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Monday, June 14, 2010

How To Start A Brewery In California

Los Angeles is a thirsty city.  The recent renaissance of home brewing has yielded increased demand for commercial micro brews and nano brews.  Many home brewers talk about how cool it would be to start a brewery of their own.  Is starting your own brewery all it is cracked up to be?

I recently sat down with the founders of the recently opened Eagle Rock Brewery to discuss what it took to start your own brewery.  It is not an easy task, to be sure.  They are the first brewery to open in LA in over 50 years.  Regulations and restrictions abound, as "The Man" likes to hold a brutha' down.  Got $500k to a million bucks, a penchant for backbreaking labor and two years of free time?  Then read on.  If not, read on anyways because we all need a reasonable cost/solution to allow more brewers to share their beers with the community.

The first step in starting a brewery in Los Angeles is deciding on one of two paths:  a manufacturing environment or a restaurant/brewery.  M2 or M3 zoning (medium or heavy manufacturing) is required if you will be a stand alone brewery without any food offerings.  This severely limits your options for locations, requires you to be paying rent (or a mortgage) while waiting over one year for your permitting/inspections, and pouring beers at your facility is another matter entirely.

The second option is to start a restaurant AND a brewery in a retail environment.  While it does allow you to have some income while you are giving reach arounds to bureaucrats, shopping for (hopefully used) equipment, and greasing the palms of police and inspectors, you have to start two businesses at once (and the cost of the location is higher).  My long time friends at the Pineapple Hill Saloon And Grill (I sold them a home, the best deal of the century!), a restaurant/bar, can tell you that just running a bar and a restaurant together is tough.  Starting both businesses on your own can be enough to give you an aneurysm.

So equipment and permitting can cost as little as $50,000 but paying rent/mortgage on a location for a year and a half or longer can run hundreds of thousands of dollars while you are waiting for permitting and inspections to go through.  Does anyone have input on how to reduce or eliminate this cost?

People interested in investing in, partnering, offering a location, or otherwise helping accomplish starting a brewery:  contact me!

To read in-depth about starting your own brewery, this book is a winner:

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