A distillery business plan from grain to glass

Start from litres of pure alcohol, not bottles

Distillery capacity is measured in litres of pure alcohol (LPA). Everything else follows from it. A good distilling malt gives somewhere around 400 LPA per tonne when the mashing, fermentation and distillation all run well. So a plant mashing one tonne a day, five days a week, for 48 weeks makes about 96,000 LPA a year at that yield.

Turn that into casks and bottles. At 63.5% filling strength one LPA is about 1.57 litres in cask, so 96,000 LPA fills roughly 750 barrels of 200 litres. Bottled years later at 46%, after evaporation, the same spirit makes far fewer bottles than the raw sum suggests. Build the plan on LPA and convert at the end. One more conversion catches people out: a 70 cl bottle at 46% holds 0.322 LPA, so every 1,000 LPA that survives maturation becomes about 3,100 bottles. Put that figure in your model and the gap between spirit made and bottles sold becomes obvious. Our guide to how whisky is made walks through each stage behind those numbers.

The cash gap is the business

Map the money month by month. Capital spend comes first: building, mash tun, washbacks, stills, condensers, boiler, cooling, spirit receivers, warehouse and the licence process. Then running costs start: malt, energy, casks, staff, insurance. Revenue from aged whisky arrives only when stock is old enough for the market and the label you plan.

Scotch must mature for at least three years. Indian rules differ. Hot climate maturation runs faster too, but serious single malt still takes years. Your cash curve goes down for a long time before it turns. The bottom of that curve, the peak funding need, is the most important number in the plan. Lenders read it first. Founders often discover it last.

Draw the curve for at least seven years. Put capex in year zero, production costs from the first month of mashing and add a working capital line for casks filled but not yet sold. Then layer in revenue from fast products in year one and aged whisky from the year your first casks are ready. Where the line crosses zero again is your payback point. Where it bottoms out is the money you must raise before you start, not after.

What you sell while the whisky ages

Most new distilleries fund the wait with products that do not need years in wood:

• Gin or vodka from the same site, often on a separate still.
• Sourced whisky bottled under your brand while your own matures, sold honestly as such.
• Cask sales or pre-release memberships, where local rules permit them.
• Visitor experiences such as tours and tastings, where licensing allows.

Each one has its own margin, licence and working capital. Model them separately. Our guide to the Indian whisky market explains where each price tier sits.

Costs that founders underestimate

Casks are the classic surprise. Good ex-bourbon barrels are imported, priced in dollars and needed every week. Evaporation in Indian heat is another: plan for annual losses well above the 2% often quoted for Scotland and test the plan at a higher figure. Then there is energy for the boiler, effluent treatment for pot ale and spent lees, state excise and label registration in every state you sell in, plus a quality lab.

Run a sensitivity table. What happens to peak funding if yield is 370 LPA per tonne instead of 400, if casks cost 20% more or if your first release slips by a year? A plan that only works on its best case is not a plan. We would rather see a modest plan that survives all three shocks at once than an ambitious one that needs everything to go right.

What lenders and investors check

They want to see that the production maths is real: yield per tonne, distillation efficiency, cask count, evaporation and bottle yield, each sourced or explained. They want a funding plan for the full cash gap, not just the build. They want named licensing steps with realistic timelines, noting that rules vary by state and change. They want a sales route: which states, which channels and what share of revenue comes from fast products in the first years.

They also read the team. Someone has to own production, someone sales and someone compliance. A founder doing all three on paper worries a lender more than a high capex figure does.

Write the plan from grain to glass

Your first step: build a one tab model with three inputs, tonnes mashed per week, LPA per tonne and annual evaporation. Let it calculate LPA filled, casks needed and bottles available in each future year. Then add costs and prices around it. If you want to build it with people who have run stills and spreadsheets, our live classes are the place to do it.