How do Breweries Lower Costs

Hey all,

I've been brewing beer for a few months now and i'm curious about something. Until now, i've been doing all extract w grain and mini-mash brews at 5 gallons. I'm spending between $30-$50 for each batch. How do micro breweries drop costs to make much of a profit at ~1.50/bottle? At some LHBS, the bottle itself is twenty-five to fifty cents. Luckily i don't have to pay for bottles. A co-worker of mine gives empties generously and i give him a 6-pack of homebrew every now and then.

When you start doing all-grain brewing, do the costs of the ingredients drop? The equipment costs more for the all-grain but i bet it pays for itself. I'm just trying to figure this out since a local Micro-brewery on Long Island (Blue Point Brewery) is selling their beer at $8.99/6 pack. They also have to pay for distribution, personnel and all the other fun things that businesses need.

Cut all the prices you pay in half and it's still more than a bit more than what an operational brewery pays.

Ever price out a 55lb bag of malt? 2 row for $0.50 a pound. Now multiply your order by a hundred or a thousand times and you're probably down to $.30 a pound.

Two pounds of malt will make 10 bottles of very strong beer.
Add a dime's worth of hops
And a nickel's worth of yeast.


Recyclable beer bottles get $0.10 in Michigan but guess what... it's the legislature that set that price. Offer a brewery a bunch of dirty bottles for a dime and they'll say no thanks. It's too expensive for them. So what do YOU think they are paying for clean bottles?

I've learned a few tricks here at HBT that saves me money. Buying in bulk is one of them. Buying my base malt in 55 pound sacks saves me about half. Buying hops from a place like Hops Direct also saves quite a bit but you end up with a lot of hops. It is better to share a hop order with 2 or more people. Reusing yeast is another money saver if you use liquid yeast. There are a number of ways this can be accomplished. There is lots of information on yeast harvesting and reusing here at HBT.
I would say that the average batch now costs me less than $20.00.

Bulk buying, all grain, and often reusing yeast.
Even for the home brewer you can often cut your costs in half by brewing all grain vs extract + grains. Combine that with buying ingredients by the pallet and you have significant cost reduction. Lastly, if you are buying liquid yeast for each batch you can save considerable amounts by reusing the yeast from the previous fermentation.
Craig

All-grain is a huge money saver, and as everyone else said in one way or another... economies of scale. Mostly breweries save money by buying in bulk and reusing yeast.

On a small scale, homebrewers can save money by going all-grain as long as you keep your gadget addiction in check.

Here's how I got started with all-grain (and I haven't changed yet, although I might get a bigger cooler soon).

$35 = Turkey fryer with a 7 gallon pot (never had a boil over, even with 6.5 gallons of wort so let's not start THAT discussion)

$20 = 5 gallon Gott beverage cooler.
$12 = Tubing, stopper and S.S. mesh sleeve.
$40 = Copper tubing and appropriate hardware for immersion cooler.

Everything else is the same from extract to all-grain.

I'm now averaging $15 for a 5 gallon batch where I was averaging $30 for extract with specialty grains. $107 investment and after 7 batches I started saving money.

That said, I didn't get in to brewing to save money. I got into it for the fun of it.