23 data to include in the business plan of your brewpub

This article was written by our expert who is surveying the industry and constantly updating the business plan for a brewpub.

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Ever pondered what the ideal cost of goods sold (COGS) percentage should be to ensure your brewpub remains profitable?

Or how many barrel turns you need to achieve each month to meet your production and sales goals?

And do you know the optimal staff-to-patron ratio for a bustling brewpub environment?

These aren’t just interesting figures; they’re the critical metrics that can determine the success or failure of your business.

If you’re crafting a business plan, investors and financial institutions will scrutinize these numbers to gauge your strategic approach and potential for success.

In this article, we’ll delve into 23 crucial data points every brewpub business plan must include to demonstrate your readiness and capability to thrive.

Brewpubs should aim to keep beer production costs below 20% of revenue to ensure profitability

Brewpubs should aim to keep beer production costs below 20% of revenue to ensure profitability because it allows them to maintain a healthy margin that covers other operational expenses.

By keeping production costs low, brewpubs can allocate more resources to areas like marketing, staff wages, and facility maintenance, which are crucial for attracting and retaining customers. Additionally, a lower cost percentage provides a buffer against fluctuations in ingredient prices or unexpected expenses, ensuring the business remains stable.

However, this target can vary depending on factors such as the brewpub's location, size, and market positioning.

For instance, a brewpub in a high-rent urban area might need to keep production costs even lower to offset higher overheads, while a smaller, rural brewpub might have more flexibility. Ultimately, each brewpub must assess its unique circumstances and adjust its cost targets accordingly to maintain financial health and competitive advantage.

Brewing equipment maintenance and replacement should account for 2-3% of revenue annually

Brewing equipment maintenance and replacement should account for 2-3% of revenue annually because it ensures the longevity and efficiency of the equipment, which is crucial for consistent beer quality.

Regular maintenance helps prevent unexpected breakdowns that could lead to costly downtime and lost sales, while timely replacement of outdated equipment can improve production efficiency and reduce energy costs. Allocating this percentage of revenue allows brewpubs to plan for these expenses without disrupting their financial stability.

However, this percentage can vary depending on factors such as the age of the equipment and the volume of production.

For instance, newer equipment might require less maintenance, allowing for a lower percentage allocation, while older equipment might need more frequent repairs, justifying a higher percentage. Additionally, brewpubs with higher production volumes may experience more wear and tear, necessitating a larger budget for maintenance and replacement.

Successful brewpubs often have a beer-to-food sales ratio of 60:40, leveraging higher margins on beer

Successful brewpubs often achieve a beer-to-food sales ratio of 60:40 because they can leverage the higher profit margins typically associated with beer sales.

Beer, especially when brewed in-house, often has a lower cost of production compared to food, allowing brewpubs to enjoy a higher markup on each pint sold. Additionally, beer sales can drive customer loyalty and repeat visits, as patrons may return to try new or seasonal brews, further boosting the profitability of the beer segment.

However, this ratio can vary depending on the specific business model and target market of the brewpub.

For instance, a brewpub located in a tourist-heavy area might see a higher food sales ratio due to visitors seeking a full dining experience. Conversely, a brewpub that focuses on creating a community atmosphere with events and tastings might maintain a higher beer sales ratio, as patrons are drawn primarily for the unique beer offerings.

Seasonal and limited-edition brews can increase customer visits by 15-20%

Seasonal and limited-edition brews can boost customer visits by 15-20% because they create a sense of exclusivity and urgency.

When customers know that a brew is available for a limited time, they are more likely to visit the brewpub to try it before it's gone. This strategy taps into the fear of missing out, which can be a powerful motivator for increasing foot traffic.

Additionally, these unique brews often attract beer enthusiasts who are eager to try new and innovative flavors.

However, the impact can vary depending on factors like the brewpub's location and reputation. In areas with a high concentration of craft beer lovers, the increase in visits might be more pronounced, while in regions with less interest in craft beer, the effect might be more modest.

Brewpubs should aim for a break-even point within 24 months due to higher initial equipment costs

Brewpubs should aim to reach a break-even point within 24 months primarily because of the substantial initial investment in equipment.

The cost of brewing equipment can be quite high, and this financial burden can significantly impact a new brewpub's cash flow. By targeting a break-even point within two years, brewpubs can ensure they are on a path to financial sustainability and can start generating profits sooner.

However, this timeline can vary depending on factors such as location, market demand, and the brewpub's business model.

For instance, a brewpub in a high-traffic urban area might reach its break-even point faster due to higher customer volume. Conversely, a brewpub in a less populated area might take longer to achieve the same goal, necessitating a more conservative financial strategy.

Prime cost (beer production, food, and labor) should stay below 55% of revenue for financial health

In a brewpub, keeping the prime cost—which includes beer production, food, and labor—below 55% of revenue is crucial for maintaining financial health.

