A Glimpse at What Nano Breweries Are Up Against

You've probably heard the term "nano" applied to segments of the beer industry in the last few months.  It's becoming quite the buzzword, actually.  These small operations are becoming enormously popular, particularly with the local beer fest scene.  However, nano breweries face some pretty significant hurdles to overcome.

Nano brewing is a real, definable, growing movement across the United States.  However, with the challenges these breweries face, how many will actually be able to go on to become successful?  What does success even mean on this scale?  Is any type of growth "success"?

First, nano breweries still have to obtain the same TTB/ATF permits and licenses that a regular brewery does.  That equates to thousands of dollars for permits alone.  They also have to undergo inspections by the Health Department in their area, as well as licensing from the Alcohol Beverage Control Bureau (or the equivalent) in their area.  That's a lot of paperwork on top of the immense amount of money. 

Moreover, with such a small operation, most of the funding is going to come from the person (or persons) involved in operating the brewery.  Usually, a nano brewery only has one or two people involved, so that places an immense financial burden on those individuals.

After successfully getting licensed, nano breweries have the problem of getting the word out about their brews.  While local beer fests can be enormously helpful here, there's still a lot of legwork that has to be done.  Local bars and restaurants need to be visited, samples need to be given, deals need to be made and contracts need to be signed.  With all that PR work, when does the brewery do what it does best?

On top of those hurdles, nano breweries have the problem of securing funding for growth.  Growth in a brewery means upgrading the barrel system – moving from a one-barrel system to a 10-barrel system, for instance.  That costs money.  However, to get that money, the nano brewery needs to be able to sell enough product to make a profit.  Even if the individuals involved put all the money that their efforts make back into the brewery (which is usually how it is done), it can be a very long road to sustainable growth.

Obviously, making a nano brewery successful is a labor of love, requiring dedication and perseverance.  However, that's exactly the type of people that start these things in the first place – committed beer lovers dedicated to sharing the best brews with everyone.

Posted on January 8, 2011 and filed under The Business of Beer.