Quebec

Hastings County
Lennox &
Addington County

Bancroft

MONTREAL

OTTAWA

Frontenac County
Harrowsmith

Prince Edward County

Ontario

Napanee

Picton

iCraft Brew | Why the FAB Region?

TORONTO

Wolfe
Island

New York

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

Howe
Island

http://www.brewstats.ca/annual/sales-by-region/2012

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:

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)

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 chefs preference
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 Regions 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. Wed be happy to help!

iCraft Brew | Why the FAB Region?

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.

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.

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
Ontarios 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.

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 youve completed your research and you are
and confident enough to move forward, the next
& the types of beer that will be brewed, comfortable
step is to ask yourself and discover, Do I have what it takes to
its highly recommended that you spend be an entrepreneur?
some time researching & learning the
This handbook has been created to assist you in starting your own
basics of craft brewing, as well as the
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.

Heres the Basics

of beer, Brewing
& the Industry
What is beer?

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 bottomfermented, 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

fruity, herbal or spicy

characteristics. Ales use
top-fermenting yeasts
that do not require the
refrigeration that other
yeasts do.
P
 ale Ale
Pale ale is a beer
which uses top-fermenting yeast and,
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
worlds 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.

iCraft Brew | Heres the Basics of Beer, Brewing & the Industry

Beer is an alcoholic beverage

produced by the saccharification
of starch and fermentation of the
resulting sugar. The starch and
saccharification enzymes are often
derived from malted cereal grains,
most commonly malted barley and
malted wheat. Most beer is also
flavoured with hops, which adds
bitterness and acts as a natural
preservative, though other flavourings
such as herbs or fruit may also be included.

iCraft Brew | Heres the Basics of Beer, Brewing & the Industry

What kinds of beer are there? (contd)

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 malts flavour is not dominant and results in a low
bitterness level to the beer.

N
 ear Beer In most provinces, a beer with an alcohol content
of less than 0.5% alcohol-by-volume is considered a nonalcoholic 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: topquality 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 its 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 whats called brewers malt.
Craft brewers can choose from several
varieties to give their beer a particular
colour and flavour.

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

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
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 710 days and,
in that time, the yeast may multiply sixfold. When the fermentation is complete,
the yeast is removed. At this stage of its
production, the liquid is now called beer.

iCraft Brew | How Its Made

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.

one adding a characteristic aroma,

flavour and bitterness to the final
product. Hops also act as a natural
preservative in the beer.

Step 7: Cellars
Finally, this young beer is stored cold
for 13 weeks (or more) and then
filtered to achieve clarity before its
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.

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:

iCraft Brew | What Kinds of Brewing Companies Are There?

C
 raft Brewery / Microbrewery The term craft brewery
was chosen to replace microbrewery as the segment began
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 doesnt actually own the
brewing facilities with which its beers are brewed. Instead, the
brewery owner contracts its production out to an existing brewery.

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 environmentallyfriendly, 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.

Ontarios Craft Brewing Industry

Ontarios craft brewing industry has experienced some significant

growth in recent years2:
O
 ntario Craft Brewers market share for premium priced brands
has more than tripled since 2002, growing from less than 1 per cent
to over 3 per cent of the beer volume sold in Ontario and continues
to be the fastest growing segment within the LCBOs beer category.
C
 urrent average growth rates across all retail channels are over
10 per cent per year.
O
 ntario consumers have a strong interest in local products of
premium quality and are increasingly engaging themselves in
the ever-growing Craft Beer Movement.

In 2005, a big boost occurred with the formation of the Ontario Craft
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 Weve 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)

Every year, thousands of people launch their own businesses and

enter the challenging world of entrepreneurship. Many start-ups
thrive, but unfortunately several will fail within the first five years.
Most often, its due to the fact that the business owners werent
well prepared, they didnt have any business knowledge or experience
and they didnt conduct any initial research or planning to determine
if their business idea was viable.
During this stage of the start-up process, we will look at the steps
that must be completed in order to successfully develop your
business plan and determine if your craft brewery business idea
is worth pursuing.

iCraft Brew | Preparing For Your Brewery

Ontario is now home to well-over 100 craft breweries, representing

each of the provinces nanobreweries, craft breweries, contract brewers
and brew pubs, currently in operation or in the launching stages. The
location of each operation can be viewed on the Ontario Brewers
Directory Map, maintained by Mom n Hops.

