Beer brewing is a combination of art and science. Brewers must make sure that their beverages are profitable in addition to producing a great-tasting beverage. Gross profit (GP), which is the difference between the cost of production and the selling price, is a crucial indicator of profitability. In this post, we’ll go through how to calculate GP on beer and address related issues like what BBL in brewing implies, how much area a microbrewery requires, how to build a taproom, and how to run a brewery. What does BBL in brewing mean?
Beer is measured in barrels, or BBLs, which are equal to 31 gallons or 117 liters. It is employed to gauge the amount of beer that brewers generate. For instance, a brewery that makes 1,000 BBLs of beer annually generates about 31,000 gallons of beer each year.
You need to know the production cost and the selling price of beer in order to calculate the GP. The price of materials, labor, packaging, and overhead costs like rent and utilities are all included in the cost of production. The cost at which beer is offered for sale to consumers is known as the selling price.
For instance, the GP is $50 or 33% if the cost of manufacture for a barrel of beer is $100 and the selling price is $150. Accordingly, the brewery makes 33 cents in profit for every dollar used to produce the beer.
The size of the brewery and the brewing apparatus utilized determine how much room is required for a microbrewery. A few hundred BBLs of beer can be brewed by a small microbrewery annually in an area as little as 1,000 square feet. However, larger microbreweries that make thousands of BBLs of beer annually might need a size of at least 5,000 square feet and as much as 10,000 square feet.
You must have the required licenses and permits from your local government in order to create a taproom. A liquor license, a permission for a food service, and a zoning permit are a few examples. Additionally, you need a place for the taproom, which could be close to the brewery or in a different area. You also need to have a menu of beers and food items to offer consumers, a business plan, and a marketing strategy.
Brewing beer, keeping track of inventory, promoting the brand, and handling finances are just a few of the important jobs involved in running a brewery. You need the proper tools, supplies, and recipes to brew beer. Monitoring supplies, finished goods, and raw materials are all part of managing inventory. Building a website, making social media profiles, and interacting with clients are all part of marketing the business. Managing finances entails maintaining tabs on costs, receipts, and profits as well as basing choices on financial information.
In conclusion, calculating GP on beer is a crucial component of breweries’ financial success. To make sure they are earning a profit, brewers must monitor their production costs and selling prices. Brewers can compete in the cutthroat beer industry by understanding BBL measurement, microbrewery space requirements, the procedure for launching a taproom, and running a brewery.
A brewery can employ another brewery to make its beer through the procedure known as contract brewing. While the contracting brewery supplies the recipe and materials, the contract brewing company offers the facilities, tools, and knowledge required to make the beer. This gives smaller brewers the ability to boost production without having to invest in additional facilities, and it may also provide them more freedom to try out other beer varieties.