The "Economy" of Homebrewing

[Bobby_M]

Another point is that its clear that we all WANT the answer to this question to be YES... You save tons of money. How bad you want something does not change the truth. This is called self delusion.

Also, for those who continue to say there's no value on your time/labor, you've already skipped over into considering it NOT WORK. I don't know about you, but if I didn't LIKE the hobby of brewing you'd be damned sure I wouldn't go through this for the hell of it. It's work. Again, you're answering the question "is homebrewing worth it?" as soon as you start deciding which costs to skip over out of convenience.

Let's say hypothetically that it took 18 hours for a 5 gallon batch. Is your time still worth nothing?

 

[_Edge]

Another point is that its clear that we all WANT the answer to this question to be YES... You save tons of money. How bad you want something does not change the truth. This is called self delusion.

Also, for those who continue to say there's no value on your time/labor, you've already skipped over into considering it NOT WORK. I don't know about you, but if I didn't LIKE the hobby of brewing you'd be damned sure I wouldn't go through this for the hell of it. It's work. Again, you're answering the question "is homebrewing worth it?" as soon as you start deciding which costs to skip over out of convenience.

Cheers to that!

 

[mr x]

hypothetically you COULD be earning money.

Hypothetical money doesn't pay the bills. I'm talking about real money. You need to skip the hypo's and do the math.

Say I make $30/hour at 46 hours per week. That's $1380.

If I homebrew for 6 hours, I don't take home less money. i.e., it hasn't cost me any real money.

If I don't homebrew for 6 hours, I don't take home more money. There is no real cost, unless you skip a real job that pays real money.

 

[mr x]

Another point is that its clear that we all WANT the answer to this question to be YES... You save tons of money. How bad you want something does not change the truth. This is called self delusion.

It's not a matter of rationalization, it's a matter of math. The math says, unless you are skipping real work that pays real money, the cost per hour of your time is fictional.

 

[_Edge]

Read:
http://en.wikipedia.org/wiki/Opportunity_cost

money:
The consideration of opportunity costs is one of the key differences between the concepts of economic cost and accounting cost. Assessing opportunity costs is fundamental to assessing the true cost of any course of action. In the case where there is no explicit accounting or monetary cost (price) attached to a course of action, ignoring opportunity costs may produce the illusion that its benefits cost nothing at all. The unseen opportunity costs then become the implicit hidden costs of that course of action.

 

[Sherpa FE]

Gets a chair and a beer to watch the Show.....

 

[BierMuncher]

nuff said...

 

[Bobby_M]

It's not a matter of rationalization, it's a matter of math. The math says, unless you are skipping real work that pays real money, the cost per hour of your time is fictional.

I'm saying that you ARE skipping real work. If you suggest that there's absolutely no way for you to earn money during that time, I'm not buying it. If you don't like that logic, by brewing, you are NOT doing a million other things that you enjoy. Do you enjoy brewing? If you answer yes, you're already biased in answering the economic question. Answer the question as if you HATED brewing and see where you get. I don't mean this as a personal attack, but ignoring economic fundamentals in this discussion is the equivelent of holding your ears and going "la la la la...brewing saves money".

Notice that I'm still a homebrewer and a big advocate of showing other people how cool it is to brew so you have to know I'm not trying to give it any negative "press". I just won't ever suggest to a potential homebrewer that he/she will save any money in the process.

If you enjoy the process, homebrewing is DEFINITELY worth the trouble.

 

[mr x]

Too many words, not enough numbers. Calculate what you think it costs you for labour to brew. Did that number affect what you brought home in pay for the week? If yes, then you were skipping work, and your time has a real cost. If no, then...

 

[maltMonkey]

There are a lot more costs than I think most of us figure in. Here of some of my 'extra' costs that I don't normally take into account for the "cost" of a batch. They seem pretty small but I bet if you actually added them all up they would be significant:


Yeast starters
--DME
--Gas for my stove to boil wort
--sanitizer

Brewing
--Propane for my burners
--sanitizer
--batteries for my thermometer & timer
--electricity for barley crusher, March pump, lights & radio in garage
--water both for my HLT and for my IC
--gas for my water heater to reheat the hot water I use from the sink

Fermenting
--more sanitizer for taking samples
--central heating/air energy to constantly keep my house at optimum fermenting temperatures year round


Yeast washing
--mason jars to store the yeast in
--gas for my stove while boiling the jars
--sanitizer

Bottling
--bottles (I don't buy empty bottles, but I still buy them)
--bottle caps
--dishwasher water/electricity to sanitize bottles
--sanitizer
--corn sugar
--stove energy to boil corn sugar in water
--label paper/ink

Overall
--shipping of ingredients and parts
--dishwasher and sink water/energy to clean up equipment
--replacement of broken equipment (hydrometers!)
--gas for driving to LHBS or hardware store
--energy for the 2 extra fridges I have to lager/store beer in
--energy for washing machine/dryer to clean up towels & washcloths


.....so yeah, it's strictly a hobby

 

[Chello]

I agree with BobbyM here. It may not be what seems logical but if we are truly wanting the economics of the situation EVERYTHING must be account for.

