Do you want to start a microbrewery business in India? If yes, you have landed at the right place. Here in this article, you will find a complete microbrewery business project plan guide with costs, licenses, equipment, and much more
Before getting into the process of setting a microbrewery business, let us first understand the meaning of the microbrewery business.
What is a Microbrewery Business?
A microbrewery business is actually a combination of a restaurant and a small microbrewery processing plant that normally offers craft beer with different customized tastes and flavors to their clients on-premise. Studies have shown that drinking beer in different customized tastes is a trend of today’s phenomena. It is also called a brewpub or craft beer brewery.
In the microbrewery business, you can offer your client a wide selection of beer including your own beer that brews on your premises. Furthermore, licensing the brewpub business is also easier than getting a full-scale liquor license.
The market for microbreweries is still developing in India. Having a strong marketing strategy an entrepreneur can start a microbrewery project with substantial capital investment.
10 Steps to Start a Microbrewery Business in India
1. Understand the Market
Before initiating the microbrewery business do some research about it. Study the market and about your would-be competitor. Study about the culture of taking beer of the people where you want to establish the business. These all will help you to craft a business feasibility report.
2. Select the Type of Beer to be Produced
It is extremely important to select the type of beers you are going to serve to the customers. It is essential to talk to local customers and collect information about what kind of beers are trending from nearby local competitors.
Some of the beers that are popular in India are India Pale Ale, Porter, Wheat, Stout, German Lager, and so on.
3. Create a Business Project Plan
Create a detailed microbrewery business project plan report. Determine your business objective and mission statement. Calculate set up cost with equipment and human resources needed.
Fix your marketing strategy considering the niche audience you want to reach. A business plan will not only help you to get finance also help you to check whether your business is on the right track or not.
4. Select Right Location
Choosing the right location is an immensely important factor in the success of the microbrewery business. Every state has laid down different rules and regulations for setting up a brewpub. Generally, a minimum space requirement of approximately 0.1 square meters is required to produce per liter of beer in a microbrewery.
On average, an area around 800-1000 SQ.FT is necessary to start a brewery pub in India. It is advised to find a location close to commercial locations, especially corporate hubs as executives are often the main target customers for crafted beers. Another lucrative location can be beside the highway junctions.
5. Legal Formalities for Microbrewery Business
To start the commercial operation of the microbrewery business, you need to obtain a license from the state government excise department. Its terms conditions and fees vary from state to state.
Also, you need to have a trade license, commercial electricity connection, commercial water line, land registration or lease agreement, NOC from the state pollution control board.
In addition, you need a water quality testing certificate, and lastly quality control certificate of finished beer from Govt. approved QC labs. It is always advisable to consult with a small business advisor to get the right advice about obtaining these licenses.
6. What are the Licenses Required to Open a Microbrewery Plant in India?
You will need to procure a specific list of licenses and permits to start and run a microbrewery pub. The license requirements though depend on the state as microbrewery licenses are provided by state governments. Find below some of the licenses that most governments will look for approval:
- Commercial Electricity Line
- Commercial Water Municipality Line/ or Borewell
- Company Registration
- Land Registration
- Wastewater Disposal Certificate from the Pollution Control Board
- Fabricated Equipment Quality Certificate
- Test Report of Water Quality
7. Setting up & Evaluate the Microbrewery Business Cost
While setting up you need to consider the place for bar accommodation, delivery platform, kitchen space, and breweries space. Ask an interior professional to create a comfortable and attractive bar zone.
Concentrate on flooring, ceiling, furnishing, music, and on everything that can create a cozy area for your clients. It is recommended to take technical consultants who can take charge of sourcing the right equipment and designing the brewery layout for the space you’ve got and the beers you want to produce.
Furthermore, Consider having outdoor signage and, if possible, offer valet parking for visitors.
According to the raw material that you want to use to produce beer, several different types of machinery are available in the market. On selecting the machinery consider the fact that how much quantity you want to get as output.
The cost of setting up a microbrewery unit will largely depend on the scale of the production of beer and the size of the brewpub. On average the cost of starting a small-scale microbrewery business is around Rs, 2 Crores in India exclusive of the land cost.
8. Equipment for Microbrewery Business
One must take utmost care in purchasing equipment while establishing a microbrewery business. The best quality of food-grade and steel-make equipment needs to be procured. Some of the basic equipment to be purchased to run a microbrewery plant are as follows:
- Steel Storage Tanks
- Fermentation Machine
- Filtration Machines
- Refrigeration Machines
- Physical Heat Exchangers
- Beer Filters
- Electric Cabinets with Controllers
- Pipelines and associated valves, motors, pumps.
- Beer Dispensers
9. Hire Manpower
Hiring proper and skilled manpower is the key to the success of the brewpub business. The most critical and important person in a microbrewery unit is the head brewer.
He is the main man and is supposed to have an in-depth idea of the entire process of manufacturing beers and the recent trends and development in the beer industry as a whole.
Here we list down the personnel that must be recruited to run a microbrewery business venture:
- Assistant Brew Master
- Bar Manager
- Waiters/ Bartenders
10. Promotion of Microbrewery Business
Offer standard quality food and drinks to the customer. It will induce them to share their experience with others. It will also build a strong reputation in your microbrewery business.
Do some outdoor advertising activities. You can also promote your brewpub by direct mailing and some add publishing on the local newspaper.
Create a catchline of your brewpub business. Create an online presence for your microbrewery business. Social media can be an ideal platform to promote your business.
Always upload posts with attractive photos. Daily basis post your ‘today’s special’ menu on social media. Ask your potential clients to share their experiences on social media.
Frequently Asked Questions
What is the Cost of Starting a Microbrewery Business in India?
The cost of opening a microbrewery will differ from state to state in India. The primary reason for it is changing excise duty.
However, an investment of Rs 50 Lacs to Rs 2 Cr. will be required to open a microbrewery production plant in India based on the scale of production. In addition, one needs to pay a one-time license fee of Rs. 2.5 lacs to start a brewery plant.
What is the Profit Margin in the Microbrewery business?
The average gross profit in the craft brewery business is in the range of 25% to 30%. The net profit margin comes around 10%.
Rupak is the founder of MUVSI. He is a small business consultant by profession. His mission is to make people know how to make money and understand personal finance for a better living.