{"id":7244,"date":"2021-05-27T07:00:11","date_gmt":"2021-05-27T11:00:11","guid":{"rendered":"http:\/\/199.250.223.35\/~craftbrewery\/?p=7244"},"modified":"2021-04-28T11:31:29","modified_gmt":"2021-04-28T15:31:29","slug":"are-brewery-taprooms-profitable","status":"publish","type":"post","link":"https:\/\/craftbreweryfinance.com\/oldversion\/are-brewery-taprooms-profitable\/","title":{"rendered":"Are Brewery Taprooms Profitable?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Let\u2019s start with some definitions. Taproom net profits are calculated by subtracting total operating costs from taproom margins.<\/span><\/p>\n<ul>\n<li><i><span style=\"font-weight: 400;\">Sales &#8211; Cost of beer = Gross Margin<\/span><\/i><\/li>\n<li><i><span style=\"font-weight: 400;\">Gross Margin &#8211; Operating Expenses = Net Profit<\/span><\/i><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The Net Profit dollars are then divided by Sales dollars to arrive at a percentage Net Profit.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is an easy way to <\/span><b>compare profitability of one taproom to another<\/b><span style=\"font-weight: 400;\">, or to compare your expected profit to your plan.<\/span><\/p>\n<p><b>Taproom Profit Example<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Your taproom purchases beer from your brewery at $150 per 1\/2 barrel.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The 1\/2 barrel will yield about 100 16oz pints, and you sell each pint for $6. Total sales on a 1\/2 barrel calculate to $600.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">$600 Sales &#8211; $150 Cost of Sales = $450 Gross Margin per 1\/2 barrel<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To get to Net Profit, deduct operating expenses from the gross margin.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Operating expenses are the day-to-day costs to run your taproom. These include lease costs, wages, taxes, utilities and so on.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Costs will vary greatly from one taproom to another, but for our example we&#8217;ll assume operating costs of 30% of sales<\/span><\/p>\n<p><span style=\"font-weight: 400;\">30% x $600 Sales = $180 Operating Expenses per 1\/2 barrel<\/span><\/p>\n<p><b>So, after all of these numbers, we&#8217;ve arrived at an average taproom net profit:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">$450 Margin &#8211; $180 Operating Expenses = $270 Net Profit per 1\/2 barrel<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The $270 Net Profit divided by $600 in Sales gives us a 45% Net Profit percentage.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Average Net Profit for a Taproom will depend on a number of factors. Sales, Margins and Operating Expenses are the ingredients that make up Net Profit, and each will influence the bottom line.<\/span><\/p>\n<p><strong>For a deeper dive on Taproom Financials, check out <a href=\"https:\/\/craftbreweryfinance.com\/oldversion\/breaking-down-the-taproom-focused-brewery-model\/\">Breaking Down the Taproom Focused Brewery Model.<\/a><\/strong><\/p>\n<p><span style=\"font-weight: 400;\">Yours in Taproom Profits,<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Kary<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Let\u2019s start with some definitions. Taproom net profits are calculated by subtracting total operating costs from taproom margins. Sales &#8211; Cost of beer = Gross Margin Gross Margin &#8211; Operating Expenses = Net Profit The Net Profit dollars are then divided by Sales dollars to arrive at a percentage Net Profit.\u00a0 This is an easy [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7245,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pgc_meta":"","_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[66],"tags":[],"class_list":["post-7244","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taproom"],"_links":{"self":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/7244"}],"collection":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/comments?post=7244"}],"version-history":[{"count":0,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/posts\/7244\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media\/7245"}],"wp:attachment":[{"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/media?parent=7244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/categories?post=7244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/craftbreweryfinance.com\/oldversion\/wp-json\/wp\/v2\/tags?post=7244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}