by Julia Herz – Mead Consultant / Owner Honeywine.com
(additonal contributions by David Myers-Redstone Meadery)
Many, many folks often ask, what is a Meadery?A Meadery is a winery that ferments honey and produces mead (honey wine).Now we’re pleased to see that folks are also asking for advice on how to open a meadery.This paper has been drafted to give those interested a head start.
Here in the United States the American Dream, besides winning the lottery, is to own your own business. More specifically, I’d say, the American Dream is to successfully run and grow your own business while paying your bills and making a profit. Now to me that’s the American Dream.
The “Owning” part is the scary part. There’s liability, many first time start up costs, personnel to manage and support, long hours, doubters, etc. Well the same goes for owning a meadery.
In terms of today, and the industry of mead
-We estimate it’s a 20-30 million dollar industry (conservative estimate) and growing
-Estimate there are 60 or so meaderies in the U.S. and another 30 or so more wineries or breweries who make mead
-Globally we estimate that total goes to at least over 200
For any type of Meadery, no matter the budget, it is agreeably a large task to figure out how to start. I know meaderies who are commercial and operating out of their homes with a pretty small production capacity (Medovina in Niwot, CO) to meaderies operating with the goal of over 20,000 liters a year which is Redstone Meadery in Boulder, CO.
How to Open a Meadery:
There are basically three approaches: (These suggestions apply to the rules and regulations in the United States. Approaches may vary based on rules and regulations in each country, state or province.)
1. Set up a meadery and produce your own product
2. Start a grape winery and also produce mead
Note: You cannot have malt on your premise of production when you are a licensed winery. This is one way the Federal Government differentiates between a brewery and a winery. Also note that breweries are regulated by FDA.
3. Contract out the production of your mead (much lower start up costs).
Specific first year items to address include:
- Name – Determine the name of the Meadery, logo design, etc.
- Tasting Room – Decide will you have a tasting room or not? If so location is key.
- Staff – Beginning staff (a mead maker is a wise first employee) and if you want to be the mead maker I would still suggest hiring a commercial brewer or wine maker in the beginning days to consult for you. It’s wise to find the mead maker first before purchasing any equipment.
- Equipment: Different meaderies approach making mead with different types of equipment. Decide if you want to use more of a winery approach or brewery approach? Also, it’s good to base your equipment needs on the physical space of the meadery you are in. Some equipment is so large it needs to be housed in high ceiling facilities. Other equipment is so wide that you need to make sure it will be able to fit through an entry way into the facility.
- Consider Used Equipment – This is a very good option for many start ups. Check out North American Brewing Services Kelowna, B.C., Canada http://www.nabrewing.com or Ager Tank and Equipment http://www.ager-tank-equipment.com here in the states. Local breweries and wineries close to you can also be great resources for equipment. It’s not a bad idea to put out some phone calls in the beginning to network locally for the equipment you need.
- Hot Box – Consider this an essential piece of equipment for any meadery.A hot box will gently heat honey so it is not crystallized and leaves it much easier to work with when pouring into a kettle. Otherwise, it is lots of hot water and steeping which can be very labor intensive.
- Production Process – Decide, will you not heat your honey at all (Havills Meadery in New Zealand is an example of this), pasteurize your must (like Redstone Meadery in Boulder, Colorado) or boil your must before you add the yeast? Will you filter your honey before production, will you filter before bottling? Will you add sulfites like many grape wineries and some meaderies or decide not to?
- Production capacity: How much mead does the company plan to produce in the first three years? Factor in your costs of ingredients also accounting for inflation. Keep in mind honey is up there as one of the most expensive base fermentables on the market.The main goal: try to figure out how much mead you need to sell in order to eventually cover costs. You don't want to buy a system that you outgrow too quickly and in the same vain you don't want to buy a system that is so large that you simply won't ever utilize all your fermentor space.
