Hastings County Quebec MONTREAL

Lennox &
Addington County Bancroft OTTAWA

Frontenac County

Harrowsmith
Prince Edward County
Howe
Island
Napanee

Ontario New York

Wolfe
Island
Picton
TORONTO
iCraft Brew | Why the FAB Region?

Lake Ontario
Why the FAB Region?
The FAB (Food & Beverage) Region is a unique economic development
partnership between the Counties of Hastings, Lennox & Addington,
Prince Edward and the Frontenac Community Futures
Development Corporation. The FAB Region offers artisanal
entrepreneurs an ideal location to start a craft brewing operation,
primarily for its low degree of competition, its relatively untapped
market and its close proximity to major centres within North America
(Toronto, Ottawa, Montreal & the U.S. Border). The FAB Region also
offers entrepreneurs an array of locally-grown brewing ingredients
and the possibility of joint ventures with local artisan food producers.
Location & Market
In 2012, 6.7-million hectolitres of beer were sold in Ontario making
our province the largest market for beer in Canada1. Given the
2 http://www.brewstats.ca/annual/sales-by-region/2012
1
strong market growth, as well as an increased interest in artisan
products, the “100 mile diet” and other “buy-local” movements,
there is certainly a market opportunity to open a craft brewery
within the FAB Region.
In comparison to other regions, such as the Greater Toronto
Area, the FAB Region offers a much lower degree of
competition and an under-penetrated market. There are
currently only three breweries that are in operation within the
region: Church-Key Brewing Co., Gateway Brewing Co. and
Barley Days Brewery. In addition to the three breweries
mentioned, there are two other operations, including one near
Bancroft and MacKinnon Brewing near Bath, that are currently
in the launching stages.
Craft beer appeals to a wide demographic of people living within
the FAB Region, from younger craft beer enthusiasts to an older
generation of baby-boomers and recent retirees. The types of
consumers that would be targeted within this region would be
split into two broad categories:
•R
 esidents - A locally crafted beer would appeal to residents
because they appreciate the idea of buying locally-produced
goods and have a desire to support their local economy
through “buy-local” type initiatives.
•T
 ourists - A locally crafted beer would appeal to tourists as
they tend to enjoy the experience of eating and drinking locally
produced food and beverages to enhance their tourism
experience. Tourists may also be more easily motivated by the
perceived scarcity of the craft beer only being available within
the FAB Region.
Local Ingredients & Joint Ventures
The FAB Region is home to a number of different farmers who
offer craft brewers a wide selection of fresh, locally-grown
ingredients to choose from, including local hops, spring water and
a variety of other harvest fruits, vegetables, spices and natural
ingredients. To learn more about some of the locally grown
ingredients available within the FAB Region, please visit:
•H
 arvest Hastings
•C
 ounty Grown
•L
 &A County Harvest
•H
 ands on Harvest
•O
 ntario Hops Growers Association (Directory)
The FAB Region is also home to a variety of different artisan food
producers, such as cheese makers, charcuterie producers, artisan
bakeries, wineries, cideries, distillery and many other specialty
foods and beverages.
Artisan foods have gone mainstream in recent years, now ranking
within the top five food trends. The trend speaks to the consumers’
concerns about health and sustainability, to the chef’s preference
iCraft Brew | Why the FAB Region?
to serve locally sourced foods and to specialty retailers interested
in supporting local and regional artisan food producers.
Artisan food producers offer many opportunities for craft brewers
in terms of the possibility of a joint venture, such as a specialty beer
and cheese that should be enjoyed together or a brew pub that
serves up fresh local fare and craft beer that perfectly complement
one another. To learn more about some of the FAB Region’s local
artisan food producers please visit us online at www.fabregion.ca.
If you require further assistance with sourcing locally-grown brewing
ingredients or connecting with a local supplier, please feel free to
contact the FAB Region. We’d be happy to help!
Government Funding
Federal, provincial and municipal levels of government all offer
Ontario businesses many types of support programs and incentives
to assist with successful business start-ups and to help grow
Ontario’s economy.
For a listing of funding programs, grants and other incentives available
to entrepreneurs and Ontario businesses, please contact the FAB
Region or download the app at www.startabrewery.ca.
3
iCraft Brew | For Your Consideration

For Your
Consideration
Before you define the details of your Getting Started
craft brewery, such as its name, location Once you’ve completed your research and you are
& the types of beer that will be brewed, comfortable and confident enough to move forward, the next
step is to ask yourself and discover, “Do I have what it takes to
it’s highly recommended that you spend be an entrepreneur?”
some time researching & learning the
basics of craft brewing, as well as the This handbook has been created to assist you in starting your own
brewery and provides some of the information the FAB Region
basic principles of business. has compiled to help you on your journey.

For more detailed information or assistance, contact the FAB Region

or download the app today at www.startabrewery.ca.

