This is a good time for breweries.
Craft brewing has emerged as a major force in the food and beverage industry, and there are now more than 10,000 craft and microbreweries operating in the U.S. and Canada alone.
But the food and beverage industry isn't without challenges. Many hospitality industry businesses operate on razor-thin margins, and breweries are no exception.
So how can you streamline your brewery operations to increase efficiency, lower costs, boost profits, and protect your bottom line? A good strategy should be multifaceted, utilizing best practices (and the right technology) to keep your brewing operations at peak performance.
Ready to learn how you can build a brewery operations program that's set up for success? Read on.
Brewery Operations 101: What Makes a Brewery Successful?
The craft beer industry is expected to be worth nearly $800 billion globally in 2023. As a segment of the food and beverage sector, craft brewing is a successful, steadily growing business that shows no signs of slowing down — meaning there's plenty of opportunity for new craft brewers to get in on the action.
Like any other business, a craft brewery needs to be profitable to be successful. That means, in the simplest possible terms, that it needs to make more money than it spends.
Of course, the reality of running a complex business is a bit more complicated than that. From hiring and staffing to partnering with restaurants and distributors, from creating a sales and marketing plan to choosing the right key performance indicators to track and analyze — and not to mention perfecting the brewing process itself — a craft brewery has a lot of moving parts that all need to work seamlessly together to streamline operations and maximize profits.
5 Tips to Boost Brewery Efficiency
With all that in mind, we've gathered five tips craft brewers can use to streamline their brewery operations and improve overall efficiency.
1. Build On a Strong Foundation
Any business will fall if it has cracks in the foundation.
Your brewery needs a strong base for its business operations, and that all starts with your business plan. Whether you're just starting your brewery or you've been open for a while, it's never too late to create a comprehensive plan to help you achieve your goals. And if you already have a business plan, the first step in streamlining your brewery operations may be to revisit it to reflect new goals, challenges, and opportunities.
A business plan will help you set goals, outline your strategy, secure funding, and build the foundation for every other part of your brewery's operations. Every business plan will be unique, but here are a few of the areas you should research and include:
- Your brewery's mission, target market, and key financial projections.
- Market analysis. Research and analyze the craft beer market in your area, including competitors, trends, and consumer behavior. This information will help you understand the potential for your brewery and inform your marketing and sales strategies.
- Product and service offering. Describe the types of beer you plan to brew and any additional products or services you'll offer, such as food, merchandise, or brewery tours.
- Marketing and sales strategy. Outline the tactics you'll use to reach and engage your target market, including social media, events, and partnerships. Be sure to include details on your pricing strategy and distribution channels.
- Operations plan: This section should cover the logistics of running your brewery, including your production process, equipment needs, and staffing requirements.
- Financial plan: This is perhaps the most important part of your business plan, as it will help you secure funding and measure the viability of your brewery. Your financial plan should include detailed projections for your startup costs, sales, expenses, and profitability.
Once your business plan is solid, it's time to think about the other part of your business's foundation: Your partnerships.
Running a successful craft brewery is more than a one-person job, but your hiring needs will depend on many factors, including your size, how quickly you plan to scale, and your own personal talents and skills.
When seeking partners or employees, look for people who can fill gaps in your own skill set — for example, maybe your business acumen would make you an excellent operations manager, but you need the beer-making expertise of a head brewer to take the business to the next level.
2. Use Data to Optimize the Brewing Process
If you don't know what needs improvement, you can't make improvements. So the first step to streamlining your brewing process is collecting data and identifying key performance indicators, or KPIs. By gathering and analyzing key metrics, craft breweries can gain visibility into trends, identify areas for improvement, and make informed decisions that can help lower costs, increase profits, and ultimately, deliver a better product to their customers.
Brewing process data can be broken down into two categories: Production data and quality data. Each has its own set of KPIs that you can choose from to track for your own beers.
Production data includes information on the volume of beer produced, the ingredients used, water and energy usage, and waste. By analyzing this data, breweries can identify areas where they can reduce waste, improve efficiency, and lower production costs.
Quality data can include data on fermentation, pH levels, alcohol by volume, gravity readings, carbonation, color, bitterness units (BU), and sensory analysis results. By analyzing this data, breweries can identify trends and make adjustments to their recipes or processes to improve the quality of their beer, which is essential for maintaining consistency and improving the overall customer experience.
Another possible data point that can help you keep tabs on quality control is customer complaints, though this data is collected after distribution and sales rather than during the brewing process.
3. Track Your Financial KPIs
Just as important as production and quality data are your financial KPIs. Without a clear picture of your costs and revenue, you'll struggle to balance your brewery's budget and keep costs in check.
Here are some key cost metrics that craft breweries should track:
- Production costs. This includes the cost of ingredients, raw materials, labor, brewing equipment, and any other expenses related to the production of your beer. By tracking these costs, you can identify areas where you can reduce waste and improve efficiency, ultimately lowering your production costs.
- Operating costs. These are the ongoing expenses required to run your brewery, including rent, utilities, and insurance. By tracking these costs, you can identify ways to reduce overhead and improve profitability.
- Marketing costs. Marketing is an important investment for any business, but it's essential to track the effectiveness of your marketing efforts to ensure that you're getting a good return on your investment. By analyzing data on the cost of your marketing efforts and the resulting sales, you can identify which tactics are most effective and allocate your budget accordingly.
In addition to cost metrics, you should closely track sales from different revenue streams, which can include onsite sales, off-site sales (via distributors or restaurant partners), and alternative revenue streams like merchandise, food sales, events, or anything else your brewery offers.
4. Implement Environmental Best Practices
As the world looks toward more environmentally sustainable business practices across industries, there are incremental changes craft breweries can start to implement now to ensure they're positioned for new environmental requirements and regulations that are likely to come in the future.
Some of these practices include:
- Reducing water usage. Water is a crucial resource for the brewing process, but it's also an area where breweries can make significant cuts. Some ways to do this include installing water-saving equipment or recycling water for irrigation or other non-potable uses.
- Reducing energy usage. There are many ways to reduce energy usage, including installing energy-efficient equipment or using renewable energy sources like solar or wind power.
- Recycling and composting. Breweries generate a lot of waste, including spent grain, hops, and yeast. By implementing a recycling and composting program, breweries can divert this waste from landfills and reduce their environmental impact.
- Using sustainable packaging. Packaging is a significant source of waste in the craft beer industry. Breweries can reduce their environmental impact by using sustainable packaging options, such as reusable growlers, kegs, and cans, or by using packaging made from recycled materials.
5. Streamline Your Distribution Process
An area where many craft breweries can streamline and optimize their operations is in how they distribute their products.
Does this sound like your business? You spend hours on the phone each week with distributors and restaurant partners, taking their orders and collecting their payments. You manually enter their purchase orders using spreadsheets, pen and paper, or another outdated system. Your accounts receivable process slows you down — and is prone to errors.
There's a better way for breweries to handle distribution, from taking orders to issuing invoices and accepting payments. You can automate it all with notch.
notch is a hospitality management app that connects with all of your systems to make it incredibly easy to manage orders, invoices, and payments — all in one platform. notch saves restaurants, distributors, breweries, and other food service businesses hours each week by replacing hours of data entry and eliminating errors, making accounts receivable processes seamless and painless.
See what notch can do for your brewery. Schedule a demo today.