You probably started brewing beer because of your passion for the craft, but as a brewery owner or manager, it’s important to remember that running a brewery is, first and foremost, a business.

Being successful in today’s brewery landscape takes careful planning, strong management, and a deep understanding of costs and profitability. Cost of Goods Sold (COGS) is a crucial metric that can make or break your profits. COGS represents the direct costs of producing your beer, including raw ingredients, labor, packaging, and much more. Keeping track of these costs is essential for setting the correct prices, maintaining healthy margins, and ensuring that every pint you pour contributes to your bottom line.

In an industry where margins can be tight (especially in recent years), knowing exactly what it costs to produce each batch of beer is not just a best practice—it’s a necessity. Accurate COGS tracking allows you to make informed decisions about everything from sourcing ingredients to scaling production, helping you to identify inefficiencies, reduce waste, and ultimately increase profitability.

We know most brewers are already tracking their cost of goods sold in some form, whether through spreadsheets or software. However, the actual impact lies in the level of detail in your data and how effectively you use it.

This is where Beer30 comes in. Beer30 offers one of the industry’s most powerful COGS reporting functions, allowing you to track costs at a granular level. By integrating every stage of the brewing process—from raw materials to finished goods—into one comprehensive platform, Beer30 provides real-time insights into your production costs. With Beer30, you can ensure that every drop of beer is accounted for, every expense is tracked, and your brewery remains profitable.

In this blog, we’ll explore five key areas of brewery operations you should focus on when measuring profitability.

Material Costs

Running a profitable brewery is a balancing act.

As a brewer, you want to ensure you’re only holding on to raw materials as you use them – you don’t want to be sitting on stock.

This could create space issues and impact your cash flow.

On top of that, brewers and operations staff need to factor in the costs of all goods and materials that come into the brewery. For many, this requires hard-to-update databases or another infinitely tabbed spreadsheet stuffed with iffy data that is tough to query and export.

Brewery professionals need reliable, easy-to-use tools that provide easy access to accurate cost data and the ability to easily display the data and see what’s really going on. Or better yet, a single tool, like Beer30, which lines up costing information side-by-side, then goes a step further, comparing material costs against profit at the click of a button.

Our side-by-side cost summary feature conveys what is coming in against what is going out, detailing:

• Monthly losses
• Losses per brew/packaging run (empty bottles, cans being wasted or destroyed, accidents, etc.)
• Downtime inefficiencies

You can pull up a report to see the total dollar value for each set of raw materials and packaging supplies sitting on your shelf and in inventory to properly assess your assets for your material costs.

With Beer30, breweries can even set realistic target COGS for each brand and compare their actual COGS against their target standards. This empowers brew teams to evaluate their processes’ effectiveness and identify areas for improvement.

Brew Day, Work In Process, Packaging Day 

Once raw materials are taken from storage and put into production – costs are moved from the raw material inventory to Work in Process (WIP).

The balance in WIP represents the value of the raw materials that comprise the beer in the tank. Several factors should be considered when calculating the WIP costs and how they relate to your overall cost of goods sold.

One of the unique features of Beer30 software is that it properly transfers all costs associated with tank splits and merging! This is incredibly important when you’re looking at taking a base beer and splitting it up to make variations — i.e., brewing into a 15 BBL tank a base IPA and then splitting up into two tanks to get a 7 BBL Pineapple IPA and keeping an 8 BBL Habanero IPA.

Brewers can also include their WIP and brewing data in other costs, such as:

• Hourly labor
• Other external factors, such as rent
• Yeast costs associated with fresh pitches/repitches/harvested

As package day rolls around, it is also important to include all package supplies. This includes items like:

• Contract packaging costs associated with third-party companies
• Bottling: Empty bottles, labels, crowns, carriers, cartons
• Canning: Empty or pre-printed cans, labels, lids, PakTechs
• Kegs: Keg shell costs, keg collars, and keg caps

Each factor contributes to making an accurate overall COGS for the beer.

Finished Goods Inventory

Finished goods inventory refers to the quantity of manufactured products in stock that are available for customers to purchase.

When you use the right software system to track the components that go into making each packaged goods item, the individual COGS can be immediately calculated.

If you’re using Beer30, this can be accessed instantly. And you can easily compare the costs of a 24-pack of bottles vs. a 24-pack of cans vs. one keg.

The finished goods calculation will show you immediately if a batch is higher or lower than the Target COGS, the ‘gold standard’ for that beer.

Beer30 tracks everything behind the scenes, including shipping costs, packaging, and more, so you can access your COGS whenever the time comes.

Finished Goods Traceability

Picture this: you’ve established relationships with distributors all throughout the region, sales are up, and everything looks good. Just then, you get a call from your keg manufacturer – the latest batch of kegs has a defect. You know, the one you just distributed 50 BBLs of your IPA in? Yep, that one.

While product recalls will always be a bummer, Beer30’s Finished Goods Traceability Module makes dealing with recalls simple. With detailed batch tracking capabilities, breweries can quickly identify the exact locations and recipients of products in the event of a recall, enabling swift and effective response measures.

This makes it simple to track batch numbers and find products in the case of a recall to set things right with your distributors.

Plus, Beer30’s Finished Goods Traceability module makes FIFO easy. It automatically applies FIFO logic to batch codes, ensuring your beers are correctly aged and delivered at their freshest—no more manual data entry or tedious logging!

Sales VS. COGS 

The final piece of the puzzle is comparing your gross revenue against your cost of goods sold.

It’s the all-important formula for a successful business – sales revenue minus cost of goods sold is your gross profit. And without profitability, a business will not survive.

Having this data on your brewery operations available anytime is not just convenient – it’s necessary.

The Beer30 sales report breaks down your sales in an easy-to-understand format, giving you essential information at a glance.

You can identify trends happening with sales on your brews, see where the demand is, and compare your revenue directly against your COGS.

Monitoring this data also helps you quickly detect theft or missing inventory from the coolroom / coldbox.

How Beer30 Differs from Other Software

Beer30 offers one of the industry’s most powerful COGS reporting functions, so how is it different from other brewery software options?

Beer30 differs from other software in the industry because it accounts for raw material and packaging material price fluctuations from batch to batch while incorporating the price changes that occur due to split batches, merges, and ingredient substitutions and additions – something you won’t find with competing software.

Beer30 also incorporates beer losses during fermentation, filtration, conditioning, and packaging into your final COGS breakdown for each batch so you can understand how your efficiency impacts your costs.

Tying in revenue from sales reports helps breweries understand margins across their different channels in retail, wholesale, and now taprooms, thanks to our new integration with Square POS.

Conclusion

Using Beer30, you can take all the factors associated with COGS – raw materials, ingredients, labor, overhead, packaging supplies, cost of yeast, and more at each stage in the brewing process – and make them all part of the bigger picture.

In a single click in the Batch History tool, you can cycle through each brand and batch and see the EXACT dollar value per BBL / HL / L – and NEVER have to look at assumed average costs.

Then, you can tie all this information together to truly understand how things are progressing and what your future looks like. The profitability of your brewery determines financial and operating budgets for your current and following financial year.

If you’re looking for a solution to accurately track the COGS at your brewery, brew more efficiently, and help scale operations, Beer30 might be the answer. Schedule a demo to see if Beer30 Brewery software is a good fit for you.