ba’s packaging breweries survey · advertising and marketing dollars follow a rough 1:2 ratio for...

BA’s PackagingBreweries Survey

By Pete Johnson

The Results Are In:The Results Are In:

BA’s PackagingBA’s PackagingBreweries SurveyBreweries Survey

By Pete JohnsonBy Pete Johnson

T he latest installment of The New Brewer’s continuing series of surveys dealing with brewery operational issues follows with the 2008 edition of the

Packaging Breweries Survey. The ultimate goal of this exercise is to encourage youto consider your own brewery’s data within a larger context and from a differentperspective. Individual breweries may compare their numbers to those from the survey and draw their own conclusions based on those comparisons. In so doing,you may be led to insights not readily apparent before.

With 97 total responses, we doubled the number of breweries participating in thesurvey from two years ago (in the March/April 2006 New Brewer) and we onceagain split the results into six annual production categories:

Category 1: 0-5,000 barrels (41 respondents)Category 2: 5,001-10,000 barrels (14 respondents)Category 3: 10,001-15,000 barrels (8 respondents)Category 4: 15,001-30,000 barrels (14 respondents)Category 5: 30,001-60,000 barrels (4 respondents)Category 6: 60,001 barrels and above (16 respondents)

The charts that follow show the average results of the responses to each question.As with past surveys, and despite the far larger response rate this year, the resultsshould not be seen as true industry averages, but rather as snapshots of where theresponding breweries stand at the time of the survey (August-September 2008).Also, please remember that this is a relatively small sampling, representing about20 percent of domestic small packaging brewery operations.

remain the top-selling styles at 39.6 percent,but are down from 44.7 percent in 2006.Porters and stouts continue to lead the low-est sales volume styles with a combined 22.6percent of respondents tagging them as lag-gards. Category 6, made up of the largestsmall brewers, has the largest percentage oflagers as their highest selling style than anyother category.

With exception of the smallest brewers,draft accounts for approximately two-fifthsof small brewer sales. The odd group out hereis Category 1, where draft is almost 51 per-cent of sales, and brewery tasting room salesare a healthy 13 percent. Category 3 (10,001-15,000 barrels) also enjoys robust tastingroom sales (13.5 percent) and is the groupclosest to parity for draft to packaged sales.

Selling the BeerIn line with past results, the larger brewerieshave a significantly greater geographic dis-tribution, with an orderly progression ofnumber of states sold in as annual barrelageincreases. However, the over-60,000-barreloperations sell in an average of six fewerstates compared to 2006 and have been dis-placed by the 30,001-60,000 barrel group formost states sold in (24.8). Continuing with

What’s Being BrewedWhen we look at the ale-lager sales percent-ages, a remarkable consistency in the splitholds both with overall numbers and withinthe individual categories: roughly 85 percentales and 15 percent lagers. Looking back to2006, the split was on the order of 82 per-cent ales and 18 percent lagers. Is the3-percent swing due simply to increased bar-relage volume over the past two years? Arelagers lagging in popularity or does thisreflect a broadening diversity of ale styles,particularly higher alcohol ales, beingbrewed by American small brewers?

In terms of year-round and seasonalbeers, the 30,001-60,000 barrel segmenttakes the prize for brewing the greatest aver-age number of both (10.3 and 9.5respectively). Category 6 is the most evenlysplit, while Category 2 has the fewest com-bined styles brewed over the course of ayear. As a whole, the survey results show theaverage year-round styles being brewed as7.6, with seasonals weighing in at an averageof 6.9. Looking back to 2006 numbers, theoverall average of year-round beers hasincreased by two and seasonals by one.

Turning to individual styles, IPA/Pale Ale

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(numbers in parenthesis are numbers of responses)

Brewery size Avg.

0-5,000 bbl (41) ..............................6.1

5,001-10,000 bbl (14) ..................10.7

10,001-15,000 bbl (8) ..................14.9

15,001-30,000 bbl (14) ................15.8

30,001-60,000 bbl (4) ..................16.3

60,001 and over (16) ....................16.6

HOW MANY YEARS HAVE

YOU BEEN IN BUSINESS?

