### Author Topic: Is this a good deal?  (Read 4350 times)

#### nateo

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##### Re: Is this a good deal?
« Reply #15 on: November 06, 2012, 10:09:34 PM »
I'm trying to wrap my head around those figures.

bottle profit = \$0.06 = bottle revenue (B) - beer cost (c) - bottling cost (bc)
keg profit = \$0.01 = keg revenue (k) - c - keg cost (kc)
so
0.01 = k - c - kc
0.06 = b - c - bc
c = k - kc - 0.01
0.06 = b - k + kc + 0.01 - bc
0.05 = b - k + kc - bc

Assuming a keg sells for between \$80-\$120, with a 15% margin, and selling direct to bars/liquor stores
\$120/1.15>(k*1984)>\$80/1.15 = 0.053>k>0.035
\$10>(b*72)>\$8 = 0.12>b>0.096

So for direct to retail
-0.017 < kc - bc < -0.011

So, kegging is cheaper for JZ than bottling.

Assuming the same as above, and that he's selling to a wholesaler who also gets a 15% cut
(\$120/1.15)/1.15>(k*1984)>(\$80/1.15)/1.15 = 0.046>k>0.030
\$10>(b*72)>\$8 = 0.105>b>0.084

For wholesale
-0.009 < kc - bc < -0.004
Kegging is still cheaper for JZ than bottling.

I guess that was a waste of time, since I think we all knew kegging would be cheaper, but it doesn't appear to be a huge price difference, per ounce. C would be a constant regardless of whether you bottle or keg.

I now believe Keith that bottling is about twice as profitable, per ounce.
In der Kürze liegt die Würze.

#### Thirsty_Monk

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• Eau Claire WI
##### Re: Is this a good deal?
« Reply #16 on: November 07, 2012, 02:04:45 AM »
Instead of the cooperage how about a small canning or bottling line? Not that I have any practical experience at all but from listening to JZ on BS it seems to me that a packaging brewery is the way to go and much more profitable. Then you have no kegs to clean or to worry about keeping track of.

If you're bottling, your per unit margin goes down pretty significantly. Glass is expensive, I imagine cans are cheaper, but you'd have to amortize the cost of the machinery, and I think canning lines are more expensive than bottling lines. So a packaging brewery would make sense if you can produce a large number of units. But if there's no slack in your production capacity, it doesn't make sense to divert production from a high margin product (beer on draft) toward a low margin product (bottles/cans).

Yes the bottle/can market has a better margin then keg market. But you want to be in both. Keg market is your advertising that you have arrived and people can have your beer when they go out to the bar or restaurant. You make bulk of the money in bottle market because there is more people who want to have beer at home then go to the bar/restaurant. If you are in bottle market you need to be carefully to pick the package that fits to you.

It is great the 22 oz has high profit margin but if you sell only a case a month then it is not working. Brewing is still a number game after all.  Bottle filler line + labeler cost about the same as a canning line.
Na Zdravie

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#### tschmidlin

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##### Re: Is this a good deal?
« Reply #17 on: November 07, 2012, 09:09:21 AM »
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.
Tom Schmidlin

#### hopfenundmalz

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##### Re: Is this a good deal?
« Reply #18 on: November 07, 2012, 12:54:28 PM »
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.

Tom, I heard about a portable canning line in a truck when visiting friends in Bend. Might be the same guy?

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#### Thirsty_Monk

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##### Re: Is this a good deal?
« Reply #19 on: November 08, 2012, 04:16:26 AM »

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.
Na Zdravie

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http://www.lazymonkbrewing.com

#### tschmidlin

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##### Re: Is this a good deal?
« Reply #20 on: November 08, 2012, 09:01:00 AM »
Mic, don't forget about the bottling trucks in our area, and I know a guy who is running canning trucks out of Portland.  When I saw him in June he was talking about having a canning truck in our area too.  I know it's a long drive out to you, but it's cheaper than buying your own canning/bottling line.  You might even be able to bring kegs to Seattle for re-packaging.  It's not a good long term solution obviously, but it's a good way to package a lot of beer quickly and check out the market interest.

