Craft beer is a complex industry with thousands of styles and brands to choose from. It takes more than just malt, hops, and yeast to make a beer. To understand the cost of making craft beer, it's important to know the labor, ingredients, margins, taxes, and other factors that go into the production process. When it comes to labor costs, it takes about 15 cents of labor to make a six-pack of craft beer.
This assumes that 30-barrel batches are standard in relatively small breweries. The ingredients for brewing make up 6 percent of the cost of beer. This includes more than just malt, hops, and yeast. Beer margins are 8 percent and distributors and retailers get 52 percent.
Federal and state excise taxes represent 23 cents per six-pack. All these factors combined make up the cost of producing craft beer. The beer industry offers a variety of options for all types of consumers. Not only are these beers brewed by large and small brewers, but they are distributed and retailed in more than 500,000 licensed retail accounts in urban and rural markets alike.
This is all possible thanks to an independent three-tier alcoholic beverage system. Knowing how to determine beer production costs through the cost of goods sold and the bill of materials is a big step towards achieving the goal of properly pricing your craft beer. As a craft beer connoisseur, you know that not all beers are created equal.
