Meadery Business Plan, With a Projection

A meadery business plan is a winery plan with honey instead of grapes. Mead is wine under federal law, so the permits, the bond and the tax are a winery's, and the honey is the biggest part of what a bottle costs. Mead also has to age before it sells, so the first months of honey, bottles and work are paid before the tasting room opens. In the example below, a meadery in Maryland sells bottles, flights and glasses in its tasting room and bottles to shops and restaurants, and ends its first year about $41,100 ahead on $133,300 of sales, before paying the owner. Below is a description example, each part of the plan, the federal rules for honey wine, the first year month by month, the startup budget, and a free template.

The short version

• Describe the meadery in a paragraph: the meads, the tasting room, who else buys, the goals.
• Cost a bottle from the honey up: honey, yeast and fruit, the making, the bottle, the tax, the fees.
• The tasting room leaves the most a bottle; shops and restaurants take volume at a wholesale price.
• Mead is wine: a federal permit and bond before the first batch, and a winery's tax, with a credit for small producers.
• Mead ages; the first batches are made and paid for months before they sell.
• TaroStack keeps honey by lot, every batch with its lots, and bottles counted. It doesn't file TTB reports. More below.

Part 1: the business description

Catoctin Hollow Meadery, a made-up meadery near Frederick, Maryland, I use in these examples, writes:

Catoctin Hollow Meadery makes still meads from Maryland honey, traditional, fruit and spiced, aged at least four months, sold by the bottle, the flight and the glass in its tasting room and online where the law allows, and to shops and restaurants in the region.

Part 2: the federal rules

Making wine for sale takes a basic permit under the Federal Alcohol Administration Act (27 CFR 24.106) and a bonded winery approved by TTB, and mead is wine. The rules for honey wine allow water to bring the honey down to no lower than 13 degrees Brix, hops up to a pound for every 1,000 pounds of honey, and sugar or honey for sweetening only after fermentation is complete; the finished wine can't be over 14% alcohol or 35 degrees Brix of total solids (27 CFR 24.203). Federal excise tax on still wine up to 16% alcohol is $1.07 a wine gallon, and a producer gets a credit of $1 a gallon on its first 30,000 gallons a year (26 U.S.C. 5041), so a small meadery pays about 7 cents a gallon, about a penny a bottle. Sparkling mead is taxed differently. The state licenses the meadery and decides what the tasting room may sell and ship. This is general information, not legal advice.

Part 3: what a bottle, a flight and a glass cost

A 750 ml bottle of semi-sweet mead at about 12% takes about three quarters of a pound of honey, bought in bulk at about $3.47 a pound.

The honey is nearly half of a bottle's cost, so its price matters more than anything else in the plan, and buying it in bulk from beekeepers, by the drum, is the difference. What honey sells for, and what beekeepers keep, is in honey business profit margin.

Part 4: customers and prices

A bottle sold in the tasting room leaves more than twice what the same bottle leaves sold to a shop, and a flight leaves more than a wholesale bottle from a third of the mead. At full speed the tasting room, bottles, flights and glasses, brings about $11,000 of the month's $14,000 of contribution, and the shops about $3,000. Shops are how people who've never been to the tasting room find the mead; what a distributor would keep if one carried it is in distributor margin.

Part 5: the first year, month by month

Fixed costs are $4,535 a month: rent for the production space and tasting room ($2,500), the tasting room's base staff hours ($1,000), insurance ($200), licenses and bond averaged ($100), power and water ($300), marketing and events ($400), and software and card fees ($35). Sales start at 15% of full speed and reach it in month 11:

The year's sales are $133,280 and the profit $41,059, before paying the owner. Cash falls to −$5,503 by month 4, and the mead for month 8 is started around month 4, so the plan keeps $6,000 of working cash on top of the first batches in the startup budget. At full speed that's about 870 bottles' worth of mead a month, about 175 gallons, well inside the 30,000 gallons a year that get the credit.

Part 6: the startup budget

The first batches are the honey, bottles and work for the first months' sales, made and aged before the doors open. At $41,100 a year, the $45,500 spent before working cash takes a little over a year to earn back. Why a batch number and a lot number are different things, which matters when one batch of mead fills bottles on three days, is in batch number vs lot number.

Get the template

Download the meadery business plan workbook. Four sheets: your bottles, flights and glasses with price, variable cost and a month's volume at full speed; the first year, month by month, with sales, profit and cash; your fixed costs; and your startup budget with working cash. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Honey from four beekeepers in drums, each a different lot, eight meads aging in tanks for months, bottlings that each fill a few hundred bottles, a tasting room pouring every weekend, and a dozen shops reordering. A notebook can't say which beekeeper's honey went into the batch a restaurant complained about, how many bottles of the cherry mead are left, or what a bottle costs now that honey went up.

How TaroStack does it

TaroStack keeps honey by lot, every batch with its lots, and bottles counted.

Honey by lot. Each drum is received with the beekeeper's lot and what it cost, and honey comes up on a reorder list in days of cover, so the next drum is ordered before a batch needs it.

Batches with their lots. Each mead is a recipe of honey, yeast, fruit, bottles and labels; each bottling is a batch that notes which honey lots went in, on its own, and gives the bottles their lot. A complaint from a restaurant is one recall report: which batch, which honey, which other shops got it.

Bottles and what they cost. Bottles are counted by mead in the cellar and the tasting room, and each batch is costed at what its honey cost, with the price creep report showing which beekeeper raised prices. Plainly: TaroStack doesn't produce TTB reports or excise returns, and it isn't built around tank transfers.

Recipes, batches, lots and recalls are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a meadery profitable?

It can be. In the example, a meadery selling in its tasting room and to shops and restaurants ends its first year about $41,100 ahead on $133,300 of sales, before paying the owner, with most of the money made in the tasting room.

How much does it cost to start a meadery?

In the example, $51,500: fermenters and tanks, a pump and filter, a bottle filler and corker, a tasting room build-out, permits, bond and label approvals, the first batches aged before opening, a website and signs, and $6,000 of working cash.

Do you need a license to make and sell mead?

Yes. Mead is wine, so making it for sale takes a federal basic permit and a bonded winery approved by TTB, and the state licenses the meadery and the tasting room.

How much honey does it take to make a bottle of mead?

In the example, about three quarters of a pound for a 750 ml bottle of semi-sweet mead at about 12%; drier meads use less, sweeter and stronger ones more, up to the 14% that honey wine can be.