A cost analysis of homebrewing

Homebrewing, how do I love thee?  Let me count the ways…

Of course there’s tons of great things to say about homebrewing and wine making, and why they’re so great.  The friendships, the great beer, the joy of making something yourself.  One of the more practical reasons that makes homebrewing special is it’s cost savings.  We don’t talk about this too much though, because it’s got this stigma of practicality attached to it.  I’ve never heard someone say, “I only homebrew for the cost savings.”  But it’s definitely an advantage.  I decided to really compare and see how much we’re talking about.

Now, of course, homebrewing and wine making has an initial startup cost.  Assuming someone is starting with nothing, how much does it cost to make that first batch of homebrew?

  1. An equipment kit. We recommend starting with the simple Maestro K1 kit we sell for $81.
  2. A stainless steel pot that holds at least 4 gallons (16 quarts), which we sell for $45.
  3. A True Brew recipe kit.  Prices vary, but the average cost is $40 per kit.
  4. Bottles… we recommend 2 cases of 22 oz. bottles that we sell for $13 each, or $26 total.  Of course, you could be really cheap and just scavenge 50 12 ounce bottles from your neighbor’s recycling bins.  Or not.
  5. StarSan is a sanitizer that we recommend as well.  Your equipment kit comes with a few C-Brite packets… but StarSan is great, leaves no flavors or smells, goes a long way, and costs $13.

The total cost of entry is $205.  That will get you all the equipment you need and will make 50 bottles of delicious tasting beer.  From here on out, the cost to make more extract recipe kit batches is going to be around $40.

We’ll assume that you’re no Miller/Coors swilling club-wannabe, so you’re probably paying about $9 per six pack for good quality craft beer.  Let’s do the math here and figure out where we break even.  We know that store bought beer costs about $1.50 per bottle ($9 / 6 bottles), so let’s check the score:

1st batch: After $205, you could have 136 bottles of store bought beer, or 50 bottles of homebrewed beer.  So far, homebrewing is behind.  However, your first batch was so successful, you’ve decided to make a second.  You also have all of your original equipment and you’re reusing your bottles.  The second batch of homebrew costs $40, and store bought beer still costs $1.50 per bottle.

2nd batch: After $245, you could have 163 bottles of store bought beer, or 100 bottles of homebrewed beer.  We’re starting to close the gap here… let’s make another batch.

3rd batch: After $285, you could have 190 bottles of store bought beer, or 150 bottles of homebrewed beer.

4th batch: After $325, you could have 217 bottles of store bought beer, or 200 bottles of homebrewed beer.

5th batch: After $365, you could have 243 bottles of store bought beer, or 250 bottles of homebrewed beer.  Finally, after five batches, we’ve beaten the cost of buying beer at the store.

If you really like to get nerdy, the functions for cost(y) vs. bottles(x) looks like this:

Homebrew: y = 0.8x + 165

Store bought: y = 1.5x

The crossover point for these two lines is at 235 bottles.  We can see this in the following graph:

After you drink 235 bottles of beer, homebrewing becomes almost 50% more cost effective.  You may look at a number like 235 bottles of homebrew and think to yourself, “How am I ever going to drink 235 bottles of beer?”  On its own, it looks like a big number, but in reality, that’s less than 2 beers every 3 days for a year… a modest and reasonable amount in my opinion.  If you homebrewed for five years at that rate, you would be drinking 1175 bottles and would spend $1,105 total.  Had you bought the same amount from the store, you would have spent $1,762… a savings of $657.

That’s great, but realistically, after a year or so, most people move up to all-grain brewing.  This requires some more equipment costs, such as a mash tun, propane burner and
a second larger brew pot.  Estimating high, I’d say that the total extra equipment is equal to about another $150.  However, your price goes down to around $25 per batch of 50 bottles.  The new cost functions looks like this:

Homebrew w/ all-grain:    y = 0.5x + 315

Homebrew w/ extract:      y = 0.8x + 165

Store bought:                      y = 1.5x

The graph for these cost functions together looks like this:

The cost functions for all-grain vs. extract are equal at 500 bottles, or $565 total for each. Therefore, after you drink 500 bottles, all grain becomes 37.5% more cost effective than brewing with extract.  Is that enough of a savings to make you switch based on price alone?  Not really, but cost isn’t why people make the switch to all grain anyway.  However, once you get past the equipment costs to do all grain brewing, you’re paying 1/3 the price per bottle of store bought beer.  That’s not bad!

If you think that is good, you should check out home made wine.  Wine making is where cost effectiveness really shines.  We’ll go through the details of that in my next
blog post.

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3 Responses to A cost analysis of homebrewing

  1. Pingback: Home Brewing = Saving Money? - Page 6 - Home Brew Forums

  2. seainhd says:

    Can you post the cost effectiveness of winemaking soon?

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