How much does it cost to start a brewery?

May 20, 2021

How much does it cost to start a brewery?

Punters in our taproom regularly make a two comments.  

“Wow this place looks awesome!”

Followed by,

“You must have dropped a bomb on this…”

Both are true.

For the sake of this post I’m gonna focus on the cost to get the actual brewhouse and essentials of the tap room up and running. We did quite a few extra bits like building some new toilets for the ladies (because they’re worth it) and hand crafting a 10m bar made from milled timber from our property.

But if you’re reading this article, trying to work out whether or not you can afford to jump off the brewery cliff like us, you’re less interested in the cost of light fittings, and more interested in stainless, plumbing and power.

So here we go… Get your overdraft ready.

Before we embarked upon this momentous journey,  my initial feasibility looked a bit like this:

Capital Expenditure

Brewing equipment

$ 300,000

Commissioning

$ 120,000

Fit-out

$ 300,000

Kegs

$ 22,000

Approvals

$ 30,000

Total

$ 772,000

 

I’m pleased to say it wasn’t a million miles off. The fit-out came in a bit lower, but things like the cool room, forklift and tap system more than made up for the difference.

Let’s start where all aspiring brewers go – The size and cost of your new appendage. Your stainless steel brewhouse!

This is was a difficult decision.

What did we want to be? A brewpub or a wholesale brewery?

It’s hard to do both well, and if you want to sell a lot of wholesale beer, I’m the wrong person to ask. But what I do know from my limited experience is that you’ll need to be doing serious volume to make it work.

Like 1mil litres and above, and to do that you’ll need a largeish brewhouse (20-30HL+) and invest in automating the shit out of it.

Wholesale beer is a game of inches. Low margins with high competition. Every cent matters at volume. Not only will you need to buy a big fancy brewhouse, but you’ll also need plenty of cash to balance lengthy payment terms and the ability to employ and manage a sales team (nightmare!).

Not for us…

A brewpub model is what turns me on.

Having a physical home to welcome punters and savour our beers together, while also enjoying generous retail margins is where it’s at. Once open we received instant cashflow, but what’s most important is we were able to get the local community excited and invested in our story while drinking our beers.

So how much did the brewhouse cost?

Our brewery consists of:

  • 3 vessel, semiauto gas fired brewhouse
  • 3 x 10HL fermenters
  • 2 x 20HL fermenters, one which is initially being used as a waste water settlement tank.
  • 1 x 10HL brite tank
  • 1 x 20HL brite tank
  • 1 keg washer
  • 1 x 10HL glycol tank
  • 1 x 20HL cold liquor tank
  • 1 x 20 HL hot liquor tank
  • Grain mill
  • Auger and grist case
  • Brewdeck
  • Plate & tube heat exchangers
  • Yeast brink
  • 2 x chillers

The cost of all this was around $160,000USD. Made in China and supplied from Brewtique here in Sydney.

I received half a dozen quotes from German, US and Chinese suppliers with prices ranging from $1mil+ for the German kit, to less than $100k direct in China. We decided to go with Brewtique for a few reasons. Their communication and transparency was amazing, the price was good, I’d received great references from other customers and one of the owners, Gavin Troxler, lives around the corner from me, so if it all went to shit I knew exactly where he lived!

$160kUSD…. Doesn’t sound so scary?

But we’re just getting started.

That gets your tanks made and ready at a factory in China. You still need to get them from the factory, to the port, across the sea, then from the local port to your door. I covered the dramas around this in more detail on one of my previous posts. But what should have been $15-20k ended up costing almost $40k due to surging demand at the time of shipping.

Once you bundle the exchange rate and shipping into the mix, we received the tanks to our door for a touch under $250k.

 

Plumbing

It took me a few weeks to find a plumber capable of doing the job. I hit up the two plumbers that did the other brewery’s in Brookie.

One scratched his head on site and said… “Mate, this is a big big job… I dunno. Reckon you’re gonna be up over $100k maybe?” I’ll have a think and shoot you through a quote. The quote never arrived.

