a decent place to work and visit. The basics.

But what are “reasonable standards”? Some would argue that a brewery couldn’t meet “reasonable standards” of quality without a laundry list of items that others would consider decadent, sinful luxuries.

I, for instance, consider a 3-vessel brewing system an unholy luxury, but there are oodles of start-ups that feel a need to have 3 and 4 vessel systems. Some people consider a North American made brewing system an absolute necessity; I do not. Hell, some people see sloped floors as a luxury (and there are large, successful breweries with floors that are goddamn stinking pietri dishes of multi-colored molds and fungi who still make excellent beer, so clearly it can be done), but I do not consider sloped floors a luxury. And that will end up costing me over $50,000.

So each day, I have to decide what standard I can set with the budget I have. Rest assured, it is not an excessively high standard. A grain silo, more sloped floor space, a third 30 bbl fermenter, a spent grain removal system, a separate mash mixer, a well-equipped lab, a decently sized pilot brewing system, and a tasting room cold box are all items I’ve said “no” or “maybe” to recently because of budget concerns.

The absence of those things will impact the consumer experience in one way or another. I could afford all of them if I’d raised twice as much money. But I didn’t.

So when you see me launch the Modern Times Kickstarter campaign, it will be those kinds of things that generous donors will be asked to finance. Things that will make their experience of the beer and the brewery better. Because whatever those things are, I can’t afford them right now.

Comments

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There is a manufacturer of microbreweries in Eastern Europe with good quality at low prices, like those of the Chinese. Called BROVARNI

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