Preparing
For Your
Brewery

iCraft Brew | Preparing For Your Brewery

10

Develop Your Craft Brewery Idea, Research & Evaluate

Now that you have a good understanding of craft brewing, youre 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
brewing industry?
What type of craft brewing operation (i.e. brew pub, microbrewery)?
W
 hat form of ownership (i.e. sole proprietorship, partnership)?
W
 hat will I name my craft brewery?
W
 here do I want my brewery to be located? What size?
W
 hat types of beer do I want to craft?
W
 hat are my competitive advantages?
H
 ow will I promote my craft beer and brewery?
H
 ow do I want to package my beer?
W
 ill people be willing to pay for my craft beer?

H
 ow does my craft beer fit within the industry? What is the
potential for growth?
What financial resources are available? From who? How much? When?
H
 ow much will it cost to launch my craft brewery?
W
 here will I get my brewing equipment and supplies?
W
 hat government regulations is my craft brewery subject to?
W
 hat licenses and permits must I obtain?
What type of distribution system will I emply (i.e. direct, agents)?
W
 hat professional resources do I have (i.e. lawyer, accountant)?
Still need?
W
 here can I find missing skills (i.e. brewmaster, engineer, etc.)?

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:

Market Trend

D
 istribution Channels

Market Growth Rate

K
 ey Success Factors

Market Profitability
C
 ompetitive Analysis A competitive analysis is a critical
part of your craft brewerys marketing plan. Conducting a
competitive analysis will help you to establish what makes
your craft brewery and beer unique and, therefore, what
unique attributes you should promote in order to attract your
target market. Some questions you may ask yourself when
completing a competitive analysis include:
What products do they sell?

What types of media do they

use to market their products?

How much do your competitors

charge for their products?

W
 hat are each competitors
strengths and weaknesses?

What is each competitors

market share?

W
 hat potential threats do
your competitors pose?

What are their past &

current strategies?

W
 hat potential opportunities
do they make available for you?

Who are your competitors?

R
 esearch Industry Trends Conducting your own research
on the latest industry trends is important, as it can help you
better understand the industry you are entering and it can help
you determine how the current position of the industry could
impact your business, both positively and negatively.
P
 repare Your Marketing Plan Your marketing plan is an
essential part of your overall business plan. Potential investors
and lenders want to see how you plan on making money and
without a solid business or marketing plan, your chances of
receiving financing is pretty slim. When you develop your
marketing plan the information that youve collected during your
market research should be used to reinforce any statements that
are made. The purpose of your marketing plan is to help you:
A
 ssess your consumer needs
& develop a suitable product
Convey unique attributes to
your target audience
E
 stablish suitable
distribution channels

D
 etermine the most effective
ways to promote your
business & products
D
 etermine the best suited
advertising / marketing tools
& venues

iCraft Brew | Preparing For Your Brewery

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
marketplace for the product(s) you are offering, what your
consumers want, how to best present your product(s) to them,
etc. The following is an outline of a market analysis:
Market Size (Current & Future) I ndustry Cost Structure

If youre 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. Itll help you to set realistic and
timely goals, secure external funding, measure your success,
clarify operational requirements and establish reasonable
financial forecasts.

iCraft Brew | Setting-Up Your Brewery

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 youre able to gauge your
success and plan for future growth. Secondly, its 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
to generate profit.
Its important to understand that taking on the challenge of
preparing your business plan isnt something youll 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

12

P
 ersonal Assets Youll 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.

Business Plan Tips

T
 horoughly review your business plan once its 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
 ont 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. Its 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 theyve
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,
youre 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.

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.

iCraft Brew | Setting-Up Your Brewery

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 wont
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.

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?

M
 ake sure you have your business plan, personal asset statement,
executive summary and pro forma financial statements with you and
that you know them inside out.
K
 now your credit rating and be able to show that its strong, if it is, or
that youre taking concrete steps to improve it.
B
 e confident about your craft brewery business idea and wellinformed about the brewing industry.
B
 e able to demonstrate your plans for the money you are requesting
and why you can be trusted with it.
F
 inally, be persistent and stay positive. Its quite possible youll be
turned down by a number of potential lenders or investors before
finding one that will take that all-important leap of faith. If you truly
believe in what you are doing, you will find a way to finance it.

