Cost Per Barrel
Cost per barrel is the fully loaded cost of producing and aging a barrel of spirit: direct materials, the barrel, labor, overhead, storage, and evaporative loss.
A common mistake is counting only grain, yeast, and the barrel, which understates true cost and inflates apparent margin. Accurate cost per barrel includes burdened labor, facility overhead, the financial weight of years of aging, and the angel's share, so pricing rests on real numbers.
What goes into the true cost of a barrel?
A fully loaded cost includes direct materials (grain, yeast, water), the barrel itself, burdened labor, facility overhead, the carrying cost of capital tied up for years of aging, and the angel's share. Leaving any of these out understates cost and overstates margin.
Why do distilleries underestimate cost per barrel?
The common shortcut counts only grain, yeast, and the barrel, which can miss most of the real cost. Overhead and years of evaporative loss are easy to ignore because they are not a single invoice, but they are what separate an apparent margin from a real one.
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