How to Value a Craft Brewery: What Owners Should Know Before Getting into a Deal

The craft beer industry has experienced a “boom” over the last decade, in the eyes of both the culture and the serious business sector. The enthusiastic owners of breweries are now starting to contemplate their exit strategy or pick an investor. If you are one of them, the crucial question would be: “What’s my brewery worth?”

Over the years, or perhaps over a decade, craft brewery owners have often struggled with assigning a numerical value to what they have been building all their lives. While a great deal of artistry and quality go into brewing, buyers and investors want the hard facts and figures. And this is where a craft brewery valuation comes in.

In this book, learn about the essential components behind a craft brewery valuation, some of the important factors considered by buyers, and how to position your business for a rip-roaring sale.

Why A Good Business Valuation Matters

A valuation gives a clear indication of your potential market value, whether you are trying to sell your company outright or just keeping options open. Some other reasons for evaluating include:

  • An actual idea of what your business is worth in the selling context
  • Increases your chances of finding sincere buyers or investors
  • Heightens your negotiating power
  • Brings to light operational weaknesses that can impact value
  • Makes succession, estate, and retirement planning easier

A valuation is not just about numbers; it is a story about how your brewery will grow, told in a language that buyers understand.

Basic Craft Brewery Valuation Techniques Include:

1. Valuation Using Earnings (EBITDA)

This valuation method is the most popular one. Buyers often purchase businesses based on a multiple of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). A buyer’s multiple will depend on industry trends, geographic location, growth potential, and perceived risk.

2. Valuation Based on Assets

This second method values your business mostly on tangible assets like brewing equipment, vehicles, furniture, and property. However, this may overlook intangible assets of equal value, like your brand and customer loyalty.

3. Valuation Market-Based

This method will try to compare your brewery with the same type of businesses that have recently changed hands between sellers in your region or market niche. It would be good if comparable data were at your disposal, though each brewery is unique according to several variables.

Factors Influencing the Value of Craft Breweries

Buyers and investors don’t just look at the number of barrels of beer you produce. They consider a wider range of risks and returns, such as:

  • Revenues and growth trends
  • Gross and net margins
  • Diversification of the customer base (taproom, wholesale, channels of distribution)
  • The strength of the brand and market presence
  • Location and expansion possibilities for the facility
  • Licenses and compliance with regulatory requirements
  • Owner involvement and employee retention status

A craft brewery business valuation that is professionally performed communicates all of the above into a thorough and believable representation.

What Other Industries Teach

Just as in any specialized industry, there exist similarities in valuing craft breweries, home services, or energy. For instance, a gutter company business valuation would consider the recurring revenue derived from maintenance contracts and the depreciation of equipment, whereas oilfield services business brokers would focus on revenues from projects and asset-heavy operations.

In simple terms, for owners: do not rely on generic valuations or online calculators. Every industry-indeed every business-has its nuances.

How the Business Brokers Add Value

Of course, you can always perform a simple valuation yourself, but if you want to make some real leverage from your business valuation, then the presence of a business broker —wiser still, one who understands the craft beverage space — can be invaluable.

The Adam Noble Group specializes in matching sellers with qualified buyers throughout Texas and beyond. This stirring team not only crunches the numbers; they weave your brewery’s story in a way that will speak loud and clear to the right buyers.

Even if today is not your selling day, these brokers will still assist you with:

  • Preparing financials and documentation,
  • Confidential market valuation,
  • Identifying value-adding improvements for listing, and
  • Map out a strategic exit schedule that fits your needs.

Just as oilfield services business brokers comprehend the intricacies within the energy sector, seasoned brokers working with breweries understand your production cycles, distribution channels, and licensing situation.

What You Should Gather for a Valuation

To prepare for the most accurate valuation possible, gather the following:

  • The last three years of financial statements (Profit & Loss, balance sheet)
  • Tax returns
  • Inventory list
  • Equipment and asset valuation
  • Lease agreements and loan documents
  • Sales split by revenue streams (taproom, events, wholesale)
  • Brand assets (logotype, social media accounts, trademark)

The buyer wants to see not only where the business stands-but where it can go.

Final Thoughts

The craft beer industry is vibrant but competitive. As a brewery owner, you may have produced your brine with all the love you have in the world — never relinquish the value of what you have created. An expert craft brewery business valuation is a stepping stone to move forward with confidence in regards to selling, investors, or future planning. 

Ready to sell your brewery?

Give Adam Noble Group a call — Texas business brokers with a solid reputation among brewery owners, service providers, and specialty entrepreneurs.

We want to uncover what your brewery is really worth, then work to put you in touch with the right buyer when the time is appropriate.