How to start a microbrewery
If you’re passionate about craft ale and want to join the growing independent brewery community, a microbrewery offers a rewarding business opportunity
When starting a brewery, important things to consider are:
- 04 | Equipment costs
- 05 | Potential earnings
- 06 | Useful contacts
What skills do you need to run a microbrewery business and who is it suited to?
Britain’s appetite for craft beers and ales shows no sign of abating, and while alcohol consumption in Britain is the lowest so far this century, beer sales are actually increasing.
The UK’s ailing ale scene has been revived, with microbreweries firing up the fermenters across the country – as of October 2017 the number of UK craft breweries now sits at over 2,000; the largest number of breweries since the 1930s!
A new report from accountancy firm UHY Hacker Young has also indicated a rising trend in craft beer with the number of new breweries up by 18% in 2016; growth of 64% over the past five years.
Usually defined as an independent brewery that produces a very small amount of beer, microbreweries are characterised by a stronger focus on quality, flavour and technique; giving consumers something to be sipped and savoured, rather than the bland, mass-produced lager pumped out by the large corporate distilleries.
To many, opening and running a microbrewery seems like an idyllic lifestyle. Paddy Johnson, from a Berkshire-based microbrewery says that you have to have “a passion for doing this over and above economic sense,” warning that “the market is now massively oversubscribed. You do this not to make money, you do this because you cannot stop yourself.”
But passion in itself doesn’t run a business; Johnson reminds us “you’ll be spending far more time selling beer than brewing it, so you need to go in with people that are business minded.”
It’s wise to appreciate that just because you love drinking beer doesn’t mean you’ll be an excellent home brewer. Many owners of microbreweries spend years learning and perfecting their craft before they think they’ve got a product good enough to sell.
You could throw caution to the wind and try to learn the time consuming and complex skill of brewing on your own, or you could take a short brewing course to learn the process from experts, and save yourself costly, early mistakes. If you have the time and inclination, you could even take a brewing degree at the International Centre for Brewing & Distilling at Scotland’s Heriot Watt University.
While there’s a tried and tested, centuries old method for brewing beer, once you’ve got the basics down you can start innovating with taste and flavours. The scope for experimenting with unusual ingredients has given rise to a vibrant and varied craft beer scene of quirky and interesting brews. And with so much competition around, creating a unique brand and product is key to success in this industry.
Despite the highly competitive market, there is also a strong sense of community amongst brewers, who are ready to share and support each other, as well as offer advice and guidance.
If you want to open a microbrewery you have to be patient, passionate and persistent. Brewing can be an enjoyable and rewarding process, but it is also time consuming, physical work that involves a lot of heavy lifting and cleaning. Johnson describes the typical brewer as someone who works “phenomenal hours, for very low rates of return […] but that’s what they want to do with their lives.”
How much can you earn running your own microbrewery?
This will largely depend on how much you can brew, and what retail avenues you use to shift your produce. Remember, the price of beer duty means your profit margins aren’t great, so if you’re going into this business to make big money then brewing certainly isn’t for you.
Johnson says that for him and his business colleagues, it’s not a means of making money but a state of life: “We’re five years in, we’re considered to be one of the most successful beer start-ups in the country. We’re paying ourselves an hourly rate at about minimum wage. However, it has some upsides – we can drink as much beer as we want, and it’s a lifestyle that people want to do. And we’re building a business, it’s our business. But would I advise people to do it as a way of getting rich quick, no, I wouldn’t.”
If you build a strong brand image, merchandising is a good way to raise your profile. You could print your logo on t-shirts or even beer related merchandise like beer mats which can be sold via your website.
Organising or attending tasting events is an excellent way to gain some exposure and build a following, as well as receiving some honest feedback on your beer.
Research how other beers are priced to get an idea of what kind of price you should put your own at. It’s not just the taste and brand image that needs to appeal to your target market, it’s the price as well.
Johnson explains that “everyone wants to be a brewer, but there’s very little money in it.” He apologises for his “doom and gloom” approach but explains that “there’s a need for realism” in the business, before concluding: “Would I do it again? Yes I would.”
Microbrewery tips and useful contacts
- Brewing is time consuming, physical and demanding – be prepared to work hard and relinquish a lot of your free time
- Have a distinctive brand and product – you’re entering a highly over-supplied market
- Research, research, research
- Get your price point right, the price you set for your beer must appeal to your target market
- As a rough rule of thumb, whatever you pay for the kit will be double in the set-up
- The Society of Independent Brewers (SIBA) represents the interests of the UK’s independent breweries.
- London Amateur Brewers hosts monthly meetings where you can meet with likeminded beginners and experts.
- The Craft Brewing Association(CBA) promotes the craft of home brewing, and organises local and regional tasting meetings, where you can get fellow aficionados to taste test your beer, and offer advice and inspiration.
- The Campaign for Real Ale (CAMRA) is an independent, voluntary advocacy group that supports consumers’ rights in the beer and drinks industry – with a mission to promote quality and choice.
- The British Beer and Pub Association (BBPA) exists to promote and protect the interests of Britain’s brewers and pubs. Claiming its members account for 90% of the country’s beer, the organisation champions the needs of the industry and speaks for a diverse and wide representative base.
- For London-based brewers, the London Brewers Alliance, formed in 2010, is a collection of breweries within the M25 that promotes the commercial interests of its members, and supports the improvement of brewing skills amongst its members. Membership is only granted to established brewers within the M25.
- The British Bottlers’ Institute (BBI) is a non-profit membership organisation that provides a point of contact for all those concerned with the bottling, canning and packaging of beverages and other products.
- Finally, the Brewing, Food & Beverage Industry Suppliers Association (BFBi) is a trade association that represents the entire value chain of its titular industries, monitoring legislative proposals, and providing a forum for formal and social member meetings.
Other useful contacts
- Beer Duty: Government guidance on beer duty
- PBC Ltd: Manchester based Brewery installer, offering a range of equipment, services and training
- The Home Brew Shop UK: Supplier of everything you need for brewing, including equipment and ingredients
- ABUK: Used brewing and bottling equipment
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