So most economic models are based around the Utility of the action. So here we would be measuring how much utility we gain from brewing beer, but to do that we must recognize all of our costs, also in terms of utility.

So our costs could be financial(equipment, ingredients) and it also must include forgone utility due to the decision you made to brew (opportunity costs). This forgone utility can include anything from lost wages from a 2nd job, mowing the grass, shredding some mountain bike trials, or even having sex!

So its better not to say time is money, but say time is utility.

 

[enohcs]

Who knew my one night of insomnia would polarize the home brewing community.
As a side note...if it took me 18 hours/brew day...I'd still do it. The joy I get out of brewing my own is worth far more than getting a second job. I enjoy watching my creations evolve into beer (I usually create my own recipes). I enjoy watching people react to my beer (for better or worse). I enjoy entering competitions, getting feedback, and winning the occasional award.

I'm joining Sherpa and Bier with a beer on the couch...I'm interested in seeing where this conversation goes.

 

[Bobby_M]

Too many words, not enough numbers. Calculate what you think it costs you for labour to brew. Did that number affect what you brought home in pay for the week? If yes, then you were skipping work, and your time has a real cost. If no, then...

You're skipping theory. I get that. You want numbers. It's not that easy because everyone has to personally decide what their time is worth.

You are deciding not to work during the time you are not at your 46 hour a week job. No one is forcing you to NOT work though. I'm giving you the benefit of the doubt that you have marketable skills that COULD make you money a couple extra hours a day. You're deciding not to work for money BECAUSE you put a value on your non-work time.

If you're asking me personally, my time is worth about what I earn at my day job. I think this is obvious by the fact that I continue to go there Monday through Friday. If it was less than my time was worth, I wouldn't go there. I'm sorry that I haven't typed any numbers for you but I believe the words are supporting the arguement by themselves. Being able to think conceptually is important here.

How about this way. You WERE working 40 hours a week. Then you had 6 hours to spare for yourself which you decided to use for brewing. Now your boss asks you to work an additional 6 hours rendering you NO time to brew for yourself. The income you'd net from that 6 hours of work is the opportunity cost of brewing.

 

[Sigafoos]

Mom! Dad! Stop fighting!

I agree with Bobby, but wouldn't factor my time into a cost equation. This means that the equation is meaningless, which I'm fine with because economics makes my head hurt.

 

[enohcs]

This forgone utility can include anything from lost wages from a 2nd job, mowing the grass, shredding some mountain bike trials, or even having sex!

Don't make me decide...brewing or sex?
I guess some would choose brewing, citing the fact that no two brewing sessions are ever the same. I'm not saying I'm one of them, however...

 

[enohcs]

How about this way. You WERE working 40 hours a week. Then you had 6 hours to spare for yourself which you decided to use for brewing. Now your boss asks you to work an additional 6 hours rendering you NO time to brew for yourself. The income you'd net from that 6 hours of work is the opportunity cost of brewing.

Fantastic point. I get that one.

 

[Syntax]

I've just been running the basic numbers myself.

Oh, i'm just in the process of brewing my first batch of home brew (hello everyone, first post and all). I'm currently in the uk and as you'll see by the end the prices here are outrageous. For most of this i'm assuming that the pound (£) has a $2 equivelent (as it turns out it's currently 1.97 pounds to the dollar) anyway...

so far i've got a beginners set-up:

Fermenting bin: £8.50
Pressure barrel (5 gallons): £22.50
Beer kit: £9
Steraliser, tubing and simple jug / spoon: £10 (ish)

So total cost so far: ~£50 for my first batch which works out at $100 for the americans.

Now you have to factor in our countries beer prices

Round of 4 drinks in pub at lunch today (just pints, nothing more): £14.75
Average pint price in the UK (http://www.whatprice.co.uk/food-drink/beer-prices.html): £2.24 (or £3 or higher if in london, that Six dollars A PINT!) i'm pretty much london so that's what i'm used to paying.

The reason homebrewing in the uk is good is the fact after the initial (admittedly basic) outlay in money, for £9 (about $18) for each brewing kit, i can make a lot more beer than i can buy for £9. so i can make around 33 - 40 pints for £9 which at £2.24 (average a pint) would cost me £73.92 for 33 pints... if i get 40 pints at average uk prices it'd cost me £89.60 thats $180 dollars!!

I'm not too bothered about adding costs on at this stage and i still need a few more items, which i think comes to ~£10, but that should be all i need.

Admittedly if i got into it in a big way, my costs would go up. but we obviously do a lot worse buying our beer in the pubs over here. i'm still not really, expecting to save money, but i thought i'd be a good comparison of the various prices...

 

[Boerderij_Kabouter]

Before I say anything... I understand the strict economics and all that, but for day to day things and deciding if HB saves money or not, and whether or not to include your time, I have this to say...

