Brewing beer is enormously expensive, commercially or at home.
If all you are counting is input costs such as grain, hops, water and yeast, it is no wonder that you think brewing a batch of beer is cheaper than buying a case of beer.
At the home brew level of five gallons, add to the input costs, the costs of energy to brew the batch, to chill the wort, to control fermentation temperatures, to condition the beer, to bottle the beer...
the costs of your equipment divided by the number of batches you have made... plus any interest payments...
and rent for the space involved...
and finally, your labor: 1 hour to purchase ingredients and plan the brew... 6+ hours to brew... 1 hour to rack... 2 hours to bottle... what is your labor worth? $6.00/hour??? $16.00/hour??? That's 10 hours of labor. $60 minimum and $160 maximum, just for labor.
add up all of the costs and we're talking about nearly $100 to $200 for a five gallon batch of homebrew, 2 cases of beer that retail at $35 each, $70.00...
and at home you don't have to worry about the costs of selling the beer...
and you think that is profitable???
now make similar calculations for the commercial scale: the bigger the system, the more efficiently the beer is produced, but also the greater the size of the loan and the greater the amount of interest being paid... and the greater the difficulty in reaching breakeven volumes of sales which for a twenty barrel wholesale brewery can run minimum at 2400 - 3000 barrels of beer a year... not an easy amount of beer to sell in your first, second, third or fourth year...
Hundreds of thousands of dollars for a new brewing system at 5 - 10% annual interest... meaning that over time you are paying maybe twice as much for the equipment plus the costs of servicing the loan...
thousands of dollars in energy costs per month...
$1 to $3 plus per square foot for commercial property; wholesale production being much cheaper than brewpub, but also garnering far less in sales dollars...
2000 - 6000 square feet...
excise taxes... $7 per barrel federal, $6.20 per barrel in the state of California... 4.25 cents per gallon... plus sales tax in the brewpub, 29 cents on a $4 pint of beer...
labor costs: production, wholesale, bartenders, waitstaff, management, bookkeeper, janitor, cooks, etc.
legal fees... marketing fees... delivery costs... packaging... brewery insurance... workmen's compensation... health insurance... accounting costs... etc., etc.
we haven't even pointed out owner compensation for risking hundreds of thousands of dollars, having the plan to begin with and putting in endless hours of work...
In short, it is very difficult to make a profit in this industry. Why do you think that after 25 years, there are only ~1400 micros/brewpubs??? Fewer now, than there were even five years ago??? Even the big guys over the last 25 years have thinned out a lot.
Admittedly, some owners underpay or seemingly undervalue their brewers, but that's only because they are under such enormous financial pressures and constrictions to make their operations work at all... but, most owners are paying whatever they can, in line with the market and in lieu of the competition's costs...
I suggest that if you are a brewer you are in it for only one or two possible reasons: (1) that you love the craft and money is not important, or (2) that some day you intend on making money in this industry. If the latter, then you probably aspire to be an owner some day and it would behoove you to make some comprehensive calculations regarding the operating and overhead costs of a brewing and sales operation. I would start with the operation that you are currently working in... Only after you have made thorough calculations will you be in a position to discuss with authority the pay rates of brewers. Believe me, you will appreciate the owner more at that point and he will appreciate you for trying to understand the position he is in...
I have been both a brewer and an owner and have been on both sides of the argument.
Generally speaking, the employees know almost nothing of what they are talking about. I personally had brewers and sales people that had ownership positions in the company, and they still refused to look at the numbers and cooperate with management. They complained of not making enough money, but they all took home more than me, rarely worked a full 40 hour week and were paid more than most on the average in the industry. I, meanwhile, worked 80 - 100+ hours a week and brought home between $3.75 and $4.68 an hour. Ultimately, my business failed because our overhead and production costs were too high and I simply could not find the last investment capital I needed post 9-11. I lost fourteen years of my career as a result.
Find out what it truly means to be in the business of brewing before you commit to this career and before you criticize owners. Against the likes of Anhueser-Busch, SABMiller and Molson-Coors, plus a host of mega-imports, the competition is truly daunting and truly fierce.
No owner likes a whiny brewer.
Hate me if you like, but someone had to say it. I am doing brewers a favor by pointing out the true costs of a brewery, like it or not. Do your homework.
