Margin Percent on Beer...

A couple of us were just talking about beer prices and how some of our local stores make most of their money on wine.

So we were wondering what the margin % on beer is? Specifically, we were wondering what a store’s cost would be for a DFH WWS...

Just curious...

Cheers,
Jason

My understanding is about 20%.

Generally speaking a single bottle 12oz, 500ml, 750ml, etc the markup is 1.5 * cost. Which means that a beer that wholesales for $4 will retail for $6. With 6 packs the formula is 1.35 * cost and cases 1.25 * cost. If a retailer does it right the profit from beer is much higher than liquor or wine, but the total dollar sales of beer is much lower.

Well I don’t know about off premise sales, but on premise runs about like this...these are the general cost of sales numbers
Liquor 13%-17%
Beer (bottles)26%-31%
Beer (draft) 18%-26%
Wine-30%-47%

So the gross margin would be the reverse
Liquor 83%-87%
Beer (bottled) 69%-74%
Beer (draft) 74%-82%
Wine 53%-70%

Originally posted by Walt
Well I don’t know about off premise sales, but on premise runs about like this...these are the general cost of sales numbers
Liquor 13%-17%
Beer (bottles)26%-31%
Beer (draft) 18%-26%
Wine-30%-47%

So the gross margin would be the reverse
Liquor 83%-87%
Beer (bottled) 69%-74%
Beer (draft) 74%-82%
Wine 53%-70%

Unless a store is trying to run themselves into the ground, you probably won’t see a margin less than ten percent. Markup (rather a different creature than margin) can be in the range of 20-40% on six packs, single bottles*, cases, etc. Generally, cases will be at the low end of that range and single bottles at the high end.

*Single bottles not sold as single bottles by the wholesaler can reach 50-60%.

As the old saying goes "Liquor & Beer pay the bills, Wine makes you rich."

You will usually see anywhere from 10-15% on domestic macro stuff, as well as SN and such. Specialty stuff usually runs from 35-45% over cost. When you are talking wine you easily see 70-80% margins.

Originally posted by joebrew
As the old saying goes "Liquor & Beer pay the bills, Wine makes you rich."

You will usually see anywhere from 10-15% on domestic macro stuff, as well as SN and such. Specialty stuff usually runs from 35-45% over cost. When you are talking wine you easily see 70-80% margins.

These numbers I am seeing are pretty ridiculous. When I looked at opening a beer store in Canada and talked to a lot of people this is what I got

5-10% on macros
15% on specialty beer
20-25% (maybe 30%) on wine
With these margins it makes doing business very hard

That said, I think it has alot to do with where you live and the cost of rent in that area.
I am in Tokyo now and I don’t know off premise mark-ups, but I am very familar with on premise mark ups here

bottle beer 200% (3X the amount the beer cost)
draft beer 150%
spirits up to 500% (in part because they are taxed very low and even with the mark up can be cheaper than beer).

Given the rent in central Tokyo, without these type of mark ups there is no way to survive.

Tim

Originally posted by wunderbier

Originally posted by joebrew
As the old saying goes "Liquor & Beer pay the bills, Wine makes you rich."

You will usually see anywhere from 10-15% on domestic macro stuff, as well as SN and such. Specialty stuff usually runs from 35-45% over cost. When you are talking wine you easily see 70-80% margins.

90-100% markup on wine? That’s f’ing ridiculous! Everything from $5 to $250 in my store is at 30% markup.

Also, talking about margins is pretty useless unless you have a feel for the operating costs of a particular area or store. In a high-rent area a 20% margin could mean a 50% markup from cost versus a 30% markup in a more business friendly environment. Just so y’all know.