This percentage ensures that there is enough gross profit left to cover other operating expenses like rent, utilities, and marketing, while also allowing for a reasonable net profit margin. If prime costs exceed this threshold, it can lead to financial strain, making it difficult to sustain the business in the long term.

However, this benchmark can vary depending on factors such as location, the scale of operations, and the specific market segment the brewpub targets.

For instance, a brewpub in a high-cost urban area might have higher labor costs, necessitating a tighter control on food and beer production expenses to stay within the 55% range. Conversely, a brewpub in a smaller town might have lower overheads, allowing for a slightly higher prime cost percentage while still remaining profitable.

Inventory turnover for raw brewing materials should occur every 14-21 days to maintain freshness and quality

Inventory turnover for raw brewing materials should occur every 14-21 days to maintain freshness and quality because these ingredients, like hops and malt, can degrade over time, affecting the taste and aroma of the beer.

In a brewpub setting, where the focus is on serving fresh and high-quality beer, it's crucial to use ingredients that are at their peak. Hops, for example, can lose their potency and develop off-flavors if stored for too long, which is why regular turnover is essential.

However, the ideal turnover rate can vary depending on the specific ingredients and the type of beer being brewed.

For instance, some specialty grains or yeast strains might have a longer shelf life and can be stored for extended periods without compromising quality. On the other hand, seasonal ingredients or those used in limited-edition brews might require more frequent turnover to ensure they are used at their freshest, enhancing the overall beer-drinking experience.

Brewpubs should allocate 5-7% of revenue for marketing, focusing on local events and beer festivals

Brewpubs should allocate 5-7% of revenue for marketing because this range is generally effective for maintaining visibility and attracting new customers.

Focusing on local events and beer festivals allows brewpubs to engage directly with their community, which is crucial for building a loyal customer base. These events provide opportunities for brand exposure and allow potential customers to experience the brewpub's offerings firsthand.

However, the specific percentage of revenue allocated to marketing can vary depending on factors such as the brewpub's size, location, and competition.

For instance, a brewpub in a highly competitive urban area might need to spend more on marketing to stand out, while one in a smaller town with less competition might get by with spending less. Ultimately, the key is to tailor the marketing strategy to the brewpub's unique circumstances and goals.

Staff turnover in brewpubs can be lower than traditional restaurants, averaging around 60%, but still requires budgeting for training

Staff turnover in brewpubs tends to be lower than in traditional restaurants, averaging around 60%, due to a few key factors.

Firstly, brewpubs often cultivate a strong community atmosphere, which can lead to higher employee satisfaction and loyalty. Secondly, employees in brewpubs might have a greater interest in craft beer, which can enhance their engagement and reduce turnover.

However, even with lower turnover rates, brewpubs still need to budget for training because new hires require time to learn the specific operations and culture of the establishment.

Turnover rates can vary depending on factors such as location, management style, and the size of the brewpub. For instance, a brewpub in a college town might experience higher turnover due to a transient student workforce, while a well-managed brewpub with a strong team culture might see even lower turnover rates than the average.

Effective taproom design can increase customer dwell time by 20%, boosting sales

Effective taproom design can significantly increase customer dwell time by 20%, which in turn boosts sales in a brewpub setting.

When a taproom is designed with a welcoming and comfortable atmosphere, customers are more likely to stay longer, enjoying the ambiance and ordering more drinks or food. Elements such as comfortable seating, adequate lighting, and thoughtful layout contribute to a space where patrons feel relaxed and inclined to linger.

Additionally, a well-designed taproom can create a sense of community, encouraging social interaction and repeat visits.

However, the impact of design can vary depending on factors like location, target audience, and the overall theme of the brewpub. For instance, a taproom in a bustling urban area might benefit more from a modern, sleek design, while a rural brewpub might see better results with a rustic, cozy atmosphere. Understanding these nuances allows brewpub owners to tailor their design strategies to maximize customer engagement and sales effectively.

Beer profit margins are generally 70-80%, making them a critical component of profitability

Beer profit margins in a brewpub are generally high, around 70-80%, making them a crucial factor in overall profitability.

This is because the cost of ingredients for brewing beer is relatively low compared to the price at which it is sold to customers. Additionally, brewpubs often have the advantage of selling their own house-made beers, which eliminates the need for middlemen and further increases profit margins.

However, these margins can vary depending on factors such as location and operational costs.

For instance, a brewpub in a high-rent area might see lower profit margins due to increased overhead expenses. Conversely, a brewpub that can source ingredients locally and efficiently manage its operations might enjoy even higher margins.

