Distillery Ownership FAQs I
t’s often asked, “What does it take to open a distillery?” Which then usually leads to many more follow up questions. So, we’re going to go ahead and answer some of the most common: The two main questions you’ll need to answer before you get started are... 1. What are you going to make? 2. How much of it do you want to produce? This may seem overly simplistic, but you won’t even be able to look at a building without knowing the answer to those two questions. Everything in your distillery will be based on those two factors. And “everything” and “as much as possible” aren’t acceptable answers. Do the research to define your market and know what that market will support. A business plan is a must.
How much does a distillery cost? Distilleries, like cars, come in all shapes and sizes. Do you want a luxury sports car with all the bells and whistles, or do you want a used van? The difference in cost between these two choices are significant, and the same goes for a distillery. Cost will depend on a myriad of factors. In our experience, we’ve found that it always costs more than you originally think, but locking down as many details as possible in your research — before you make the first purchase — is going to make a difference. But, as a good rule of thumb, plan on around $750K to $1.5 million to start.
Don’t forget branding. One of the most overlooked aspects of starting a distillery is the branding and marketing of your product. One might assume that a good product alone will have people beating down the doors to get a bottle, but this is not the case. You’ll need good packaging and branding to stand out from your competition, and also think of who is going to be selling the brand. If you have a distiller who is short on words and doesn’t like to talk to crowds, that’s probably not going to be the person who is out making the sales. Keep in mind that this will be an additional cost on top of actually opening the distillery.
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WRITTEN BY COLIN BLAKE
What does it take to become a Master Distiller? In short, earn it. There is no test or certification to become a master distiller, so anyone can use the title if they want. However, if you don’t know what you’re doing or release a bad product, then prepare to be mocked endlessly. There is nothing wrong with an alternative title like head distiller, and in most cases this will be a less contentious title. Spend some time making various products and mastering making one or two, then work toward the grander title.
Is it too late to open a distillery? Isn’t the market saturated? Not yet. There is still room for growth right now. You just need to be thoughtful of your market and plan as you put your business together. Small- to medium-sized distilleries looking at bottle sales and distribution growth are slowing, but we’re seeing more distilleries opening a “brew pub” style where they are a small distillery but mainly focused on on-premise sales along with food.
Is this much more difficult than opening a brewery? Yes. Opening a distillery not only costs more than opening a brewery but you’ll also have to adhere to more codes, which means more inspections. And due to the higher proof of spirits, everything in and about your building will be held to a higher standard of safety, which translates to more time and capital. Not to mention you’re going to be paying way more taxes on spirits than you would for beer.
Is there a place where I can buy used equipment? The used equipment market can be unpredictable, but as distilleries start to scale up their operations more and more will be up for sale. Another alternative may sound morbid, but you can also keep an eye out for distilleries that are going out of business and beginning to liquidate. There can be opportunities to purchase equipment and even products at reduced rates. American Distilling Institute (ADI) is a good source for used equipment.
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