No great brewery can be successful without the right recipe and end product. But effective brewery business management is just as important to get the right ingredients, optimize your inventory, keep track of your finances, and stay compliant with the relevant authorities.
To be sure, these factors are not the reasons why most brewers start their business. At the surface level, these technical elements have little to do with the passion for brewing and creating that perfect pint. But they’re also key to solving the biggest challenges brewers face every year. A plan to manage your business effectively can help you focus on what you do best—brewing great beer.
Getting there requires a core understanding of the various business aspects connected to running your brewery. The good news is that technology has become an increasingly valuable tool to help with anything from supply chain forecasting to inventory management, distribution, accounting, and more—if you can find the right solution. Join us for an exploration of the processes you’ll need in place to manage your brewery and the ways in which technology can help.
Managing the Supply Chain
Breweries, like any business, need a basic understanding of the supply and demand for beer in their target market. That understanding informs the ways in which you can (and should) manage your supply chain, and that supply chain necessarily starts with raw ingredients.
You need to know how to effectively source and manage the acquisition of materials like water, hops, and yeast. Non-traditional beers might need other ingredients, as well. And of course, you’ll also need containers—like bottles, cans, and cases—to store and distribute the beer once it’s brewed.
Unfortunately, the last few years have seen multiple supply chain disruptions for breweries and brewpubs. Reports of aluminum can and carbon dioxide shortages, lower hops yields, concerns over future wheat and barley supplies, and even water shortages all have the potential to disrupt operations if not properly planned for.
Effective management of your supply chain becomes an essential component of a brewery’s success. That means more than just tracking your incoming supplies on spreadsheets. Ideally, more comprehensive technology can help you understand where your inventory is getting short and even automatically reorder supply to avoid disruptions to your production process.
Mastering Effective Inventory Management
Effective supply chain management starts with your own inventory. You need to know where you stand at all times, not just in terms of the materials needed to produce your beer but also on the finished beer ready for sale or distribution. In fact, getting your inventory management right is key to minimizing the negative effects of many of the above supply chain disruptions.
As you manage your daily brewery operations, ask yourself:
- How much inventory should you carry of your raw materials?
- How long can those raw materials stay in your inventory without spoiling?
- How much space do you have in your current facilities, and is that space designed to maintain the quality of your materials?
The same questions are just as true for brewed end products ready for sale and distribution. Most of the common inventory challenges breweries face today revolve around being uncertain of the answers.
Related: 7 Ways Software Can Strengthen Your Brewery’s Inventory Management Process
Technology is certainly not the only answer to these questions. But it can help, allowing you to estimate the cost of inventory, manage inventory for batches in production, and more. The result is more streamlined inventory management, ultimately resulting in smoother processes and lower inventory costs for your business.
Organizing Distribution of Your Products
The final part of the supply chain involves getting your beer into the hands of consumers. For most breweries, that tends to happen in one of three ways:
- Direct sales on location, as part of your brewpub
- Direct sales online, using an e-commerce store
- Distribution to resellers, like local bars and restaurants
Each of these distributions has to be carefully managed, as well. Resellers will be difficult to procure if they cannot rely on a steady stream of new beers that taste just like the previous ones. Online customers will look elsewhere if your products are out of stock. And of course, you’ll have difficulty serving beer yourself if the beverages you brew aren’t consistent in either quality or availability.
Effective inventory management helps in this regard, but so does distribution management. For example, some platforms now offer keg tracking so breweries always know about the location of their shells and how long they’ve been out. This ensures reliable replacement to keep the quality high. When selling your beer to consumers online or in person, look for brewery management integrations that link your e-commerce or POS system directly to your inventory and financial reporting.
Core Accounting Processes and Reports
Financial management is an essential part of any business, and breweries are no different. You need to know your sales, product costs, operations costs, and more. For most business owners, financial reports like balance sheets, income statements, and cash flow statements have become almost second nature.
That’s especially true in the brewing industry, which has some core reporting requirements. If you’re in the US, you must regularly submit a report called the Brewer’s Report of Operations to the Alcohol and Tobacco Tax and Trade Bureau (TTB)—in addition to regular tax reporting and reporting that serves your own knowledge of business finances. The state in which you operate might have additional requirements, as well.
Keeping an eye on the books is key for the accuracy of these reports. Unfortunately, they can also take extensive time out of every month, a process that the right technology can help to streamline.
Related: Take The Next Step in Brewery Record-Keeping
Finding a platform that integrates with your accounting systems is essential for keeping accurate financial data and getting everyone the information they need. Look for software that allows you to leverage reports that pull together all the required information. The result is spending less time on your accounting processes and reports while still ensuring their accuracy.
Analytics and Business Intelligence to Build Growth
Finally, no brewery business can ever be static. The best beer attracts loyal customers, and so does a great dining and communal experience for your brewpub or bar area. But you also need to remain in the loop about business, industry, and competitive trends.
Forecasting matters—as much for future planning as it does for understanding future supply shortages and needs. You might want to know which products are starting to sell more online or in-person, and where costs are too expensive to justify brewing future batches. The more you can understand and analyze your business data, the more informed these types of decisions will be.
Traditionally, this has meant examining spreadsheets and making informed guesses. But technology is taking on an increasing role in this process, as well. It starts with the early embrace of business intelligence (BI) software, which can take all relevant data about your business and “digest” it into easy-to-read dashboards and reports.
That information, in turn, can help keep an overview of your brewery, especially as new technologies built specifically for the beer industries are emerging.
Some BI software has also begun to embrace another piece of the puzzle: predictive analytics, or the process of using past data to predict future results. The technology can analyze patterns and observe trends, all designed to help brewery owners improve their operations through more informed decision-making. As a rapidly emerging field, the predictive analytics market is growing by more than 20% every year.
Choose the Right Software for Your Brewery Management Processes
Put it all together, and one thing is clear: managing your brewery might be complex, but technology has come a long way toward supporting these complexities and streamlining your processes. Of course, that can only be true if you find the right software solution to support your brewery management and operations. These tips can help you narrow your choices:
- Look for a comprehensive, unified solution. The more of the above tasks a single platform can integrate and accomplish, the less you have to rely on multiple systems or data duplication.
- Integrations still matter. Even the most comprehensive package likely won’t become your brewery management system and online shop and accounting software. In places where you already have working solutions, choose a solution that integrates other elements as seamlessly as possible.
- Gravitate toward brewing industry software. You can find plenty of generalized solutions that work generically across industries, but they won’t account for the nuances you’ll need to keep in mind like automated batch production tracking or pre-built TTB reports.
- Prioritize business intelligence. The more the software can help you use current operations to forecast future trends, the more likely you’ll be to use it to your advantage as you look to sustain and grow your brewery over time.
Finding that software may take some time. We humbly suggest Ekos, a dedicated brewery management software specifically designed for brewers and their complex needs. Book your demo today to get started and improve your brewery operations.