4
Here’s the Basics
of beer, Brewing
& the Industry
What is beer?
Beer is an alcoholic beverage fruity, herbal or spicy
produced by the saccharification characteristics. Ales use
of starch and fermentation of the top-fermenting yeasts
resulting sugar. The starch and that do not require the
saccharification enzymes are often refrigeration that other
derived from malted cereal grains, yeasts do.
most commonly malted barley and
•P
 ale Ale –
malted wheat. Most beer is also
Pale ale is a beer
flavoured with hops, which adds
which uses top-fermenting yeast and,

bitterness and acts as a natural
preservative, though other flavourings
such as herbs or fruit may also be included.
What kinds of beer are there?
With the wide variety of beer styles available today (approx. 65
established beer styles from around the world) beer shopping
can be a bit confusing. Many retailers offer beers segmented by
country, by brand and, then, by style — making it almost impossible
to shop for a specific style of beer. The following information has
been included to help you better identify the different beer styles:
•L
 ager – A lager is pale, crisp, dry and refreshing. Lager yeast is a
cool, bottom-fermenting yeast and is fermented for a much longer
period and at a lower temperature than ales. Pale lagers are the
most commonly consumed beers in the world.
•P
 ilsner – Pilsners have a familiar, golden colour and notable
hop accent. Even though pilsners and lagers are both bottom-
fermented, you can rely on a difference in tastes to help
distinguish between the two.
•A
 le – In ales, you will find much more flavourful beer with
strong, individual personalities. Many of them will have
iCraft Brew | Here’s the Basics of Beer, Brewing & the Industry
predominately, pale malt. Pale ales may range in colour
from golden to deep amber and were named pale ales
because they were much lighter in colour than the dark
porters and stouts that preceded them. Pale ales are more
highly-hopped, lightly-carbonated and robust. Pale ales
pair perfectly with strongly spiced foods and are one of the
world’s major beer styles.
•P
 orters & Stouts – Dry or sweet, flavoured with roasted
malt barley, oats or certain sugars, stouts and porters are
characterized by darkness in colour and rich, roasted malt
flavour. Porter is ale brewed with a special combination
of malts to create a heavier flavour, aroma and colour.
To complement this heavier flavour, porters have a fuller
body and a slightly sweeter taste. There are a number of
variations of porters and stouts, including Baltic porter, dry
stout and Imperial stout.
•W
 heat Beer – Wheat beer often has an unfiltered, pale and
hazy appearance because of the type of yeasts used. Wheat
beer is usually top-fermented and has a wide-range of flavours
as a number of spices are used in the brewing process. As the
name indicates, a wheat beer is brewed with a large proportion
of wheat and malted barley.
5
iCraft Brew | Here’s the Basics of Beer, Brewing & the Industry
What kinds of beer are there? (cont’d)
•L
 ight & Extra-Light Beer – Light and extra-light beer is brewed
in a similar fashion to ale and lager but is lower in alcohol
content and contains fewer calories. A light beer in Canada
contains 2.6% – 4% alcohol-by-volume and an extra-light beer
contains less than 2.5% alcohol-by-volume.
•F
 ruit / Vegetable / Spice Beer – In recent years, brewers
have revisited a past tradition of adding flavour and, in many
cases, real fruit or vegetables to the brewing process in
order to create a wide-variety of new beer. While most fruit
beer is ale, it does not carry much of the ale character. In
order to allow for the fruit flavour to come through nicely,
the malt’s flavour is not dominant and results in a low
bitterness level to the beer.
6
•N
 ear Beer – In most provinces, a beer with an alcohol content
of less than 0.5% alcohol-by-volume is considered a non-
alcoholic beverage. To brew this type of beverage, a brewer can
either use a very short fermentation cycle or produce a regular
strength beer and then remove some or all of the alcohol.
How is beer made?
The key ingredients required to brew craft beer are simple: top-
quality malting barley, the purest water, special yeasts, hops and
natural flavouring to give the beer special character. Brewing is
a natural process, allowing craft brewers to use their skill and
knowledge to guide the process along.
How it’s Made
Step 1: Choosing Malt
Aside from fresh water, the main
ingredient in beer is barley. Malting
companies take the barley and soak,
germinate (sprout), then, dry or roast it
to create what’s called “brewers malt.”
Craft brewers can choose from several
varieties to give their beer a particular
colour and flavour.
Step 2: Mashing Malt
Once at the brewery, the malt is coarsely
crushed or milled to expose its starchy
core but keep its husks whole, to allow
these husks to act as a filter bed later in
the process. The crushed malt or grist is
mixed with heated, purified water and
through a carefully-controlled process,
the natural malt enzymes in this “mash”
break down the starch into sugar.
Step 3: Lautering Mash
The mash is transferred to a straining
or lautering vessel. There, the liquid
is separated from the husks as hot
water is sparged or sprayed on top of
the grains to rinse out as much of the
sugary extract as possible. This sugar
solution is called “wort.”
Step 4: Boiling & Hopping
The wort gets collected in a copper
or stainless steel kettle and boiled.
Hops are then added at various
times during the boil. Hops are the
pinecone-shaped, green-coloured,
female flowers of the hop vine that are
harvested each Fall and dried for use
