If you live in any major U.S. city, you’ve likely noticed a veritable avalanche of craft breweries popping up in the last few years. Men and women all over the country are opening their own operations. This means more delicious beer, but it also means sky-high competition.
Let’s say you love beer. You fancy yourself a halfway decent homebrewer, too. And, like most of us, you entertain occasional daydreams about opening your own brewery. Should you?
Sure, your friends gush about your home-brewed vanilla imperial stout. But they have to say nice things. In a hyper-competitive marketplace, passion and product don’t guarantee success, sadly. Making a handful of tasty beers isn’t enough to sustain a viable business.
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With that in mind, we asked 10 of our favorite brewers to tell us the myriad reasons opening a successful brewery is much, much harder than we think. Truth hurts, we know.
“It can be difficult to anticipate the shifting regulatory landscape that is involved in opening a brewery. While most businesses have to deal with some basic licensing, beer comes with a host of federal and state laws that can be difficult to navigate and are subject to change. Changes in a state’s laws related to distribution, on-site sales, and marketing rules can be unpredictable and could result in a start-up brewery having to quickly alter its business plan… Start-ups need to be adaptable and quick to seize on new opportunities.” – Amy Cartwright, Independence Brewing Co.
“I consider myself a better-than-average cook but that doesn’t mean I’m qualified to open my own restaurant. There are a lot of unforeseen headaches and challenges that await anyone who jumps in to the business of brewing beer. These are not insurmountable, but many people aren’t prepared for this, or don’t have the background to run a business. Be prepared for long hours, getting wet and dirty, cleaning and more cleaning, dealing with the public and then having to balance the books on top of all that. Importantly, you must remain self-critical. You should never feel you’ve mastered the craft but rather that you can always improve. You must nurture the ability and the discipline to dump a batch of beer that is off. It should not be a financial decision. Bad beer is bad beer and bad beer will kill your business.” – Phil Markowski, Brewmaster, Two Roads Brewing Company
“I would never talk someone out of opening a craft brewery. I see opportunities all over the U.S. for taprooms and hyper-local neighborhood pubs where one can serve great beer. That said, I will admit that if you have aspirations for packaging and distribution, it’s very competitive right now. You’ll need a well-thought-out, well-financed operation. You’ll need to build relationships with the right distribution partners and invest in packaging designs that stand out on the shelves. And, of course, your beer better be clean and delicious.” – Todd Usry, Brewmaster and President, Breckenridge Brewery
“If you’re focused on a tap room, you’ve really got to consider the saturation in your area, because we’re now seeing some closings in certain parts of the country. On the more traditional route through distributors and retailers, there’s really a logjam and it’s getting increasingly more difficult to get new items through the system. So while I would not discourage someone from pursuing their passion, there are different sets of competitive challenges today that didn’t exist five years ago.” – Mark Hellendrung, CEO, Narragansett Brewing Company
“One of the major challenges of opening a brewery is cash flow. Constant expansion is needed in order to grow, which usually isn’t financially self-sustainable. Additionally, consistency and efficiency of product are major factors. You have to be precise every time, and that’s challenging for a lot of brewers starting out. You definitely would not want to open a brewery if you don’t already have a team that has brewed professionally for some time.” – John Rankin, Managing Partner, Boomtown Brewery
“If your town does not already have a brewery and it appears to be a big enough town to support one, then go for it… If you plan on selling all your beer right across the bar in pints and growlers to the local folks, then have at it. If you make good and interesting beers they will come.
“If your plans include packaging and distributing your beer far and wide, think again. Packaging beer with consistent quality is very difficult and requires extensive capital investment and lots of people running the machines as well as people to fix them when they break. Distributing beer is harder yet again, whether you do it yourself or work with a distribution network. It is a very difficult marketplace out there with thousands of breweries competing for tap handles and shelf space, and there’s never a guarantee that the world needs one more.” – Scott Ungermann, Brewmaster, Anchor Brewing Company
“Distribution for beer has shifted – it used to be easy to get into grocery stores and other mass-market venues, but the space on the shelf is getting tighter and tighter. The popular theory among the craft community is that producing beer on a smaller scale will set them up for success, but brewing on a larger scale proves difficult if you don’t have the technical resources, or the funding to ensure sustainability, you’re setting yourself up for a challenging road ahead.” – Layton Cutler, Head Brewer, Angel City Brewery
“With so many breweries opening, the space is starting to become saturated and competitive, and customers know what great beer is supposed to taste like. This makes for a very short learning curve. Either you come out of the gate making amazing beer, or be ready to dump it. I highly recommend hiring a professional brewer with at least 2-3 years experience in a brewery. It is a labor-intensive, demanding, and stressful process, from lifting and moving 150-pound kegs and 55-pound sacks of malt, to cleaning, cleaning, and more cleaning.” — Chris Walowski, Head Brewer, Verdugo West Brewing Co.
“If your goal is to open a local ‘watering hole’ following the taproom model, then you might have a chance. Please keep in mind this will require working almost every day of the week and with very slim resources… If you think you can work for years in this manner without an end in sight, then go for it. If not, take heed. I would also argue while the future is uncertain, the one thing certain is you will be taking business away from another pre-existing brewery, which could hurt both of your businesses in the end.” – Matt Thrall, Director of Brewing, Left Hand Brewing Company
“It’s free to dream and sometimes those dreams become a reality. Which can be a blessing and curse. Before transitioning from a home brewer to brewpub owner ensure you are ready to handle staffing issues, have a solid HR policy established, and be ready to sleep only a few hours per night for the next 10 years.” – Jeremy Tofte, Melvin Brewing
“Grocery stores aren’t getting bigger, so there will be more pressure on the space craft beer has taken over. That’s an important point – when craft grew up in the ’90s we got new shelf space. We got that by displacing other items on the shelf. That displacement cycle is a natural event in stores. Craft beer is not immune. Only strong sales keep you present out there. You need to actively manage what you’re putting out. If it’s not selling you may need to replace it with another beer or lose the space on the shelf.” – Joe Bisacca, Co-Founder, Elysian Brewing