Brewery Business Growth in a Crowded Craft Beer Market

Operating in today's craft beer industry is no easy feat. Craft breweries face rising costs, material shortages, limited shelf space, and changing trends in beer consumption. But, there is still potential for craft breweries to grow when armed with the right tools. Whether you're just starting out, or already an established business producing quality beer, we believe there are a few metrics you should keep a close eye on to ensure future growth.

We get that looking at business reports and data isn't the most glamorous part of running a successful brewery, but it can help you to uncover opportunities for growth, better understand consumer preferences and grow in the craft beer industry. We believe there are three reports that are often overlooked:

• Material planning
• Product profitability
• Customer re-order period

Chances are, you have a rough idea of what your beer production schedule looks like for the next week or two. You’ve looked at the tanks, you know what you need to brew, and roughly what raw materials you need for brew day. So what else is there?

Many small and independent brewers have limited shelf space and aren't able to keep surplus inventory on hand for months at a time. This is where a robust material planning report comes in.

Your material planning report should look at the required raw material for the next period and compare it to your existing inventory. It should also show the quantity of inventory waiting to be received and then, finally indicate what you’re missing for the next couple of batches.

Your brewery’s material planning report can help your brewery in three key areas:

• It helps you to plan your craft beer production schedule while accounting for lead times on supplier deliveries without over purchasing raw materials
• It streamlines your inventory management ensuring you can meet demand in a more timely manner
• It helps manage cashflow ensuring that you aren't tying cash up in unused supplies

Many brewers periodically reference a cost of goods sold report to see how much their beer costs them to produce. This sort of information is often pulled from an accounting platform, or a spreadsheet, but these reports often aren't designed to show profit margins at the product, recipe or even beer style level.

To get a good idea of how each of your brewery's beer brands are performing, you might want to turn to a dedicated profitability report looking at the unique profit margins of each type of beer you produce.

This information is usually easy to find if you're using a brewery management system, but it can be gathered in a spreadsheet too. If you are looking to build out your own report in excel there are a few things to consider:

• Volumes sold through each distribution channel within the period
• Varying price points that the product is sold at
• COGs for each packaging type that a product is offered in

With this type of tracking in place, you can prioritize your brews based on which products are performing well. This helps you to manage business operations more strategically.

One of the factors driving the success of your brewery comes down to your customers' purchasing patterns. Now that we have additional information on what to buy, and which products are selling the best, we should look at who we are selling to.

The craft brewing industry sees frequent changes in consumer trends. Staying ahead of these trends can make a world of difference in your brewery's chance of success, help you plan new beer releases, and make it easier to prioritize your production schedule. So what does this look like?

For brewpubs, taprooms and microbreweries, you'll want to focus on things like:

• How consumer demand fluctuates period over period in your own storefront or taproom
• The impact of events on sales trends
• Trends among beer drinkers within your local market and at other local breweries

For breweries where distribution is a larger part of the business, wholesale customer reorder analysis could also be a powerful tool.

While forecasting sales is important, reorder analysis allows breweries to identify behavioural trends among their customers, by looking at reorder frequency patterns. By tracking customer reorders, sales teams can take a more proactive approach, engaging customers who haven't ordered in a while. This also creates opportunities to upsell or promote new products to a customer base that is already familiar with your beer.

This list isn't exhaustive and there are plenty of other metrics that your brewery could track. But whether you're just starting out, or are an established brewery, these reports can help position your business for sustainable growth.

Block of some time in your calendar to get your reports setup, whether that be in a spreadsheet, or using your brewery management software. Once that part is done you just need to set a plan to update your numbers on a periodic basis. Make these numbers each to access and you'll be all set to make better decisions for your business!

As a brewery management software, Brew Ninja can help automate this work, putting powerful reports at your fingertips without any additional work required. Interested in learning more? Book a demo with a member of our team!