Growler profitability question

[ErikZ]

I have a restaurant that's been open for three years and is profitable, and just added a 7.5bbl brewery (having a brewpub was the plan from the outset). We are launching our first beers next week. I have purchased growlers, but can't figure out how they could be profitable. Let's say I sell a pint of beer in the brewpub for $5. 64 oz. gowlers hold 4 pints. 4 x $5 = $20. I'm supposed to sell a growler with the same amount of beer for $10? Seems like a losing proposition.

I've been racking my brain to try to justify selling growlers, but the only things I can come up with are 1. great advertising, and 2. business you likely wouldn't otherwise have. Perhaps valid, but nebulous for sure. But, looking at the trees rather than the forest, I'd be turning a section of my business into a package outlet, but with the overhead of a restaurant. I am extremely passionate about beer and brewing, but no one can afford to ignore the business side. Does anyone have any experience with whether or not this makes good business sense? Your comments are greatly appreciated.

[jcmcdowell]

You're numbers are correct. Add to that the loss from spillage and the PIA factor its a wonder anyone sells them, but...

We are a tasting room only. No food, no distribution, no bottling or canning. Growlers fills for us is the 2nd most profitable (and only other) next to sales by glass.

Compared to keg sales or packaging- growlers are easier to implement and more profitable.

I think everyone will agree, if you can sell 100% by the glass- you should.


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[3guysandabeerd]

you also need to facter in the price of your growler and also brake down your beers by cost down to the oz then figure out where your at with it
we say get are growlers for 4$ we charge 8 for say
then we brake are beers down were at about .13$ and oz .13 * 64oz = 8.32$
so then wa will charge a 30 % markup 8.32+30%=10.81$ (28% is the norm)
in return we only charge 10$because were makeing up on the growler price
now on some beers like imperial ipa russian stouts higher end stuff we charge 12-15$ for them bc of the cost to make
al to geather the lower end beers we make american pale cream ale brown ale we only charge 10$
so all togeather were getting 18$ totle for beer and growler they bring it back 10$ sspecialty 12-15$ may be more havent got there
hope this help
cheers matt 3GB

[SMiller]

It's volume, not margin. Do you profit on a growler? Yes, just not as much as a pint. Saying no to growlers is the equivalent of saying you'll only sell 1/6 kegs and no 1/2s because your margins are better. Personally, I'd want as much beer moving out my door as possible.

Also, think of growlers as incremental sales. Most your growler sales will come from someone who is sitting at your bar drinking a pint. They like the beer and would like to drink it at home. You just made an extra $10-$15 on that customer.

Just my 2 cents.

[Bainbridge]

Eh, don't think of them as the same things. It's more like you can sell someone:

a) Two pints for $10. Sweet, highest profitability.

or

b) Two pints for $10, plus they then leave with a $10 growler fill, so you gross $20. Huzzah!

or

c) They wouldn't have come for a pint originally, so you gross $0, however they came for a $10 growler fill and then left. $10 to you instead of $0. W00t!

As long as it your COGS on that growler fill is less than $10 (which sweet jeebus it should be), you still net more money on the whole.

Plus there's a whole intangible marketing angle to it. Someone takes your growler to a party, other people get to try it, maybe they come in later...etc..

Now if you're production can't keep up and you keep running out of beer, well that's a very different issue...

[beerguy1]

Its the dead of winter here and things just slow down in this resort town. Our distribution is booming but the tap room is slower.We just started a promo come in buy a pint and get your growlers (up to 2) filled for $8. It has been doing well for us as most people come in and have at least a couple of pints and they dont want to sit alone so they bring someone along 2 more pints and leave with 2 growlers come back and do it again

[BeerBred]

I'm seeing more like $14 for growler fills here in Richmond, VA

[mrocka]

I only sell 1/6 kegs and not 1/2's. This decision is based on COG. I can not afford put out a lot of cash to save my customers $30. I would rather use that money to open up another market like canning. Putting my money into a silo or canning is a better choice. I think we all understand who makes the big bucks with our hard work. Growler sales keeps us going.