Tom, I heard about a portable canning line in a truck when visiting friends in Bend. Might be the same guy?
If it's Owen who used to work at Wyeast, then yes

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.
That's for sure!  Congratulations, I'm excited (and just a little scared) for you.
Tom Schmidlin

#### a10t2

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##### Re: Is this a good deal?
« Reply #21 on: November 08, 2012, 02:49:31 PM »
Our margins on bottled beer is significantly higher than on draft, but I can't imagine the labor involved on a part time operation if you had to bottle all of your beers.

This. One person can (barely) operate a small brewhouse, but packaging that production on a small bottling/canning line would be a full-time job for two people.
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#### Thirsty_Monk

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##### Re: Is this a good deal?
« Reply #22 on: November 08, 2012, 03:02:18 PM »
Our margins on bottled beer is significantly higher than on draft, but I can't imagine the labor involved on a part time operation if you had to bottle all of your beers.

This. One person can (barely) operate a small brewhouse, but packaging that production on a small bottling/canning line would be a full-time job for two people.

Juggling that by myself. We also operate a tap room and i self distribute. I have a part time help from my wife. Wish that week would have 8 days.
Na Zdravie

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#### jeffy

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##### Re: Is this a good deal?
« Reply #23 on: November 08, 2012, 03:42:32 PM »
My friend at St. Somewhere gets people to volunteer for bottling day and seems to have no trouble getting people to help.  He gives them lunch and two bottles of beer (750's) to take home.  In four hours or so six people can bottle, cork, cage and label 10 bbls.
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#### nateo

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##### Re: Is this a good deal?
« Reply #24 on: November 08, 2012, 04:14:46 PM »
How dangerous is bottling machinery to operate? I'd guess you'd want an insurance policy to cover volunteers, and you'd probably want them covered under worker's comp if you can, since that's an exclusive remedy in most states.
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#### majorvices

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##### Re: Is this a good deal?
« Reply #25 on: November 08, 2012, 04:52:32 PM »
Mine is pretty fool proof. There are plexi-glass covers that protect you if a glass breaks on both the bottler and capper (and you will get one or two breaks every bottling session) and it takes two hands to operate the capper. That said, we make everyone wear eye protection. With those protections the danger is minimum. Way more opportunities to injure yourself around an active brewing session.

#### kylekohlmorgen

• Senior Brewmaster
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• Saint Louis, MO
##### Re: Is this a good deal?
« Reply #26 on: November 08, 2012, 05:37:16 PM »
How dangerous is bottling machinery to operate? I'd guess you'd want an insurance policy to cover volunteers, and you'd probably want them covered under worker's comp if you can, since that's an exclusive remedy in most states.

Depends somewhat on the equipment.

Depends mostly on the volunteers.

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#### bluesman

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• Delaware
##### Re: Is this a good deal?
« Reply #27 on: November 08, 2012, 05:43:17 PM »
hmmmmm.

http://seattle.craigslist.org/skc/for/3387581635.html

Looks like a sweet deal to me.

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.

Congrats on the equipment upgrade.  If you don't mind me asking, what make or type/capacity and cost of canning system have you purchased?

« Last Edit: November 08, 2012, 05:46:50 PM by bluesman »
Ron Price

#### Thirsty_Monk

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• Eau Claire WI
##### Re: Is this a good deal?
« Reply #28 on: November 09, 2012, 05:18:20 AM »

You are correct sir. I just place PO for manual canning line. I am exited and scared at the same time. Nothing is cheap in brewing.

Congrats on the equipment upgrade.  If you don't mind me asking, what make or type/capacity and cost of canning system have you purchased?

I got Wild Goose Engineering MC-50:
http://www.wildgoosecanning.com/main/mc-50/

Manual line that has an upgrade path to automatic line.
Star up cost is not just cost of the line.
You also need to buy supply (cans, ends), artwork, compressor...
Lead time is 16 to 18 weeks so I have some time before I will see it.

Ohh... the cost. Nothing is cheap in the brewing. When all is settled and done I think you will be able to buy two nice cars for it.
« Last Edit: November 09, 2012, 05:23:14 AM by Thirsty_Monk »
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#### majorvices

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##### Is this a good deal?
« Reply #29 on: November 09, 2012, 02:26:12 PM »
we got quotes on automated Meheen that started at 52K for 4 head filler. That includes training at the facility (but you gotta pay to fly out there). Bottler, not canner, but there you go.