Opportunity costs are a hypothetical cost. Done and done. You never ACTUALLY pay them. I realize that in theory everything (yes even sex, and yes, by economical standards we are all men and ladies of ill repute) has an associated cost. However, this argument is already factored in when you decide to start brewing. You have already decided that that cost is worth it. Therefore I would not count the time cost. If I was an east coast lawyer who worked 70 hr weeks and made $500k, I would probably not HB because I would have all the money to buy a six pack of Westvletaren 12 everyday. However, I have already decided to "spend" my time by homebrewing on weekends for enjoyment and the brew.

If this "money" was spent the first time I decided to brew, I consider it water under the bridge. That said, it will take me a long, long, long time to start breaking even because I plan on continuing my purchases for a long time. At the same time though, whenever I have a party, I "save" a good $50-70 on beer because I brew my own.

Good topic!

 

[olllllo]

I have been to this planet before.

When are all of these labor-free brewpub going to open?

Of course, the savings will be passed down to the customer.

 

[brett]

Time at work is valuable, because without it I'd have no income.
Time at leisure is more valuable, or else I'd be at work.
Time brewing is even more valuable, or else I'd be spending that time at leisure.

If I spent 24/7 working to make the most money possible, I'd ruin my marriage, lessen the quality of, and shorten my life-span. Can someone please give me a dollar figure on that?
I might even eventually go insane, working constantly so I don't lose any opportunity to make a buck. What's the cost of sanity?

For some reason it really bugs me when people take the idea of opportunity costs to an extreme.

 

[Aust1227]

Pretty obvious who has some Economics schooling in here, and who needs some.

That being said. I think I have ONE scenario where you could save money..

You work 40 hours a week. Your company has a non-compete signed with you so that you can not hold another job. Your company will not pay overtime. All other sources of income are forbidden by your binding non-compete.

It is 50 miles to the nearest grocery store, where (By the way) they charge $20 per six pack.

If all of that is true you MIGHT save money brewing. Otherwise, just accept that we are in this hobby to enjoy ourselves, and not to save money!

 

[enohcs]

just accept that we are in this hobby to enjoy ourselves, and not to save money!

I'll drink to that

 

[Jumbo82]

Factoring in cost of time, how much did all of you spend last month watching TV? Even an hour a day for 30 days at $25 an hour.... expensive.

As for the price per beer, I think most people are under estimating the true value. If a complete stranger came up to you and offered to buy all of your homebrew for $1 per beer, would any of you accept? I wouldn't. But I would for $10 per beer. With the cost of time, making a batch of 50 beers comes out closer to $300, or $6 per beer. That seems high, but that is closer to its true value. I personally enjoy giving away my homebrew to friends and family, but I wouldn't sell my last case for $50. I'd consider selling homebrew for $5 per bottle, but only because I enjoy the brewing process so much. Thats my take on it.

 

[Jaybird]

Once you stop buying equipment .

ha ha ha LOL ya right never gonna happen!!!!!
JJ

 

[EdWort]

It may not be what seems logical but if we are truly wanting the economics of the situation EVERYTHING must be account for.

NEVER!!! I don't want to know!!!

 

[BierMuncher]

...we are in this hobby to enjoy ourselves, and not to save money!

I dunno...

Fresher than fresh beer, brewed for my taste and my own exacting standards for 17 cents per bottle?



I defy anyone to tell me I'm not saving money.

 

[Bobby_M]

That's a good point too, considering what you'd sell your homebrew for. That's literally the value you put on it. At first you'll be jaded by the flattery and sell it too cheap. Then you'll start realizing that you're working your a$$ off and decide the price needs to be higher. Then you'll start realizing that this opportunity cost concept is not at all hypothetical. It's only hypothetic right now because the joy you get from brewing far outweighs the additional cost and ALL of the labor.

My typical 10g batch costs:
$20 in grain @ $1 per pound bulk (Maris is $60/55lbs and that's not considering all the other literal costs because I know things like NPV is a "hypothetical" concept that doesn't exist in some minds.)
$21 in hops @ $3/ounce (my last bitter had 7 oz)
$8 in fuel.
$10 ammortized equipment cost (total wild guess.. do I count the gas I used driving around to find kegs and a welder?)
$1 CO2

So, I'm already at $60 in lala land where my 6-7 hours are ignored and what if this batch SUCKS? I obviously love the process.

 

[Bobby_M]

Factoring in cost of time, how much did all of you spend last month watching TV? Even an hour a day for 30 days at $25 an hour.... expensive.

Ok, you're right but it's a moot point because no one ever asked what the economy of TV time was because there's no product from that hobby. We're in the middle of a literal cost debate between brew and buy.

 

[DeathBrewer]

i'll start saving money once i start brewing 500 gallons at a time...and sell some of it

 

[zacster]

How about this analogy. You can buy prepared food at the store, or you can make it yourself. Hmmm, sounds just like our option with brewing.

If we considered the opportunity cost of cooking, some of us would never cook. (some of us shouldn't cook, but that's a different story.) I make decent money, but I also cook for the family when I get home, time that I could easily spend at work most days. Someone else, under the age of 15, could easily go to the store and buy a meal for the family, already cooked. You definitely save money on ingredients.

How many of you would consider that a bad use of my time?

I better go and check on the chicken on the grill! And pour myself a Brooklyn Local 1 belgian ale. Commercial, but bottle fermented.