Brewery Manager

Category 1: . . . . . . . . . . . . . . . . +19%

Category 2: . . . . . . . . . . . . . . . . +12%

Category 3: . . . . . . . . . . . . . . . . -31%

Category 4: . . . . . . . . . . . . . . . . +18%

Category 5: . . . . . . . . . . . . . . . . equal

Category 6: . . . . . . . . . . . . . . . . +18%

Other Salaried Brewing Staff

Category 1: . . . . . . . . . . . . . . . . . +9%

Category 2: . . . . . . . . . . . . . . . . +15%

Category 3: . . . . . . . . . . . . . . . . . -8%

Category 4: . . . . . . . . . . . . . . . . +16%

Category 5: . . . . . . . . . . . . . . . . equal

Category 6: . . . . . . . . . . . . . . . . . +7%

Brewing Staff Hourly Wage

Category 1: . . . . . . . . . . . . . . . . +10%

Category 2: . . . . . . . . . . . . . . . . . +6%

Category 3: . . . . . . . . . . . . . . . . . +9%

Category 4: . . . . . . . . . . . . . . . . equal

Category 5: . . . . . . . . . . . . . . . . +14%

Category 6: . . . . . . . . . . . . . . . . . -3%

Sales Staff Salary

Category 1: . . . . . . . . . . . . . . . . -17%

Category 2: . . . . . . . . . . . . . . . . -20%

Category 3: . . . . . . . . . . . . . . . . -20%

Category 4: . . . . . . . . . . . . . . . . +22%

Category 5: . . . . . . . . . . . . . . . . +12%

Category 6: . . . . . . . . . . . . . . . . +14%

SALARIES & WAGES —

% CHANGE SINCE 2006

the progression theme, we find the numberof sales staff on an orderly upward curve asbarrelage increases until the big bump at Cat-egory 6. This number is admittedly skewedby a single brewery in the group, which ifremoved puts the number at much moremanageable 28 full-time equivalents.

Advertising and marketing dollars followa rough 1:2 ratio for breweries up to the15,000-barrel level. Beyond that, marketingincreases exponentially compared to adver-tising with ratios of 1:4, 1:9 and 1:5respectively for categories 3 through 6. Cat-egory 3 merits special attention as theleading spenders in both advertising andmarketing by a wide margin. Clearly, movingbeyond the 15,000-barrel level takes a lot ofhard work and a lot of cash!

To raise that cash, one might suspect thatthe Category 3 breweries would be charg-ing on average higher than some of theother groups, but this isn’t the case. On aver-age, the 10,001-15,000 barrel operationshave the lowest mean prices for kegs amongall categories and one of the lowest forcases. At the high end on both kegs andcases are the smallest breweries (about 10percent above the next highest prices oncases and 20 percent on kegs); on the lowend for cases are the largest breweries(about 9 percent below the price of the nextlowest group) and the 10,001-15,000 bar-rel breweries for kegs (around 9.5 percentless than the next lowest group).

57w w w . b e e r t o w n . o r g The New Brewer J a n u a r y / F e b r u a r y 2 0 0 9


Brewery size Advertising Marketing

0-5,000 bbl (29)..........................................................$2.38 ..........................$5.33

5,001-10,000 bbl (12) ................................................$2.60 ..........................$5.12

10,001-15,000 bbl (7) ................................................$6.64..........................$15.41

15,001-30,000 bbl (12) ..............................................$2.23 ..........................$8.44

30,001-60,000 bbl (4) ................................................$0.76 ..........................$6.88

60,001 and over (10) ..................................................$2.51..........................$12.15

HOW MANY DOLLARS PER BARREL ARE SPENT ON:


Brewery size Avg.

0-5,000 bbl (40) ............................18.4

5,001-10,000 bbl (14) ...................25.3

10,001-15,000 bbl (8) ...................39.4

15,001-30,000 bbl (14) .................46.7

30,001-60,000 bbl (4) ...................60.0

60,001 and over (16)...................179.1

WHAT SIZE IS YOUR BREW

SYSTEM (IN BARRELS)?


Brewery size Ales Lagers

0-5,000 bbl (41) .............83.7......16.3

5,001-10,000 bbl (14) ....91.0.......9.0

10,001-15,000 bbl (8) ....83.7......16.3

15,001-30,000 bbl (14) ..84.6......15.4

30,001-60,000 bbl (4) ....88.3......11.7

60,001 and over (16)......80.4......19.6

WHAT PERCENTAGE OF

YOUR SALES IS:

The Costs of Doing BusinessOn the other side of the ledger, the costs ofraw materials and labor vie for being thelargest expense of breweries across theboard (averaging 25 percent of annualexpenses for categories 1-3 and 21 percentfor categories 4-6), with packaging materialsranking third (12 percent of annual expensesfor categories 1-3 and 19 percent for cate-gories 4-6). Two years ago a different pictureemerged as it was labor and packaging coststhat were battling it out for top honors andingredients were a solid third-place finisher.Not that any affirmation of dramaticallyincreased ingredient costs are needed, butthere you have it.


