Managing a successful brewery taproom requires more than just great beer and friendly service. With taproom sales typically generating 40-50% higher profit margins than distribution, it’s no secret that breweries with taprooms typically see the highest profit margins from on-site beer sales.
Without the cost of packaging, shipping, or paying a distribution partner, you can hold onto a lot of the profit from each draft sale. Plus, the taproom is a vital component of your company’s branding and overall reputation. Understanding and optimizing taproom profitability can make the difference between a brewery that thrives and one that merely survives.
For many craft breweries, the taproom represents not just their highest-margin sales channel, but also their best opportunity to build lasting customer relationships and strengthen brand loyalty. Yet surprisingly, many brewery owners struggle to accurately track and optimize their taproom performance.
By implementing the right brewery monitoring systems and some key strategies to increase sales in your taproom, you can transform your taproom from a simple retail outlet into a profitable cornerstone of your business.
The Ekos Taproom Toolkit: Best Practices for an Effective & Efficient Brewery Experience: Learn More
Understanding Taproom Profitability: Net Profits
Understanding your taproom’s net profits and overall taproom profitability is crucial for long-term success. To calculate net profits accurately, ensure you’re doing some key things:
1. Track Your Key Metrics
These foundational metrics provide a baseline for understanding your taproom’s overall health and performance trends. While revenue is important, avoid the common mistake of focusing too heavily on top-line numbers—high revenue doesn’t always translate to high profitability. By monitoring these numbers consistently, you’ll quickly spot both opportunities and potential issues before they impact your bottom line:
- Net income (total revenue minus expenses and operating costs)
- Week-over-week customer counts and sales
- Gross margin by package type (separating draft vs packaged products)
- Sales channel mix (comparing taproom to wholesale and other channels)
- Quick ratio (cash + accounts receivable / liabilities)
2. Calculate Your True Taproom Profitability
While tracking basic metrics gives you the big picture, diving deeper into taproom-specific calculations reveals where you can optimize operations and maximize profits. These elements help you understand the true cost and revenue potential of your taproom operations.
- Monitor your taproom-specific revenue streams
- Track labor costs and staffing efficiency
- Account for overhead costs (utilities, rent, equipment maintenance)
- Factor in raw material costs for draft products
- Consider additional revenue from merchandise and food sales
These calculations might seem complex at first, but breaking them down into simple components makes them more manageable and actionable. To put these metrics and calculations into perspective, let’s examine how these numbers work in a real-world scenario.
3. Breaking Down the Numbers: A Taproom Profit Example
To understand your taproom’s profitability, you’ll need to calculate your net profits by subtracting total operating costs from your margins. Let’s look at a practical example. Here’s a simplified calculation:
- Your taproom sells pints for $7 each, and each 1/2 barrel keg yields approximately 124 pints (assuming 16oz pours). This gives you potential revenue of $868 per keg.
- The brewery charges the taproom $175 per 1/2 barrel keg, making your calculation: $868 Sales – $175 Cost of Beer = $693 Gross Margin per keg
- Next, factor in operating expenses (staff wages, utilities, rent, insurance, etc.). If these typically run about 35% of sales: 35% x $868 = $304 Operating Expenses per keg
- Your net profit calculation becomes: $693 Gross Margin – $304 Operating Expenses = $389 Net Profit per keg
- This gives you a net profit percentage of 45% ($389 ÷ $868 = 45%)
Keep in mind that this is a simplified example. Your actual results will vary based on factors like:
- Pour size and waste
- Operating cost fluctuations
- Seasonal variations in sales
- Special event impacts
- Staff efficiency
- Marketing expenses
Knowing the taproom is likely your most lucrative sales channel, making small changes to operations, marketing, or sales strategies can help you maximize those dollars. How do you do it? Let’s explore three key strategies to increase sales in a taproom: increasing efficiency, increasing sales per customer, or increasing overall customer count.
The Ekos Taproom Toolkit: Best Practices for an Effective & Efficient Brewery Experience: Learn More
How to Increase Operational Efficiency in the Taproom
Your taproom’s success starts with understanding exactly where you stand today. A thorough operational review will uncover opportunities for improvement and highlight what’s working well.
1. Do an Operational Analysis
To figure out where you have gaps, you’ll want to start with a self-audit of taproom operations. With a self-audit, you’ll review SOPs, financial operations, HR programs, safety and compliance processes, and marketing and sales tactics. This will give you a starting point to focus on the biggest issues.
2. Use Technology to Work Smarter
Sure, software costs money. But when it comes to your taproom staff’s time, you want them to focus on providing excellent customer service and selling more beer — not wasting time on administrative tasks. The right software systems can help your team communicate better with the back-of-house team, keep accurate records, and improve overall taproom profitability. A few solutions we’d recommend include:
- Point-of-sale and e-commerce
- Inventory management
- CRM and/or email marketing
- Internal communication or messaging
- Keg tracking
- Restaurant reservation management (if you have a restaurant)
By integrating these systems effectively, you’ll reduce manual work, minimize errors, and free up your team to focus on what matters most: creating exceptional guest experiences. Remember, the initial investment in technology often pays for itself through improved efficiency and increased sales.
Learn How Wolf’s Ridge Brewing Stays On Top of Its 3,000+ Kegs with Ekos: Learn More
How to Increase Sales Volume or Frequency per Customer
Getting more value from existing customers is often easier and more cost-effective than attracting new ones. Focus on these proven strategies to increase your per-customer revenue.
