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Which Costs More...The beer I'm drinking or the can it's in.
January 31, 2014 7:11 PM   Subscribe

When I buy a case, am I paying more for beer, or aluminum?

I'm interested in the big brewers here; Coors, Bud, Heineken, et al.

I turned in some cans a while ago, and it wasn't a lot of money, but it was money. And the beer's mostly water.

So, assuming the brewer is already operating and the various sunk costs are already sunk. Which are they spending more on? Beer or aluminum?

I toured Miller Valley a few times when I lived in Milwaukee, and the overhead is indeed impressive. Lots of copper and piping.

(Thank you hive mind!)
posted by SlyBevel to Food & Drink (12 answers total) 2 users marked this as a favorite
 
Where are you? When you turned in the cans, were you getting the cash value of the aluminum in them, or were you getting a return of the 5 or 10-cent deposit on them? It makes a huge difference. In states that have a can deposit, the deposit is worth far more than the metal in the can, in order to encourage people to return the can for recycling rather than to litter or toss it in the trash.
posted by brianogilvie at 7:15 PM on January 31


"Where are you?"

Good question! I'm in a US state that does not give 5 cent or 10 cent per can awards. They weigh it and tell you what the rate is, and the rate times the weight is how much you get.
posted by SlyBevel at 7:24 PM on January 31


I don't know about the big breweries (of course they buy in bulk so their costs will be lower), but I worked at a restaurant/microbrewery so I have a vague idea. The main cost of making beer, besides the overhead (equipment, storage, building, workers) is the ingredients. A lot of the cost depends on the quality of the ingredients. Our brewers switched from imported to domestic to reduce the costs, so again you have the factor of source. But overall the expense of ingredients and overhead was definitely more than the cost of aluminum would have been. I don't have a quote on aluminum but it's cheap, and again the big manufacturers buy in bulk which further reduces their cost.
posted by DoubleLune at 7:32 PM on January 31 [1 favorite]


I'm gonna go with the beer. How can you not account for overhead? Facilities, employees, taxes, etc.. You have that with aluminum can manufacturing, too, but depending on the brewery much of that equipment is still being paid for. The material costs in can making are probably slightly less influenced by market fluctuations whereas there are many elements that go into beer making that can affect the price of the raw goods.
posted by amanda at 7:38 PM on January 31


It may be dangerous to extroplate, but when buying materials to make beer at home it is more expensive to buy ingredients then brand new glass bottles.
posted by edgeways at 7:55 PM on January 31


[Couple of comments deleted; please give some basis for your answer, don't just guess or say you figure it must be the beer. Thanks.]
posted by LobsterMitten at 8:41 PM on January 31


Assuming this chart from 6 years ago is still relatively accurate (The book that they get the numbers from is an interesting read if you're into the minutiae of beer making):

Packaging is 28% total, that includes the cans and the stuff they're shipped in, ingredients are only 15%. However, ingredients without production doesn't give you beer, it gives you a bunch of ingredients. Production's another 15%. So the cost of buying the ingredients and turning them into beer is slightly higher than the cost of what you ship that beer to the consumer in.
posted by Gygesringtone at 8:58 PM on January 31 [7 favorites]


Which are they spending more on? Beer or aluminum?

Depending on the jurisdiction, they could be paying for water and/or wastewater disposal. There are often specific rules for major consumers and disposers of water which wouldn't be a sunk cost but would be over and above the cost of ingredients.

I'm very good friends with the GM of a beer plant who's part of a major international conglomerate. Costs vary wildly between jurisdictions - both the above ones, as well as proximity to local markets, labour costs/laws, and electricity pricing (in that order) are major factors in where plants are located.
posted by rutabega at 4:37 AM on February 1


I can get ingredients to make a batch of beer for about $30. That makes two cases @ 60 cents a bottle. A major manufacturer could get a better deal, sure.

A random recycling site I found online will give you 40 cents a pound for aluminum cans.

Gotta be the beer.
posted by MrMoonPie at 6:23 AM on February 1


Just as a point of reference, the consumer product company where I work spends anywhere from 5% - 25% of total cost of goods on packaging. I am sure each category is different, but I think a general rule of thumb is that the product costs more than the packaging it's in.
posted by gillianr at 8:31 AM on February 1


"Where are you?" should be a standard AskMe staple.

From what I remember from my work at a local brewery, it's really close. When they switched from strictly bottles to cans and bottles, they lost money initially, but made it back in the longer term.

/disclaimer, I did IT work, I was in no way involved with pricing or bottling/canning stuff.
posted by Sphinx at 8:44 AM on February 1 [1 favorite]


Beer distributors pay the brewery more for the keg than they do the beer in the keg, at least on the big volume brands, and that does not account for shipping. Some specialty beers are the other way around. I don't know if that means those beers actually cost more to make or if the breweries feel like they can charge more because it's not the usual swill, though.
posted by wierdo at 5:34 PM on April 1


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