Can you make beer cheaper than you can buy it?

New Albion, now

New Albion, now (Photo credit: cizauskas)

The answer is a definite maybe not.

You may be able to brew your own beer cheaper than you can buy it at the supermarket unless we are talking a Bud/Miller/Coors product, and then only if you never make a mistake and have a bad batch (they do happen, even to the big guys), don’t include your labor time, or the equipment.

I just brewed a batch of a New Albion pale ale clone. If you’re not familiar with New Albion, it was the craft beer brewed by a micro-brewery (in the days when Anchor Brewery was considered a small brewery), the year was 1976. (I will write more about New Albion’s history in another post.) The recipe is simple with no specialty ingredients needed. It is base malt plus a small amount of hops, and water and yeast. The simplicity lowers the ingredients cost and the time.

My calculations (below) show that I can brew a New Albion clone for $0.127 per ounce versus buying one from the supermarket for about $0.136. Or put another way, a bottle of my clone costs $1.52, which is 11 cents cheaper than a store bought version. My calculations include the cost of bottles and labor (at minimum wage).

Now, you can argue that you won’t need to buy bottles every single time (and you would be right). You might not even have to buy bottles at all and have them donated to you by friends. If you go the used bottle route, there is still a cost, the cleaning and sanitizing will take time and materials to get them ready to fill.

You might not want to include your labor, but it needs to be included (even if it’s only at minimum wage rates) because it is what economists call the “opportunity cost.” Your time is not worthless. Instead of brewing beer you could be doing something else, perhaps earning money at the minimum wage. I used four hours for the time needed to set up, mash, sparge, boil, cool, transfer to fermenter, and clean up afterward (which may be a little tight). My time for all of that is around the six hour mark, which would mean that it is cheaper for me to buy my beer than to make it (by $0.17 per bottle). I am paying for the privilege and fun of the brewing day.

The cost of equipment type stuff, boil kettles, mash tuns, etc., has been ignored; though when you throw that in it certainly tips the scales in favor of the buying of commercial beers.

The costs of brewing versus the cost of buying  are here:

Ingredient price per unit unit Amount Total
2-row pale malt $0.73 lb 12 $8.76
Cascade hops $1.25 oz 2.1 $2.63
Safale American 05 yeast $2.99 ea 2 $5.98
Propane $2.49 gallon 2.5 $6.23
Bottles $12.95 case 2.2 $28.49
Corn sugar $1.95 lb 0.25 $0.49
Labor $7.25 hr 4 $29.00
Total $81.57
Price per ounce $0.127
price per 12 oz bottle $1.53
New Albion (with CRV and sales tax) $9.79 6 pack 1
Price per ounce of Sam Adams New Albion Ale $0.136
price per 12 oz bottle $1.63
Advertisements

3 thoughts on “Can you make beer cheaper than you can buy it?

  1. Great breakdown Norm. I agree with your comparisons to the $10 6-pack but what if we compare to the more expensive 22 ounce bottles of craft beer . It seems like beer is getting more and more expensive. $10 22-ounce bombers are now becoming more and more ubiquitous and a bomber of Allagash is now selling for $20. Dogfishhead, North Coast, and even Sierra Nevada are now selling 4 packs for the same price as they once sold their 6 packs. Pliny the Elder sells for $5 for a 16.9 ounce bottle. Even with the increased cost of ingredients for brewing a 10 gallon batch of a double IPA, it would cost me $375 to buy the equivalent of 10 gallons of Pliny in their fun size 16.9 ounce bottles or $1163 to buy the equivalent of Allagash in 22 ouncers to use an extreme example. Obviously I am not drinking Allagash every night but if any other homebrewers need a justification for the time, energy, and money they put into this hobby, feel free to share in my delusion.

    • Great comment, Paul. I’m not sure I would want ten gallons of Allagash (Belgian being my least favorite style of beer), but I take your point. Dogfish runs around $10/four-pack. Hey, if I had ten gallons of Pliny, I’d be the most popular guy around (16.9 oz of Pliny! Holy crap! 8 oz is my lightweight limit). I purposely picked a beer with low ingredient requirements, which puts a homebrewer at the advantage. Though I still expected the commercial beer to win, which it does if you factor in up-front equipment costs (until they are “paid off” by your “savings”). If you want to brew a beer cheaper than any of BMC, you can’t.

      I think the cost in craft beers is in the labor (and the cachet of the brand — I think the $10 bomber is partly a construct of marketing–they charge $10 to give the illusion of it being an affordable though slightly expensive treat). While the equipment these craft brewers use is sophisticated and expensive, they employ a lot of people to do hands-on work. And, the more complex the beer, the number of inputs goes up–many of which are hands-on.

      I’ll have to run some numbers on Pliny.

Add your voice to the discussion. Be respectful of others.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s