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Yo! Hey, today we’re talking about production wages. What are considered production wages? Well, anyone producing the beer, right? So your brewers, your director of operations, your cellar men, your packaging guys, your — anybody that touches the beer is considered production.

And what we want to aim for as a benchmark of production is between 6% and 8% of total beer sales.

Same formula: Pick a time period, look at the amount of beer sales before that time period, wholesale and retail beer sales — includes beer-to-go out of the taproom. From then you want to multiply the sales number by 6% and by 8% and compare that to your gross production wages. Okay?

Pitfalls that we see with production wages are just we’re over the benchmark, right? Over the benchmark and lack of accountability with scheduling.

You and I both know there’s a lot of uptime and there’s a lot of downtime in brewing. And there’s very little in between, very little gray area.

So you’re either brewing, cleaning, packaging, banging it out or you’re waiting, you’re sitting and waiting. It falls on your director of operations, it falls on your lead brewer, your head brewer, brew master, to get the scheduling down.

So that would be the biggest pitfall that I see when it comes to over-subscribed production wages. And the breweries that are doing it well have their production schedule lined up. They have their production schedule in order. There’s very little deviation from that.

I know that’s easier said than done because you’re dealing with lots of variables when you’re brewing. But if your director of operations is able to hit that yeast cell count, the fermentation days, the packaging days, the — fixing the packaging line, the canning line, if it goes down. If they’re able to do all that, you’re able to stay on production schedule.

Very important for time, very important for profit. Ok, so production wages, 6-8% of total beer sales. Pitfalls are accountability and scheduling. The winners are really able to dial in their production calendar and stay on target.

Talk to you tomorrow where we wrap up the week with taproom labor. Talk to you then, see ya.
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