Brewery size

0-5,000 bblAmberAmber AleAmber/ BlondeAmerican Brown AleAmerican HefeweizenAmerican IPAAmerican Pale AleBelgian AleBelgian AlesBelgian-style TripelBlonde LagerBlond AleBlonde AleBrown AleBrown AleCream AleDark AleFruitHefeWeizenHoney AleIndia Pale AleIPAIPAIPAIPA/Double IPAIPA/Hefe/AltIrish-Style AleLight Lager (no well-defined style)

OktoberfestPale AlePale AlePale AlePale AlePale Ale/AmberPilsnerPorterRed AleScottish AleSteamVienna-style LagerVienna-style Lager

5,001-10,000 bblAmber AleAmerican Pale AleBiere de GardeBrown AleIndia Pale AleIPANut BrownPale AlePale AlePale AlePale AleScottish AleSummerWitbier

10,001-15,000 bblAmberAmerican WheatIPAIPAIPAPale AlePale AleWhite

15,001-30,000 bblAmberAmber AleDry hopped aleESBExtra Pale AleFruit beerIPAIPALagerPale AlePale AleSaison Scottish-style Ale

30,001-60,000 bblBock w/ ale yeastEnglish Brown AleIPAScottish/Amber

30,001-60,000 bblWheat AleIPAIPAPale AleAmber AleLagerLagerWheatIPAAleIPAAmber alePale AleIPALagerGolden Lager

WHAT STYLE OF BEER ACCOUNTS FOR

YOUR HIGHEST SALES?


Brewery size

0-5,000 bbl (41) ..............................3.4

5,001-10,000 bbl (13) ....................6.6

10,001-15,000 bbl (8) ..................10.9

15,001-30,000 bbl (14) ................17.5

30,001-60,000 bbl (4) ..................24.8

60,001 and over (16) ....................20.8

HOW MANY STATES DO

YOU SELL BEER IN?


Brewery size

0-5,000 bbl (41) ..............................1.4

5,001-10,000 bbl (14) ....................2.3

10,001-15,000 bbl (8) ....................2.1

15,001-30,000 bbl (14) ..................6.5

30,001-60,000 bbl (4) ....................6.3

60,001 and over (15) ....................41.7

HOW MANY SALES PEOPLE

DO YOU EMPLOY (IN FULL-

TIME EQUIVALENTS)?


Brewery size Year SeasonalRound

0-5,000 bbl (40)...............5.8 .........7.6

5,001-10,000 bbl (14) .....6.0 .........5.6

10,001-15,000 bbl (8) .....8.8 .........4.5

15,001-30,000 bbl (14) ...7.1 .........6.6

30,001-60,000 bbl (4) ....10.3 ........9.5

60,001 and over (16) ......7.7 .........7.8

HOW MANY BRANDS DO

YOU BREW?



Brewery size

0-5,000 bbl (23) ......................$28,900

5,001-10,000 bbl (14) ............$36,700

10,001-15,000 bbl (7) ............$40,300

15,001-30,000 bbl (13) ..........$57,700

30,001-60,000 bbl (4) ............$66,900

60,001 and over (13) ..............$60,200

WHAT IS THE AVERAGE

ANNUAL SALARY YOU PAY

SALES STAFF?


Brewery size

0-5,000 bbl (28) ......................$42,700

5,001-10,000 bbl (14) ............$46,700

10,001-15,000 bbl (8) ............$55,900

15,001-30,000 bbl (14) ..........$71,500

30,001-60,000 bbl (4) ............$75,900

60,001 and over (13) ............$111,500

WHAT IS THE ANNUAL

SALARY OF YOUR

BREWERY MANAGER?


Brewery size

0-5,000 bbl (19) ......................$30,900

5,001-10,000 bbl (12) ............$34,800

10,001-15,000 bbl (6) ............$38,700

15,001-30,000 bbl (12) ..........$41,200

30,001-60,000 bbl (2) ............$40,000

60,001 and over (14) ..............$51,800

WHAT IS THE AVERAGE

SALARY OF OTHER

SALARIED BREWING STAFF?