The second plumber gave me more hope “Mate, yeah we can do it. Definitely won’t cost $100k, whoever gave you that quote is bonkers. Let me think about it and I’ll come back with a price” Two days later he left me a message saying “Sorry mate, I’m gonna go away for a couple of months, so can’t do the job. Sorry, good luck”

Righto… Ah… What now?

I called my mate Dylan that owned a commercial building company who had a mate who had a mate who had a mate that ran a fairly large commercial plumbing business out at Seven Hills and was keen for work.

Ronan from Tradewise came out, all professional and eager to understand what was needed to plumb up a brewery. The job was fairly extensive and involved:

  • Excavating and running drainage through approx. 40m of the warehouse slab
  • Excavating a 1,000L pit in the middle of the warehouse.
  • Installing gas metre and gas lines to burners
  • Plumbing in the new toilets
  • Plumbing in the bar

Quote for all of the above, including waste removal, which ended up being 3 x 10cubic skip bins, was $45,000.

They were there almost every day for 3 months, and despite several small changes we didn’t get stung for variations. They were awesome and I’d certainly use them again if given the chance.

 

Electrical

Finding an electrician was difficult.

Our initial guy, who installed 7th Day Brewery around the corner, was local and keen for the job. We shook hands and he agreed to work at $80/hr. However once we got the keys and began ripping into the fit-out I received a text “Sorry mate, I’m flat out. Let me pass you onto another mate who can do it”.

Ok…

At this point I urgently needed a three-phase electrical point installed for a floor grinding machine, and asked them to come in and do it. 3hrs later I got a $1,300 bill… Sheesh!

However I was getting desperate. The entire build was about to stall due to lack of sparky action.

“Thanks mate… would you like to quote for the rest of the job? There’s a fair bit of work here.” I asked Sparky No. 2.

“Sure mate! We’re local and have a team of guys that can rip in. I’ll come back to you on Monday.”

Monday came… radio silence.

Over the next few days I chased up with multiple phone calls and of text messages. Nada. Nothing. More radio silence.

Fucking great.

We now needed to wire in our new cool room urgently or our gypsy brews could spoil.

So I hit up Dylan again and thankfully he also knew  some great sparky’s on the North Shore. Nick and Christian from iElect arrived and finally started ripping in, getting our cool room hooked up and turned on hours before we rolled our first kegs in. Phew!

The cool room was on, but we still had a heap to do in wiring up the brewhouse which had now arrived and was sitting powerless.

The next day a COVID cluster in Avalon spiked and greater Sydney was warned against coming to the Northern Beaches. The date was 15th December.

“Sorry mate, I feel bad but I can’t get over there until this settles down. We’re also off from next week until the 16th Jan. So I’ll see you then. Have a good Christmas!” Said Christian the next day.

Fair enough… but fuck.!  

As luck would have it, Marty, our resident carpenter, knew a local sparky that didn’t have COVID, had his holiday cancelled and was keen to work through the break. Geoff Butler didn’t know a thing about brewing or how a brewhouse worked. But over the next couple of months he was in here every day getting us online. He even dropped his rate once he could see the velocity in which money was flying out the door.  An absolute champion and now a regular on the otherside of the bar.

All up, across all four sparky’s the total cost of electrical was $52,000, which included extensive wiring of the bar and tap room.

 

Flooring

We needed to install food grade flooring as part of our council approval and I was keen to ensure the falls on the brewery floor allowed for proper drainage so water didn’t pool. This was a big issue in many other breweries I’d spoken to.

I researched products and debated the merits of installing a floating slab. A slab would cut down the cost of excavation and concrete cutting, but we’d be left with a step and a reduction in our internal ceiling clearance (which was tight).

In the end I decided to cut into the slab and use a product known as Roxset. This stuff is epic. It creates fall, is durable, looks great and built for abuse.

It’s just very expensive… My read of the initial quote had an option which looked to be what we needed priced at $11,500.

The floor was installed ready for the tanks and looked incredible.

But then final invoice arrived… it was $33,00!

I had a mild heart attack and called them up.

As it turns out, I misunderstood the quote. The $11,500 option was just the first OPTION. There was also option two and three. Which were more requirements than “options”.

