How to Benchmark Labor Costs—and Keep Them in Check

Besides occupancy costs, labor is a brewery’s largest expense, critically influencing profitability. Just as people are pivotal to a brewery’s success or failure, so is the cost of their work—yet labor costs are often under-discussed and under-evaluated among small breweries.

That conversation needs to emerge if breweries are to survive lean sales periods. Chris Farmand, founder of brewery consulting firm and financial agency Small Batch Standard, says it’s unfortunate that labor costs are such a taboo topic in the industry.

Breweries “don’t want to underpay their people,” says Farmand, who’s also a certified public accountant. “We’re a very communal and social industry, so we want to make sure we’re taking care of our people. But at the same time, if we’re not monitoring it, labor costs will sink the business.”