How Much do Brewpubs Make? (Profit Margins, Explained)

Opening a brewpub sounds like the dream: pour your own beer, build a community, and actually make money doing it. But before you sign a lease or buy a brewhouse, you need to know what the numbers actually look like.

Brewpubs can be profitable, with net margins ranging from 9% to 25% depending on how you run the operation. Below, we’ll break down revenue expectations, startup costs, operating expenses, and the tactics that separate profitable brewpubs from the ones that close within a few years.

How much does the average brewpub make?

Brewpubs can be highly profitable, with net profit margins typically ranging from 9% to 25%. The wide range depends on size, location, and how much beer you sell directly to customers versus through distribution. A brewpub is a restaurant that brews beer on-site and sells most of it in-house, which means you’re running two businesses under one roof.

Revenue varies widely. A small brewpub with 50 seats might bring in a few hundred thousand dollars a year. A larger operation with strong foot traffic and a loyal following could push into the millions. The difference comes down to a few factors:

• Location: Urban spots with foot traffic and tourism typically outperform rural locations, though rent runs higher too.
• Size: More seats mean more covers. A bigger brewhouse means more beer to sell.
• Business model: Some brewpubs lean into food service. Others keep the kitchen simple and focus on beer. Each approach affects your revenue mix.

Annual revenue by brewpub size

Small brewpubs operate on a different scale than larger ones. A 50-seat spot with a 3-barrel system won’t generate the same revenue as a 200-seat operation with a 15-barrel brewhouse.

What drives the difference? Production capacity, seating, and staff size. A bigger brewhouse means more beer to sell. More seats mean more covers per service. But more staff also means higher labor costs, so scale doesn’t automatically equal profit.

Revenue breakdown by sales channel

Brewpubs generate income from multiple streams, and each one carries a different margin:

• On-premise beer sales: Selling your own beer by the pint, flight, or growler delivers the highest margins.
• Food sales: Typically lower margin than beer, but food drives traffic and keeps guests longer.
• Merchandise: Glassware, apparel, and growlers add incremental revenue.
• Distribution/wholesale: If you sell kegs to local bars or cans to retailers, expect lower margins than taproom sales.

What is a typical brewpub profit margin?

Profit margin is what’s left after you subtract all your costs from your revenue. It tells you whether your brewpub is actually making money or just moving it around.

Brewpubs often have better margins than traditional restaurants for one reason: they produce their own beer. Instead of buying beer from a distributor at wholesale prices, you’re making it in-house at a fraction of the cost.

Gross profit margin

Gross profit margin is your revenue minus your cost of goods sold (COGS), divided by revenue. For brewpubs, COGS includes brewing ingredients like grain, hops, and yeast, plus food costs.

Here’s the advantage: beer brewed in-house has a much lower cost than beer purchased from distributors. A pint that costs you $0.50 to produce can sell for $7. That’s a gross margin most restaurants can’t touch on their beverage program.

Net profit margin

Net profit margin is what’s left after all expenses, including labor, rent, utilities, insurance, and marketing. This is the “real” profitability number.

While gross margins on beer can exceed 80%, net margins typically land between 9% and 25% for well-run brewpubs. The gap between gross and net? That’s your operating costs eating into your profits.

Are brewpubs profitable?

They can be. But profitability depends on controlling costs, especially labor and COGS, while maintaining strong beer sales.

Here’s the reality: many brewpubs struggle, particularly in the first few years. High startup costs, long paths to profitability, and a competitive market mean not everyone makes it. According to the Brewers Association, 529 breweries closed in 2024, representing roughly a 5% closure rate.

The brewpubs that succeed tend to share a few traits: they maximize direct-to-consumer sales, keep labor costs in check, and build a loyal local following.

How much does it cost to start a brewpub?

Starting a brewpub requires more capital than opening a standard restaurant or a production-only brewery.

Brewing equipment

The brewhouse is the heart of your operation. You’ll need a mash tun, kettle, and whirlpool, plus fermenters and brite tanks, a glycol cooling system, and kegging and serving equipment.

Capacity determines cost. A 3-barrel system for a small brewpub costs significantly less than a 15-barrel setup. But the smaller system limits how much beer you can produce and sell.

Licensing and permits

Brewing adds licensing complexity beyond standard restaurant permits. You’ll need federal approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB), plus state and local licenses. Requirements vary by location, so check with your state’s alcohol control board early in the process.

Buildout and renovation

Brewpubs need more than a typical restaurant buildout. You’re looking at floor drains throughout the brewing area, specialized ventilation for the brewhouse, heavy-duty plumbing for water and wastewater, and reinforced floors to support heavy equipment. All of this adds to construction costs and can limit your choice of locations.

Initial inventory and working capital

You’ll need raw materials like grain, hops, and yeast, plus food inventory and enough cash to operate before revenue stabilizes. Here’s the catch: beer takes weeks to produce. Your first batch won’t be ready to sell for at least two to four weeks after you brew it. You need working capital to bridge that gap.

Brewpub operating costs breakdown

Understanding your cost structure is essential for protecting your profit margin. Here’s where the money goes.

