Page 9 - Beverage MasterAprMay 2021

Legal & Marketing

and realize a net profit.

In the example above, the total costs of the pack-
age are $14.80. The PTW, price to wholesaler is $25,
and the brewery margin is 40.8%.

The next step is to understand the required mar-
gins for the wholesaler and retailer and expected
price to consumer.

In the example above, the wholesaler sells to the
retailer at $36 per case. The retailer then sells the
case in four units (four six-packs) at $12.99 each.
This is the price to consumer.

The pricing model takes all the variables involved
in setting the price and combines them into an
easy-to-use spreadsheet. Simply enter a few num-
bers and you’ll have the information to get your
beer on the shelf at a competitive price.

Wrap Up + Action Items

Read and understand the pricing terms - Price to
Wholesaler (PTD), Price to Retailer (PTR) and Price
to Consumer (PTC). Know that everyone needs to
make money at each step in the sales cycle. The
wholesaler needs to make their margin, and so does
the retailer. Most importantly, so do you, the brew-
ery owner.

Don’t guess or follow the herd when it comes to
pricing. Use the pricing model to properly price your
beer and achieve profitability. Your income state-
ment will thank you.

You can download a copy of the pricing model at
www.CraftBreweryFinancialTraining.com

Receive a special $50 discount off of the Craft
Brewery Financial Training annual subscription.
Visit http://www.craftbreweryfinance.com – Use
the discount code beveragemaster at checkout to
claim savings.

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