Craft beer costs

[Crazy Climber]

This isn't a new article, and I apologize if it's been discussed on the Borg already:

Here's How A Six-Pack Of Craft Beer Ends Up Costing $12

Kind of an eye-opener to me that OVER HALF the cost of a commercial craft beer goes to the distributor and retailer.

If you spend $10 on a six-pack, on average, the brewery pockets 80 cents, the distributor gets $2.10, and the retailer makes $3.10. Ingredient cost? A buck. What I'll call "other brewery overhead" = $2.20. Taxes: 90 cents.

Granted, the distributor and retailer have costs that come out of their share. But together, they get over half of the money you plunk down.

A quick rule of thumb on a $10 sixer would be:
Brewer - $4
Retailer - $3
Distributor - $2
TaxMan - $1

Now I know why so many breweries focus on their tasting room!

[John Sand]

Amazing right? I learned this too, while reading up on craft breweries. I guess I should be ashamed about how much it costs me to brew! Still way cheaper than buying though.

[Bluejaye]

Interesting timing, I was just working on a recipe last night and looking at the cost. I worked out ~$3.42 for a sixer. I can't really figure in water, gas, my labor, and eqiupment costs over the years, but that seemed awesome to me considering what the store wants. I was wondering how much the taxman took. Kind of surprised by the distributer cost, I figured they made their money by sheer volume.

[Dawg LB Steve]

I added up grain, hop, yeast and spring water (I use half bottled spring and half tap) for a Brown and a Pale Ale that I recently brewed, came out to $5.66 a gallon. Can get it a little lower for simpler grain bills though.

[jimjohson]

If you eliminate the foolish thinking that you have to pay yourself(beer IS the pay off) and don't feel the need to spread the cost of your equipment over every batch you ever make(I just made 1 very expensive batch). Then my batches cost $6.36 a gallon, that works out to $.60 per 12 oz bottle(rounded up). I can live with that.

[joechianti]

Sounds about right. I try to maintain my cost to between $3 and $4 for most brews. Like most I consider the labor as a recreational activity, far cheaper than a speedboat or a fishing boat or ski gear or whatever, too. If I had a different hobby I wouldn't get paid, either, plus I'd have to buy stuff for that hobby, and I wouldn't expect to get paid while I was painting watercolors, and most of all, I'd still have to buy my beer from the store for 2 or 3 times as much. As for the poor professional brewers, my heart goes out to them.

[jimjohson]

I only know the price 'cause it's a constant source of amazement among my friends. How little my brews costs compared to what they buy. While I'm quick to point out 1) I have no overhead and 2) they're trying to make a profit, I'd go to jail for that. While I have little sympathy for BMC I feel bad for the 3 brew pubs in the area. They're not getting a even break like start up business deserve.

[joechianti]

Totally agree. I should have specifically independent professional brewers. I have no sympathy for the big boys, either.

[gwcr]

Just for fun I priced out my Cream Ale recipe that is similar (but not a clone) to Spotted Cow by New Glarus Brewing in Wisconsin. The ingredients come in right at $22.40 for a 5 gallon batch, so figuring 52 12oz bottles per batch (even though I keg) that comes out to $0.43 per beer. I was in Wisconsin last weekend and picked up a 12 pack of Spotted Cow for $19, or $1.58 per beer. I'm sure SWMBO would be quick to point out that I didn't factor in the fermentation chamber, kegs, tower, etc., but that's my argument for why I need to brew more often. To lower the perceived cost of that equipment over time!!