Selling kegs wholesale

[Dogwonder]

I am putting a microbrew business plan together and part of my plan includes selling kegs to retailers or distributors for retail sale. Does anyone have a good planning rule of thumb for how much this would be? I'm looking for the average selling price for half barrells.

Any info is appreciated.

Dogwonder

[Breweryrep]

Around $90 -$100 for 1/2 bbl plus deposit is average for California

[Diamond Knot]

In our neck of the woods, we charge $103 and we self distribute to the retailer. If you go through a distributer, they'll charge the same as you to the retailer but will expect you to sell to them for $26 - $30 cheaper so they can make a profit. Basically, they're charging you the $26 - $30 per keg to deliver it for you.

[Sir Brewsalot]

Call a distributor in your area and ask them what they go for. If they're tight lipped, try asking the neighborhood bar what they pay for a keg of "good beer" - be sure to ask them if they get from the "Master" distributor (if your state runs anything at all like PA.)

S.

[lhall]

Make friends with one of the managers at your local good beer store, tell him what you are planning to do, and ask him for a copy of his price sheets for kegs from the local distributors. Most distributors work off a 25% margin so subtract any wholesale taxes on the beer (if your state levies any, Tennessee it's 17%) and multiply that price by 0.75 to get what the distributor buys it for from the brewery. Then figure out whether the brewery or the distributor pays the state excise tax on the beer.

The average prices are going to vary a lot from region to region due to taxes and freight costs. For instance a keg of Anchor Steam is about $130 here.

[Larry Horwitz]

Also, remember that if your business plan is for a brew pub, your best margin is at the faucet. at $4 per pint you should gross $800+ per BBL....without the cost of getting your beer to the distributor. It's usually more profitable to spend your time selling more beer at your own bar than trying to sell it outside. You have to sell more than 10 times as much just to make the same gross profit...and your margin will be way lower.

just a thought from a pub brewer. I've seen 8 different breweries try and figure this one out. The result is always the same. The more you sell inside, the more sucessful you will be. No exceptions.

[arfbrau]

One thing to consider is that while you don't make the margin on wholesale kegs, they are a great way to raise market awareness. By selling some of your beers in other establishments, you are basically putting advertising on the street that not only pays for itself directly, but actually brings in some profit and keeps your stock turning over. If you don't need to bring more people in the doors, and are selling all that you can make across your own bar, then selling wholesale kegs makes no sense. If not, it can be a great secondary revenue stream as well as a marketing tool for your brewoub.

[scrubb]

I too am working on financials for my b-plan. I searched this site but didn't find any info on pricing other than for kegs. What then is the average price people are getting from 24 pack cases to wholesale?

[Moonlight]

Go ask at a liquor store.

[Laughing Dog]

Doug,
In our area Pacific NW a case of 12oz LNR goes for 14.75-16.80 per case depending on if its FOB or delivered cost.

Fred Colby
Laughing Dog Brewing