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[mashpaddled]

If you can sell all the beer you can/want to brew by the pint then maybe there is no reason to sell by the growler or at least to sell by the growler at a significantly lower cost.

If that is not the case then the growlers represent an opportunity to bring in more customers (have a drink while the growler is filled) or extend customers already on site (have dinner and bring a growler home) while moving more beer so you can keep fresh beer on your taps. Also consider the value of having those growlers out in the wild. They are out there marketing for you and extending your reach to new potential customers without having to pay for marketing materials, give away samples, pay for another packaging line and packaging, keep a sales/delivery force, etc. Can bringing in those growler customers and the free marketing they will do for you get you increasingly closer to selling maximum production volume and increasingly closer to selling maximum production volume by the pint? If so then that long term goal is why growler sales make sense.

[ChesterBrew]

My opinion/plan: start with pints, and once you've established your market, sell growlers. If people ask you to fill their growler and it's a 64oz size before you offer them on the board, tell 'em it's 4x a pint and explain why. Businesses have to make a profit and it's a much better strategy to set a price when you know some of your variables than to set a price and then have to raise it.

[Bainbridge]

"Hey dude, let's go fill some growlers for tonight's party!"
"Hells yeah! How about we go to Brewery X?"
"No, they don't fill growlers. Dude totally gave me a lecture about it last time too. Whatever, their beer sucks anyway."
"Lame. But Brewery Y fills them right?"
"Sure do. Let's go there."
End Scene

How to Brewery:
Brew enough beer.
Then sell as much as possible, as fast as possible, wherever and however you can, at prices that generate a net profit.

[ChesterBrew]

If directed at me, you misunderstand me Russell... The rhetorical question is, if you can sell beer as a pint instead of as a growler, depending on brewhouse and cellar size, why sell it as a growler?

Of course, in my area, there's not another brewery within 40 miles at the moment...

[Bainbridge]

Sorry, no offense meant if any was taken. Had a root canal this morning...made me a bit curt. But what I meant to illustrate was the way that the failure to fulfill a reasonably expected service from a consumer (fill a growler) can have a tarnishing effect on the brand (these guys were 'jerks') and lead to sour grapes (their beer sucks anyway). Not rational, but something that happens.

By all means, if you can't produce enough beer to fill growlers, don't. I brewed in a 5bbl brewpub years ago and we were busy enough that we couldn't have done growlers if we'd wanted to. (Un)fortunately growlers weren't legal in that state at that time anyway...) But I guess that gets to the point of 'might as well plan to be able to produce enough beer to do growlers from the start'. Haven't run the numbers recently, but there are days we can fill 150+ growlers. I want to say it nets us about 50k a year, but it's probably more.

An interesting point made about the availability of alternative options. In contrast, there's about 100 breweries within 40 miles of us, so perhaps our options and perspectives are more limited. Competition is not an abstract. Something like "We don't make enough beer to sell growlers" translates to "Well then I'm going somewhere else next time I want a fill." I even get people who are like "I can get this filled for $2 cheaper thirty minutes away!" Well, sir, since apparently you don't understand Opportunity Costs, have fun with that. Plus bottle shops, beer bars, gas stations and soon grocery stores will all be in on the growler game around here. Not necessarily a bad thing, but it remains to be seen what the long term effect will be.

[Coolhand]

If you think beer $/oz is bad with growlers you've never sold a wholesale keg...

Even out here in the boonies we get a lot of mileage out of growlers. Buy them in big enough quantities (if you can) and you'll make a little bit on the glassware as well.

Justin

[Beer Nerd]

Perspective

If you run out of beer for your restaurant its a valid perspective. If the growlers are added sales it's not. To ease your profit thinking. Think of it as selling the growler beer for twice the price in the restaurant instead restaurant pints for 1/2 price. You don't have to serve the guy for 2 hours and there are no pint glasses to clean. If the customer breaks the growler he buys another off of you. My partners and I are hoping for most of our sales to be through growlers. Higher profits than kegs, least amount of handling.