Brewpubs should aim to have at least 10-15% of their beer menu as flagship brews to build brand identity

Brewpubs should aim to have at least 10-15% of their beer menu as flagship brews to build brand identity because these core offerings help establish a recognizable and consistent presence in the market.

Flagship brews serve as the anchor of a brewpub's identity, providing customers with a reliable choice that they can associate with the brand. This consistency is crucial for building customer loyalty, as patrons often return for the specific flavors they love and trust.

However, the percentage of flagship brews can vary depending on the brewpub's size, location, and target audience.

For instance, a brewpub in a tourist-heavy area might benefit from a larger variety of experimental brews to attract adventurous visitors, while a local neighborhood pub might focus more on flagship offerings to cater to regulars. Ultimately, the key is to balance flagship brews with seasonal or experimental options to keep the menu fresh and exciting while maintaining a strong brand identity.

Collaborations with local breweries can increase foot traffic by 10-15%

Collaborations with local breweries can boost foot traffic by 10-15% because they create a unique draw for customers who are eager to try exclusive brews.

When a brewpub partners with a local brewery, it often results in limited edition beers that are only available for a short time, creating a sense of urgency. This exclusivity can attract both regular patrons and new visitors who are interested in experiencing something they can't find elsewhere.

Additionally, these collaborations often come with cross-promotional opportunities, where both the brewpub and the local brewery promote the event to their respective audiences, effectively doubling the reach.

However, the impact on foot traffic can vary depending on factors like the popularity of the local brewery and the marketing efforts put into the collaboration. In some cases, if the local brewery has a strong following, the increase in foot traffic could be even higher than 15%, while less well-known breweries might not have as significant an impact.

Brewpubs should maintain a current ratio (assets to liabilities) of 1.5:1 due to higher capital investment in equipment

Brewpubs should aim for a current ratio of 1.5:1 because they require a significant amount of capital investment in specialized brewing equipment.

This ratio ensures that brewpubs have enough liquid assets to cover their short-term liabilities, which is crucial given the high upfront costs associated with brewing operations. Maintaining this ratio helps brewpubs manage their cash flow effectively, allowing them to invest in quality ingredients and staff without risking financial instability.

However, the ideal current ratio can vary depending on the specific circumstances of each brewpub.

For instance, a brewpub in a high-demand area might sustain a slightly lower ratio due to consistent revenue streams, while a new or expanding brewpub might need a higher ratio to cushion against unexpected expenses. Ultimately, the key is to balance investment in equipment with the ability to meet short-term obligations comfortably.

Offering beer flights can increase average ticket size by 15-25%

Offering beer flights can increase average ticket size by 15-25% because they encourage customers to try multiple beers, leading to higher spending.

Beer flights provide a unique opportunity for patrons to sample a variety of brews, which can entice them to purchase full-sized pints of their favorites. This not only boosts the initial sale but also increases the likelihood of repeat visits, as customers may return to enjoy the beers they discovered.

Additionally, beer flights often come with a higher price point than a single pint, naturally raising the average ticket size.

The impact of offering beer flights can vary depending on factors such as the brewpub's location, the diversity of its beer selection, and the preferences of its clientele. In areas with a strong craft beer culture, flights may be more popular, while in regions where beer is less of a focus, the increase in ticket size might be less pronounced.

Brewpubs should aim for a table turnover rate of 1.2 times during peak hours due to longer customer stays

Brewpubs should aim for a table turnover rate of 1.2 times during peak hours because customers tend to stay longer, enjoying both food and drinks.

Unlike traditional restaurants, brewpubs often have a more relaxed atmosphere where patrons linger to savor their craft beers and socialize. This extended stay means that tables are occupied for longer periods, making a turnover rate of 1.2 times more realistic and manageable.

However, this target can vary depending on factors such as the size of the brewpub and its location.

For instance, a smaller brewpub in a bustling urban area might aim for a slightly higher turnover rate to accommodate more customers, while a larger venue in a suburban setting might be comfortable with a lower rate. Ultimately, the key is to balance customer satisfaction with operational efficiency, ensuring that guests have a great experience without feeling rushed.

Regularly rotating taps can boost sales by up to 30% by attracting beer enthusiasts

Regularly rotating taps can significantly boost sales in a brewpub by attracting a diverse crowd of beer enthusiasts eager to try new flavors.

When a brewpub frequently changes its beer selection, it creates a sense of excitement and novelty that draws in customers who are always on the lookout for the next great brew. This strategy not only keeps the regulars coming back but also attracts new patrons who are curious about the latest offerings.

However, the impact of rotating taps can vary depending on the brewpub's location and target audience.

In areas with a high concentration of craft beer lovers, the effect might be more pronounced, leading to a substantial increase in sales. Conversely, in regions where the craft beer scene is less developed, the boost might be more modest, as the local clientele may not be as adventurous in their beer choices.

