How Much Does it Cost to Open a Brewery in Canada? [Brewery Startup Costs]

How Much Does it Cost to Open a Brewery?

This past decade has been huge for the world of craft beer. With just four ingredients — water, malt, hops, and yeast — and a trip to the local brewery equipment store, just about anyone can begin brewing their own batch of beer. Well, those four ingredients, some brewing equipment, and a brewery to house the entire operation!

The brewery industry quickly gained momentum when craft beer was popularised in the early 2000s. Since then, it’s continued to grow steadily, with 1,224 breweries in operation in Canada as of 2022. Brewery-hopping and craft beer trading have become hobbies, attracting crowds of beer connoisseurs to breweries around the world to try exclusive batches. 

As long as they keep making beer, people will continue flocking to breweries to share a drink with their friends and family. For budding brewmasters, that means it’s always a good time to begin laying groundwork towards opening your own brewery. Here’s how much it costs to make your brewery dreams come true, along with the business planning tips you’ll need to attract a thirsty crowd.

Average Restaurant Startup Costs

Depending on the specifics of your restaurant — where it’s located, how big it is, what format it takes, and what’s on your menu — the cost of starting a restaurant can vary pretty drastically. The average total cost to open a restaurant in Canada ranges from $175,000 to over $750,000.

Average Cost of Opening a Brewery

Similarly, the cost of opening a brewery can also vary depending on those aforementioned factors, with one primary difference — it also includes all of the brewery equipment you need to malt, mash, boil, ferment, and package your beer.

Even small operations cost at least $50,000 to get started brewing. For larger breweries with more varied craft beer offerings, startup costs can reach as high as $3 million. On average, the cost to start a brewery is in the range of $500,000 to $1 million.

Brewery Opening Cost by Square Foot

Due to the oversized nature of brewery equipment, you’ll need to find a substantial space within which to operate your brewery — especially if you decide to open a taproom so customers can enjoy your brews on-site.

Whether you’re building from the ground up, converting a different type of restaurant or retail space into a brewery, or renting out a vacated pre-existing brewery, you can expect to pay between $200-$500 per square foot.

Brewery Startup Costs to Expect

Before you begin calculating costs, take some time to map out your restaurant business plan to ensure you’re allocating funds appropriately. Brewery costs vary depending on the specifics of your operation, but these are the averages you can expect. 

A Breakdown of Brewery Startup Expenses

Follow this checklist to help plan and manage your budget while opening your brewery.

1. Utilities

A well-run brewery in Canada uses 8 to 12 kWh of electricity, 5 hl water, and 150 megajoules (MJ) fuel of fuel per hectolitre (hl) of beer produced. Using those ratios, you can expect to pay roughly $18 per hectolitre of beer on utilities.

2. Location

Due to local government regulations, you can’t open your brewery in just any available retail space. Most provinces and territories have designated zones for the industry. To ensure you aren’t wasting any time scouting in restricted areas, check with your local government before this step. Or enlist a restaurant industry realtor who is already an expert on local regulations, required permits, and available properties.

Once you’ve determined potential locations for your brewery, outline your space requirements. For example, opening a microbrewery requires a fraction of the space that opening a standard sized brewery with a taproom does. Factor in all of the space you need to store and operate your equipment, as well as the space you need for your staff to comfortably work before making any final location decisions.

3. Brewery Interior Design

What atmosphere do you want to cultivate at your brewery? Is it going to be a relaxed, chill place where people can go on laid back dates or small group hangs? Or do you want to open a brewery with a taproom that doubles as the hottest new party spot in town? Will guests be able to take a tour of brewery operations, or will it be a more “behind the scenes” style brewing area?

The interior design and layout will dictate how people spend time there and the overall atmosphere that’s created. When designing the layout and floor plan of your brewery, ask yourself guiding questions such as:

• Will you have a taproom?
• If so, how many guests will you host at a time?
• Is the brewery the only place where you will be brewing your beer?
• Will your brewery double as an event space or venue?
• How much space needs to be allocated for brewing equipment?
• How much space needs to be allocated for customer seating?
• Will you have table games like shuffleboard or ping pong?
• Will you offer other perks like board games or cards?
• Will you have arcade games or a photo booth?

Many breweries choose to include activities since they make for ideal event spaces. If you’ll be hosting weddings or other events, think about how to design a space that’s either on theme, or neutral enough to be decorated for each event.

4. Brewery Equipment

Equipment is generally the biggest cost you’ll encounter when opening your brewery. Microbrewery systems with 3-7 barrels could range from $70,000 to $200,000. Whereas medium-sized craft brewery systems, such as 10-30 barrel systems, can range from $275,000 to $1.3 million, depending on features.