in brewing. Craft brewers can select
many different varieties of hops, each
one adding a characteristic aroma,
flavour and bitterness to the final
product. Hops also act as a natural
preservative in the beer.
Step 5: Hop Separation & Cooling
After the wort has been boiled and
infused with the aromatic flavour of
the hops, it proceeds to another vessel
where the hops are then removed
and the wort is clarified. The clear,
hopped wort is then cooled to room
temperature or lowered in preparation
for yeast addition.
Step 6: Fermentation
iCraft Brew | How It’s Made
The cool wort is moved to the
fermenting vessels and yeast is added.
Yeast is a living, single-cell organism
that converts the sugar in the wort to
carbon-dioxide and alcohol. There are many kinds of yeasts, each
imparting its own subtle flavour characteristics to the beer.
Fermentation lasts about 7–10 days and,
in that time, the yeast may multiply six-
fold. When the fermentation is complete,
the yeast is removed. At this stage of its
production, the liquid is now called beer.
Step 7: Cellars
Finally, this young beer is stored cold
for 1–3 weeks (or more) and then
filtered to achieve clarity before it’s
ready for bottling or racking into kegs.
For more detailed information or assistance, contact the FAB Region
or download the app today at www.startabrewery.ca.
7
 What Kinds
of Brewing
Companies
are there?
Brewing companies range widely in the volume and variety
of beer produced, ranging from small breweries to massive,
multi-national operations. Some commonly used descriptions
of breweries are:
•C
 raft Brewery / Microbrewery – The term craft brewery
was chosen to replace microbrewery as the segment began
iCraft Brew | What Kinds of Brewing Companies Are There?
to grow several years ago. A craft brewery is a brewery
that produces less than 400,000 hectolitres, but more
than 3,000 hectolitres of beer, annually. A craft brewery,
generally, starts out with a few styles or types of beer. This
is the most common brewery for new start-ups because the
specific processes that go into the beer are already familiar
to the brewer. Later, many brewers branch out into more
experimental brews.
•N
 anobrewery – A nanobrewery (or picobrewery) is a brewery
that produces less than 3,000 hectolitres of beer, annually.
• B rew Pub – A brew pub is a restaurant-brewery that sells 25
per cent or more of its beer on-site. Brew pubs are a popular
choice among start-up brewers. Sometimes, the owner of
an existing restaurant or bar wants to add a unique feature
to its existing business. A brew pub lets the owner create its
signature beer flavours and even build a menu around them.
• Contract Brewer – A contract brewer doesn’t actually own the
brewing facilities with which its beers are brewed. Instead, the
brewery owner contracts its production out to an existing brewery.
8
• Estate Brewery – An estate brewery is a brewery primarily
brewing its beer on a farm and using ingredients grown on
the farm, such as barley, wheat or hops. An estate brewery is
similar in concept to a vineyard, which grows its own grapes
and uses them to make wine.
•O
 rganic Brewery – An organic brewery is a brewery using
certified, organic ingredients to craft its beer. Organic beer
represents an emerging market that is showing potential for
growth. Capitalizing on Canadian consumers’ growing desire
for organic foods and beverages that are environmentally-
friendly, some Canadian breweries have extended the organic
food movement to beer, which is marketed as a high-quality
product and produced in a way that encourages sustainable
agriculture. Certification to the Organic Production System
Standards is mandatory for all organic products being used
in inter-provincial and international trade and for products
bearing the “Canada Organic” logo.
• B rew-On-Premise – A brew-on-premise operation is a
commercial establishment providing brewing equipment, raw
materials and technical advice, where a person can brew and
package beer for personal consumption or to be given away
without charge or for commercial use / sale.
Ontario’s Craft Brewing Industry
Ontario’s craft brewing industry has experienced some significant
growth in recent years2:
Preparing
•O
 ntario Craft Brewers’ market share for premium priced brands
has more than tripled since 2002, growing from less than 1 per cent
For Your
to over 3 per cent of the beer volume sold in Ontario and continues
to be the fastest growing segment within the LCBO’s beer category.
•C
 urrent average growth rates across all retail channels are over
Brewery
10 per cent per year. Every year, thousands of people launch their own businesses and
•O
 ntario consumers have a strong interest in local products of enter the challenging world of entrepreneurship. Many start-ups
premium quality and are increasingly engaging themselves in thrive, but unfortunately several will fail within the first five years.
the ever-growing Craft Beer Movement. Most often, it’s due to the fact that the business owners weren’t
well prepared, they didn’t have any business knowledge or experience
Ontario is now home to well-over 100 craft breweries, representing and they didn’t conduct any initial research or planning to determine
each of the provinces’ nanobreweries, craft breweries, contract brewers if their business idea was viable.
and brew pubs, currently in operation or in the launching stages. The
location of each operation can be viewed on the Ontario Brewers During this stage of the start-up process, we will look at the steps
Directory Map, maintained by Mom ‘n’ Hops. that must be completed in order to successfully develop your

