A spreadsheet from three years ago
When the IPA launched, someone built a costing spreadsheet: malt, hops, yeast, cans, a guess at energy and labour. The price was set from it. Since then hop prices changed, you switched can supplier, the beer got a heavier dry hop, and the brewhouse loses more to trub than the sheet assumed. The spreadsheet has not been opened in a year.
Ask which beer makes you the most money in cans versus cask, and the answer is a feeling. Ask whether the new hazy is worth brewing at its current price, and nobody can say for sure.
Why brewery costs are hard to pin down
Costs live in different places. Ingredient prices are on supplier invoices in Xero. Recipes are in the brewery system or on paper. Losses, from trub, dry hop absorption, transfers and packaging, are rarely measured per batch. Dry goods costs depend on the pack. Duty and overheads need spreading. Doing this by hand for every batch is not realistic, so it is done once and left.
- Ingredient prices change but the costing sheet does not.
- Losses are guessed rather than measured.
- Different containers carry very different packaging costs.
- Overheads and duty figures are not spread consistently.
- Nobody compares cost with the price each account pays.
What not knowing costs
Beers priced below what they now cost. Promotions on beers that barely make money. Effort spent selling a format that earns less than you think. And decisions about which beers to keep, which to drop and which containers to push are made on feel. Duty and tax treatment is for your accountant; we just use the figures they give you.
Batch costing from what actually happened
- Ingredient costs are taken from supplier invoices in Xero, QuickBooks or Sage, by lot where possible.
- Each batch uses the ingredients actually recorded at brew day, not the recipe's theory.
- Volumes at each stage are recorded, so losses are measured per batch.
- Packaging runs add the dry goods used per container, from your bill of materials.
- Duty and overhead allowances come from figures your accountant or finance person sets, applied the same way each time.
- The result is a cost per litre and per container for each batch, and an average per beer.
- Margin is shown against price lists and actual account prices, so you can see what each beer earns by channel.
| Cost element | Source | Updated how |
|---|---|---|
| Malt and hops | Supplier invoices and lots used | Every batch |
| Yeast and adjuncts | Invoices and brew records | Every batch |
| Losses | Volumes at each stage | Every batch |
| Cans, labels, kegs | Packaging run and bill of materials | Every packaging run |
| Duty and overheads | Figures from your accountant | When they change |
Seeing margin per beer and per container
A table showing each beer, each container, its latest cost and what it earns in trade, taproom and web. Batches where losses were higher stand out. When an ingredient price moves, you see which beers it hits. Price reviews become a look at the table rather than a new spreadsheet.
The decisions stay yours: which beers to reprice, which to keep for the range even at thin margin, which to drop. You just make them knowing the numbers.
Is this how you cost your beers?
- Your costing spreadsheet is older than your last price change.
- Losses in the brewhouse are a guess.
- You are not sure which containers make the most money.
- Ingredient price changes are not reflected in costs.
- Promotions are run without knowing the margin.