Brewery size Draft Bottles/cans In-housetasting room/pub

0-5,000 bbl (40 ..........................50.8.......................36.2..........................13.0

5,001-10,000 bbl (14) ................35.4.......................60.1...........................4.5

10,001-15,000 bbl (8) ................41.0.......................45.5..........................13.5

15,001-30,000 bbl (14) ..............35.6.......................59.0...........................5.4

30,001-60,000 bbl (4) ................43.7.......................53.7...........................2.6

60,001 and over (15)..................35.6.......................63.7...........................0.7

WHAT PERCENTAGE OF YOUR SALES IS:


Brewery size

0-5,000 bbl (31) ........................$11.40

5,001-10,000 bbl (14) ..............$11.67

10,001-15,000 bbl (7) ..............$12.21

15,001-30,000 bbl (14) ............$13.39

30,001-60,000 bbl (3) ..............$15.42

60,001 and over (13) ................$17.93

WHAT IS THE AVERAGE

HOURLY WAGE OF YOUR

OTHER BREWING STAFF?



Brewery size Case of beer Keg of beer

0-5,000 bbl (41) ..........................................$25.93....................................$106.51

5,001-10,000 bbl (13) ................................$19.91 ....................................$85.97

10,001-15,000 bbl (8) ................................$19.99 ....................................$77.50

15,001-30,000 bbl (12) ..............................$21.11 ....................................$84.74

30,001-60,000 bbl (4) ................................$22.01 ....................................$85.20

60,001 and over (12)..................................$18.23 ....................................$80.54

WHAT IS THE MEAN PRICE, FOB YOUR LOADING DOCK, OF A:

Brewery size

0-5,000 bblAmberAmerican HefeweizenAmerican Pale AleBarleywineBelgian WitBiere de GardeBrown AleBrown AleCoconut PorterExport LagerFruitFruitGerman PilsnerIrish RedIrish RedLagerLagerMaibockMinor SeasonalOatmeal StoutOctoberfestPale AlePale AlePale AlePorterPorterPorterPorterPorterSeasonalSeasonalSeasonalsSeasonalsStoutStoutStoutViennaWheatWit

5,001-10,000 bblAbbey DubbeBarleywineBelgianBlack LagerGolden AleHefeweizenMai BockOlde AlePale AlePorterSeasonalSour AlesStock AleStout

10,001-15,000 bblCream StoutDubbelGerman LagerLitePale LagerPilsnerStoutStout/Porter

15,001-30,000 bblAleAmerican WheatBiere de MarsBrownESBESBImperial StoutKolschOatmeal StoutPilsnerPorterPorterStout30,001-60,000 bblImperial StoutMiscellaneous specialtybrewsOrdinary BitterSmoke/Rauchbier

30,001-60,000 bblStoutSpecialtySmoked PorterExtra Special BitterAleAleStoutDarkSpecialtySaisonBelgian AbbeyImperial StoutSaisonWeisseStout

WHAT STYLE OF BEER ACCOUNTS FOR

YOUR LOWEST SALES?

Generally speaking, Category 5 breweriesoffer the best array of benefits at the highestlevels for salaried staff and are either first orsecond best when it comes to hourly staffbenefits, although on a small base of fourresponses. Of note is that 100 percent ofresponding breweries above 10,000 barrelsprovide medical coverage for salaried staff andat least 75 percent provide dental coverage.

Regarding salaries and wages, averagebrewery manager salaries generally rose byhealthy margins in all barrelage categoriesover the past two years, with the exceptionof the 10,001-15,000 group. This anomaly,however, is undoubtedly explained by thegroup’s extremely small response rate of twoin 2006. Sales staff salaries suffered consid-erably for the smaller breweries under15,000 barrels.

Looking to the results of the survey’s finaltwo questions, we find self distribution (anextremely important option for small brew-ers) has increased for the first four barrelagegroups in the survey and clocks in at ahealthy 44.5 percent for the smallest cate-gory. The final question dealt withmembership in state brewer guilds and asso-ciations. The affirmative response levels wereextraordinarily good, particularly when youconsider that only about 60 percent of stateshave active organizations. The fact that 82.5percent of survey respondents belong tostate guilds is extremely heartening consid-ering the extent to which the small brewingcommunity is regulated at the state level. As



Brewery size Yes

0-5,000 bbl (41) ........................78.0%

5,001-10,000 bbl (14) ................64.3%

10,001-15,000 bbl (8) ................87.5%

15,001-30,000 bbl (14) ..............78.6%

30,001-60,000 bbl (3) ................100%

60,001 and over (15) ................86.7%

DO YOU BELONG TO A

STATE BREWERS

GUILD/ASSOCIATION?