iCraft Brew | Preparing For Your Brewery

business plan and determine if your craft brewery business idea
In 2005, a big boost occurred with the formation of the Ontario Craft is worth pursuing.
Brewers Association (OCB), a trade association that has allowed the
industry to build critical mass, given craft brewers a collective voice and
is imperative in continuing to move the industry forward.

The craft brewing industry has seen its share of support from
the Ontario government, through funding programs such as the
Ontario Craft Brewers Opportunity Fund (OCBOF) and the Ontario
Microbrewery Strategy, as well as from the LCBO, through its
promotional campaigns “I Love Canada” and “We’ve Got Your Beer.”

But, the most important support the industry has been shown has
been from Ontario consumers.

According to John Hay, President of the OCB, people are eager for
local alternatives to mainstream products. Hay believes this growing
demand is not so much due to different consumers but a different
mindset. Consumers are beginning to show more support for the “100
mile diet” and other “buy-local” initiatives. Just as some people prefer
to shop at farmers’ markets because they like to know exactly where
their food is coming from, some consumers want to know the brewery
that crafts their favourite beer.
2
http://www.ontariocraftbrewers.com/pdf/media_IndustryFactSheet.pdf (June 1, 2013) 9
iCraft Brew | Preparing For Your Brewery

Develop Your Craft Brewery Idea, Research & Evaluate

Now that you have a good understanding of craft brewing, you’re now ready to develop your craft brewery business idea and research
and evaluate its potential for success. Some questions you may consider asking yourself while developing your craft brewery business
idea include:
•W  hat are my reasons / objectives for entering the craft •H  ow does my craft beer fit within the industry? What is the
brewing industry? potential for growth?
• What type of craft brewing operation (i.e. brew pub, microbrewery)? • What financial resources are available? From who? How much? When?
•W  hat form of ownership (i.e. sole proprietorship, partnership)? •H  ow much will it cost to launch my craft brewery?
•W  hat will I name my craft brewery? •W  here will I get my brewing equipment and supplies?
•W  here do I want my brewery to be located? What size? •W  hat government regulations is my craft brewery subject to?
•W  hat types of beer do I want to craft? •W  hat licenses and permits must I obtain?
•W  hat are my competitive advantages? • What type of distribution system will I emply (i.e. direct, agents)?
•H  ow will I promote my craft beer and brewery? •W  hat professional resources do I have (i.e. lawyer, accountant)?
•H  ow do I want to package my beer? Still need?
•W  ill people be willing to pay for my craft beer? •W  here can I find missing skills (i.e. brewmaster, engineer, etc.)?
10
Analyze Your Market
Performing market research will assist you in collecting accurate
and specific information about your consumers and competitors,
which is a critical part of the planning process. Consumer
demands impact and direct all aspects of your business’ activities
and can, ultimately, dictate the success or failure of your craft
brewery. The tasks that should be completed when performing
your market research include:

•M
 arket Analysis – The goal of a market analysis is to
determine the attractiveness of a market, both now and in the
future. Entrepreneurs can evaluate the future attractiveness of
a market by gaining an understanding of evolving opportunities
and threats as they relate to their business’ own strengths
and weaknesses. Conducting a market analysis will also assist
you in determining if there is enough of a need in your target •R
 esearch Industry Trends – Conducting your own research
marketplace for the product(s) you are offering, what your on the latest industry trends is important, as it can help you
consumers want, how to best present your product(s) to them, better understand the industry you are entering and it can help
etc. The following is an outline of a market analysis: you determine how the current position of the industry could

iCraft Brew | Preparing For Your Brewery

• Market Size (Current & Future) • I ndustry Cost Structure impact your business, both positively and negatively.
• Market Trend •D
 istribution Channels
•P
 repare Your Marketing Plan – Your marketing plan is an
• Market Growth Rate •K
 ey Success Factors
essential part of your overall business plan. Potential investors
• Market Profitability and lenders want to see how you plan on making money and
without a solid business or marketing plan, your chances of
•C
 ompetitive Analysis – A competitive analysis is a critical receiving financing is pretty slim. When you develop your
part of your craft brewery’s marketing plan. Conducting a marketing plan the information that you’ve collected during your
competitive analysis will help you to establish what makes market research should be used to reinforce any statements that
your craft brewery and beer unique and, therefore, what are made. The purpose of your marketing plan is to help you:
unique attributes you should promote in order to attract your •A
 ssess your consumer needs •D
 etermine the most effective
target market. Some questions you may ask yourself when & develop a suitable product ways to promote your
completing a competitive analysis include: business & products
• Convey unique attributes to
• Who are your competitors? • What types of media do they your target audience •D
 etermine the best suited
• What products do they sell? use to market their products? advertising / marketing tools
•E
 stablish suitable
• How much do your competitors •W
 hat are each competitor’s distribution channels & venues
charge for their products? strengths and weaknesses?

• What is each competitor’s •W

market share?
• What are their past &
current strategies?
 hat potential threats do
your competitors pose?
•W
 hat potential opportunities
do they make available for you?
If you’re having some trouble piecing together your market research
or preparing your marketing plan, contact the FAB Region or download
the app today at www.startabrewery.ca.

11
 Prepare Your Business Plan
What is a business plan & do I need one?
A business plan is a written document that describes your
business objectives and strategies, your financial forecasts and
the market you are targeting. It’ll help you to set realistic and
timely goals, secure external funding, measure your success,
clarify operational requirements and establish reasonable
financial forecasts.
A well-researched, well thought-out business plan is essential
for several reasons. First, it increases your chances of success by
forcing you to consider every aspect of your business and it serves
as an on-going benchmark so that you’re able to gauge your
success and plan for future growth. Secondly, it’s what investors,
including banks, want to see in order to determine whether you
and your business are good risks. To be considered for funding
from investors, your business plan must successfully demonstrate
that you understand every aspect of your business and its ability
iCraft Brew | Setting-Up Your Brewery
to generate profit.
It’s important to understand that taking on the challenge of
preparing your business plan isn’t something you’ll want to do
all on your own. Working in partnership with an organization
or consultant is a much better way to approach building such a
crucial piece of your business.
If you require assistance with preparing your business plan,
please contact the FAB Region or download the app today at
www.startabrewery.ca.
SETTING-UP
YOUR BREWERY
Financing
•P
 ersonal Assets – You’ll need to use some of your own
money for start-up, either from your savings or from personal
property you can sell. Although, you can also access start-up
money from your personal credit or your RRSP, you should
investigate carefully before taking either of those routes.
12
Business Plan Tips
•T  horoughly review your business plan once it’s complete.
• Try to avoid using jargon or industry terms — the person that
reads your business plan may not understand your business as
well as you do.
• A sk friends, family, associates and mentors to review your
business plan.
•D  on’t be afraid to seek advice from professionals.
•C  onsider hiring a Certified General Accountant to review your pro
forma financial statements.
•R  emember, your business plan represents your craft brewing
business, so you want it to be as professional as possible.
•L
 ove Money – While borrowing from family and friends is an
option, and many entrepreneurs have done it. It’s an option you
need to think about very carefully. Money often changes
relationships and it may not be worth it to involve family
and friends in your business venture, particularly, if they’ve
not been entrepreneurs themselves. If you do borrow from
family or friends, make sure you formalize any loans by way
of a promissory note that sets out the amount of the loan,
whether interest is payable and, if so, at what rate, how
and when the loan is to be repaid and what security, if any,
you’re offering for the loan. A promissory note clarifies the
agreement for both parties.
•F
 inancial Institutions – Aside from your own personal
resources, financial institutions including banks, trust
companies and credit unions are the most common
source of financing for small businesses. They can provide
a number of options, including personal lines of credit,
short-term loans, long-term mortgage loans and, in some
cases, loans against inventory or accounts receivable. The
Canadian Bankers Association (CBA) has links to all its
member charter banks. Another possible source of financing
is the Business Development Bank of Canada (BDC). BDC
bills itself as a leader in delivering financial and consulting
services to small businesses and, depending on your
situation, BDC may be able to provide start-up financing.
 •A
 ngel Investors – Angel investors are wealthy individuals
or groups who invest their own money in promising new
businesses, usually ones in the same field they come from.
Typically, angels provide money, usually between $10,000
and $2,000,000, in the early stages of the business in
return for a share in it. Your lawyer or accountant may be
able to help you find an angel, you can ask around in your
local business community or you can also try the National
Angel Organization.

