A Practical Guide to Brewery COGS & Margins

In this episode, we break down what really belongs in COGS, how to read gross margin correctly, and how to dig deeper to uncover hidden margin leaks. 

If you want stronger cash flow, smarter pricing, and better decisions, this episode will help you master the numbers that matter most.

🎯 5 Actionable Takeaways

• Define COGS correctly and clean up misclassifications.
  Only direct materials, direct labor, and production overhead live in COGS. 
• Calculate and monitor gross margin.
  Track gross margin % trends and compare draft vs package so you can catch margin decline early.
• Break down margins by brand and package.
  Don’t rely on blended averages - calculate COGS and margin by SKU to identify profit drivers and margin killers.
• Allocate labor and overhead intentionally.
  Use simple drivers to create a realistic cost per BBL — clarity beats perfection.
• Turn margin insight into action.
  Use what you learn to adjust pricing, rationalize SKUs, improve efficiency, negotiate with suppliers, and drive profitability.

Resources

Get the Brewery Profit Brief - actionable tips, tactics and strategies to run a more profitable brewery.

Today’s episode is brought to you by BevCap. At Beer Business Finance, we talk a lot about installing systems that improve profitability and health insurance should be no exception. BevCap helps beverage companies apply the same discipline they use across the rest of the P&L to employee benefits, helping create smarter plans, more visibility into costs, and significant savings over time. To learn more visit BevCapManagement.com. 

Ready to transform financial results in your beer business? Learn more about the Beer Business Finance Association, a network of owners and managers working together to build more profitable companies.