As the craft beer scene continues to boom in the UK, setting up a microbrewery can be a great way to turn your passion into profits. But even with the best brew in the world, if you’re unsure of how to start a business, bringing your idea from bud to bloom will be an uphill battle.
With huge rewards but even higher competition, starting a successful microbrewery can be like catching lightning in a bottle. Not only does it require careful planning, but you’ll also need a unique idea that’s capable of cutting through the already saturated craft beer industry.
To help you avoid launching your venture on a sour note, this article covers everything you need to know about starting a microbrewery in the UK, including what steps to take, how much it could cost, and what potential challenges you should be aware of.
In this guide, we'll cover:
What is a microbrewery, and should I start one?
The Brewers Association classifies a microbrewery as a brewery that produces under 15,000 barrels of beer per year, and sells 75% or more of its beer off-site.
Microbreweries are often independently owned, and unlike larger “macro” breweries like Heineken and Guinness that dominate bar taps in the UK, they tend to prioritise the quality and unique flavour profiles of beers over mass production.
However, while there’s often an overlap between microbreweries and craft beer, microbreweries are defined by their limited size and production volume, over their focus on innovation and creativity.
Overall beer sales are declining in the UK, yet craft and independently produced beers – specifically those with complex and unique flavour profiles like IPAs and stouts – are bucking the trend by showing signs of increased popularity.
Not only is this a reflection of customer tastes becoming more adventurous, but it’s also driven by growing desires to buy local and value regional breweries that foster strong connections with the community.
This growing demand, alongside the creative freedom this type of brewing can afford you, might make launching a microbrewery seem like a mouthwatering proposition in 2025. However, becoming a master of your craft doesn’t come without its challenges, as we’ll explore next.
Is it hard to start a microbrewery business today?
While it’s true that high-quality, artisanal brews are enjoying their time in the sun, starting a microbrewery is still a risky undertaking – and one which requires more than a bit of pub change.
The cost of launching and maintaining a microbrewery continues to climb in the UK, with the price of raw materials essential to beer, such as malt and yeast, growing alongside inflation, and energy prices remaining elevated since before the pandemic.
The price of labour is on an upward trajectory too, with the British Beer and Pub Association (BBPA) estimating that recent increases to the National Living Wage and National Insurance Contributions (NICs) could cost the sector £70 million extra per month.
The recent craft beer boom has also led to an industry rife with competition. In early 2024, the UK had 1,715 active breweries, making the market particularly saturated compared to those in the US and Europe.
Due to these obstacles, 2024 proved to be a very difficult year for the sector, with more breweries closing than opening in each quarter according to the Society of Independent Brewers and Associates (SIBA).
However, as long as you’ve got the capital to back it up, there are steps you can take to increase your chances of success, including embracing savvy digital marketing strategies and leaning into current trends.
For example, there have been two massive success stories from this year. First up is Impossibrew, which has cashed in on the UK’s growing desire for non-alcoholic, hangover-free beverages, and secondly JUBEL, a thirst-quenching brewer that bridges the gap between fruity cider and crisp lager.
How to start a microbrewery business in six steps
Setting up a microbrewery requires careful planning and legal considerations, as well as a whole lot of determination. We’ve distilled how to turn your hobby into a business in six key steps.
Step 1: Create a business plan
Just like with starting any business, the success of your microbrewery hinges on your business plan.
Your business plan will act as a roadmap for your microbrewery. It’ll help you navigate the complexities of the industry by forcing you to distil information about your microbrewery’s vision, finances, and target audience into one document.
Your business plan should include a company description, a summary of your objectives and financial forecasts, information about your target audience, and detailed descriptions of the beers you plan to brew.
If you haven’t identified your target market, we recommend using platforms like Google Analytics or SEMrush to gain a deeper understanding of consumer trends, evaluating the competition to identify gaps in the craft beer market, and creating customer profiles to help guide your marketing efforts.
Writing a business plan for the first time? Learn how to write a business plan, and get the ball rolling with one of our free templates.
Step 2: Find a location
Location is everything when it comes to setting up a microbrewery. Not only will it determine the price of your rent and property prices, but it will also impact delivery logistics and foot traffic, if you’re considering opening up a taproom.
When deciding on a location, you should consider a variety of factors, including:
- Zoning laws
- Support from local authorities
- The cost of renting or purchasing property
- Accessibility for deliveries
- The feel and popularity of the neighbourhood (for business owners setting up a taproom)
Zoning laws are particularly important to watch out for, as they dictate whether manufacturing and retail will be permitted in a specific area. We recommend contacting your local authority early to obtain information about necessary licenses and to check whether you’ll be able to brew in your chosen neighbourhood.
If you’re still undecided on a location, cities like Newcastle, Manchester, London and Bristol already have bustling craft beer scenes, making it easier for new contenders to capitalise on the existing infrastructure and consumer demand.
Alternatively, if you’re looking to avoid sky-high rent prices and endless competition, opting for a smaller location could give you access to more loyal, local customers while lowering your operating costs.
Step 3: Sourcing equipment and ingredients
Once you’ve pinned down a location, it’s time to get yourself set up.
Launching a brewery requires a significant investment in equipment and ingredients. And just like with anything, skimping on these investments could impact the quality of your final product.