•V
 enture Capitalists – Venture capitalists look for
businesses with high growth and profit potential. They offer
money, management expertise and connections for a share
in the business. As a rule, venture capital companies won’t
look at an opportunity that requires less than $500,000,
and most prefer a deal size of at least $3 million. You can
get a list of venture capitalists from the Canadian Venture
Capital & Private Equity Association.

iCraft Brew | Setting-Up Your Brewery

•B
 arter Exchanges – You can get creative and barter with
other companies, offering your products in exchange for
anything from advertising to goods.

•G
 overnment & Non-Profit Financing – There are a
number of government and non-profit organization
financing programs, some of them aimed at specific target
groups, such as youth and Aboriginals. Many of them
include valuable hands-on training, planning assistance
and mentoring services. Some of the main financing
programs include:
• The Community Futures Development Corporation in
Ontario provides repayable financing of up to $250,000
on commercial terms through loans, loan guarantees or
equity investments to help finance new or existing small
businesses that help maintain or create jobs in rural and
northern communities. Please contact the Frontenac
CFDC, Trenval Business Development Corporation,
PELA CFDC or the CFDC of North & Central Hastings
and South Algonquin for more information.
• The Canada Small Business Financing Program makes
it easier for small businesses to get loans from financial
institutions by sharing the risk with lenders.
The maximum loan size has increased to $500,000, of
which no more than $350,000 can be used for purchasing
leasehold improvements or improving leased property
and purchasing or improving new or used equipment.
• The Canadian Youth Business Foundation (CYBF) Loan
Program provides loans of up to $15,000 to young
entrepreneurs between 18 and 34 to help cover start-up costs.
• The Self Employment Assistance Program provides financial
support to unemployed people eligible for unemployment
assistance to get their businesses up and running.
There are also a number of other government assistance
programs available, please feel free to contact the FAB
Region for more information or download the app today at
www.startabrewery.ca. 13
iCraft Brew | Setting-Up Your Brewery

How do I prepare for financing? Government Regulations

•M
 ake sure you have your business plan, personal asset statement, Registering Your Business (Provincial)
executive summary and pro forma financial statements with you and If you’ve incorporated your business, you’ve already registered
that you know them inside out. your business name. If you’ve chosen not to incorporate, you’ll
•K
 now your credit rating and be able to show that it’s strong, if it is, or need to register your business name with the province of
that you’re taking concrete steps to improve it. Ontario. Before registering your business name, check to see
•B
 e confident about your craft brewery business idea and well- whether the name you’re planning on registering is already in
informed about the brewing industry. use. If it is, choose a different one. You can do a name search
at ServiceOntario at the same time as you do your business
•B
 e able to demonstrate your plans for the money you are requesting
registration for an additional fee.
and why you can be trusted with it.
•F
 inally, be persistent and stay positive. It’s quite possible you’ll be
turned down by a number of potential lenders or investors before
Registering Your Business (Federal)
You may need to register with Canada Revenue Agency to get
finding one that will take that all-important leap of faith. If you truly
a Business Number. Registration is mandatory if your business
believe in what you are doing, you will find a way to finance it.
14
requires a GST / HST (depending on your total revenue), Payroll,
Corporate income tax or Import / Export account. Businesses
are able to register online, over the phone or by mail. For more
information please contact the Canada Revenue Agency.

Incorporating Your Business

•P
 rovincial Incorporation – Incorporating your business,
provincially, allows you to do business under a corporate name
in Ontario. Corporate name protection applies in Ontario and
you can open offices / stores within the province.
•F
 ederal Incorporation – If you incorporate your business
federally, you can open locations within Ontario and in other
provinces and territories across Canada. If you open offices /
stores in different provinces, you will be required to register
your business in those locations. Federal incorporation also
provides corporate name protection across the country.

Having an experienced lawyer or accountant look after your

incorporation is helpful. They can make sure your incorporation

iCraft Brew | Setting-Up Your Brewery

forms are filled out properly, saving you possible problems down
the road. Your lawyer or accountant can also tell you whether or
not it’s advisable to incorporate federally.

