The $1 Pricing Mistake That’s Costing Breweries Thousands

Friends!

Hope you are wrapping up a prosperous and successful summer at your brewery.

Controversial statement loading…..

Brewery owners have incredible pricing power in their taprooms as compared to wholesale.

How does that land?

Power, in this context, is a good thing. And we certainly understand that pricing is going to be based on your location.  

Just hear me out.

I get it, you don’t want to think about the taproom pricing, because it hasn’t changed in 6 years and you fear rocking the boat.

You’re not alone.  

Most brewery owners resist raising prices in their taproom out of fear their customers will not return.

Let me share a small secret with you. Customers are coming to your taproom to drink the freshest beer, from the source. Add in a kick-butt experience, and you should charge for it.

Let’s say your flagship IPA is $7.00 a pint. What happens if you raise it to $7.50?

Most owners’ first reaction is: “Customers will complain.”

Maybe. 

But the real question is: Will they leave?

A customer grumbling about a $7.50 pint and then enjoying two of them isn’t complaining. It’s commentary.

I love customer commentary. 

It’s important to listen to the customer and acknowledge them. I don’t advise allowing their commentary to shift the direction of your business. 

That said, losing a customer stinks.  I’m not advocating to dig your heels in and upset the whole group for the sake of profit. But at the same time, we need to admit what is actually happening. Labor is up. Rent is up. Insurance is up. The glycol chiller is one bad Friday away from a repair bill. That gap has to come from somewhere, and usually it comes out of your pocket. 

Which brings me back to my initial point, pricing power. 

Can we look at the math?

Take a brewery selling 500 pints a week at $7.00. That’s $3,500 a week. Raise it to $7.50 and you add $250 a week, $14,000 a year, off the exact same beer, staff, and crowd. At a 50% margin, that’s $7,000 in profit from one line on the menu. No new fermenter. No new hire.

Worried about losing volume? At $7.50, you only need 467 pints a week to match what you made at $7.00. You could sell 33 fewer pints, a 6.6% drop, and still come out ahead.

Flights are the same trap, just easier to miss, because they feel like one sale instead of four. Move the four-pour on a board from $10 to $12, sell 150 a week, and that’s another $15,600 a year. 

While flights are a labor nightmare, they should be priced accurately. 

Below is a breakdown of two items we discussed. 

Menu item	Price change	Weekly volume	Weekly lift	Annual Revenue lift
Pint	$7.00 → $7.50	500	$250	$14,000
Flight (4-pour)	$10.00 → $12.00	150	$300	$15,600
Combined			$550	$29,600

$29,600 in additional annual revenue. Same beer, same customer, no major investment.  The beauty of this power move is, it compounds. This example is for two menu items, imagine if you took a close look at each offerings and adjusted them. Most of our customers will sell 500 pints before 2 PM on a Saturday. So if you have a busy taproom, this play can change your cash position, for the positive, rather quickly. 

Still not convinced you have this power play down?

That’s fine, let’s approach taproom pricing from a different angle, account pricing. I want you to visit five on-premise accounts and see what they charge for your product. Come back to the brewery and make sure you are not undercutting those accounts. I want you to charge more than they do. Why?

If you scroll up to the top of this blog post, I must remind you that the customer is getting the beer from the source. That is the freshest product available. So charge for it. Also accounts get really upset when you undercut them. 

Curious what this looks like for your taproom operations? Check out our Taproom Profit Plays guide (the tool that helps you find more profit without adding staff, equipment, or advertising) and schedule a free profit consulting call with our team.

-cf