How To Start Your Own Brewery
Don't boil your business before your hops.
You may have spent years brewing at home, labouring over your IPA, NEIPA, Sours and pales in hopes of a perfect recipe. Now, the next move from handing out free pints from your garage is moving to an actual storefront. The jump from home to shop can be a long process. However, here is a rundown on what you need to keep in mind when starting your own brewery.
Legal Requirements for your brewery
It can look like the legal hoops that you have to pass through are never-ending for your brewery. The best method is to start planning all the legal requirements you have to fulfil in advance. There is little advantage to spending all summer perfecting your porter recipe for a winter opening if you end up bogged down and delayed by legal obligations.
As a brewery, you are going to need space for your tanks, bottling area, refrigeration and storage. This means you will probably need to go to your local council and get a development approval. This includes if later down the track you want to provide live music or comedy at your brewery. Therefore, you should ensure that the brewery fits all the food safety requirements for not just handling and making beer but also the surfaces and building itself.
A new trial came out recently which is a liquor license for microbreweries in the inner west. If the application for the trial doesn’t apply to your brewery, then the producer/wholesale license will usually apply. This means you need to be aware of the restrictions that each license comes with on trading. The other requirement is on commercial trade wastewater with Sydney water which may involve a grease trap. If Sydney water classes you as low risk or you don’t discharge much water then they might allow you to not need a permit if you meet the criteria.
Furthermore, there also requirements at the national level. This includes getting either an ABN or ACN. This depends upon which business structure you choose. A business name is also needed as well. The more complex requirements are the excise tax which is the license to manufacture alcohol. The other regulations to abide by are the labelling laws. This will cover standard drinks, warnings and ingredients. An overlooked but still relevant issue is intellectual property like trademarks. When you’re naming your latest saison beer double check you haven’t stolen the name of someone else’s beer. If you want to check that you haven’t missed any legal issues at any level you can always check with a business lawyer.
Being a newcomer to the scene can mean over expectations. Budgeting is important but underbudgeting is fatal. As a brewery, the machinery and equipment needed is expensive and can present a massive barrier to entry. Crowdfunding is a solution around this and already exists like in the case of the Hopsters Brewery. Additional possibilities include private investors like an angel investor. You could also join together with a brewing buddy and form a partnership. You should also factor in cleaning costs and insurance but above all just make sure you have enough to keep going as you may not see a profit for a while with all those startup costs.
Just like any business, for a brewery a business plan is crucial. It should have your long-term goals along with plans for expansion and costs. As a result, if your brewery picks up speed and secures contracts with local bars then you need to budget for this. Therefore, as your business grows so do your costs, with bigger batches to make comes more ingredients to buy. If you don’t plan for this, you might fail to deliver on a contract due to either underproducing, running out of cash or not having the size or facility to keep up. Burning a contract or a client is going to hurt your brewery in making connections. Hence, being calm and deliberate in how you choose to expand is critical.
When starting your brewery make sure to take these things all into consideration. The Australian craft market has developed with inter-brewery friendships. As a new brewery make sure you don’t cheap out on your product as it will show. The brewery is for the consumers, so make sure it appeals to them.
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Justin is a legal intern at Lawpath as part of the content team. He is currently studying a Bachelor of Laws and a Bachelor of Economics at UTS.