The Changing Landscape of Brewing and Distillery Equipment Appraisals and Liquidation
The brewing and distilling industry is undergoing a significant transformation. With shifting consumer habits, increased market competition, and economic pressures, many breweries and distilleries are closing or restructuring. This has created a surge in the appraisal and liquidation of brewing and distilling equipment. Understanding the dynamics of this industry, the factors influencing equipment values, and the best practices for liquidation can help business owners, lenders, and investors make informed decisions.
The Changing Market: Increased Competition and Declining Alcohol Consumption
The craft brewing and distilling boom of the past two decades has led to an oversaturated market. While the industry saw rapid expansion in the early 2000s, recent years have witnessed slowing growth, and in some cases, closures. According to industry reports, consumer preferences are shifting toward non alcoholic alternatives, health-conscious options, and premium spirits rather than mass-produced craft beer.
This decline in demand has impacted the viability of many small and mid-sized breweries and distilleries, leading to business closures. As a result, an increasing number of companies are looking to liquidate their equipment to recover investments. Understanding this shift is critical in assessing the value of used brewing and distilling equipment in the secondary market.
The Resale Value of Brewing and Distilling Equipment
One of the most notable aspects of this market shift is the relatively high resale value of brewing and distilling equipment. Unlike other industries where used equipment may depreciate significantly, brewing and distilling equipment retains a strong resale value due to several key factors:
Durability and Longevity – Stainless steel fermentation tanks, kettles, and distillation columns are built to last decades. Their durability makes them highly desirable in the secondary market.
Industry Demand – While some breweries and distilleries are closing, others are looking to expand or start new ventures with lower overhead costs by purchasing used equipment.
Versatility – Many brewing and distilling components can be repurposed for other beverage manufacturing processes, such as kombucha, cider, and non alcoholic beverages.
Cost Savings – Purchasing used equipment can save new brewers and distillers substantial capital, making the secondary market attractive.
These factors contribute to the strong resale market for brewing and distilling equipment, but determining the precise value of assets requires expert appraisal.
The Importance of Equipment Appraisals in Brewing and Distilling
Equipment appraisals play a crucial role in the brewing and distilling industry, particularly during business transitions such as closures, mergers, acquisitions, and liquidations. A professional appraisal provides an accurate, unbiased valuation based on market conditions and industry trends. Here’s why appraisals are essential:
Fair Market Value Determination – An appraisal helps sellers set a competitive yet fair price for their equipment.
Lender and Investor Confidence – Financial institutions and investors rely on accurate valuations for collateral assessment.
Tax and Accounting Compliance – Proper valuation is necessary for tax reporting and financial records.
Auction and Liquidation Planning – An accurate appraisal ensures that liquidation strategies align with market expectations.
Professional appraisals consider factors such as equipment condition, market demand, manufacturer reputation, and recent sales trends. Without expert valuation, sellers risk undervaluing or overpricing their assets, leading to financial losses or prolonged sales cycles.
The Brewing and Distilling Liquidation Process
When a brewery or distillery decides to liquidate its assets, following a structured process can maximize returns. Here are the key steps involved:
1. Asset Inventory and Assessment
Before selling, it’s crucial to take a detailed inventory of all equipment, noting specifications, age, condition, and any modifications. This includes fermentation tanks, brewhouses, boilers, pumps, filtration systems, canning and bottling lines, kegs, and laboratory equipment.
2. Appraisal and Valuation
Once an inventory is compiled, professional appraisers evaluate each piece based on current market conditions. Factors influencing value include:
Brand and Manufacturer – Well-known brands tend to retain higher value.
Condition and Maintenance History – Well-maintained equipment commands better resale prices.
Market Demand – Equipment in high demand sells quickly and at better prices.
3. Choosing the Right Liquidation Strategy
There are multiple avenues for selling brewing and distilling equipment, each with advantages and considerations:
Private Sales – Selling directly to buyers can maximize returns but may take longer.
Auction Sales – Auctions create competitive bidding environments, ensuring quick sales at market-driven prices.
Brokered Sales – Working with industry brokers can connect sellers with the right buyers efficiently.
Wholesale Bulk Sales – Selling to resellers or manufacturers in bulk can expedite liquidation but may result in lower returns.
4. Marketing and Sales Execution
Proper marketing is crucial in attracting the right buyers. Using industry-specific marketplaces, social media, trade shows, and direct outreach can enhance visibility. High quality photos, detailed descriptions, and transparent pricing improve buyer confidence and accelerate sales.
5. Logistics and Equipment Removal
Once a sale is finalized, arranging transportation, disassembly, and installation logistics ensures a smooth transition. Buyers often require assistance with rigging and shipping, which should be factored into the sale process.
Challenges and Considerations in Brewing and Distilling Liquidation
While the market for used brewing and distilling equipment remains strong, there are challenges sellers should be aware of:
Oversupply in Certain Categories – Some types of brewing equipment, such as small fermenters, may be oversaturated in the market, leading to lower prices.
Regulatory Considerations – Distillery equipment may be subject to legal restrictions and compliance requirements that can affect resale.
Condition and Warranty Issues – Buyers may be hesitant to purchase equipment without warranties, making well-documented maintenance records crucial.
Timing of Sales – Market conditions fluctuate, and selling during peak demand periods can yield higher prices.
Conclusion
The brewing and distilling industry is evolving rapidly, with closures and consolidations reshaping the landscape. As a result, the demand for equipment appraisals and liquidation services has surged. Understanding current market trends, proper valuation techniques, and strategic liquidation methods can help sellers maximize returns and ensure smooth transactions.
For businesses facing equipment liquidation, working with professional appraisers and industry experts can make a significant difference in securing fair market value and achieving a successful sale. As the industry continues to change, staying informed and proactive will be essential for navigating the shifting market dynamics of brewing and distilling equipment.
