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Starting a business

How to Start a Brewery in Canada

Opening a brewery has unique challenges that other industries do not face. With the licences you need to file for, equipment you need to plan for, and options with how to sell your products, if you’re able to make it through these challenges, operating your own brewery can be incredibly rewarding.

Legal and Administrative Steps

As you start your brewery, make sure you take the right legal steps to protect yourself and your company. File a trademark for your brewery name and specific names of each beer you intend to sell. This trademark should also cover your logo and other brands you plan on using. Consider reaching out to government or nonprofit agencies that assist Canadian small businesses with securing loans. Make sure you register your business within your province as well as with the Canada Revenue Agency. You also want to cover your bases with permits and licences. You’ll obtain a liquor sales licence, manufacturer’s licence, excise duty licence if you operate more than one location, and an excise warehouse licence if you bottle goods.

Planning for Capacity

A basic requirement for starting a brewery is to figure out how much beer you want to sell. This drives the amount of money you will need, the partnerships you need to make for distributions, and odds of you having a market to sell all of your product. This also relates to your ability to buy ingredients and dedicate time to fermenting your beer. A single full barrel typically serves just over 250 pints. Using this information and your anticipated customer demand, forecast the number of beers you plan on serving and the distribution size you need to build to have this capacity.

Meeting Building Requirements

There are a number of essential physical business requirements to brew beer. Hot and cold water are required. Because sanitation is an essential, consider having a water analysis done to see if your water supply needs filtration. Drainage systems are also required for any area you may experience spillage, and you should seal your floors to protect the long-term stability of your structure. To have proper space for vessels, plan for ceiling space at least 14 feet in the areas you will ferment. You may also need a serving area, seating area, cooking area, and storage/maintenance area. Make sure the space you decide upon meets all of your needs.

Developing Products and Services

Opening a brewery gives you numerous opportunities with what you can do and what you can sell. Alongside your beer, you can sell food. Along with a taproom, you can have a refrigerated area to sell bottles. As the time of the year changes, you can switch to seasonal drinks. You can plan to have event space for classes or lessons on home brewing. You can choose to have a stage for live music. All of these items will take up vital space and require you to plan ahead. Once you’re locked into a brewery space, it is hard to have flexibility with the layout of the building and your capacity to use free square footage.

Determining Need of Space

As you plan for your brewery, you also want to prepare for what you brewery will look like in the future. You should be prepared to know how much space you need now but also be able to envision the direction your company will take and the space you will need. The square footage depends heavily on how many barrels you plan on producing. A five-barrel system typically warrants 500 square feet, while systems up to 15 barrels may need over twice as much space. All of these decisions directly impact the costs you will face when building or buying your brewery space.

Demographic Research

Before you begin your business, you must perform market analysis of your customers. Because your alcohol sales will be made to people of a certain age, you must know your target market. You want to research the legal drinking age of your province and understand what portion of your market is made up of people at least this age. Research customer trends to understand what age group, gender, and demographics are most likely to purchase your beer. If you plan on bottling and distributing your beer, your demographics will be very wide. You have the power to determine what markets you want to be in, even if these customers do not live geographically close to where you make your beer. Make sure you include marketing and promotion in your budget as you try to get exposure in markets in which you may not naturally be involved.

Employment Agreements

Because you will be innovating and making new products, you need to protect the rights of your business. As you hire employees, make sure you have written agreements that outline a fixed amount of time an employee must be employed, especially if the employee is vitally important to the fermentation process of your beer. To prevent someone from leaving in the middle of the development of a beer, have executive employment agreements that explain the length of employment. Set employees up with covenants not to compete as well. As you innovate and create products, employees cannot leave and create a competing business. This will protect your beer formulas, trade secrets, fermentation and brewing process, and recipe list. There are numerous steps and things to consider when starting a brewery. Because it is an easily scalable business, begin by establishing a strong infrastructure to promote the long-term likelihood of success.

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