Cost of Production

[Alpert]

European newbie on the forum, bear with me...

I’m thinking of investing in a Sabco Brew Magic. Let's say some of you like it, some don't, but it looks decent enough, let’s see if it can make any money. What’s smaller than Nano? Yocto? We’ll call the project that.

What I’m interested in is estimating the cost of a batch and from there to determine my average cost of production per bottle, pint etc.

I’m talking rough numbers here and I’m very well aware of the fact that different recipes use different inputs with different cost. For the sake of this exercise let’s say we go with a recipe for English Bitter (is that Pale Ale there?) of your choice.

If we go with the Sabco keg quantity of 15.5 Gallons i.e approx 58 litres (I like litres) as our batch, I’d like to know:


- What quantity of malted barley you’d need? What is the cost of a bag of this (what you pay or you’d expect to pay)?

- How much water goes in a batch? (this one is rather stupid, I know…)

- How much hops, the price etc.

- Yeast, price, etc.

- Other auxiliary materials?

Thanks!

 

[Runyanka]

You will only get 10 gallons of beer out of that system. 15.5 gallons is just the capacity, you will start with roughly 12-14 gallons of beer and boild down to 10 to 11 gallons.

minus the cost of my equipment, I buy my grain and hops in bulk, wash and re-use my yeast. So I'm at roughly .20 cents a beer.

None of the above counts in the labor and time it takes to brew.

 

[lpstudio18]

If we're sticking with metric, let's call it a Picobrewery.

 

[Alpert]

Agreed. On to the costs...

If we're sticking with metric, let's call it a Picobrewery.

 

[LandoLincoln]

So you're a business entrepreneur, aren't really interested in brewing, just want to push a few buttons and sell the stuff that comes out of a machine?

And you want us to do the math and legwork for you on the research end? For no charge?

Did I miss anything?

 

[PVH]

This forum is a great place to go for help on learning how to brew. You might want to do that before contemplating a small commercial operation. Your question is much broader than you realize.

 

[Alpert]

You missed a bit because I didn't tell all, primarily because I don't think it's important. I addition there's some truth in what you say and then there's a lot more.

And I though what most of the people here do is share knowledge either way, no matter if you want to sell or drink at home. And everyone's a begginer at the start, no?

So you're a business entrepreneur, aren't really interested in brewing, just want to push a few buttons and sell the stuff that comes out of a machine?

And you want us to do the math and legwork for you on the research end? For no charge?

Did I miss anything?

 

[hopsalot]

I think duece answered the question, now no more "duecing" on Alpert

 

[Alpert]

Perfectly aware of the compexity. Just need a few numbers to decide if I realy want to spend quite a bit of the savings going into this.

Learnig how to brew can start with these small questions...

This forum is a great place to go for help on learning how to brew. You might want to do that before contemplating a small commercial operation. Your question is much broader than you realize.

 

[LandoLincoln]

Do your future customers a favor. Learn how to brew without a machine doing the work for you.

 

[Tinga]

I would include sanitizer in variable costs as well.

 

[Alpert]

Right there under auxiliary materials...

I would include sanitizer in variable costs as well.

 

[GHC007]

Perfectly aware of the compexity. Just need a few numbers to decide if I realy want to spend quite a bit of the savings going into this.

Learnig how to brew can start with these small questions...

In the amount of time youve spent waiting for someone else to give you an answer you could very easily have done a little research yourself and had an answer...

Even if you dont know how to brew, do a search for an English Bitter recipe and find an online homebrew retailer to price out the ingredients listed.

 

[Alpert]

Isn't this research?

In the amount of time youve spent waiting for someone else to give you an answer you could very easily have done a little research yourself and had an answer...

Even if you dont know how to brew, do a search for an English Bitter recipe and find an online homebrew retailer to price out the ingredients listed.

 

[waldoar15]

I'll bet you're probably in the best position to calculate the costs of materials in the Canary Islands. Far more so than the rest of us.

 

[mlyday]

Look here (http://www.brewmasterswarehouse.com/recipe/e7d55382/ )for what ingredients for 5 gallon would cost double that for the 10. Look at recipes for what grains they use and look for bulk 50lbs sacks for cost.

For an idea on price look here www.fiftypoundsack.com. Obviously if your in the canary islands getting the grains is going to be alot more expensive.

 

[mredge73]

I will give it a hypothetical shot based off of my limited knowledge:

You will be brewing 10gal batches.
~ 20lbs of grain per batch, $.75 per lb so $15
~ 40gal of water per batch at $.0015 per gal so $.06
~ 2-4 oz of hops per batch at $1 per oz so $3
~ 96x 12oz caps at $2 per 100, so $2
~ 96x bottles at about $.125ea, so $12
~ Propane, $4
House yeast used, no cost.
Batch cost $36.06 + 10% error= $39.66; about $.41 per bottle.

8 hour day could produce:
Hour 1) clean, sanatize, prep, fire burners
Hour 2) Batch 1, 30min mash + 30min sparge
Hour 3) Batch 1 Boil, Batch 2 60min mash
Hour 4) Batch 1 Cool, Batch 2 sparge
Hour 5) Batch 2 Boil, Batch 3 60min mash
Hour 6) Batch 2 Cool, Batch 3 sparge
Hour 7) Batch 3 boil, clean, prep for next day
Hour 8) Batch 3 Cool, pitch yeast to all containers, finish cleaning

8 hours at $50 per hour (1 hired contractor or 2 skilled workers at $25 per hour) so $400
30gal production cost = $518.98
Add 2 hours to hand bottle 288 bottles 1-2 weeks later = $618.98 or $2.15 per bottle.
If you can cut labor cost in half then you could get it down to $1.28 per bottle.
Cutting it further will decrease cost but also decrease quality.
Keep in mind that this is a skilled job, I wouldn't trust this to a min wage kid fresh out of school.

If you figure in equipment cost, this figure will skyrocket.
With a fast yeast, lets say 1 week to hit FG and a 5 day workweek.
Lets say you can get 15 batches done in a week.
This is a business venture, no more plastic buckets or carboys.
You would need 15 stainless fermenters, lets say $500 each so $7500
Twice that many if you plan on 2 week fermentations so $15000
Volume out must equal Volume in for maximum efficiency.

As you can see, in order to make any money in this business you have to scale up your batches x 100 because labor will always be your greatest expense.

 

[Alpert]

Now this gives me something to work on! Thanks 73!

Mlyday, will check that one aswell!

I was looking at plastic one-way kegs for distribution in order to avoid bottles at the start and go for draught instead.

 

[mredge73]

I screwed up the math a little
check it again, a 10gal batch makes about 4 cases of beer not 2.

 

[mlyday]

Now this gives me something to work on! Thanks 73!

Mlyday, will check that one aswell!

I was looking at plastic one-way kegs for distribution in order to avoid bottles at the start and go for draught instead.

The post after me was much better I was just trying to give you at least something to go on, and base materials cost.

 

[kh54s10]

Add into the cost of equipment and materials:
Gov't licensing fees, taxes, rent, some construction/plumbing, office equipment, accounting, brewing and business software, advertising, any import fees?. etc. etc. etc.
I'm assuming that you have thought of this but....

Good luck and let us know of your progress.

 

[mredge73]

I built this to help track my cost per batch.
Feel free to use and update it.

https://docs.google.com/spreadsheet/ccc?key=0Ag4llxCtfLyDdElydUlSdEhTTDhsSGxRMEtWcVpoMVE&hl=en_US