How to Price Your Brewery Products for Profitability
- Nate Jones, CPCU, ARM, CLCS, AU
- Nov 10
- 2 min read
Pricing your brewery products correctly is one of the most important decisions you’ll make as a business owner. Set prices too low, and you risk losing money; set them too high, and you may drive customers away.
At Wexford Insurance, we understand the financial and operational challenges breweries face. Beyond protecting your business with brewery business
insurance, we want to help you develop a pricing strategy that ensures profitability and sustainability.
Why Pricing Matters for Breweries
Your pricing strategy impacts:
Profit margins and cash flow
Customer perception of value
Competitiveness in the craft beer market
Ability to cover operational and insurance costs
Steps to Price Brewery Products for Profitability
1. Calculate Production Costs
Start with the basics:
Raw materials (malt, hops, yeast)
Packaging (bottles, cans, kegs)
Utilities (water, electricity)
Labor costs for brewing and packaging
Read more: Explore brewery cost saving tips.
2. Factor in Overhead
Include expenses like:
Rent or mortgage
Equipment maintenance
Marketing and branding
Insurance premiums
These costs should be spread across your product pricing to ensure full coverage.
3. Include Taxes and Compliance Fees
Alcohol excise taxes vary by state and production volume. Make sure these costs are included in your pricing model.
4. Choose a Pricing Model
Common models include:
Cost-Plus Pricing: Add a markup to your total cost per unit.
Market-Based Pricing: Align with competitor pricing while maintaining profitability.
Value-Based Pricing: Price based on perceived quality and brand reputation.
5. Adjust for Packaging and Format
Pricing will differ for:
Draft beer sold in taprooms
Bottled or canned beer for retail
Kegged beer for wholesale distribution
Each format has unique packaging and handling costs.
6. Consider Sales Channels
Taproom sales often have higher margins than wholesale or online sales. Factor in distribution costs for off-site sales.
Don’t Forget Insurance
Insurance is part of your operating expenses and should be included in your pricing strategy. Here are essential coverages and typical annual cost ranges:
Including insurance in your pricing ensures financial stability and compliance with lease and licensing requirements.
Final Thoughts
Pricing brewery products for profit requires a balance between covering costs, staying competitive, and delivering value to customers. By factoring in production, overhead, taxes, and insurance, you can create a sustainable pricing strategy that supports growth. At Wexford Insurance, we help breweries protect their operations so they can focus on brewing—and selling—great beer.
Contact us today.