The $200 Mistake You Make With Every Small Batch of Beer

Overhead is the forgotten cost in brewery economics—especially with experimental or small-batch beers. Because there’s both art and science to allocating overhead, many brewers skip it entirely or under-allocate it. That leads to poor decisions about what to sell, how to price it, and what will actually move your business forward. If you’re measuring gross margin without factoring in overhead, those numbers are incomplete.

Fortunately, I’ve made two worksheets: one to help you allocate overhead simply, and another to track your experimental beers so you can decide which ones are worth repeating.

Don’t overlook overhead when calculating the cost of your experimental brews

Overhead is a real cost. And for a lot of breweries, most of it is fixed—meaning the more you brew, the less it costs per bbl. That depends on what’s in your overhead bucket, of course. But if you're just looking at ingredient costs for an experimental brew, you're seriously underestimating what it takes to make that beer.

If you're looking at materials and labor, that’s a step in the right direction—but you’re still missing one big piece: overhead. Including it—even roughly—can be the difference between identifying a beer with potential and wasting time on one that’s dragging you down.

Some breweries just allocate a flat 15% to overhead across the board. That’s not perfect, but it’s better than nothing. Costing is subjective. What to include, how to slice it up, and how to assign it to your SKUs—that’s all up for debate. There are more sophisticated ways to do this, especially with overhead. But again, allocating something is better than ignoring it entirely.

Calculating brweing overhead quickly and accurately

Instead of using a generic percentage, a better option is to total up your annual spend on indirect costs. That includes things like rent, utilities, insurance, cleaning and sanitation, taxes, compliance, depreciation, maintenance—basically anything you NEED to make beer - that isn’t a direct input like grain or labor.

Take that total, divide it by how many barrels you expect to brew (historically or forecasted), and you’ve got an overhead cost per bbl. Apply that to your experimental batches and boom—you’ve got a workable allocation.

I built a free spreadsheet to do this quickly. It isolates materials and labor too, so you can plug those numbers into your Experimental Beer Postmortem.

Experimental Beer Postmortem Worksheet

And if this isn’t your thing? Ask your operations manager or bookkeeper to help. If they’re already touching the numbers, it shouldn’t take long for them to give you a ballpark figure on overhead per bbl.

Overhead is a real cost—don’t ignore it

Don’t settle for “close enough” when it comes to overhead—especially for your experimental or flagship beers. It might not be the bulk of your COGS, but it’s still worth a quick calculation.

As for whether an experimental beer is worth scaling up or writing off, the postmortem worksheet I built helps you compare both financial metrics and taproom feedback against your brewery average.

Allocating overhead—even roughly—forces clearer decisions about what to brew, how to price, and where to focus. That’s the kind of math that moves a small brewery forward.