How to Open a Micro Distillery in Pennsylvania

Stills are often made from copper.

Be part of the "local" movement and attract liquor aficionados by opening a micro-distillery in Pennsylvania. According to "Forbes Magazine," before Prohibition, the United States had thousands of small distilleries. Like micro-breweries, craft distillers operate on a small level, producing spirits with attention to details, and they frequently use local ingredients. Join the movement to bring more micro-distilleries to Pennsylvania, but understand in advance the requirements for this kind of endeavor.

Things You'll Need

• Business plan
• Site
• Distillation system

Instructions

1. The best way to open a micro-distillery is to understand the entire process. Intern at a distillery or complete a class in distillation. Use library books to research the art of making spirits. Complete a small business class offered by your local city or county if you do not have any business experience.

2. Tour all the distilleries you can, large and small. Speak to other distillers, especially the two other Pennsylvania-based companies, Philadelphia Distilling and Keystone Distillery.

3. Write a detailed business plan by researching all the tax laws, alcohol laws and other micro-distilleries in the state. Investigate any advantages with Pennsylvania's farm statutes that may benefit your business if you grow your own grains. Pennsylvania is a Right-To-Farm state that offers assistance to local farmers.

4. Present your business plan to potential investors. Seek small business loans or agricultural loans. Obtain investment from family and friends and offer a percentage in your company. Retain a controlling interest in your company of at least 51 percent.

5. Obtain an alcohol license from the Pennsylvania Liquor Control Board to distill and distribute your distilled spirits. Obtain a business license from the state. Request a EIN, or Employer Identification Number, from the IRS.

6. Visit potential real estate for your micro-distillery. Check if the site's zoning allows micro-distilleries. Buy used or new distillery equipment for the business, such as a still that is at the heart of the distillation process. Order ingredients, such as barley or corn, from local farmers and wholesalers, to make the spirit.

7. Send in your distillation application for a distillery license to the U.S. Alcohol and Tobacco Tax and Trade Bureau. The process takes at least six weeks and it may take months to obtain the license.

8. Choose a bottle type and design your bottle label. Mail the label to the Alcohol and Tobacco Tax and Trade Bureau for approval. Gain a license to sell your liquors at the retail level.

Tips & Warnings

• Incorporate your business to protect you as an individual.

• Find a business mentor to help guide you through the process.

• Work toward a signature spirit, such as gin or vodka. Once you gain a reputation with one liquor, you can branch out into other types.

• The Pennsylvania Liquor Control Board requires any licensees to have all taxes paid and up to date.

• You may need to contact the FDA before you start selling your spirit.

References

• Forbes: Crafty Spirits
• Daily Finance: Pennsylvania's Small Liquor Makers Are Bottling Heritage
• Pennsylvania Liquor Control Board: Bureau of Licensing Frequently Asked Questions
• Pennsylvania State University; The Acre Initiative: Adding Strength to the Right-to-Farm Law; Jennifer Beidel
• American Distilling Institute: Starting Up
• Alcohol or Tobacco Application with the Alcohol and Tobacco Tax and Trade Bureau: Things to Know When Filing an Alcohol or Tobacco Application with the Alcohol and Tobacco Tax and Trade Bureau (TTB)
• Still Waters Distillery: Mashing