Brewery size (bbl)0-5,000 5,001-10,000 10,001-15,000

(26) (12) (5)Raw materials ................24.5% ........................23.8%..........................27.9%Labor (including benefits)22.7% ........................27.5%..........................15.4%Insurance ........................6.5% ..........................2.8%............................2.7%Excise tax ........................4.4% ..........................3.6%............................3.5%Other taxes ......................5.1% ..........................2.9%............................7.9%(income, payroll, sales)Utilities ............................6.4% ..........................5.2%............................6.2%Packaging materials ......13.2% ........................17.8% ..........................9.2%Beer freight......................2.7% ..........................4.2%............................5.2%

Brewery size (bbl)15,001-30,000 30,001-60,000 60,001 and over

(10) (3) (10)Raw materials ................22.1% ........................21.2%..........................19.1%Labor (including benefits)23.6% ........................25.5%..........................17.3%Insurance ........................1.5% ..........................1.4%............................1.2%Excise tax ........................7.1% ..........................3.2%............................6.7%Other taxes ......................3.2% ..........................3.7%............................4.6%Utilities ............................3.7% ..........................2.4%............................3.3%Packaging materials ......20.6% ........................19.2%..........................18.5%Beer freight......................3.5% ..........................2.8%............................3.5%

WHAT PERCENTAGE OF YOUR ANNUAL EXPENSES IS

YOUR COST FOR:


Brewery size

0-5,000 bbl (35) ........................44.5%

5,001-10,000 bbl (14) ................18.0%

10,001-15,000 bbl (8) ................ 4.9%

15,001-30,000 bbl (14) ..............11.1%

30,001-60,000 bbl (4) ..................6.3%

60,001 and over (13) ..................4.7%

WHAT PERCENTAGE OF

YOUR BEER DO YOU SELF

DISTRIBUTE?


Brewery size

0-5,000 bbl (22) ........................22.0%

5,001-10,000 bbl (14) ................25.5%

10,001-15,000 bbl (7) ................45.1%

15,001-30,000 bbl (13) ..............21.8%

30,001-60,000 bbl (3) ................43.3%

60,001 and over (10) ................18.9%

WHAT PERCENTAGE OF

SALES STAFF SALARY IS

COMMISSION BASED?

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we enter even more uncertain economic andpolitical times, it is crucial that small brew-ers come together at the state level toactively defend and promote their issues andinterests.

While this article has focused on some ofthe highlights within the data, the accompa-nying charts hold a wealth of informationwaiting to be analyzed and applied to youroperation. As you consider the data withinthese charts, you will undoubtedly revealsomething about breweries in general that isuseful for your brewery in terms of futuregrowth and continued success.

Pete Johnson is programs manager forthe Brewers Association from his homebase in Chapel Hill, N.C. ■


www.supportyourlocalbrewery.org

Brewery size (bbl) 0-5,000 5,001-10,000 10,001-15,000

(36) (14) (8)

Medical 58.3% 85.7% 100%

Dental 13.8% 42.9% 75.0%

Vision 11.1% 42.9% 50.0%

Retirement 25.0% 21.4% 37.5%

Profit sharing 11.1% 28.6% 37.5%

Ownership share 11.1% 14.3% 0%

Brewery size (bbl)

15,001-30,000 30,001-60,000 60,001 and over (14) (4) (14)

Medical 100% 100% 100%

Dental 78.6% 100% 85.7%

Vision 50.0% 75.0% 57.1%

Retirement 92.9% 100% 85.7%


Ownership share 7.1% 50.0% 28.6%

WHAT BENEFITS DO YOU OFFER YOUR SALARIED STAFF?

Brewery size (bbl)

0-5,000 5,001-10,000 10,001-15,000(36) (14) (8)

Medical 33.3% 64.3% 87.5%

Dental 11.1% 35.7% 62.5%

Vision 8.3% 35.7% 50.0%

Retirement 19.4% 21.4% 25.0%

Profit sharing 13.8% 28.6% 0%

Ownership share 0% 7.1% 0%

Brewery size (bbl)

15,001-30,000 30,001-60,000 60,001 and over (14) (4) (14)

Medical 85.7% 75.0% 100%

Dental 71.4% 75.0% 85.7%

Vision 42.9% 75.0% 50.0%

Retirement 78.6% 100% 85.7%


Ownership share 7.1% 50.0% 14.3%

WHAT BENEFITS DO YOU OFFER YOUR HOURLY STAFF?

ba’s packaging breweries survey · advertising and marketing dollars follow a rough 1:2 ratio for...

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