As a general rule of thumb, you’ll need the following equipment to kickstart your microbrewery journey: a mash tun, a later tun, brew kettles, fermenters, and conditioning tanks.
Other essentials include a water treatment system, depending on the quality of the water in your location, basic laboratory equipment, safety tools, and cleaning and sanitisation supplies.
For ingredients, you’ll need to source a steady supply of malted barley, hops, yeast, water, brewing salts, and specific fruits, herbs, or spices if you’re developing a beer with unique flavour profiles.
Depending on your budget constraints and the ingredients you require, you’ll have to choose whether to opt for wholesale or local suppliers. Establishing relationships with reliable suppliers is also a crucial component of this step, as it can significantly impact your outgoing costs, as well as the quality and consistency of your products.
Step 4: Obtain licensing and legal requirements
Setting up a microbrewery requires you to navigate a range of national and local regulations. So, before you showcase your brew to the world, you’ll have to sort out the legal nitty-gritty.
Here’s a list of actions you’ll need to take to get your products fit for the shelf or taproom:
- Register your brewery – for tax reasons, you’ll need to register your brewery with HM Revenue and Customs (HMRC) before you produce any beer.
- Apply for relevant licences – a number of licences are required to ensure that your business is operating legally, including a HMRC Alcohol production licence, a Premises Licence from your local authority (if you plan on selling alcohol on or off the premises), a Personal Licence, and relevant planning permission.
- Adhere to health and safety standards – you’re also legally obliged to carry out risk assessments and adhere to a wide range of health, safety, and welfare regulations to mitigate potential risks.
Other potential regulations to be aware of include Provision and Use of Work Equipment Regulations (PUWER), fire safety regulations, and environmental permits, depending on the nature of your operation.
Step 5: Market your microbrewery
The reality is that in the craft beer world, your brew only represents half of the equation.
To break through the increasingly saturated market, you’ll need a unique concept capable of resonating with your audience before you even get eyeballs on your product.
Your brewing philosophy should be the cornerstone of your brand strategy. What makes your beer unique? What are your core values? What story are you trying to tell? These are factors you need to communicate through your name, logo, and messaging in order to capture the attention of loyal buyers.
When it comes to marketing your products, developing a strong online presence is a must. Aside from creating a slick website, launching social media campaigns, and engaging with customers on platforms like Instagram and TikTok, is one of the most effective ways to build brand recognition.
Making a name for yourself in your local community is essential, too. You can do this by collaborating with local businesses like the fast-growing brewer JUBEL, hosting taproom events like tasting and tours, and supporting local initiatives.
The good news? By using our best free marketing plan templates, you don’t need to break the bank or create a marketing planner from scratch to see real results.
Step 6: Decide on a distribution model
If you haven’t already, you’ll need to decide on how to distribute your products.
For instance, do you want to sell directly through the taproom, deliver your beer to local shops, pubs, and restaurants, partner with a regional or national distributor, or sell online to increase your microbrewery’s reach?
When choosing a distribution model, you should consider the scale of your production, the financial resources at your disposal, and your target market. For example, if your brewery is community-focused, selling locally might make the most sense, while beers with unique concepts or flavour profiles might perform better online.
You’ll also need to decide if you want to keg, bottle, or can your beer. In both cases, opting for a hybrid approach is often the most sensible as it allows you to cater your distribution model to the unique needs of your brewery.
How much will it cost to start a microbrewery?
The average set-up cost of a microbrewery is anywhere between £50,000 to £500,000. However, the total bill could easily exceed £750,000, especially if you’re planning to build a facility from scratch.
This is just a benchmark, though. The cost will depend on a wide range of factors, including its scale, your chosen equipment, the quality of your ingredients, and the location of your premises.
For instance, a basic BBL barrel system required to brew beer can cost around £20,000, while larger, more sophisticated systems capable of handling more volumes can cost up to £80,000. Premises licences and legal fees add to the total price tag too, with application fees ranging from £100 to £1,905, depending on the value of your premises.
Fortunately, if you’re setting up a microbrewery on a budget, there are a number of actions you can take to keep costs manageable. For example, renting out brewing equipment or buying it second-hand can significantly lower setup prices without sacrificing the quality of your end product.
Starting out with a smaller brewing system is also an effective way to minimise startup costs, as you always have the option to scale up as demand for your business grows.
If you’re in a financial crunch, you can also apply for funding to help you cover the cost of equipment, building rental, and even taproom construction.
Read our guide to small business grants to learn more about opportunities that are open to you.
Finding your hoppy ending (conclusion)
Setting up a microbrewery is thirsty work, which requires a unique vision, careful planning, legal considerations, and a whole lot of start-up cash.
As should be obvious by now, not every casual home brewer will be up to the task, but this doesn’t mean the rewards don’t have the potential to be huge.
Demand for craft beer continues to bubble over in the UK. Combine this with endless opportunities for innovation and the community connection that local breweries can foster, and it’s no surprise that so many entrepreneurs are looking to turn malt into money in 2025.
While launching a microbrewery is no easy feat, by being mindful of the current competition, sticking true to your values, and ensuring your product isn’t all fizz and no substance, there’s a decent chance you’ll be able to experience the taste of success.
