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  • costs??

    In order for some investors to feel comfortable that an up start craft brewery will make money, I need of course costs related to a typical brew. This would included raw materials, water, hydro, labour, packaging, etc. everything broken down and associated with one typical brew (not capital costs). I am having trouble finding an example with these figures. I would greatly appreciate if someone could help or as least steer me in the right direction.

    Thank you for your time

    J

  • #2
    The best thing you can do is build yourself an Excel spread sheet, divide it into three sections; COGS (cost of goods sold), fixed and active overhead. Arrange your variable costs in a vertical column so they are easy to change. You will use this tool over and over again. Figure a gazillion dollars for material cost, and about $3.00/hr for labor + beer and beer nuts. The other costs are largely dependent on your system's efficiencies and the location of your brewery.

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    • #3
      Call up potential suppliers and get current prices for the ingredients. Just tell them what you're up to and they'll be happy to help. Apply those prices to your recipes. Get in touch with the water company and find out how much water is per gallon and apply that price to your expected water consumption. Don't forget sewage costs. Do the same thing for each individual cost associated with brewing that batch of beer. Don't forget about filter media and cleaning chemicals.

      As far as I know, no one has ever put together an easy reference for the estimated cost of brewing a batch of beer. That's probably because there are way to many variables to give you a reasonably accurate estimate. Unfortunately, you're just going to have to spend the time to research each item. There are no easy answers to figuring out your COGS and you might eventually find your estimated COGS in you business plan is way different than your actual COGS when you begin operating.

      Best of luck.
      Mike Hiller, Head Brewer
      Strangeways Brewing
      2277-A Dabney Road
      Richmond, VA 23230
      804-303-4336
      www.strangewaysbrewing.com

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      • #4
        There is no easy answer. I have spent over two years (OK, maybe four) building an extensive excel spreadsheet that factors very specific information based on my market and business plan. There are some factors that cannot be simply plugged into a standard form. That being being said, you will be better off doing the math and really understanding the inputs once you make your own workbook/model. I cannot say enough things about this exercise in business modeling and it will be a great tool even as you go foward in your business.
        -BX
        Last edited by beauxman; 04-12-2008, 02:47 PM.

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