Top 5 Brewery Profitability KPIs All Brewery Owners Need
As craft breweries and tasting rooms navigate a challenging 2025 business landscape, financial success depends on keeping track of precise, actionable metrics. At Plato Brewing and Consulting, we empower clients to achieve visibility in their business through over 15 years of experience in direct brewery operational management and targeted Financial Planning and Analysis (FP&A). For brewery owners, brewpubs, cideries, distilleries, and beverage manufacturers, tracking the right Key Performance Indicators (KPI’s) is essential for maintaining brewery profitability and growth.
Here are the top 5 KPIs to monitor for your craft brewery and tasting room:
1. Gross Operating Margin
This KPI measures profitability after direct production costs (COGS) and operating expenses, excluding taxes and interest. It reflects how efficiently you manage direct production and overhead, critical amid inflation and labor cost pressures.
How to Measure: Start with your total Revenue, Subtract COGS and direct operating expenses (e.g. production labor, production specific consumables), this will give you your gross profit, then divide gross profit by total revenue, and multiply by 100.
For example: $100,000 monthly tasting room revenue, $10,000 COGS, and $20,000 direct production expenses, it’s (100,000 – 10,000 - 20,000) / 100,000 = 70% gross profit margin for the month
Takeaway: This is one of the highest-level metrics to regularly track to ensure your brewery and production margins are healthy at their core. Depending on your business model, production efficiency, and local market, a healthy gross margin range for a typical brewery and tasting room model can fall between 60-80% - though this can vary depending on business model – see our other articles on Brewpub KPI’s and Distribution KPI’s, as these business models margins will differ.
Track this metric monthly, quarterly, and annually over time. Benchmark against internal measurements over time and industry peers. Adjust pricing or cost controls to maintain your margin health.
2. Net Operating Margin
Net Operating Margin goes a step further, showing profitability after all operating costs, including indirect expenses. It’s a true indicator of operational sustainability and operational profitability.
How to Measure: Start with your total Gross Profit, subtract all remaining operating expenses (including admin, marketing, rent, cleaning, etc.) from gross profit, divide by total revenue, and multiply by 100. For $70,000 gross profit and $100,000 revenue with $30,000 indirect and overhead costs, it’s (70,000 - 30,000) / 100,000 = 40% net operating margin
Takeaway: Monitor onsite sales shifts and seasonality trends to manage expenses and adjust marketing spend to protect this metric. Track this metric monthly, quarterly, and annually over time.
3. Average Cost per Barrel
This tracks production costs per barrel (target: $100-$150 depending on scale), highlighting efficiency and waste. Rising ingredient and labor costs in 2025 make this a key brewery profitability KPI.
How to Measure: Divide total production costs (ingredients, labor, packaging, consumables, etc.) by barrels produced for the time period. For example: $30,000 direct production costs for the month and 100 barrels produced, it’s $300/barrel.
Takeaway: Use ERP data to track real-time costs and labor and compare to production totals over time. The larger you are, the more frequent your reporting and review should become. This will ensure you stay on top of your production expenses before rising costs or poor labor management snowball and become a problem.
4. Average Revenue per Barrel
This measures revenue generated per barrel, reflecting pricing strategy and sales performance. Optimizing this metric is crucial to avoid pricing your product below local and industry market average.
How to Measure: Divide total beer revenue by barrels sold. For $100,000 in monthly tasting room revenue for 50 beer barrels sold, is $2,000/barrel.
Takeaway: Track this metric monthly. Regularly review and adjust pricing and product mix to focus on and promote high-margin products. Maximize revenue, ensure margin health, and maintain variety for customer preferences and brand identity. The acceptable range for this will depend on both your local market and internal brewery economics.
5. Channel Specific Contribution Margin
This KPI dives deeper than standard gross margin, focusing on beer profitability after COGS and direct channel costs (e.g., delivery, sales expenses) across tasting rooms, brewpubs, self-distribution, and third-party distribution. Breaking it down by brand, style, or region ensures healthy margins tailored to each sales model (target: 50-65% depending on channel).
How to Measure Subtract beer COGS and direct channel costs from total beer revenue, divide by total beer revenue, and multiply by 100.
For example: $100,000 self-distribution beer revenue and $20,000 COGS, $10,000 in direct delivery expenses, $10,000 in direct sales expenses: $100,000 - $40,000 / $100,000. It’s 60% Gross margin on self distributed beer for the period. You can take this a step further and determine your margins by region, sales rep, etc.
Takeaway: Use beverage FP&A to identify low-margin channels or products (e.g., third-party distribution) and adjust pricing or focus on high-margin products and efforts. We help our clients have improved this metric through channel optimization.
Why These KPIs Matter for all Breweries in 2025
The craft beverage sector faced a 1% net closure rate in 2024 and 2025 has brought increased uncertainty and price increases. Without strategic FP&A for your brewery, there is potential for your business to unknowingly shoulder these costs and erode your margin health. These KPIs, when tracked regularly via custom dashboards, provide a clear financial health snapshot, enabling cost control and revenue growth.
At Plato Brewing and Consulting, we work with our clients to track and transform these metrics (and more) into action plans to connect the dots and maintain healthy margins for your brewery.