How would you price your homebrew? market value.

[Revvy]

Example: Revvy's Squirrel Spew Brew

Ingredients: $42 (grain, hops, yeast, water)
50 bottles, flip top - $4 per bottle, but reused, so $2 per bottle x 50 = $100
fuel: 1/6 propane tank @ $20 per tank = $3.33
equipment: $200 / 4 batches to date = $50
labor: 6 hours @ $15/hr = $90
space: 2 months using 1 sq foot of apartment space @ $1/sq foot per month = $2

Total value: $287.33
per bottle value: $5.75

I wonder what the true breakdown of that beer would be, since in reality it retails for 765.00 a bottle and has an abv of 55%

http://www.msnbc.msn.com/id/3837604...dkill-worlds-most-shocking-beer/#.TjlcgmHlyyU

 

[bad coffee]

An old roommate begged me to make her two kegs for her 'fundraising party' She said she'd pay for the ingredients.

$100,000, per keg.

Yes, I will indeed sell a keg of my home brew for that much. I figure $50,000 for the fines, $25,000 lawyers fees, $10,000 for the bail money, $5,000 for the lost wages, and $5,000 for all my equipment they take/break (including the beer that's in the kegerator.) and that leaves me $5,000 for all the bull**** I go through.

I put a tip jar on the kegerator at one big house party.

6 kegs kicked, $9 in the jar at the end of the night! $7 was from one of the roommates, so I gave it back to him...

B

 

[bad coffee]

What do you mean by "Forfeit a considerable inventory?"

We need the rest of the story!!!


As for VALUE cost, add up EVERYTHING it takes you to brew a batch.

WATER. Don't forget chilling, cleaning and brewing. This does add up.
Cleaners, sanitizers
ingredients
yeast
bottles & caps
Fuel/electric for brewing
electric for fermenting temp control
electric for chilling ready-to-serve beer

Equipment costs. I figure depreciation to how long I'm actually going to use the item. Pots, spoons, kegs, etc I look at like 15-50 years. I mean how many brews would it take to make a stainless pot unusable?
Hoses/fittings/orings 1 year

Time. Your time it takes to set up, brew, rack, package, check, test, and deliver the beer. Don't forget cleanup, shopping for ingredients, recipe formulation as well. It's all time spent on one beer. Also include the time it takes to ferment.

Space: not just storage space for your beer, but your equipment as well.

B

 

[a10t2]

I'll assume a 10 gal batch. Since a couple people mentioned SNPA, an average-gravity, moderately-hopped APA would look something like:

20 lb grain: $15
8 oz hops: $6
Yeast, you'd be repitching, so let's call it: $2
5 lb propane: $3
Miscellaneous chemicals, water, salts, etc: $1
96 bottles, caps, six-pack holders: $44
12 hr labor: $87

$1.65 per bottle, or $9.90 per six pack, gets you a stack of unlabeled, undistributed bottles sitting in your living room. With fuel costs where they are, you'd be looking at a minimum of $11/six pack just to break even. If you priced it at $15/six pack, and worked every day, alternating brewing and packaging, you'd be making minimum wage and clearing a whopping $11,688 a year in profits before taxes, equipment maintenance, etc.

Legalities aside, there's a reason no one sells homebrew.

 

[stamandster]

What do you mean by "Forfeit a considerable inventory?"

Divorce or fire/flood/hurrican/tornado/earthquake maybe?

I definitely agree that there's a perceived value because of the time spent doing the hobby. But for something like insurance you have to have the material cost only. So water@vol costs X amount, electricity used@duration/amps/wattage equals X amount, etc. (not sure you can count water, just an example)

 

[Weizenwerks]

A business plan involving bottled distribution at the nano-brewery level would never get the investment. The only nano model that works as far as I know is the 100% tasting room and/or mixed with local keg distribution. There's just way too much overhead in packaging and the market retail price is too low. In other words, you can get $4 a pint in a tasting room.

Plenty of nanobreweries are doing just fine without a tap room. I know of several that sell only wholesale, no tap room, no in person sales. They are doing just fine with that business model.

 

[Weizenwerks]

You know, I used to work at a Rock Bottom/Big River brewery as a bartender, and also spent alot of time helping out the regional brewer on various weekend mornings. I was also in charge of inventory, including brewed beer stock, which was a tricky one.

Anyway, we made 7 basic brews, then had one or two rotating seasonals. All of the basic brews cost in the neighborhood of 9-12 cents a PINT to produce. From there, there was a federal tax of about 28 cents per pint sold, and a state tax of about 77 cents per pint sold, including the overhead of ongoing licencing and compliance and sales tax. This was in South Carolina, which I am told has pretty strict beer laws and above average licencing fees.

Anyway, so you have to think that in the real world your beer costs much more in overhead than it will to make, so an average homebrew is probably worth about $1.05 PLUS cost of goods PLUS cost of labor, then marked up about 25-50%.

I bet my average batch at my current costs would demand about $20.00 cost of goods, PLUS $1.05/pint federal/state taxes and overhead ($43.05/batch...this number is probably MUCH lower in a mass-production facility in the three-tier system), PLUS about $60.00 labor PLUS 25% markup= $153.81/batch divided by 55 bottles = $2.79 a bottle or $16.78 a six pack or $3.72 a pint to gross about $32 a batch BEFORE the rest of my overhead (production facility, equipment, etc.).

