I’ve had more free time on my hands recently and with inflation hitting my favorite alcoholic beverage (the CPI release for November 2022 shows a 7.7% increase over the previous 12 months for “beer, ale, and other malt beverages at home”) I started making my own beer again earlier this year. I already had some gear on hand due to previous experiments including a couple failed attempts to make hard cider in college, and several successful beer batches using concentrated malt extracts. Wanting to nerd out a bit more over the process I decided to dive into all-grain brewing which is the traditional method where the brewer starts with a big pile of crushed grains and needs to extract all the fermentable sugars themselves.
Some mental math shows a decent savings from homebrewing — the recipe I’m brewing right now resulted in 5 gallons of beer from $40 worth of grains and yeast. 5 gallons yields about 50 twelve ounce bottles, so for a quick estimate that recipe cost me around 80 cents per bottle which is clearly much cheaper than one can purchase beer at the store for. I was curious what a full Return on Investment (ROI) analysis would look like for homebrewing though, given the start-up costs required and also considering one’s own time as an input to the process.
Some brewers go crazy acquiring a bunch of fancy gear, but I’m more interested in doing things the frugal way, especially when seeing if a hobby will stick or not. Additionally I don’t have space in my apartment for a bunch of specialized brewing equipment, so I’m making do with as minimal of a setup as I can.
The minimalist all-grain brewing equipment setup
Here’s what I think is an all-inclusive gear list of the bare minimum a homebrewer would need for all-grain brewing (prices compared between two popular homebrewing gear sites):
You can actually likely brew one or two gallon extract batches with whatever soup pot you already have in your kitchen. But there’s not much if any cost savings there compared to buying beer at the store, for example a 2 gallon extract kit costs $30.99 from Northern Brewer. For all-grain brewing it’s probably not worth the time investment to make less than 2.5 or 3 gallons at a time, which requires a 5 gallon pot for the initial mash volume. A 10 gallon pot will accommodate 5 gallon batches of any beer style you’d ever want to make.
A frugal tip, you can get one gallon glass carboys for “free” by purchasing various products that come in them such as Whole Foods apple juice or Carlo Rossi wine. If you were going to use a gallon of apple juice or mediocre wine anyway, you just scored a reusable one gallon carboy. Some people prefer to brew with multiple smaller carboys instead of one huge one due to the comparative ease of lifting and cleaning the smaller vessels.
The minimalist all-grain equipment setup using the “brew in a bag” (BIAB) method would cost a total of $301.87 at the time I gathered this pricing data. We will need to accumulate at least that amount of savings from homebrewing beer to pay off that initial investment.
Calculating the homebrew savings
There are some pretty fairly priced all-grain homebrew recipe kits out there which cost in line with what you’d pay just buying the grains and yeast piecemeal. I’ve been using those while I get my feet wet. For enough ingredients to make a 5 gallon yield these kits range from $22 to $90, comparing across some popular websites and my local homebrew store.
Generally the prices of these kits are correlated with the price of that style of beer at the store, which makes sense because commercial breweries need to buy roughly the same ingredients to brew that style. The cheapest kits tend to make wheat beers and brown ales, while the more expensive end of the spectrum is where you find the hop-heavy beers, imperial stouts, and barleywines. The latter cost more due to including more hops and/or specialty grains, and in turn you’d pay more to buy these off the shelf at the liquor store.
What I’ve currently got brewing below my desk is a holiday red ale for which the kit cost me $40. Using the 1 gallon to roughly ten 12 oz bottles conversion, my 5 gallon kit is about 80 cents per 12 oz bottle for the raw ingredients. We now need to consider the other costs.
What about glass bottles? Well I consider those “free” if you buy beer from the store and save the pry-top bottles, which can be re-used an infinite number of times. Bottle caps cost $5.49 for 144, which adds 3.8 cents to each bottle of homebrew.