Regulations, Licences & Permits

In order to successfully and legally operate your craft
brewery business, you will be required to adhere to certain
regulations and obtain certain licences and permits from the
federal, provincial and municipal levels of government.
The Alcohol and Gaming Commission of Ontario (AGCO)
is responsible for administering the Liquor Licence Act (LL A)
that covers most aspects of Ontario’s beverage alcohol
laws. These laws provide the regulatory requirements for
the responsible sale and service of beverage alcohol in the
province. The following is a list of liquor licences issued by
the Registrar of Alcohol and Gaming that you must obtain (as
of July 1, 2013):
•L
 iquor Sales Licence – A sales licence for on-premise sale,
service and consumption of beverage alcohol. Please also see
Endorsements to a Liquor Sales Licence.
•M
 anufacturer’s Licence – A manufacturer’s licence gives
authority to a manufacturer to sell its wine, beer or spirits to
the Liquor Control Board of Ontario.
•E
 xcise Duty Licence (Brewery) – To operate a brewery, you
need an Excise Duty Licence. The licence authorizes the person
or business entity to carry on specific activities at one or more
locations. Contact your nearest Regional Excise Duty Office
for more information.
•E
 xcise Warehouse Licence – This license authorizes a person
to possess, in their excise warehouse, non-duty-paid packaged
alcohol or manufactured tobacco and cigars that are not
stamped. Alcohol retailers are not eligible.
The FAB Region can assist you with determining and obtaining the
applicable permits and licences in order to legally operate your
craft brewery business. For more detailed information download
the app today at www.startabrewery.ca.
15
iCraft Brew | Setting-Up Your Brewery

Finding a Location / Building •T

 he amount you’re willing to pay for improvements, if necessary.
The next step is to find commercial land to build your craft • I f it’s a rural location, does it have the necessary infrastructure
brewery on, if you’re choosing to start from the ground up, (i.e. water supply, septic system, etc.)?
otherwise you’ll need to find a suitable building to rent or
purchase. There are several things that should be taken into If you decide to rent, you’ll need to sign a lease with the owner.
consideration when searching for a location or building for your Make sure your lawyer goes over it carefully and explains it to you
craft brewery, including: before you sign it so that you understand the commitments to
•T
 he kind of space you’re looking for which you are agreeing. Commercial tenancies aren’t covered by
the same landlord-tenant legislation as residential ones and you
•T
 he location — its proximity to potential customers and clients,
need to be much more careful when renting commercial space.
and the zoning for your type of business
•A
 vailability of parking & supplier access
If you decide to purchase commercial land or a facility, get help
•C
 ost to purchase, if you choose to buy. from a real estate agent who specializes in commercial properties
•T
 he amount of rent you’re able to pay and whether it includes and have your lawyer review your offer before you buy.
utilities and services.
16
It’s important to understand just exactly how much money
and work is involved with building a craft brewery from the
ground up. It’s highly recommended that during the early stages
of development you choose to rent a facility, allowing you to have
a better exit strategy if the business were to fail (i.e. you aren’t
stuck with a building in your possession). It can also be extremely
difficult to finance a start-up business venture and a building at
the same time, unless you are investing a large amount of your
own money. Once your business is off the ground, has achieved
some growth and has proven to be a success, then, explore the
possibility of purchasing your own building or building your own
brewery from the ground up.
Breweries must be zoned properly and conform to municipal,
provincial and federal regulations. Generally, light industrial-zoned
buildings are good candidates but craft breweries have also been
seen in some more unique locations, including old stable buildings,
century-old churches and old dairy farms. When searching for a
building for your brewery, there are also certain requirements that
the building must meet. The following are just a few requirements
and recommendations to keep in mind when searching for a building:
Water
•T
 he main water supply to the brewery is recommended to
be 60 psi @ 25 GPM. Uniform water flow to the brewhouse is
critical and should not be affected by water demand elsewhere
in the building.
•H
 ot and cold hose bibs are required in all brewery spaces and
lab areas.
• I f kegging or bottling will be done, a water supply will be
needed in these areas.
• Filtration may be required for municipal water. It is recommended
a water analysis be completed to determine if a filter is required.
Drainage
•F
 loor drainage systems that are acceptable for food production
operations are required in the brewhouse, fermentation, walk-
in cooler (if applicable), boiler room and any other areas where
water and spillage may occur (i.e. kegging / bottling).
•F
 loors should have a recommended pitch of 1/8 – 1/4-inch per
foot toward drains.
• I t’s recommended that 4” channel drains with stainless steel
or fiberglass grating are installed. All drains should be sized
adequately to handle 4–6 barrels of effluent for every 1 barrel
of beer produced.
•C
 heck on what types of drainage systems are required in your
area before renting or purchasing a building.
Electrical
•T
 he building must have commercial wiring.
•A
 200 Amp service is recommended for the brewery area, this
would include such things as a boiler and glycol condensing unit.
Finish
•B
 rewery floors should be sealed and resistant to both mild
acids and strong alkalines, making concrete floors mandatory.
•D
 ue to the nature of the brewing process, walls and ceilings
should be washable and made of materials that will withstand
a wet environment and not harbour bacteria growth.
iCraft Brew | Setting-Up Your Brewery
•A
 ll floor penetrations for transfer lines, steam lines, flex auger,
etc., should be curbed to prevent overflow.
Square Footage
• I t’s recommended the total space for a craft brewery should be
at least 5,000 square-feet and no less than 2,500 square-feet.
Ceiling Height
• It’s recommended to have 20-foot ceilings in the brewhouse area.
Ventilation
•T
 here should be good ventilation throughout to remove
condensation and provide fresh air.
•R
 emember to always use adequate screens to exclude pests.
•C
 onsider protecting the bottling room from dust and impurities
by including a filtered air system in this area.
•A
 ir conditioning is recommended in all brewery spaces.
FAB Region Property Search
For more information on available properties please contact the
FAB Region or download the app today at www.startabrewery.ca.
17
iCraft Brew | Setting-Up Your Brewery

