Beginner’s Guide on Starting a Microbrewery Business in the United Kingdom
Beer has been instilled as an important aspect of society in the United Kingdom. From pubs to family gatherings, the beverage has been bringing people together to have fun, relax, and communicate with each other. Furthermore, the UK is one of those places where people are always ready to try new brews if they are good, and all of these reasons make starting a microbrewery business a great idea for smaller brewers.
What Is a Microbrewery Business?
A microbrewery is a small brewery that produces up to 15,000 barrels of beer a year. They mostly cater to the local market and sell most of their beer in off-site locations such as bars and pubs. However, with the changing buyers’ behavior, microbreweries these days mostly offer packaged beers to liquor stores. A microbrewery may sell to a wholesaler, a retailer, or directly to a customer.
Microbrewery Trends in the United Kingdom
Before starting a microbrewery business, you need to understand the current market trends. This will give you a sense of direction when creating a business plan and onboarding clients. Furthermore, the current trends of the market can also help you to find your specialization.
Low ABV Beer
ABV stands for ‘Alcohol By Volume.’ As the demand for soft drinks and healthy non-alcoholic alternatives grows, more low-alcohol craft beers are entering the market. Non-alcoholic (less than 0.5 percent alcohol per volume or less) and low alcohol beers contain less alcohol and fewer calories than traditional beers. With people becoming more health-conscious and responsible while drinking, creating your own low ABV brew could prove to be beneficial for your company.
Another trend that we can’t miss is our Sour Beers. These beers, traditionally made in Belgian and northern German breweries, are gaining a foothold in the United Kingdom as more and more people discover their distinctive flavors. Furthermore, most of the brewers who sell sour beers also specialize in non-alcoholic beverages containing hops, including sodas, mineral water, and tea.
Ecommerce and Digital Marketing
Last year saw people confined to their homes to subdue the effects of the COVID-19 pandemic. This has changed the way the world does business, and the effects have been seen on the beer industry as well. Most of the brewers have started becoming more active on social media and online platforms. Thus, one of the first things you need to do when starting a microbrewery business is to build a website and a social media profile.
Cans and Bottles Packaging
Many microbreweries supply beer directly to pubs and restaurants, but these days, food places are more reluctant to use beer melters and taps. Furthermore, even if the vaccination has been successful for the most part, people are still not so keen on public gatherings. This has led to the demand for cans and beer bottles. Thus, even if you want to focus entirely on local sales, you may still need to network with a bottle supplier.
Another buying behavior that COVID-19 resulted in is the preference for multi-packs. The pandemic forced people to make their stay outdoors as short as possible, so they needed to buy items in bulk. Thus, these days, we see various breweries offer beer in cans and bottles in front of the boxes and label it like party packs. This can be a beneficial trend, as you will be able to sell more and offer better prices.
The Process for Starting a Microbrewery Business
This is how you can start a microbrewery business in the United Kingdom:
Prepare a Business Plan
Creating a business plan is the first step in any business. The more comprehensive the business plan, the better defined your road to success. In your business plan, you have to include every essential thing such as executive summary, company description, market analysis, organization and management, marketing and sales, funding, etc. It should clearly define your goals and also discuss how you plan to reach your goals.
Decide on the Sales Model
Before a year or two, local pubs and bars would be your first priority, but that’s not true these days. You may have to find customers directly and network with local wholesalers and retail grocery and liquor stores. You also need to allow the public to buy directly from you. Furthermore, home delivery services are becoming popular these days, so count that in when deciding on your primary sales model.
Think of a Unique Selling Point
Millions of barrels of beer are sold in the United Kingdom every year. You have a better chance to sell more than the others if you offer something unique. In other words, you have to build a brand and make your customers associate you with something. It could be your unique product offering, your prices, or your extraordinary customer support. On the other hand, some breweries have gained success just by using unique bottles or playing around with the alcohol levels.
Create a Marketing Plan
Like we said, while starting a microbrewery, you have to factor in the generally huge market competition. So, after creating your USP, the next step is finding a marketing plan revolving around that unique selling point. You have to involve the internet, for the most part, learning digital marketing and leveraging SEO, Social Media, Email Marketing, and such. Try to be consistent with your marketing plan and focus on building good relationships with your existing customers, which will help you get more customers via word of mouth.
Register Your Business
A Microbrewery business, most of the time, is a sole proprietorship, meaning that it is the ownership of a single person. However, you still have the option to start a partnership or a limited liability company. The business registration process starts by coming up with a name and then gathering the necessary documents. In case you want to start a limited liability company, you need to appoint a director and a shareholder. For more information, see our guide to company registration in the UK.
Register for the Taxes
In the United Kingdom, any commercial beer producer needs to pay Beer Duty if the strength exceeds 1.2% ABV. Furthermore, they need to register with the HMRC as a brewer to receive a certificate to brew. Furthermore, smaller breweries, essentially ones producing less than 60,000 hectolitres of beer a year, can get tax relief through the Small Breweries’ Relief scheme.
At the same time, you need to pay other regular taxes. You can work with a UK corporate service provider to register and work around your taxes, so you will have to pay the minimum amount.
What Licences Do I Need for Starting a Microbrewery Business in the United Kingdom?
Just like any other business, you need to get special licenses for starting a microbrewery business. Here are some permits you may need:
- Registration of beer brewer or beer packager (All UK)
- Notify the Information Commissioner’s Office (ICO) if your organization processes personal data in an automated form.
- Public space surveillance (CCTV) license to install CCTV cameras on your premises.
- Environmental permit or exemption for the discharge of trade effluent into inland freshwaters, estuaries, or coastal waters ( this is required in England and Wales).
- Pollution Inventory reporting (England and Wales).
- Environmental permits are issued by the Local and the Environmental authorities of your location.
- Hazardous waste producer registration ( England and Wales).
- Notification to the authorities to handle, produce, use or store dangerous substances
- Environmental permit for discharges to surface water or groundwater (England & Wales)
- Goods vehicle operator license (England, Scotland & Wales)
- Greenhouse Gas Emissions Permit if you do activities under the European Union Emissions Trading System.
- Revenue trader registration (All UK).
Scotland Special Licences
- Pollution prevention and control permit – Part A.
- Pollution prevention and control (PPC) permit air emissions.
- Pollution data reporting.
- Controlled water activities (CAR) consents.
Northern Ireland Special Licences
- International road freight operators license
- Greenhouse gas emissions permit
- Pollution Prevention and Control Permit Part C
Note: Based on your business activities, you may need to apply for some or all of this license. You may consult company incorporation services in the UK to be sure of everything you need.
Owing to how much people love beer in the United Kingdom, starting a microbrewery business here can really make you successful. However, formally registering a business and gaining a license can be a lot of work, and for that, you may need professional help.
3E Accounting United Kingdom provides company incorporation services in the United Kingdom. We offer you guidance, consultancy, and registration services for any kind of business, and that includes a microbrewery business. You can contact us for any inquiry.