Utilities? My largest stove burner is about 2500 watts, and I’ve got it cranking on full for an hour during the wort boiling step (plus an additional 20 mins just to get that volume of water to a boil). I’ll round up to 1.5 hours for the time I’m pulsing the burner on and off during mashing. At 25.6 cents per kWh, that’s 96 cents in electricity, an additional 1.9 cents per bottle. Water use is such a negligible cost that I’ve declined to include it for simplicity.
I’m at 85.7 cents per 12 oz bottle to produce this particular homebrewed beer. For the cost savings comparison I need to compare with buying commercial beer off the shelf. For that I’ll choose Sam Adams which offers a holiday beer and is about the most affordable tier of craft beer, which I can get a 12 pack of for $17.49. This comes out to $1.458 per 12 oz bottle.
Homebrewing this style creates a savings of about 60 cents per 12 oz bottle of beer.
If you like big IPAs like the ones that cost $15 or more for a 6 pack, you’d be saving even more money with homebrewing. A New England IPA would save over $1.50 per 12 oz beer compared to buying a similar style at the store. IPAs require a couple extra steps so I’m going to be taking a look at those soon now that I’ve got some experience with all-grain brewing under my belt and am comfortable with the general process.
Homebrewing equipment ROI period
Everyone drinks at different rates, so retaining the volumetric basis in these calculations makes the most sense.
Dividing my $301.87 worth of equipment by the 60 cents per beer savings I calculated above, the result is 503 twelve ounce bottles of beer to break even. This is about 50 gallons of beer, so if one brews 5 gallon recipes just 10 times, the minimalist brewing equipment setup will have paid for itself. I tend to rotate through slowly trying out a bunch of hobbies and only a fraction of them last for the long-term, so that’s good news for people like me.
I try to stick to about 10 standard drinks per week, in addition to sharing some homebrews (which is really one of the most fun aspects of the hobby). So for me this means brewing about once per month which would reach break-even with the above equipment list in under a year.
The break-even period could be shifted even earlier by brewing more complex beers which offer a greater potential for savings. However, even sticking to basic beers, brewing just 10 times to pay for all of the equipment is a very good ROI for a hobby.
Is it worth homebrewing for purely financial reasons when considering time/labor?
Astute readers may have noticed that I have not mentioned time inputs yet, and in any ROI analysis the value of one’s labor is a fair and critical consideration. Brewing day and cleanup takes me about 5 hours, and bottling day is an additional 2 hours. So that’s 7 hours of my own labor to turn grain and yeast into beer.
Brewing a 5 gallon beer kit, one is looking at a total savings in the range of $30–100 (depending on the style brewed) compared to buying an equivalent volume of a similar beer at the liquor store.
Divided by 7 hours of labor per batch, that comes out to $4.29 to $14.26 per hour saved by homebrewing. Clearly that is below the US minimum wage on the lower bound, but towards the middle and upper of the range when brewing more difficult beers is actually a decent financial hourly return for a hobby.
I like to multitask and listen to podcasts when brewing to get even more value from my time.
Clearly there’s a decent savings potential from homebrewing, but it’s a big time commitment and having other reasons for getting into it is wise such as being interested in picking up a new skill, wanting to learn about the art of making beer, or having a tendency towards self-sufficiency. When you can combine at least one of those aspects with the financial savings that homebrewing brings, it’s a no-brainer.
Homebrewing resources
This article is purely a financial analysis and I don’t have room or time to write a guide on getting started with homebrewing. Thankfully, better resources than anything that I could assemble already exist. For anyone looking to get into the hobby I recommend checking out the following:
- John Palmer’s book How to Brew, the first edition of which he has uploaded for free online.
- The American Homebrewer’s Association has a primer on the “brew in a bag” (BIAB) method which is an approach to all-grain brewing in a single vessel, minimizing the amount of equipment required compared to traditional approaches using techniques such as sparging.
- The Basic Brewing Radio podcast which has hundreds of episodes starting from 2005, most of which are packed with information and still relevant today.
- Your local homebrewing store, if you have one. Chances are the owner and employees are helpful sources of knowledge.
Happy brewing and happy holidays! I will be back writing on the blog in a couple of weeks to do my spending and budget analysis for the end of 2022.