Brewing Equipment & Supplies • Kettle – A large vessel, similar in shape to a mash tun, usually
made of copper or stainless steel in which the wort is heated.
So, now that you’ve found the perfect location / building for your
Also called a brew kettle.
craft brewery, it’s time to source the brewing equipment and
•F  ilter – Removes solid particles from the beer.
supplies you’ll need to actually brew your beer.
• Fermenter – A generic term for any open or closed vessel in
which primary / secondary fermentation take place.
Let’s start off with some of the equipment you’ll need. Please note
•B  right Beer Tank – Storage tanks for the clarified final beer.
that this is not a complete list but is meant to cover the major
•P  ackaging System – A system that puts the beer into the
equipment requirements:
containers in which it will leave the brewery. Typically, this
•M  alt Mill – A machine that crushes malt into grist.
means putting the beer into bottles, aluminium cans and
•H  ot Water Tank – The container where the brewing water is
kegs / casks.
heated to mash temperature.
•M  ash Tun – a vessel in which mashing takes place and where
wort is separated from the spent grains. New vs. Used Equipment
• Lauter Tun – A large vessel with a perforated false bottom. It is When sourcing equipment for your craft brewery you have the
used to strain the sweet wort off the spent grains after mashing. option of purchasing new equipment from a manufacturer that
18
specializes in brewery systems and works with you to develop a
system based on your requirements and operation or you may
consider purchasing used equipment.
When considering used equipment, it’s crucial to source
equipment that has been originally designed for other food
processing operations, such as dairies, soft drink plants, etc.
Alternatively, pieces of used brewing equipment, from different
sources, can, collectively, be made into a brewing system.
Unless you are extremely lucky, purchasing a mish-mash of used
equipment can leave you with some pieces that are oversized and
require repairs, modifications or adaptations and sanitization
to be performed. While you may end up saving more money by
purchasing the used equipment, keep in mind you still have to
piece it together and install it. By the time you are finished, you
could very well end up with a used brewing system that may have
cost almost as much as a brand new, turn-key system.
Until you have all of your money in place and are ready to actually
buy, it’s recommended you research both options to determine
which best suits your requirements and budget.
Several resources, including a list of used equipment websites and
brewing system manufacturers, have been included within the
app, download it today at www.startabrewery.ca.
Equipment Tips
• T he equipment used should be made of safe, approved materials
such as stainless steel. Copper is an acceptable material for use in
breweries and wort can come into contact with it, although there
may be some restrictions in terms of fermented beer coming into
contact with copper.
•A
 void brass because it, generally, contains lead. Brass fittings can be
treated by “pickling” the parts in a vinegar and hydrogen peroxide
mixture, which removes the surface lead.
•F
 ood-grade plastics and rubber, such as polyethylene plastic, high-
temp polysulfone plastic, neoprene rubber and high-temp silicone
rubber, are perfectly acceptable.
•A
 lways be sure not to exceed the temperature ratings of all materials
and components.
• W hen using PVC or vinyl tubing, look for the “FDA approved” stamp
printed on them.
Brewing Ingredients & Suppliers
iCraft Brew | Setting-Up Your Brewery
As previously mentioned, there are four key ingredients required
to brew beer:
• Malting barley • Yeasts
• Water • Hops
When searching for ingredient suppliers it’s crucial to
remember the quality of your beer is only as good as the quality
of your ingredients.
There are many excellent sources for quality brewing ingredients,
including local suppliers, growing your own or sourcing your
ingredients from places like New Zealand and Germany. Typically,
where you decide to purchase / source your ingredients comes
down to your budget, the styles of beer you are brewing and your
own personal preference.
The FAB Region is home to several local suppliers to consider
utilizing for your brewing ingredients, including locally grown
hops and barley. For more information on the local suppliers,
within the FAB Region, please contact us or download the app
at www.startabrewery.ca.
19
iCraft Brew | Running Your Brewery

Running
Your Brewery
Bottling, Kegging & Labelling
The most important thing about the bottling and kegging process
is to keep the beer from being contaminated by stray yeasts and
to keep oxygen away from the beer — the two main things that
reduce the shelf-life of beer.
Bottling
The first step in bottling begins with loading the empty bottles on
the conveyor that feeds into the unscrambling table either from a
pre-pack or bulk-pack bottles.
Pre-Pack
Craft brewers often buy what is known as a “pre-pack,” which
includes printed six-pack carriers inserted in a printed case along
with the bottles. For craft brewers, this is the most convenient and
cost-effective way to go, even though it is a relatively expensive
way to buy bottles.
In craft breweries, loading with pre-packed bottles is usually done
manually at a rate of 80 to 100 bottles per minute (BPM). The table
funnels the wide mass of bottles into a single stream. Several
types of mechanisms prevent the bottles from bridging as they
are funneled to a single line. These include mechanical joggers,
reversing chains and good inherent design.
Bulk-Pack
Another method, common with larger breweries and some craft
breweries, automatically feeds bottles onto the conveyor from a
palletized bulk pack. Bulk-pack bottles are full pallets of bottles

20
with no cartons. Rather, the bottles are separated by cardboard
sheets and wrapped in plastic shrink. A de-palletizer removes the
bottles from the pallet, usually a layer at a time, and places them
on the unscrambling table.
Pressure-Sensitive Labeler
These units are used in the wine industry and food industry but
are used more often in the cosmetic, pharmaceutical and soap
industries. Pressure-sensitive or self-adhesive labels are also used
in the craft brewing industry though not as much as paper labels.