Fuck me…

To their credit, they were good about it. Understanding where we both made mistakes in the communication. I’m pleased to say we reached a middle ground and are gradually paying the difference.

Total flooring cost $33,000

 

 

Cool room

This part of the build was relatively straight forward. Our cool room is around 20m2 and I had an idea to put a window looking into the cool room from the tap room so punters could see the back of house operations and how the beer goes from keg to the tap.

We managed to source a heated window from an old butchers shop and after half a dozen quotes ranging from $18k - $25k, we decided to go with Beers-R-Us for the chilling and New Wave for the panelling.

Troy from Beers-R-Us was also installing the beer tap system and bar. He offered to look after the process and all honesty I was happy to pay a premium to have this part of the project managed. Because frankly I didn’t know shit about cool rooms, beer tap systems or bars at the time. Also, at this point in the build I was stressed the eyeballs and couldn’t take on any more responsibility.

Total cool room cost $24,000

 

Tap System

For the uninitiated, this is the bit of the process between the keg and the beer tap.

I spent hours researching the different options and almost fell off my chair when the quotes started coming in at $20k+. I began looking at second hand gear, and considered ways we could serve directly off the cool room.

Some background to help educate you on beer tap systems: Many breweries serve beer directly off the cool room wall, but it compromises the beer - here’s why:

Most beers styles should be served between 0.5 and 2 degrees, however beer cool rooms run at 6-7 degrees. Any colder and beer begins to over carbonate when connected to gas - because science.

Therefor if pouring directly from the cool room, the beer really should have a secondary chilling system. Either an icebank or glycol system. This is where the cost begins to escalate.

I decided to follow the advice of Jordan McDonald, one of the owners of Frankies Pizza and a bunch of other sick Sydney venue’s who said to me “If beer is gonna be your thing, then you want to be pouring it as cold and consistently as you can. Don’t go cheap or second hand”.

It was also important to for us to be facing the punters while pouring. I reckon it’s those small moments to connect with the people that can make a big difference to their beer drinking experience. 

We went with a 12 tap glycol system plus a single handpump imported from the UK.

Total beer tap system cost = $27,000

 

In addition to these big core expenses, we also spent chunks of money on:

Stainless steel bar  ~$24,000

Waste water system  ~$5,000

Lab testing equipment for brewery ~ $17,000

Brewery hoses ~$5,000

Kegs @ $97USD per keg x 200 kegs ~ $25,000

Electric Forklift ~ $20,000

Racking ~ $5,000

New ladies ladies toilets inc walls, 3 pans, and 2 hand basins ~ $20,000

3 new men’s urinals with screens mounted above ~ $6,000

Hand made tables & stools ~ $20,000

Kids play area ~ $3,000

Second hand food truck with appliances ~ $35,000

Painting ~ $15,000

Signage ~ $12,000

Pool table, foosball table and arcade game ~$10,000

New front windows ~$6,000

Glassware ~ $5,000

Uniforms & merch ~ $6,000

Consultants for DA and CC ~ $40,000 (we got screwed here on an environmental report which cost $15,000 alone)

“Assorted carpentry” which included building fences, dozens of small and large design elements inc the huge timber bar ~ $40,0000

Lighting ~ $8,000

Sound system ~ $10,000

Bank guarantee for the lease on the property ~$70,000

 

Now you’re probably wondering what all that adds up to…

Once you’ve typed it into your calculator, please don’t tell me, because it hurts my feelings.

But I will say, now that we’ve been through the process, I wouldn’t change anything. It’s almost all been worth it. The beer's pouring and tasting magnificent with rave reviews and each weekend we have lines of thirsty punters out the door just trying to get in and enjoy a pint with us.

If we hadn’t put so much into it, I’m not sure we'd be getting so much out of it. 

If you’re serious about starting a brewery please reach out to me on email and I’ll happily give you more info on each aspect of this journey to help you make the right decisions. I was blessed to have an incredible support network around me that helped push us over the line and I’d like to pay that forward if given the chance. I can be reached on nick@buckettys.com.au