So, basically, without getting my costs WAYYYYY down, I would be selling $3.75 pints at the local brewpub to make about $0.58 per beer sold before other set costs. Not too bad!

An easier way to state it is to factor your cost of production, labor, taxes, and other overhead. That's the true cost of goods sold (COGS). Then price it per unit; generally per pint. Much easier to factor everything into a final and true COGS and price from there.

 

[Phunhog]

I'll assume a 10 gal batch. Since a couple people mentioned SNPA, an average-gravity, moderately-hopped APA would look something like:

20 lb grain: $15
8 oz hops: $6
Yeast, you'd be repitching, so let's call it: $2
5 lb propane: $3
Miscellaneous chemicals, water, salts, etc: $1
96 bottles, caps, six-pack holders: $44
12 hr labor: $87

$1.65 per bottle, or $9.90 per six pack, gets you a stack of unlabeled, undistributed bottles sitting in your living room. With fuel costs where they are, you'd be looking at a minimum of $11/six pack just to break even. If you priced it at $15/six pack, and worked every day, alternating brewing and packaging, you'd be making minimum wage and clearing a whopping $11,688 a year in profits before taxes, equipment maintenance, etc.

Legalities aside, there's a reason no one sells homebrew.

BUT take out bottling and labor....You are only in it for 27 dollars!! You are going to brew anyways so I would subtract labor. Have people bring in their own growlers and you don't have to worry about bottles or time to sanitize/fill them. 20 growler fills equals 10 gallons of beer. NOT that I would ever do that since it is illegal.

 

[ACbrewer]

Thanks for all the replies. I don't want to sell it. Trying to come to an agreement on the value. I recently had to forfeit a considerable inventory. I really do need a realistic value. I know it is very difficult to price a labor of love, but in this case, I need to!!

1. Find a comperable microbrew that is sold and you could use that for a baseline.
2. the add up of ingredients, bottle costs, etc that have been posted are pretty good.
3. you owe us a story of 'forfeited inventory'... wait not just inventory, but CONSIDERABLE inventory.

 

[TopherM]

Plenty of nanobreweries are doing just fine without a tap room. I know of several that sell only wholesale, no tap room, no in person sales. They are doing just fine with that business model.

There are like 39 states where the three-tier system is the law of the land, so producers are forced by law to sell wholesale. They legally can't sell retail unless they own the retail outlet (i.e., brewpub, taproom). If you took the three-tier system and lowered the federal, state, and interstate taxes on beer, Bud Light would cost like $2.00 a sixer and microbrews would be closer to domestic prices.

Alas, the gov't REALLY has their claws in the alcoholic beverage industry!!

 

[Weizenwerks]

There are like 39 states where the three-tier system is the law of the land, so producers are forced by law to sell wholesale. They legally can't sell retail unless they own the retail outlet (i.e., brewpub, taproom).

My state allows self distribution of a microbrewery (as defined as less than 30,000 barrels annual production) to be able to be served on premises for on or off premises consumption with no other restrictions. I don't have to have a tap room. I can brew and package in the back and sell retail up front in bottles, growlers, kegs, or cans if I want to. My state has a three tier law with less limits on microbreweries.

 

[houndsbreath]

I see the reason behind factoring in equipment and what not but that'll be used numerous times over hundreds of batches. I figure if I ever was to brew and sell a significant portion, I'd sell for $10 per 6 pack for a ~6% ABV beer. If i started selling beers, I would upgrade to 20 gal batches, buy grain/hops/sanitizer in bulk and thereby cut my coat per batch...To answer the OP: $10/ 6 pack seems fare these days for a truly hand crafted, fresh ale. Give 5% to the Lost Puppy Fund or something just to win over the hippies TopherM has it right on the money! If the damned state would let the breweries distribute their own products, I GUARANTEE we'd see lower prices...

 

[a10t2]

BUT take out bottling and labor....You are only in it for 27 dollars!! You are going to brew anyways so I would subtract labor.

I wouldn't look at it that way, since if I knew I was going to be giving it all away I definitely would not be brewing anyway.

But let's say that you keep your day job and only brew once a week, and only do growler refills. At $15 per fill (which I'm pretty sure would price you out of the market in most places) you're going to clear just under $14,000 a year. Which is a nice little bit of supplementary income to be sure, but is it worth breaking the law?

I'm not sure what someone would get out of operating a "taproom" like that. You'd be better off picking up a couple shifts at McDonald's.

 

[Weizenwerks]

I see the reason behind factoring in equipment and what not but that'll be used numerous times over hundreds of batches.

The cost of equipment is amortized over the useful life of the equipment and then factored in the cost of your beer production.

TopherM has it right on the money! If the damned state would let the breweries distribute their own products, I GUARANTEE we'd see lower prices...

I don't think many would lower their prices. Customers have been conditioned to purchase the beer at the current price. If they pay that price now they will still pay that price if your overhead and COGS were lowered. When other microbreweries expand capacity and increase production, thus reducing costs not a single one of them that I know of has lowered their price.