Brewing Beer: Cost-Effective Or Not?

Homebrewing is often viewed as an expensive hobby, with the cost of a basic brewing kit ranging from $160 to $200. However, when compared to the cost of buying beer, especially craft beer, brewing at home can be significantly cheaper in the long run. The startup cost for homebrewing equipment can be steep, but the cost per beer decreases with each batch, and the overall cost depends on various factors such as brewing methods, ingredient quality, and consumption quantity.

Brewing equipment costs

When considering brewing equipment costs, it is important to take into account the potential success of the brewery. If a brewery becomes popular, a system with less capacity may become difficult and costly to modify. Additionally, certain equipment may be more expensive than others, such as a good composite floor, which can cost upwards of $10 per square foot but is necessary to withstand impact shock, temperature shock, and acid from beer.

Another factor to consider is the cost of bottling or kegging the beer. Bottling equipment can range from basic options costing around £500 to more expensive options, such as a bottling machine, which can cost upwards of £65,000. For kegs, there is also the option of using single-use KeyKegs or hiring one-way casks, which can reduce costs associated with tracking and cleaning.

When starting a brewery, it is crucial to have a realistic understanding of the costs involved and to consider all factors that can impact the overall expenses. This includes not only equipment costs but also ingredients, labour, energy, bottles or kegs, and other operational expenses.

Cost of ingredients

The cost of ingredients for brewing beer at home depends on the type of beer being brewed and the quality of the ingredients. Basic ingredients for brewing a simple beer can cost as little as $30 for a 6-gallon batch, while more exotic ingredients for a robust recipe can cost up to $46 for a 5-gallon batch.

For example, a basic home-brewed American Light Lager costs about $2.06 for a six-pack in ingredients, while a more complex Juicy NEIPA costs about $7.86 for a six-pack.

Homebrewers can save money by buying ingredients in bulk, such as malted barley, hops, yeast, and malt extract. They can also reuse and sanitize non-screw-top bottles from store-bought beer instead of buying new bottles.

The cost of ingredients for a batch of beer can also depend on the brewing method. Brewing with malt extract is faster and cheaper than all-grain brewing, but it may not produce the same quality of beer.

Overall, the cost of ingredients for homebrewing can range from $30 to $500, depending on the equipment, ingredients, and brewing method chosen.

Time and labour

Brewing beer at home is a time-consuming process. One source estimates that brewing a batch of beer takes a minimum of 8-9 man-hours spread across a 5-week waiting period. The first brew day takes up most of this time, with 4-5 hours spent brewing the wort and starting fermentation. The remaining time is spent on transferring (1 hour), bottling (1 hour), and cleaning/sanitizing (2-3 hours).

Another source estimates that brewing a batch takes 4-5 hours with the malt extract method, and 7-9 hours with the all-grain method. Fermentation then takes 2+ weeks.

The time commitment involved in home brewing is a key reason why many people choose not to do it. One source suggests that if you factor in the value of your time, home brewing is not worth the cost. For example, 8 hours at $5 per hour adds an extra $40 cost to each batch of beer. This increases the cost per beer and may make it as expensive as store-bought beer.

However, some people may not want to assign an opportunity cost to their time if they enjoy the hobby of home brewing. One source states that "many people continue to homebrew because they love the beer they create, enjoy sharing it and love exploring new ideas".

There are ways to cut down the time spent on home brewing, such as brewing two batches at once or getting friends to help out. However, this may come at the expense of quality.

Energy costs

Energy is a significant factor in the cost of brewing beer, and brewers need to consider both the thermal power used for brewing and the electric energy that powers equipment.

Thermal Power

Thermal power is used to generate steam and hot water for brewing, packaging, and heating. Natural gas is often used as a thermal energy source. Boiling wort—heating water to a specific temperature to steep grains—requires the most thermal power of any brewing process and can account for up to a third of a brewery's total energy bill.

Electric Energy

Electric energy is used to power a brewery's equipment, including refrigeration and cooling systems, compressed-air systems, motors, and packaging systems.

According to the U.S. Energy Information Administration, the average American manufacturing plant paid $0.083 per kilowatt-hour (kWh) in November 2022. The Brewers Association (BA) estimates that a barrel of beer takes 50-66 kWh to produce. Therefore, a brewery with an annual output of 10,000 barrels might pay between $41,500 and $54,780 for energy each year.

Home brewers also need to consider energy costs. The cost of running an electric brewery depends on the local cost of electricity and the size of the batch being brewed. For example, brewing a 10-gallon batch in Hawaii, where electricity costs are around $0.045/kWh, might cost around $4 per brew. In contrast, brewing a 5-gallon batch in an area with an average electricity cost of $0.12/kWh would cost around $1.60.

Home brewers using propane for thermal power will also need to consider the cost of refilling tanks. For example, a 20-pound propane tank costing $20 might be used for four to five 6-gallon batches.

Reducing Energy Costs

Breweries and home brewers can reduce energy costs by implementing energy-saving strategies. For example, the BA recommends eliminating waste, turning off appliances and lights when not in use, and matching lighting and temperature control output to demand. Breweries can also save energy by scheduling energy-intensive processes outside of peak hours.

Cost per beer

The cost per beer varies depending on the type of beer, the equipment used, and the method of brewing.

Homebrewing Costs

Homebrewing equipment can range from $115 for basic equipment to $500 for a more advanced setup. The cost of ingredients for a 5-gallon batch of beer ranges from $30 to $46. This yields approximately 50 beers of 12 ounces each.

Commercial Beer Costs

The cost of commercial beer varies widely depending on the brand and type. "Macro" or commercial beers like Coors Lite, Miller Lite, and Bud Light are relatively inexpensive, costing around $5 for a six-pack. Craft beers tend to be more expensive, with prices ranging from $10 to $12 for a six-pack. Special release beers, hazy IPAs, and high ABV beers can cost even more, with four-packs selling for $15 or more.

For homebrewing, the cost per beer can be calculated by taking the total cost of equipment and ingredients and dividing it by the number of beers produced. For example, if we consider a basic setup with $115 equipment and a $35 ingredient kit, the total cost for the first batch is $150. With each batch yielding approximately 50 beers, the cost per beer for the first batch is $3 ($150/50). For subsequent batches, the cost per beer would be lower, as you only need to consider the cost of ingredients, which is around $0.70 per beer ($35/50).

To calculate the cost per beer for commercial options, we can use the average price of a six-pack and divide it by the number of beers in the six-pack. For "macro" beers, the cost per beer is around $0.83 ($5/6). For craft beers, the cost per beer is around $1.67 ($10/6).

Comparison

Homebrewing offers a lower cost per beer compared to purchasing commercial beer, especially when considering craft beers. However, it is important to note that homebrewing requires a larger upfront investment in equipment, and the time and effort involved in the brewing process should also be considered.

Frequently asked questions