- Location – What state will the meadery be in? Figure out the laws of that state to determine what you are allowed to do as a winery, when you are allowed to be open what kind of state taxes you will be responsible to pay, etc. In the U.S. for a list of State Liquor Control Boards visit: http://www.ttb.gov/alcohol/info/faq/subpages/lcb.htm
- Target Demographic – What market will you go after (wine drinkers, beer drinkers, both?). This is key and frankly has yet to be determined as mead is such a diverse beverage.
- Federal and State Licenses – Apply for your federal and state paperwork for licenses and product labels early because it sometimes takes a VERY long time. In the United States, meaderies are regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Their web site is at: www.ttb.gov Below is a example of some of the licenses you will be responsible to obtain: (remember it varies by state)
4. Determine the name of the Meadery, logo design, etc.
- State Alcohol Beverage License (allows one to wholesale). In Colorado, for example there is a $1050 annual fee
- State Manufacture License (allows one to produce) $30 annual fee in Colorado
- City Sales Tax License – In Boulder, CO for example 7.9 % of what is sold via the tasting room is due to the city.
- BATF Basic Permit to be a wine producer – This requires background checks, verifying source of funds and inspection of the business premises. Allow at least 90 days to receive your Federal permit.
- BATF Tax Stamp (Bonded Wine Cellar) – $1,500
- BATF Wholesale Liquor Dealer Permit – $1,500
- Distribution Out of State – For each of the states you want to be distributed in you will need to follow that state’s guidelines. Sometimes there is a license fee, form, copies of labels and label approvals, etc. required. Other times a state requires no fee or form from an out of state manufacture but will require the designated distributor to fill out paperwork for the new brands. Visit http://www.ttb.gov/alcohol/info/faq/subpages/lcb.htm to contact specific states.
- Direct Shipment to Individuals Out of State – This is a hot topic these days. If you plan to ship directly to individuals out of state you need to follow the laws for those specific states plus use a common carrier (FedEx, UPS, etc.) who can legally ship for you. This web link is a good place to start when researching direct shipments: http://www.wineamerica.org/wineshipment/ShippingStates.htm
- Exporting out of the U.S. – To obtain information on exporting alcohol out of the United States go to: http://www.ttb.gov/alcohol/info/expreq.htm
- Mead Recipes – Figure out some of your key recipes first because you will then have to submit the formula of each brand to the Federal Government for approval and once approved then you’ll need to submit your label (along with a copy of approved formula) for approval. Go to www.ttb.gov to find all the appropriate forms.
- Label Approval for Each Brand Produced – Wine America's http://www.wineamerica.org/ label submission service to submit labels directly to the ATF is a very helpful service. This requires a yearly membership fee that differs depending on yearly production of individual winery. IMPORTANT: Allow lots of time, sometimes a few weeks if you’re lucky, sometimes months if you’re not, for label approval.
- Signage and Promotional Material – Plan signage for your store front, promotional materials, etc. This should all be designed right in the beginning so you are ready on designated release date.
- Release Date – Design a plan (based on estimated production time) of when you think your first product will be ready for market. (Remember to apply for label approval ASAP because this can hold you up).
- PR – Plan a PR push for when that first product will be available for the market. The day you release the first product is when you can consider you are really open for business.
- International Mead Festival www.meadfest.com / International Mead Association www.meadfest.org – .Plan to attend and or enter the annual festival if you have commercial product. You can also taste the largest collection of commercial meads and network with others in the industry.Formed in 2004, The International Mead Association is working on improving the classification of meaderies and labeling guidelines for mead plus on public education about the beverage.
Business Plan – So with all that above, not to mention marketing and office expenses you might be able to write out a business plan that estimates the first 3 years of expenses.Then you need to look 3-5 years ahead of that figure out what kind of money you need to have coming in or in savings to continue to operate.
For more information on mead, commercial meaderies and the industry visit: www.honeywine.com
(allows one to wholesale). In Colorado, for example there is a $1050 annual fee
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