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Break Even Cost of Home Brewing

Saturday, June 7th, 2008

The economics of home brewing are almost as pleasing as drinking the final product.

If you just want to make ales, you can break even after only four batches. Some starter kits are so cheap, you can break even after less, but the more ‘tools’ the more fun and the easier the job becomes. For a full kegging, lagering, and all-grain setup, it can take up to 34 batches to re-coup equipment costs, but that is fairly high estimate. Over a lifetime of 50 years of brewing, one thousand batches are within reach, and most of the equipment doesn’t wear out ever (like glass carboys and pots).

The underlying assumptions used:

Your average cost per batch is $40, you brew 15 times a year, and if you had to buy store bought beer *shudder* you would get a mix of micro, USA craft, and Euro import beer. Each batch you brew pays you profits, which add up and quickly overtake your equipment investment. You will feel this after looking over the results your first bottling session. Your next trip to the grocery store will be lighter because you made your own beer.

Average Cost Per 5 gallon batch $40.00
Average Price of 5 gal, retail $100.00
Savings / batch (profit) $60.00
Batches / Year 15
Minimum Setup Costs: $225.00
Batches to Recoup Cost: 3.75
Time to recoup (months): 3

Basic equipment only.

Setup Costs for lagers, kegs, fridge, capacity: $1,500.00
Batches to Recoup Cost: 25
Time to recoup (years): 1.67

The extra cost here translates into more flexibility, less bottling time, and the ability to make lagers and drink draft beer at home.

Full setup for all grain, 10 gallon batches $2,000.00
Batches to Recoup Cost: 33.33
Time to recoup (years): 2.22

All grain beer is better quality, and 10 gallon batches are 2x time efficient.

break even analysis

  1. 8 Responses to “Break Even Cost of Home Brewing”

  2. Larry, do you detail it elsewhere or can you break out the costs on these setup estimates?

    For example, you list a full setup for 10 gallon all grain batches as $2K. But the…ahem…economical brewer (i.e. cheapskate, like me!) is going to see a much much lower cost than that. As an inveterate bargain hunter I’ve spent way less than 2 grand on setting up my brewhouse to accommodate 10 gallon batches. I make some decisions that others might make differently along the way to that setup, surely. For example I use several pots (I can usually do one full wort boil, and one divided wort on my stove). I’ve spread my mashing rigs across camping cooler + drilled bucket lauter tun and a modified igloo with lauter bed. I have three carboys and two buckets…you know, the various accumulations of an extract brewer. But my all grain setup is much closer to $500 than two grand.

    That’s not criticism, but I’m curious how you get to the numbers you got and I imagine some beginners curious about all grain would want to know also.

    By JonO on Sep 28, 2010

  3. Quite right, a bargain hunter can get a 10 gallon all grain brewing setup going for $500. My $2,000 estimate is for something akin to a brewing sculpture, the 3-tier gravity system with an additional propane burner, hot liquor tank (additional kettle with ball valve), mash tun, mill, etc. I also included the cost of the beer fridge and kegging kit in that, since it really helps to be able to package the beer into kegs at that point.

    The absolute minimum for the upgrade would be:
    • 15 gallon kettle with valve ($240 new)
    • Mash tun ($75 for the tun and all the parts), you may need a new larger mash tun if you are going for a high gravity 10 gallon batch
    • Digital thermometer ($20)
    • Aeration System ($45)
    • Extra carboy, air lock and bung ($30)

    If you don’t already have the following, I would think this is required for 10 gallon batches:
    • Propane burner ($60)
    • Wort chiller ($75), or use the no chill method with an extra fermentor ($30).
    • Grain Mill – the grains can be milled at the home brew store, but I have my own mill ($75 used).

    So most people are probably looking at $400-$600 retail price, and that could be cut down considerably by a smart shopper. I got sick of searching craigslist every hour for a kettle so I bought mine new.

    By the way, a $2000 investment can easily build up to a computer controlled brewing sculpture and a new shed in the back to hold everything.

    By Larry on Sep 29, 2010

  4. Thanks for the post. Very Helpful. Someone complains about the estimates? This is very conservative in the first place. One can easily drop $2k on just a good ale system without a deep freeze etc in a blink. Good equipment does not come cheap. I would even argue that a good all grain system is at least $3k done properly for a 5 gallon setup but can of course be done on the cheap. Great reference and very well thought out. Gives everyone a good breakpoint for different $ amount investments. If someone can’t research costs and equipment on their own then they shouldn’t get into it. $2000 seems steep to some and ridiculously cheap to others for the same setup. Thanks for this.

    By Doug on Nov 8, 2011

  5. Yeah well the shed was $8k plus the electric upgrade, so I’m WAY over budget at this point!!!!

    By Larry on Nov 9, 2011

  6. From a purely economic point of view, time is also an expense. You have to consider what you could earn during the time spent brewing. Say you spend 4 hours on a batch and can earn minimum wage of $7.25. This adds up to at least $29 to five gallons of homebrew ($14.50 for 10 gallons).

    It’s still cheaper, but if you earn more than minimum wage, not much. But I’m sure most of us don’t brew just to save money. I’d much rather make beer than work extra hours.

    By Eric on Jun 24, 2012

  7. Agreed, there is an opportunity cost to the time we spend brewing, as with all hobbies. There is also a relaxation factor to brewing that money can’t buy.

    By Larry on Jun 25, 2012

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