Labor costs

Labor is typically the largest controllable expense for any restaurant, and brewpubs are no exception. You’re staffing both a restaurant with servers, bartenders, cooks, and hosts, and a brewing operation with brewers and cellar workers.

Efficient scheduling directly impacts profitability. Overstaffing a slow Tuesday afternoon or understaffing a busy Saturday night both hurt your bottom line.

Cost of goods sold

COGS for a brewpub includes brewing ingredients plus food costs. The good news: house-brewed beer has lower COGS than purchased beer. That’s your margin advantage.

Track your COGS weekly, not monthly. By the time monthly numbers arrive, you’ve already missed opportunities to adjust.

Rent and utilities

Brewpubs need more square footage than a typical restaurant because you’re adding brewing space, cold storage for fermenters, and potentially a grain room. More space means higher rent.

Utilities run higher, too. Brewing uses significant amounts of water and gas. Rent and utilities are largely fixed costs, so they hit harder when sales are slow.

Marketing and overhead

General overhead includes insurance, accounting, POS systems, and marketing. Brewpubs often invest more in branding and events to build community around their beer.

How to calculate brewpub profit margin

Here’s the basic formula in plain language:

1. Calculate total revenue by adding up beer sales, food sales, and merchandise.
2. Subtract COGS to get gross profit.
3. Subtract operating expenses like labor, rent, utilities, and marketing. What’s left is net profit.
4. Divide net profit by revenue. That’s your net profit margin.

Track this monthly at a minimum. Weekly is better. If you’re not watching your margins, you won’t know there’s a problem until it’s too late.

How long does it take for a brewpub to break even?

Brewpubs can take longer to break even than traditional restaurants. The higher upfront investment in brewing equipment, specialized buildout, and licensing means more debt to service before you see profit.

Break-even timing depends on startup costs, monthly expenses like rent, labor, and loan payments, and how quickly you build a customer base. Many brewpub owners don’t pay themselves a meaningful salary in the first year or two. The business comes first.

What salary can a brewpub owner expect?

Owner salary depends entirely on profitability. Many owners pay themselves last and reinvest in the business during the early years.

For context, the average annual salary for a brewer (an employee role) in the United States is around $41,500, according to ZipRecruiter. Head brewers at larger operations can earn more. But owner compensation is tied to what the business can afford after expenses.

How to increase brewpub profit margins

Here’s where you move from understanding the numbers to improving them.

1. Control labor costs with smarter scheduling

Labor is your most controllable major expense. Match staffing to demand by scheduling fewer servers on slow weeknights and more hands on deck for Saturday dinner to keep your labor cost percentage in check. Cross-train staff so a bartender can help run food when you’re slammed.

Tracking labor costs manually means spreadsheets, a calculator, and about 30 minutes per schedule. Or you can use scheduling software like 7shifts that calculates labor costs in real-time as you build your schedule. Start a free trial today.

2. Maximize beer sales margins

Push house-brewed beer over guest taps. Train your staff to recommend higher-margin brews like your flagship IPA, not the guest lager you’re buying wholesale. Offer flights that encourage sampling and upselling.

3. Improve your food menu mix

Identify your high-margin items and promote them. Pair food with beer to increase check averages. A well-designed menu guides guests toward profitable choices without feeling pushy.

4. Reduce waste and spoilage

Track pours and inventory tightly. Beer waste from off batches, expired kegs, and over-pours adds up fast. Same with food waste. A weekly inventory count catches problems before they become expensive.

5. Increase revenue per guest

Upselling, merchandise, growler fills, and loyalty programs all help you get more from each visit. A guest who buys a pint, a burger, and a t-shirt is worth more than one who just has a beer.

Brewpub vs brewery vs restaurant profitability

If you’re weighing your options, here’s how the models compare:

Business Type	Primary Revenue	Margin Advantage	Key Challenge
Brewpub	On-site beer + food	High margins on house beer	Dual operations complexity
Production Brewery	Distribution/wholesale	Scale potential	Lower per-unit margins
Taproom Brewery	On-site beer only	Lowest food costs	Limited revenue streams
Traditional Restaurant	Food + purchased drinks	Simpler operations	Lower beverage margins

Brewpubs offer the best of both worlds with high-margin beer and food revenue, but they’re also the most complex to operate.

Build a more profitable brewpub with the right tools

Profitability comes down to controlling costs and maximizing revenue per guest. Labor is your biggest controllable expense, and getting it right means tracking costs as you schedule, not after the week is over.

Tools like 7shifts help brewpub operators see labor costs in real-time, build schedules that match demand, and give staff an easy way to manage availability and swap shifts.

Start a free trial

Related watch: A look inside this Ontario brewpub

FAQs about brewpub profitability

How many employees does a typical brewpub need?

Staffing depends on size and service style. A brewpub needs both front-of-house restaurant staff and back-of-house brewing staff, which means more total employees than a standard restaurant of similar size.

Do brewpubs make more money from beer or food?

Most brewpubs generate higher profit margins on house-brewed beer than on food. However, food sales often make up a significant portion of total revenue and help drive traffic.

Is a taproom more profitable than a brewpub?

Taprooms have lower operating costs because there’s no full kitchen or food staff, but they also have fewer revenue streams. Brewpubs can generate more total revenue but have higher expenses and operational complexity.