Microbrewery Business

How To Start a Microbrewery Business in India

Do you want to open a brewpub or microbrewery business? Find here a detailed guide on how to start a microbrewery in India.

Let us first understand what is exactly a microbrewery or brewpub? A microbrewery or craft brewery is a brewery that produces a small amount of beer.

Exact definitions may vary. However, the terms are typically applied to breweries that are much smaller than large-scale corporate breweries. Also, these breweries are independently owned. Such breweries are generally characterized by their emphasis on quality, flavor, and brewing technique.

In India, the prevalence of the culture of microbreweries is not much popular. Some of the potential reasons are stringent state liquor laws, licensing issues, restriction of funds, and lack of skilled labor for the highly technical job of brewing.

However, the brewpub or microbrewery concept is gaining popularity these days. And several state Governments are allowing permissions for starting microbreweries.

These microbreweries are essentially resto-bars where one can consume fresh-off-the-tap beer that has been brewed in-house. The concept is new and now trending in our country. With substantial capital investment and strategic planning, one can start and operate this business successfully.

Microbrewery Market Potential in India

Beer sales in India are expected to see an annual growth of 7.5% over the next five years despite regulatory hurdles, as rising disposable incomes in the hands of the middle class will lead to higher spending says, BMI Research in its “Outlook for India’s beer market” report.

“We believe India holds significant long-term growth potential as a beer-drinking culture is growing in momentum,” the report said. Currently, one can open microbrewery businesses in states like Maharashtra, Haryana, Karnataka, Punjab, and West Bengal.

10 Things to Consider in Starting Microbrewery Business

Overall, microbrewery is not an easy business at all. The business is highly capital intensive. It is advisable, not to start the business with a stringent budget. Therefore, you must consider some important aspects carefully.

  • First of all, analyze the structure and size of your target market and their purchasing power.
  • Identify what all kinds of Beer are available and popular in your target market.
  • What kind of Beer do people prefer in your target area.
  • Income groups and price range of your target market.
  • What are the distributive trade practices, restrictions, preferences?
  • Regulatory requirements, local approvals, product approvals, etc.
  • Identify the right location for your brewpub business.
  • Choose the right form of business organization. Whether it’d be proprietary, partnership, Pvt Ltd or Ltd company.
  • Business plan with financial inputs.
  • Finally, identify your potential competitors and how you will compete with them. Simply write down your marketing plan.

Related: 10 Characteristics of Successful Entrepreneurs

How Much Does it Cost to Start a Microbrewery in India?

Financial planning is one of the most important aspects of this business. Some of the major costs include rent, license fees, equipment costs, production costs, and staffing expenses. Also, you will need to consider the other costs like utility bills, raw material purchases, and promotional expenses.

The license fee varies from state to state. To be sure, you must talk to the state’s excise department. Additionally, you will need to think about the interior setup where you can offer a comfortable sitting arrangement to your customers.

Business Compliance for Microbrewery Business

In starting this business, you have to apply for several licenses and permissions. However, it hugely varies from state to state. Therefore, you must check your state law carefully. Generally, the state excises the government issues the microbrewery or brewpub license. It allows the company to start operations in its microbrewery for commercial use.

The price for this license is Rupees 25000/- per month. The amount may vary from state to state. Additionally, you have to obtain a separate bar license too. Also, you have to obtain the following licenses and permissions.

  • Commercial Electricity line
  • Commercial water line- Municipality/underground bore water
  • Land registration/ Lease sanction
  • Company registration
  • Wastewater disposal certificate from the pollution control board
  • Fabricated equipment quality certificate from third-party inspection.
  • Water quality testing certificate from quality control labs.
  • Quality Control (QC) certificate of finished beer from govt. approved QC labs, on a random inspection basis.
  • GST Registration

Microbrewery Business Setup & Machinery Equipment

You can initiate a microbrewery business in two ways. First of all, you can start the brewpub with the bar and restaurant setup. However, if you already have a hotel or restaurant, you can add on a microbrewery with the existing infrastructure. In that case, you must have space for it.

List of the most important microbrewery equipment:

  • Mashing Tuns & Kettles
  • Lauter Tuns
  • Fermenters
  • PHEs (Physical Heat Exchangers)
  • Refrigeration machine
  • Boiler
  • Electric Cabinet with all controls
  • PLC touch-type process controller
  • Beer Filters
  • Distribution Tanks
  • Serving System

It is important to purchase machinery from reliable suppliers. Ask for customer feedback before placing your final order. Additionally, ask for a detailed equipment list and technical specifications of materials and physical technical specifications. Additionally, if the water supply does not meet standards, you will need to have an RO system.

Related: Things To Consider In Purchasing Machine & Equipment

Beer Production or Brewing Process

Beer is a mildly alcoholic beverage. You can produce it from Barley malt, hops, yeast, water, and other adjuncts such as maize, rice, sugar, wheat, etc. First of all, weigh the barley malt. Mill it to get a powder form.

Then, mix the malt with other ground ingredients as per the specific recipe. Add the treated water. Then put the whole mixture for Mashing.

During mashing the enzymes of the malt degrade the starch and proteins as per specific demands of the recipe for the style of beer and bring the sugars, amino acids, and minerals into the solution. Here, you will get WORT.

Then separate the WORT from the waste solid matter through a process of filtration called lautering. After Lautering, transfer the “WORT” to the kettle for WORT Boiling. Finally, send the solution to a Whirlpool wherein the WORT is swirled to precipitate the suspended matter and make it clear.

Finally, chill the WORT in a Plate Heat Exchanger from 100 °C to about 10 °C in an hour. Add the yeast into the Fermenters. In the fermenters, the yeast converts the fermentable sugars in the WORT to alcohol and Carbon Dioxide and this takes place for about 5-7 days at about 10 °C.

Soon after the maturation, pass the beer through a Filter. Finally, send the clear beer to the beer tanks. The beer is now ready to be dispensed fresh to the customer.

Related: How to Start a Restaurant Business In India

Microbrewery Business Operation

Starting a microbrewery business demands a lot of planning, energy, and capital investment. Also, you must have some sort of knowledge about the food retail business. Also, manpower plays an important role in this business.

You have to employ highly skilled employees for the brewing and the other customer service. Additionally, you must start the operation with the right software to get everything on the right track and in control.

Finally, you must have a promotional strategy. At least, you have to promote the brewpub offline and in the digital media. However, the quality of the beer and the great customer service are the crucial aspects of getting the overall success in the microbrewery business.