Cost Breakdown of Beer, Home Brewing vs. Commercial
August 31, 2008 – 1:33 pmThe relative cost of commercial beer to the consumer is 70% marketing, packaging, and taxes! It is all because of the hefty price of marketing and packaging that home brewers have a substantial economic edge over large scale breweries. Comparing the breakdown to what home brewers pay for the relative ingredients tells us home brewers are paying a lot more for hops and malt. That makes sense due to the buying power large breweries have. Even so, home brewers easily beat the price of store bought beer. Quality is also easy to surpass after the fist few batches.
Large Scale Breweries:
| Factor in Price | Percentage Weight |
| Packaging | 28.00% |
| Tax | 25.00% |
| Sales and Marketing | 17.00% |
| Production | 15.00% |
| Malt | 8.00% |
| Minor Ingredients | 4.00% |
| Adjuncts | 2.00% |
| Hops | 1.00% |
| Total: | 100.00% |
Data Source: Beer: Tap Into the Art and Science of Brewing, by Charles Bamforth, 2nd Edition, Page 191
Home Brewing Relative Costs:
This is a basic 5 gallon batch of beer, OG of 1.05. Let’s assume we need 5.5 lb of DME (or 10-12 lb of grain) 4 oz of loose hops, gypsum/irish moss, fresh liquid yeast, 50 bottle caps and some cleaning solution.
| Factor in Price | Percentage Weight | |
| Malt (5.5 lb DME, or 12 lb grain) | 48.00% | $18.00 |
| Hops (4 oz) | 21.33% | $8.00 |
| Yeast | 18.67% | $7.00 |
| Packaging (caps/crowns, priming sugar) | 6.67% | $2.50 |
| Adjuncts (Gypsum, irish moss) | 2.67% | $1.00 |
| Production (cleaner) | 2.67% | $1.00 |
| Tax | 0.00% | NA |
| Sales and Marketing | 0.00% | NA |
| Total: | 100.00% | $37.50 |
Closing Thoughts:
The time factor of home brewing is not considered, since home brewing is a hobby and something to be enjoyed. In other words, this hobby pays for itself. Check out the break even cost article for more details on that:
http://www.brewersfriend.com/2008/06/07/break-even-cost-of-home-brewing/
3 Responses to “Cost Breakdown of Beer, Home Brewing vs. Commercial”
Water is no where to be found in this analysis, even though beer is roughly 95% water. Odds are in the next 20-30 years, clean water will begin to factor into the price.
By Larry on Sep 8, 2008
A small quibble: why not change the colours of the pie-charts so that similar components are represented in both charts by similar colours? Why is dark blue packaging in the commercial chart and malt in the domestic chart?
It’s just a thought, but it would make the visual impression of the two charts less misleading.
By Ken on Apr 5, 2010
Nice point, this has been corrected.
By Larry on Apr 15, 2010