Midwesterners hoping to turn a love of brewing into their career often turn to hubs like the Twin Cities and Milwaukee when they want to start a business. But it’s not just the location that matters; choosing the type of business you plan to run should also be a top priority.
Beyond choosing the business entity for a new enterprise, an owner must also decide on the appropriate business model. This could involve deciding between opening a taproom or a brewpub. If you are unsure of your model, consider the differences between the two types of businesses.
Key differences between taprooms and brewpubs
As explained in this Minnpost article, some of the key differences between these businesses include:
- Food offerings: A taproom typically does not offer food for purchase, although a taproom is permitted to operate a restaurant at the brewery. Brewpubs are restaurants that also have the ability to manufacture beer and may obtain a license to sell all types of beverages.
- Offsite sales: A taproom may sell their beer for offsite consumption directly to consumers in growlers and may also package and sell their beer to wholesalers and retailers. Brewpubs may sell their beer for offsite consumption directly to consumers in growlers but do not generally package and sell their beer to wholesalers or retailers.
- Barrel caps: Brewpubs in Minnesota can only produce 3,500 barrels per year. Taprooms may not produce more than 250,000 barrels per year.
- Licensing: Taprooms and brewpubs must have appropriate licensing. The licensing and fees vary depending on the city in which the business is located and the amount of beer being manufactured. A brewpub that also offers wine and distilled spirits requires different licensing than a taproom that only serves its own beer.
Considering the options for your business
Whether you want to open a taproom, a brewpub, or any other business that sells alcoholic beverages, there will be several factors to consider beyond the actual product you plan to manufacture or sell.
You will also need to navigate the legalities of securing licensing and setting up your business so that it does not face operational hiccups or barriers. This may not be an area in which a new business owner is familiar, so legal guidance can be crucial.
New breweries, taprooms and brewpubs open every year in Minnesota. To set yours up for success, you should focus on making informed decisions and shrewd business moves from the very beginning.