Distro pricing

[kpeabody]

Have a taproom brewery. We finally have a little extra capacity so was looking to self distribute a few kegs and cans. I’m not sure what my pricing will be in This new age if inflation. Asking around I have interest in 1/2, 1/6 and cans. In Addition we sell a range of styles. Anyone have any guidance on what a fair price I should sell it for? We are operating in MA if that matters

[plh]

Roughly 1/2 of retail - guessing another tap room or bar?. So if the establishment is selling a pint for $7 then you are selling it to them for $3 to $3.50. $140 for a 1/6 maybe $400 for a 1/2. Assumes no distributor fee. A lot less if you need to sell to a distributor.

[kpeabody]

That seems a little higher than I was expecting.

[RandyB]

Never seen a restaurant/bar willing to run 50% COGS on beer. I never would in my 3 decades in it.

[lhall]

Ask some of your potential accounts for a distributor price list to see what your potential competitors' kegs are going for, and price yours accordingly. An account isn't going to put on a 1/2 bbl of your beer if it is significantly higher than other craft brands. I don't know about MA but I would guess a 1/2 bbl of craft beer would be $175-$195 a keg.

[kpeabody]

I have thought about that. My only concern it possibly allows a client to help set the price. I have asked one for a list but they never seem to find it.

[RandyB]

My 2c, and painting with a very broad brush here: Restaurants/Bars will look to be no higher than 25-30% COGS, usually on the lower end. So your keg needs to run the business $190-250 roughly for $7 pints. If your beer will demand $7.50-8. pints, that gives you more room. Selling to wholesaler: $120-170 depending on style. Managing your raw goods should give you a 30-35% COGS, which is respectable with the lower margin, higher volume model. Distributors work on roughly a 35% margin. If you are self distributing, you can take that margin for your distribution expenses.