The craft beer industry has turned out to be a highly lucrative industry. According to Kell (2016), the smallest breweries continue fueling a flavorful revolution in liquor stores as well as bars across the United States. Without a doubt, everyone would wish to invest in this highly profitable industry. It is true that one ought to be ready to deal with legal and high capital raising issues when starting a microbrewery. Mitchell & Koopman (2014) maintains that brewers face numerous regulators and regulations at the local, state, and federal levels of government. In essence, the various regulations and regulators present different obstacles to the entrepreneurs launching microbreweries. There are rules for the manufacture, distribution, trade and pricing practices, container characteristics, labelling, alcoholic content, advertising, and credit of every alcoholic beverage set by the U.S. Alcohol and Tobacco Tax and Trade Bureau (Brown, 2015). Consequently, one should consider these and other rules when launching a microbrewery.
I completely agree that cost factoring should not be ignored when one is launching a microbrewery. The start-up costs for a microbrewery are exorbitant. Apart from the excessive costs of acquiring the equipment, there are high costs of complying with the excessive regulations in the craft beer industry. The major costs involved with launching a microbrewery include the equipment and building. Taxes further increases the cost of running a microbrewery. According to Williams (2015), beer duty is responsible for about 60 percent of the costs. Egan (2015) advises the new breweries to start with sufficient working capital beyond the start-up costs. It is true that one may be lucky if he/she brews a successful brand and effectively navigates the start-up financial costs. In an attempt to capture the market share, a new microbrewery ought to make its marketing efforts excessively aggressive. The new microbrewery cannot afford to fail considering the excessive costs involved in its launch. Thus, it needs to employ aggressive marketing strategies to reach as many potential customers as possible.
References
Brown, C. (2015, July 7). Starting Your Own Brewery? Here's Your Legal Primer. Entrepreneur. Retrieved from https://www.entrepreneur.com/article/246099
Egan, M. (2015, March 3). How to start a successful craft beer brewery. CNN Money. Retrieved from http://money.cnn.com/2015/03/03/smallbusiness/craft-beer-startup-how-to-guide/
Kell, J. (2016, March 22). What You Didn't Know About the Boom in Craft Beer. Fortune. Retrieved from http://fortune.com/2016/03/22/craft-beer-sales-rise-2015/
Mitchell, M., & Koopman, C. (2014, June 3). Craft Brewing Industry Stifled by Regulation | US News Opinion. Retrieved from http://www.usnews.com/opinion/economic-intelligence/2014/06/03/craft-brewing-industry-stifled-by-regulation
Williams, H. (2015, June 25). How to start a microbrewery. Startups. Retrieved July 29, 2016, from http://startups.co.uk/how-to-start-a-microbrewery/4/