1. Hire (& Train) the Right People
You might not think of sales as starting with hiring, but you should. One of the most effective strategies to increase sales in a taproom is having great servers who know how to upsell, If you have this,you’ve won half the battle.
Servers should be friendly, knowledgeable about your products, and ready to offer well-timed suggestions to guests. Simply asking whether someone wants another round can encourage additional sales. In fact, The average guest who is asked to order another beer spends 16.3% more than guests not asked.
By the same token, letting a guest know about an upcoming product release they may be interested in (based on what they ordered during that visit) could encourage them to return. Guests who receive high customer engagement are more likely to recommend and/or return to your brewery.
2. Keep Your Fans Informed
If you have any type of email list, you should be sending a regular newsletter to let customers know what’s going on in the taproom. You can build your list by having taproom servers offer free merch (something small like a sticker or coaster) in exchange for a guest’s email address.
You can also ask customers to opt in when they order from you online. In your newsletter, hype up your upcoming product releases, promote your club or subscription (if you have one), and get people excited about taproom events.
3. Reevaluate Your Pricing Strategy
Pricing is a basic part of running a beer business, but one that you can easily forget to revisit. Has it been more than a year since you last reviewed prices? Your costs may have changed (maybe dramatically) since then. Review pricing at least quarterly, considering:
- Changes in raw material costs
- Labor cost fluctuations
- Market competition analysis
- Target profit margins by product type
- Sales channel performance data
If you’re still targeting the same profit margins, or even trying to improve them, the math might be off. Understanding your taproom profitability metrics will help you use data from your inventory and production management software to help you decide what prices are reasonable for your business and your customers. Need to go back to basics? Use these guidelines for setting your beer prices.
Learn How Malibu Brewing Used Ekos to Create a Competitive Pricing Strategy: Read More
4. Turn Your Metrics Into Action
Implementing some key monitoring practices will help transform your taproom data into actionable insights that drive taproom profitability and growth. Develop a consistent reporting rhythm for reviewing taproom metrics: Schedule weekly team meetings to review key data points and monthly deep dives into broader trends. This regular cadence helps identify issues early and keeps everyone aligned on goals.
- Focus on 2-3 key performance indicators at a time: Rather than drowning in data, choose a few critical metrics like per-customer spend, labor costs as a percentage of sales, or draft system yield. Master these before adding more metrics to track.
- Track week-over-week trends to identify patterns: Look for correlations between events, weather, promotions, and sales performance. This data helps optimize scheduling and promotional planning.
- Maintain at least 10 weeks of cash reserves: This buffer protects against seasonal fluctuations and unexpected expenses while ensuring you can take advantage of bulk purchasing opportunities.
- Use software solutions to automate financial tracking and reporting: Manual tracking leads to errors and wastes valuable time. Integrated software systems provide real-time data and reduce human error.
- Share key metrics with staff to increase buy-in and motivation: When employees understand how their actions impact the bottom line, they make better decisions and feel more invested in the business’s success.
Learn How Ekos’s commitment to transparent data helped Akasha Brewing Company achieve its plans to grow 30%-40% each year: Learn More
Increase Customer Count (AKA: Marketing 101)
We get questions all the time about marketing. Marketing is hard! And with all the competition out there, it can feel overwhelming. Luckily, you don’t have to have a six-figure marketing budget to build a loyal following. The name of the game is consistency and frequency. Here are a few simple tips:
- Post on social media regularly (at least once per day) so your fans know what you’re up to. If you only have time to focus on one social media platform, we suggest Instagram. Publish daily happenings to your story and plan in-feed posts for (at a minimum) every product release and taproom event. If you have a little budget to use, experiment with Facebook and Instagram ads to drive purchases or taproom visits.
- Decide on your brand aesthetic and messaging and let that inform every marketing choice you make. Your website design, social media graphics, digital ads, merchandise, and taproom decor should all feel like they “go” together. This goes beyond logos and colors — what kind of “vibe” are you after? What type of customer are you hoping to attract? Why would they choose your brewery over another? Make sure your branding reflects those differentiators.
- Make sure your website includes all the basic information a potential customer would want to know. That includes what drinks you offer (ideally an up-to-date tap list), taproom hours, location, any relevant policies or FAQS like parking and food options and whether dogs are allowed, and prominent links to your e-commerce site if you have one.
Consistency in your marketing efforts is key—even small, regular actions can lead to significant growth over time. The most successful taprooms combine these marketing fundamentals with careful tracking of which strategies bring in the most customers, allowing them to refine their approach and maximize their marketing ROI.
Ready to Maximize Your Taproom Profits?
Building a profitable taproom takes dedication, data, and the right tools. By implementing proven strategies to increase sales in a taproom, like focusing on operational efficiency, maximizing customer value, and implementing strong marketing strategies, you can transform your taproom into a thriving revenue center. The key is having systems in place to track, analyze, and act on your performance data consistently.
Ready to unlock your taproom’s full potential? Ekos brewery management software helps you track everything from inventory and production to sales and taproom profitability, giving you the insights you need to make data-driven decisions. Our comprehensive platform integrates with your existing systems to streamline operations and boost your bottom line.
Schedule a demo with Ekos today to discover how our brewery management platform can help you increase efficiency, boost sales, and maximize profits in your taproom.