Kegging Pressure-sensitive labels are applied from a coiled strip of waxed

carrier (also called “backing”) paper.
Kegging is another option in packaging beer. Kegging involves filling
carbonated pasteurized beer into sterile aluminum or stainless steel
Rotary Labeler
kegs of various sizes. Aluminum kegs are generally more popular than
Rotary labelers are machines for which the bottles must be
stainless steel kegs because they are lighter and more resistant to
transferred from the bottle conveyor into the labeler carousel.
minor damage. Kegging fits into the cost structure for craft brewers
Rotary labelers operate at higher speeds than pressure-sensitive and
with limited startup capital for bottling lines and low product output.
tandem labelers and are equipped to apply front, back, full wrap and
neck labels.
Open-Keg Systems
Open-keg systems are characterized by their barrel shape and
Tandem Labeler
bunghole on the side by which the interior can be readily accessed
An in-line labeler is a type of machine for which the bottle travels in a
without extracting the valve body or spear.
straightforward motion and the label or labels are applied while the
bottle is moving along the bottle conveyor. Tandem labelers cannot
Closed-Keg Systems

iCraft Brew | Running Your Brewery

Closed-keg systems are identified by their typically straight
sides with a rim called a chime on each side. The top chime has
integrated handles for easy handling. The top also contains a
concentric valve fitting in the center allowing for easy cleaning and
filling by automated systems. Draught accounts prefer closed-keg
systems over open-keg systems for several reasons, including
ease of tapping, ease of storage and handling and the improved
profit margin due to the reduction of beer loss, commonly
associated with older keg styles.
do front and back labels at the same time and are not very well-
suited for applying neck labels.
Label Standards
Any beverage containing 1.1% or more alcohol by volume is considered
an alcoholic beverage. These products must meet the labelling and
compositional requirements found in Division 2 of the Food and
Drug Regulations (FDR). (Note: It’s also highly advised that you verify
provincial legislation as it may differ from the federal requirements).

Sankey-Style Valve The FDR requires all beverage alcohol labels to include the
The newer, more common single-valve keg (SVK), or “Sankey” following information:
keg, has a valve arrangement that consists of a stainless steel rod •C
 ommon name • I ngredients (required only
housing called a combination fitting that is permanently installed for “unstandardized”
•C
 ompany name and address
into the top center of the keg and sealed with a spring-loaded alcoholic beverages)
check ball. The tapping device, or tavern head, fits into the lug • Net quantities in metric units
•D
 urable life date (if shelf
housing of the valve. •A
 lcohol content by volume
life is 90 days or less)
•C
 ountry of origin
Labelling For more detailed information on the FDR and other labelling
Bottle labeling is completed after bottle filling once the bottles
requirements for alcoholic beverages, please visit the Canadian
have been dried. The principal types of labelers used in the
Food Inspection Agency, the Canada Business Network or the
brewing industry are pressure-sensitive, rotary and tandem.
LCBO website or download the app at www.startabrewery.ca.
21
 SElling YOUR
Craft beer
Marketing & Promotion
While marketing is critical to the success of your craft brewery,
during the start-up stages the cost of marketing can be an issue.
It’s entirely possibly to effectively market your craft brewery
business without spending a fortune on traditional advertising,
which tends to be the most expensive and often not the best
choice for small businesses. The most important thing to keep in
mind about marketing is that it is communication. The following
ideas have been included to assist you with planning your
marketing, without breaking the bank:

Brand your business.

First thing, establish a concrete identity. You may even consider using
iCraft Brew | Selling Your Craft Beer

a tagline that reflects your business philosophy to reinforce who you

are as a business. It’s highly recommended that you invest in having
a professional logo designed by a graphic designer, as your brand
will appear on your labels, packaging, website and other promotional
materials you plan to use. Being a do-it-yourself designer won’t save
you any money in the long run. Remember, you’re busy with running
your craft brewery and your specialty is not design, leave it to the
professionals. There are many excellent small design firms and
freelancers to consider over the big-box agencies. communication between you and your consumers. You can even
sell your beer through your website! You don’t need to spend a
Network, network, network. fortune developing a huge website. The quality of the content and
Networking is an extremely powerful and inexpensive (and in professional of appearance of your website is paramount, not the
some cases free) way to generate awareness of your craft brewery number of pages or the expensive “bells and whistles.”
and beer. Attend industry events, join an industry association
or local chamber or even consider volunteering for a board or As suggested with your logo, you should invest in having a professional
committee. Effective networking is all about building relationships website designed by a web developer. Having your nephew develop
that can lead to business down the road. Know your goals and your site will not save you any money in the long-run. Work with
what you can give in return. Follow up in a timely fashion and stay experts who understand your goals and objectives and will help you
in touch to reinforce the relationship. build a site tailored to your business and needs.

Use a website. A more extensive guide and links to tools and resources can be
Having a website is essential in today’s business world. Unlike found by downloading the iCraft Brew app, which can be found at
printed materials, a website can be a dynamic source of two-way www.startabrewery.ca.
22
LI V E YOU R D R E A M O F

iCraft Brew | Download iCraft Brew

OW N I N G & O PE R AT I N G
YOU R VE RY OW N
CR A F T B R E W E RY!
We are a group of economic development specialists in eastern
Ontario who want to help you open your brewery in our region.

Our four Counties are situated exactly halfway between Toronto

& Ottawa, along the 401 corridor & stretching up as far North as
Algonquin Park.

To help you get started, our free app, for the iPad & other tablets,
will guide brewing enthusiasts through the necessary steps of
opening a small-scale craft brewery.

GET STARTED TODAY!

startabrewery.ca 23
 Get Something Brewing
In Eastern Ontario
Anne Prichard, Andrew Redden, Stephen Paul, Neil Carbone,
Executive Director Economic Development Manager Economic Development Manager Director of
Community Development
Frontenac Community Hastings County Lennox & Addington County
Futures Development Prince Edward County

frontenac@fabregion.ca hastings@fabregion.ca LandA@fabregion.ca cdd@pecounty.on.ca

startabrewery.ca fabregion.ca