The Brewery Investment Opportunity
This brewery feasibility study dissects every variable—from fermentation vessels to state franchise laws. For a general overview of the feasibility process, see our guide on how to create a business feasibility study.
1. Market Analysis: The State of Craft Beer in 2025
1.1 The Post-Boom Reality
- Market Bifurcation: "Macro-Craft" struggles; "Hyper-Local" thrives.
- Stability: Brewery count stabilized at ~9,800. Closures concentrated in distribution-heavy models.
1.2 Consumer Behavior
- Rotation Fatigue: Shift from "new beer every time" to consistency and classic styles (Lagers).
- Experience Economy: Taproom "vibe" drives visits. Beer is just the prop.
- Premiumization: Consumers willing to pay $7-$9/pint for quality.
1.3 Saturation vs. Density
- Saturation: Supply > Demand (e.g., Grocery store shelves).
- Density: Breweries per capita. "Brewery Districts" create tourism draw. Don't fear density; fear isolation.
2. Business Models: Defining Your Path
Nano-Brewery (1-3 BBL)
High labor, low capital ($50K-$150K). 100% taproom sales. Owner often buys a job. Risk: Burnout.
Microbrewery (7-15 BBL)
Sweet spot. 10 BBL system supplies taproom + select accounts. Capital jump ($250K-$2M). Requires professional staff.
Brewpub
Restaurant that makes beer. Food drives traffic but has lower margins (5-10%). Complexity of running two businesses.
Taproom Brewery
Production license, taproom focus. Goal: Cover 100% fixed costs with taproom sales. Distribution is just marketing.
3. Financial Feasibility: The Economics of Brewing
For detailed financial modeling, see our startup financial projections guide.
3.1 Startup Costs Breakdown
| Cost Category | Nano (3 BBL) | Micro (10 BBL) | Brewpub |
|---|---|---|---|
| Brewhouse Equipment | $30,000 | $120,000 | $120,000 |
| Cellar (Tanks/Chiller) | $20,000 | $80,000 | $80,000 |
| Buildout/Floors | $40,000 | $200,000 | $400,000 |
| Working Capital | $30,000 | $150,000 | $200,000 |
| TOTAL ESTIMATED | $125,000 | $625,000 | $995,000 |
3.2 Unit Economics: Pint vs. Keg
🚛 Distribution Sale
- Price: $150/keg
- Revenue (10 BBL): $2,850
- Gross Profit: $2,250
- Result: Volume trap. Low margin.
🍺 Taproom Sale
- Price: $770/keg ($7/pint)
- Revenue (10 BBL): $14,630
- Gross Profit: $14,030
- Result: Margin King. 5.1x Revenue.
Strategic Implication: Model break-even based solely on taproom sales. If you need distribution to survive, the model is fragile.
4. Technical Feasibility & Equipment
4.1 The Brewhouse
- Electric (1-5 BBL): Efficient, no ventilation needed. Hard to scale.
- Direct Fire (5-10 BBL): Cheaper hardware, inefficient, hot spots.
- Steam (10 BBL+): Pro standard. Fast, even heat. Expensive boiler/piping.
4.2 The Cellar
- Unitanks: Industry standard. Ferment, carbonate, lager in one vessel.
- Sizing: "Double-batching" (brew 2x to fill 1 tank) maximizes efficiency.
- Cooling: Oversize glycol chiller by 30-50% for expansion/heat waves.
4.3 Quality Control
Dissolved Oxygen (DO) Meter: Non-negotiable ($10k-$15k). Oxygen ruins beer in weeks. Without one, you are flying blind.
5. Operational Feasibility & Licensing
5.1 Regulatory Maze
- TTB (Federal): Brewer's Notice. Takes 90-120 days. Requires lease first (paying rent on empty building).
- State: Three-Tier System.
- Franchise Laws: Protect distributors. Signing a distribution contract is often a lifetime marriage. Consult specialized counsel.
5.2 Supply Chain
- Hops: Market softened. Spot market often cheaper than contracts.
- Malt: Prices rising due to climate. Budget $0.60-$0.80/lb.
- COGS Target: $0.30-$0.60 per pint.
6. Marketing Feasibility
- The "Why": Need a niche (Family Friendly, Metal & Stouts, Lager Temple). Generic "good beer" fails.
- SEO: "Brewery near me", "Dog friendly brewery".
- Untappd: Ratings influence traffic. <3.75 deters tourists.
- Events: Trivia, Run Clubs, Food Trucks drive midweek traffic.
7. The "Food" Question
- Full Kitchen: High CapEx ($100K+), low margin, high staff turnover.
- Snack Model: Pretzels/Empanadas. High margin, no chef.
- Food Trucks: Low capital, but unreliable. If truck breaks down, customers leave.
- Verdict: Small internal kitchen (pizza/smash burgers) offers best stability if budget allows.
8. Risk Analysis & Mitigation
| Risk | Mitigation |
|---|---|
| Saturation | Focus on hyper-local loyalty; avoid distribution wars. |
| Bad Beer | Invest in QA/QC lab; dump bad batches immediately. |
| Undercapitalization | Launch with 6 months working capital ($150K+). |
| Franchise Law | Sign "Brand Only" agreements; limit territory. |
9. Conclusion & Roadmap
- Secure Money: Capital committed before lease.
- Find Building: Check floors and drains first.
- File TTB: Immediately upon signing lease.
- Order Equipment: 3-6 month lead times.
- Focus on Taproom: Distribution is for ego; Taprooms are for profit.
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