Price Breakdown

[bigbobsnow]

Kind Experts,

A Neophyte needs some general information about the "basic" beer market
for my business plan.

Assuming a three tier system, and realizing that EVERY situation is different,
but on industry "average" , what % of the final retail selling price (100%)
goes to the actual BREWER, what % goes to the DISTRIBUTOR, and what % goes
to the RETAILER ?

Any info is useful.

[Jim Schembre]

Price Breakdown

On your pricing strategy there are very diffrent margins for each segment but basically you start with retail. There is retail Grocery, Convience, Super Stores, Liquor Stores, and then resteraunts and bars. Most national grocery chains work on between 20 to 25% margin when you get to Super Stores they will work on as low as 15% even lower on special items. Convient stores are in the 25% range and on premise are less margin sensitive and usually round out the dollar. Liquor stores will work on depending on the state but as high as 40% and as low as 15% again depending on the state. Wholesalers across the country average around 27% margin after laid in.
Hope that helps.

[dplittle]

It's all a negotiation

When we are working on pricing here we want our brewers to tell us what they need to make. You know your costs and what profit you need to make. Once we get that we can plug in the numbers and add the margin we need to make. If the price then is off for the market (too high or too low) we work with the brewer to even out the margins. Here in Georgia we have to offer the same price and deals to all customers so it's a matter of making sure the price (with discount, if any) is as acceptable to the smallest convenience store who buys one case at time to the largest "big box", grocer or package store who may buy a 100 cases.

[Fred Scheer]

beer breakdown LOLOL

Hi

Very interesting discussion.

Back when (>>>>>) I worked at F'muth brewery,
we worked with the 30%rule.

Our cost plus the profit we wanted to have, + 30%to wholesaler,
+ 30% to retailer.

Cheers

Fred