Regardless if you’re buying new or used, the typical equipment you’ll need to begin brewing your own beer includes:

• Fermenters, boiling equipment, and brew kettles
• Test strips, meters, stock pots, and portion scales
• Walk in refrigerators for keg storage
• Bottling and packaging tools including growlers and beverage shippers
• Keg tapping, dispensing, and serving equipment
• Safety gear and equipment

Pro tip: Buy your equipment with an eye on the future. If you’re opening a microbrewery now but plan to scale in coming years, don’t invest in pieces of equipment that your operation will quickly outgrow and need to replace.

5. Pre-Opening Expenses

Pre-opening expenses are all the costs that incur before opening day. Depending on the specifics of your operation, this can include everything from accounting and consulting fees to marketing costs and rent.  

6. Marketing, Branding, and PR

Alcohol brands in Canada spend big on advertising each year. With a combined $21.76 million on digital media, $47.36 million on TV, $124.16 million on digital media, $17.92 million on OOH, and $34.56 million on TV. 

With the brewery world growing increasingly more crowded with each passing year, new and emerging breweries need to prioritise marketing and branding strategies in order to stand out against competing beer halls.

Here are a few brewery marketing tips:

• Develop a clear brand identity that’s unique and exciting.
• Create original branded merchandise like keychains, can holders, bumper stickers, tee shirts, and other swag.
• Run engaging social media marketing campaigns.
• Invest in marketing tactics such as paid digital ads, creating a website, and email marketing.
• Partner with local businesses.

7. Brewery Startup Capital and Loans

The restaurant startup capital needed to open a brewery includes:

• Opening costs
• At least six months of operating costs
• Emergency funds

8. Brewery Exterior Design

One popular way that breweries save costs is by reserving their indoor space for beer production and designing an exterior taproom, tasting room, and seating area for customers to enjoy their drinks.

If you decide to offer outdoor seating and to take the design of your brewery outside, prepare to spend up to $55,000 in exterior design costs.

9. Organisational and Development Costs

Opening a brewery requires you to obtain a collection of restaurant licenses and permits before opening day. They include:

• Company registration: $200 to $250
• Brewery license: $3,150 for a 2 year term and $6,300 for a 4 year term using Ontario as an example (may vary depending on location and size of brewery)

Work with a professional to guide you through the licensing process, as it can be tricky and it can be helpful to have some hand-holding from someone who's practised in navigating the bureaucracy in your local area.

10. Professional Services

Opening your own brewery is a lot of work. In addition to overseeing the brewing and packaging of your beer, you also need to market your brewery, apply for permits and licenses, hire staff, and ensure you’re constantly operating in accordance to local and state brewery regulations.

To help juggle all of those tasks at once, many brewery owners choose to outsource responsibilities to third-party restaurant industry experts such as accountants, lawyers, marketing professionals, and brewery consultants. 

Costs will range depending on your specific needs, but new brewery owners can spend up to $70,000 in professional services during pre-opening.

11. Technology and Point of Sale

It’s official, tech has made its way into the brewery industry. Modern brewing tech tools have been designed with advanced computing and AI to revolutionise the way brewers produce and package their creations. For example, canning was once a time-consuming seven step process — now, it’s completely automated.

Brewery point of sale systems that streamline taproom operations have also emerged. Toast’s POS system is designed to improve the brewery operations experience for staff and guests, while integrating with your other restaurant tools. 

12.  Brewery Food Costs + Partnerships

You may decide to offer a brewery food menu alongside your beer selections, or partner with local restaurants or food trucks to offer dining options. While many patrons don’t head over to breweries expecting a full dining room menu, offering a selection of snacks, appetisers, and shareable treats is a great way to set your brewery apart.

Just remember that if you do decide to offer a menu, you should research the permits and licences that may be needed in your province.

13. Staffing and Management

Last but not least, you’ll need to allocate a fair share of your brewery startup costs to hiring staff and a management team. Breweries are specialised establishments, meaning that in addition to hiring bar and wait staff for your tap room you’ll also be hiring a roster of brewing professionals, including:

• Packaging and cellarmen
• Brewers
• A quality assurance/quality control team
• Head brewer/brewmaster

On average, you can expect to spend 30% of total revenue on restaurant labour costs.

Brewers, Start Your Engines

As long as there is water, malt, hops, and yeast in this world, people will find a way to turn them into beer. But starting a brewery takes more than the right equipment. It takes the passion of a brewmaster and the drive to continue producing high quality ales, stouts, lagers, and pilsners.

To find out if you have what it takes to break into the ever expanding world of craft beer, create a comprehensive business plan for yourself and manage your startup budget wisely.

Related Resources

• How to Open a Bar: Starting a Bar Business Steps
• How to Write a Bar Business Plan
• How Much Does it Cost to Open a Nightclub in Canada? 
• How to Design a Bar in Canada: 20 Bar Design Concepts and Ideas
• What is a Rail Drink?