14

Government Regulations

Registering Your Business (Provincial)

If youve incorporated your business, youve already registered

your business name. If youve chosen not to incorporate, youll
need to register your business name with the province of
Ontario. Before registering your business name, check to see
whether the name youre planning on registering is already in
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
registration for an additional fee.

Registering Your Business (Federal)

You may need to register with Canada Revenue Agency to get

a Business Number. Registration is mandatory if your business

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.

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 Ontarios 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
 anufacturers Licence A manufacturers 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.

iCraft Brew | Setting-Up Your Brewery

Having an experienced lawyer or accountant look after your

incorporation is helpful. They can make sure your incorporation
forms are filled out properly, saving you possible problems down
the road. Your lawyer or accountant can also tell you whether or
not its advisable to incorporate federally.

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

The next step is to find commercial land to build your craft

brewery on, if youre choosing to start from the ground up,
otherwise youll need to find a suitable building to rent or
purchase. There are several things that should be taken into
consideration when searching for a location or building for your
craft brewery, including:
T
 he kind of space youre looking for
T
 he location its proximity to potential customers and clients,
and the zoning for your type of business
A
 vailability of parking & supplier access
C
 ost to purchase, if you choose to buy.
T
 he amount of rent youre able to pay and whether it includes
utilities and services.

16

T
 he amount youre willing to pay for improvements, if necessary.
I f its a rural location, does it have the necessary infrastructure
(i.e. water supply, septic system, etc.)?
If you decide to rent, youll need to sign a lease with the owner.
Make sure your lawyer goes over it carefully and explains it to you
before you sign it so that you understand the commitments to
which you are agreeing. Commercial tenancies arent covered by
the same landlord-tenant legislation as residential ones and you
need to be much more careful when renting commercial space.
If you decide to purchase commercial land or a facility, get help
from a real estate agent who specializes in commercial properties
and have your lawyer review your offer before you buy.

Its important to understand just exactly how much money

and work is involved with building a craft brewery from the
ground up. Its 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 arent
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.

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, walkin 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.

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.
A
 ll floor penetrations for transfer lines, steam lines, flex auger,
etc., should be curbed to prevent overflow.
Square Footage
I ts 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
Its 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.

iCraft Brew | Setting-Up Your Brewery

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:

I ts recommended that 4 channel drains with stainless steel

or fiberglass grating are installed. All drains should be sized
adequately to handle 46 barrels of effluent for every 1 barrel
of beer produced.

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

18

Brewing Equipment & Supplies

So, now that youve found the perfect location / building for your
craft brewery, its time to source the brewing equipment and
supplies youll need to actually brew your beer.
Lets start off with some of the equipment youll need. Please note
that this is not a complete list but is meant to cover the major
equipment requirements:
M
 alt Mill A machine that crushes malt into grist.
H
 ot Water Tank The container where the brewing water is
heated to mash temperature.
M
 ash Tun a vessel in which mashing takes place and where
wort is separated from the spent grains.
Lauter Tun A large vessel with a perforated false bottom. It is
used to strain the sweet wort off the spent grains after mashing.

Kettle A large vessel, similar in shape to a mash tun, usually

made of copper or stainless steel in which the wort is heated.
Also called a brew kettle.
F
 ilter Removes solid particles from the beer.
Fermenter A generic term for any open or closed vessel in
which primary / secondary fermentation take place.
B
 right Beer Tank Storage tanks for the clarified final beer.
P
 ackaging System A system that puts the beer into the
containers in which it will leave the brewery. Typically, this
means putting the beer into bottles, aluminium cans and
kegs / casks.

New vs. Used Equipment

When sourcing equipment for your craft brewery you have the
option of purchasing new equipment from a manufacturer that

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, its 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.

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, hightemp 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

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.

Malting barley
Water

As previously mentioned, there are four key ingredients required

to brew beer:
Yeasts
Hops

When searching for ingredient suppliers its 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.

iCraft Brew | Setting-Up Your Brewery

Until you have all of your money in place and are ready to actually
buy, its recommended you research both options to determine
which best suits your requirements and budget.