Allocating 3-4% of revenue for community engagement and sponsorships can enhance local brand loyalty

Allocating 3-4% of revenue for community engagement and sponsorships can significantly enhance local brand loyalty for a brewpub.

By investing in local events and sponsorships, a brewpub can create a stronger connection with its community, making customers feel valued and appreciated. This sense of belonging can lead to increased customer retention and word-of-mouth referrals, which are crucial for a brewpub's success.

However, the effectiveness of this strategy can vary depending on the specific community and its unique characteristics.

In areas with a strong sense of local pride, such investments might yield higher returns in terms of loyalty and sales. Conversely, in communities with less emphasis on local identity, the impact might be less pronounced, requiring the brewpub to adjust its approach to better align with local values and interests.

Brewpubs should keep rent below 8-12% of total revenue to manage financial strain

Brewpubs should aim to keep their rent below 8-12% of total revenue to effectively manage financial strain.

Rent is a significant fixed cost, and keeping it within this range helps ensure that a brewpub can cover other essential expenses like staff salaries and ingredient costs. If rent exceeds this percentage, it can lead to financial stress, making it difficult to maintain profitability and invest in growth opportunities.

However, this percentage can vary depending on the location and size of the brewpub.

In high-demand urban areas, rent might naturally be higher, so brewpubs may need to focus on increasing customer volume or average spend per customer to maintain a healthy balance. Conversely, in less expensive areas, keeping rent below 8% might be more feasible, allowing for more flexibility in other operational costs.

Health inspection scores should stay above 92% to maintain customer trust and foot traffic

Health inspection scores should stay above 92% to maintain customer trust and foot traffic in a brewpub.

Customers often associate high health inspection scores with cleanliness and safety, which are crucial for a place serving food and drinks. A score below 92% might raise red flags about potential health risks, leading to a decline in customer confidence.

In a brewpub, where the focus is on both food and crafted beverages, maintaining a high score is essential to ensure that patrons feel comfortable and safe.

However, the importance of the score can vary depending on the local competition and customer expectations. In areas with many dining options, a lower score might significantly impact foot traffic, while in less competitive areas, the effect might be less pronounced.

Effective menu engineering, including beer pairings, can boost revenue by 12-18%

Effective menu engineering, including beer pairings, can boost revenue by 12-18% in a brewpub because it strategically enhances the dining experience, encouraging customers to spend more.

By carefully curating the menu and suggesting complementary beer pairings, customers are more likely to try new items and order additional drinks, which increases the average check size. Additionally, highlighting signature dishes and beers can create a sense of exclusivity and entice patrons to indulge in higher-priced options.

However, the impact of menu engineering can vary depending on factors such as the demographics of the clientele and the overall theme of the brewpub.

For instance, a brewpub located in a tourist area might see a higher increase in revenue due to visitors seeking unique local experiences, while a neighborhood pub might experience a more modest boost. Ultimately, the key is to tailor the menu and pairings to the specific preferences and expectations of the target audience, ensuring that the offerings resonate with their tastes and enhance their overall experience.

Brewpubs in tourist areas should allocate 4-6% of revenue for partnerships with local hotels and tour operators

Brewpubs in tourist areas should allocate 4-6% of revenue for partnerships with local hotels and tour operators because these collaborations can significantly boost their visibility and customer base.

By partnering with local hotels, brewpubs can tap into a steady stream of tourists who are often looking for unique dining and drinking experiences. Similarly, working with tour operators allows brewpubs to be included in curated experiences, making them a part of the tourist's itinerary and increasing foot traffic.

This investment in partnerships is a strategic way to ensure that the brewpub becomes a recognized and recommended spot for visitors.

However, the percentage of revenue allocated can vary depending on factors such as the size of the brewpub, its current market presence, and the level of competition in the area. For instance, a well-established brewpub with a strong local following might allocate a smaller percentage, while a newer establishment might need to invest more to build its reputation and attract tourists.

Establishing a beer cost variance below 4% month-to-month is a sign of strong management and control.

Establishing a beer cost variance below 4% month-to-month in a brewpub is a sign of strong management and control because it indicates that the business is effectively managing its resources and minimizing waste.

In a brewpub, where the cost of ingredients and production can fluctuate, maintaining a low variance shows that the management is adept at forecasting and adjusting to changes. This level of control helps ensure that the brewpub remains profitable and can reinvest in quality ingredients and customer experience.

However, the acceptable variance can vary depending on factors such as the size of the brewpub, the variety of beers offered, and the local market conditions.

For instance, a larger brewpub with a more extensive selection might experience slightly higher variances due to the complexity of managing multiple products. Conversely, a smaller brewpub with a focused menu might achieve even lower variances, reflecting their ability to streamline operations and reduce costs.