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

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.

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

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

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.

20

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.

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.

Kegging

Kegging is another option in packaging beer. Kegging involves filling

carbonated pasteurized beer into sterile aluminum or stainless steel
kegs of various sizes. Aluminum kegs are generally more popular than
stainless steel kegs because they are lighter and more resistant to
minor damage. Kegging fits into the cost structure for craft brewers
with limited startup capital for bottling lines and low product output.
Open-Keg Systems
Open-keg systems are characterized by their barrel shape and
bunghole on the side by which the interior can be readily accessed
without extracting the valve body or spear.

Sankey-Style Valve
The newer, more common single-valve keg (SVK), or Sankey
keg, has a valve arrangement that consists of a stainless steel rod
housing called a combination fitting that is permanently installed
into the top center of the keg and sealed with a spring-loaded
check ball. The tapping device, or tavern head, fits into the lug
housing of the valve.

Labelling

Bottle labeling is completed after bottle filling once the bottles

have been dried. The principal types of labelers used in the
brewing industry are pressure-sensitive, rotary and tandem.

Rotary Labeler
Rotary labelers are machines for which the bottles must be
transferred from the bottle conveyor into the labeler carousel.
Rotary labelers operate at higher speeds than pressure-sensitive and
tandem labelers and are equipped to apply front, back, full wrap and
neck labels.
Tandem Labeler
An in-line labeler is a type of machine for which the bottle travels in a
straightforward motion and the label or labels are applied while the
bottle is moving along the bottle conveyor. Tandem labelers cannot
do front and back labels at the same time and are not very wellsuited 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: Its also highly advised that you verify
provincial legislation as it may differ from the federal requirements).
The FDR requires all beverage alcohol labels to include the
following information:
C
 ommon name
C
 ompany name and address
Net quantities in metric units
A
 lcohol content by volume
C
 ountry of origin

I ngredients (required only

for unstandardized
alcoholic beverages)

iCraft Brew | Running Your Brewery

Closed-Keg Systems
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.

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.
Pressure-sensitive labels are applied from a coiled strip of waxed
carrier (also called backing) paper.

D
 urable life date (if shelf
life is 90 days or less)

For more detailed information on the FDR and other labelling

requirements for alcoholic beverages, please visit the Canadian
Food Inspection Agency, the Canada Business Network or the
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.
Its 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:

iCraft Brew | Selling Your Craft Beer

Brand your business.

First thing, establish a concrete identity. You may even consider using
a tagline that reflects your business philosophy to reinforce who you
are as a business. Its 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 wont save
you any money in the long run. Remember, youre 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.
Network, network, network.
Networking is an extremely powerful and inexpensive (and in
some cases free) way to generate awareness of your craft brewery
and beer. Attend industry events, join an industry association
or local chamber or even consider volunteering for a board or
committee. Effective networking is all about building relationships
that can lead to business down the road. Know your goals and
what you can give in return. Follow up in a timely fashion and stay
in touch to reinforce the relationship.
Use a website.
Having a website is essential in todays business world. Unlike
printed materials, a website can be a dynamic source of two-way

22

communication between you and your consumers. You can even

sell your beer through your website! You dont need to spend a
fortune developing a huge website. The quality of the content and
professional of appearance of your website is paramount, not the
number of pages or the expensive bells and whistles.
As suggested with your logo, you should invest in having a professional
website designed by a web developer. Having your nephew develop
your site will not save you any money in the long-run. Work with
experts who understand your goals and objectives and will help you
build a site tailored to your business and needs.
A more extensive guide and links to tools and resources can be
found by downloading the iCraft Brew app, which can be found at
www.startabrewery.ca.

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.

iCraft Brew | Download iCraft Brew

LI V E YOU R D R E A M O F

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,
Executive Director

Andrew Redden,

Economic Development Manager

Stephen Paul,
Economic Development Manager

Frontenac Community
Futures Development

Hastings County

Lennox & Addington County

frontenac@fabregion.ca

hastings@fabregion.ca

LandA@fabregion.ca

startabrewery.ca

fabregion.ca

Neil Carbone,

Director of
Community Development
Prince Edward County

cdd@pecounty.on.ca