If you’re still using a brewery cost spreadsheet to track how much it costs to produce your beer, you’re relying on outdated technology in more ways than one.
Today, better technologies, like ERP systems, are available to transform the manual chore of inputting costs into spreadsheets into an experience of discovery that more accurately reveals your true costs of producing craft beer. Could that be the game-changer your brewery needs?
Thijs Weber, CFO of Texels Brewery in The Netherlands, discovered this firsthand. Before implementing Crafted ERP Brewery Software, he used to do manual calculations, a process he described as “time-consuming, personal and error-prone.”
Once Thijs and his team switched to Crafted, the change was dramatic.
“Think of dynamic financial reports linked to up-to-date transactions,” he says. “This gives us real-time insight into business performance. The goal is to integrate all our processes so we can work more efficiently and get more comprehensive insight.”
The Limitations of Brewery Cost Spreadsheets
As a craft brewer, you likely used spreadsheets from the start. They help you track labor costs, raw materials, production capacity, beer sales and other expenses as well as help you calculate your cost of goods sold. Chances are this method has probably quickly outgrown its usefulness and may be hindering your growth. Let’s examine why.
Inaccurate Data
Spreadsheets are a manual, hands-on method of ascertaining a brewery cost breakdown. This opens you up to the possibility of inputting errors.
As Collin McDonnell, CEO and co-founder of HenHouse Brewing Co., explains: “Spreadsheets are full of lies. If you’re running everything through spreadsheets, there’s so much room for human error.”
The data in spreadsheets can quickly become outdated, and it may not present an accurate picture of your cash flow.
Wasted Time
If you’re like most craft brewers, you probably didn’t get into this business to spend hours hunched over a laptop updating a beer costing spreadsheet. You want to be out there with your team brewing or selling your beer.
However, we all know as a craft brewery grows, so does its complexity. Spreadsheets require constant manual updating to be of any use, and that’s precious time that can be invested in more strategic initiatives.
San Francisco’s Fort Point Beer Company realized it needed a more comprehensive solution as its business began to take off.
“Early on we noticed the complexity of moving from a smaller brewery to a production brewery, and everything that goes into figuring out how much each batch of beer or keg costs,” says Justin Catalana, CEO and Co-Founder. “The way we were doing that before with spreadsheets was just not sustainable.”
Justin found the better option was to replace those old spreadsheets with a modern ERP system. Crafted provides the Fort Point team with a 360-degree, real-time look at its costs and allows the brewery to make more informed decisions with our purpose-built Brewery Software.
Siloed Information
Spreadsheets tend to be siloed systems maintained by individual team members. This hampers collaboration and can lead to a host of problems.
For example, if the sole team member who is responsible for the beer production cost spreadsheet leaves, they take their expertise with them. Without shared processes and collaboration, productivity will decline as you work to transfer that responsibility to another team member.
ERP solutions operate off a centralized system. Data formerly stored in individual spreadsheets or a siloed software system is now accessible to the broader team.
The Benefits of ERP for Beverage Cost Tracking
If seeing the pitfalls of brewery cost spreadsheets isn’t convincing enough, consider reasons to switch to a more comprehensive business management solution. Let’s examine the benefits of using an ERP system over spreadsheets.
Automation Saves Time and Increases Accuracy
Comprehensive ERP software can manage every aspect of the brewery’s operation, from production to procurement to compliance. With a cloud-based brewery ERP, data flows in real time, and it’s always up to date and accurate.
Automation is vital for small beverage companies. By reducing redundant tasks and manual data entry, teams are able to accomplish more work in less time. Data is more accurate, and less time is wasted on correcting mistakes.
Greater Access Improves Usability and Flexibility
Making sense of a spreadsheet from your phone is difficult. With a cloud-based ERP system, you can easily access your data from anywhere, anytime. View simple dashboards on a smartphone or tablet on the brewery floor, or complete a task on your laptop thousands of miles away.
Scott Lyall, COO of the Australia-based Burleigh Brewing Co., describes Crafted as having “fantastic capacity, capability and flexibility in how we want to configure it while maintaining data integrity.”
He continues to explain, “The amount of data and reporting we can get out of it is limited only by us and how we want to go about using it…we’re really only scratching the surface of what I know it can do for us.”
Collaboration Creates Efficient Teams
Businesses today are always searching for ways to tear down the silos that are obstacles to collaboration. ERP systems replace spreadsheet silos with a solution easily accessible via a web-based dashboard. “The goal is to integrate all our processes so we can work more efficiently and get a more comprehensive insight,” says Thijs from Texels Brewery.
Aron Ferguson, from Berlin-based BRLO, says “The cross-departmental cooperation is a big advantage for us because we are working on the same system. From purchasing to production to logistics, sales and finance, quality control, CRM – it’s all on the same system now. That’s good for us.”
In-depth Analysis Uncovers Brewery Costs
Collin, of HenHouse Brewing, explains how Crafted enables his team to get a better handle on valuable production information.
“The batch production software was initially a really good way to track costs and make sure the beers were moving through the system in a timely fashion,” he says. “Now, it’s central to our accumulation of quality information, and our quality director takes all of the data that comes from the lab and attaches it directly to batch records.”
In fact, McDonnell adds, “The biggest strategic benefit to us in terms of using Crafted has been a really, really fine aperture on costing. We use the costing functionality pretty aggressively to make sure we really understand what it costs to make beer.”
ERP systems also include other functions, such as sales, inventory and compliance, to enable a top-down look at costs. Analytics and reporting dashboards provide great insights into how resources are used. Breweries can dive into information such as sales trends and supply costs to better understand product demand and profitability.
Justin of Fort Point Beer explains, “The insight we now have into our cost of goods and how every component factors into that final cost has really allowed us to focus on our overall gross profit. That continues to be something I feel Crafted does better than other solutions.”
Scalability Fosters Growth
While many craft beer entrepreneurs rely on brewery costs spreadsheets early on, more comprehensive brewery management software is often better fitted to a growing company.
In fact, the top reason small businesses move to ERP is to support growth. ERP systems make beverage companies more agile, helping breweries diversify product offerings and expand to new markets. Collin, of HenHouse Brewing, added “One of the cool things about Crafted is the depth we can go to is so much deeper than what we needed when we first implemented. So, when we continue to grow and need more specificities and heightened levels of accuracy, we already have the ability to do that within Crafted.”
Transitioning to ERP
Once you’ve selected your new brewery software, what’s next? Transitioning from spreadsheets to ERP involves a dedicated team and a well-executed implementation plan to ensure long-term success.
Your ERP software provider will work with you to create a detailed timeline for deployment. It includes verifying and testing data, migrating all important information over, and training your team on the new system.
Change management is another vital part of the transition process. It’s important to get everyone on board and excited about the new ERP system. After all, greater adoption leads to more accurate information and improved visibility across your entire organization.
A Harmonious Solution
Many craft brewers may be apprehensive of the perceived costs of moving to an ERP solution. As technology has improved, many new ERP systems are now more affordable for small businesses, like craft brewers. The many benefits should create a strong ROI pretty quickly — and some in areas you might not expect.
An often overlooked benefit of brewery management software is that it can actually foster team harmony. As Collin, of HenHouse Brewing, explains, “Someone’s always going to get blamed (for inaccurate cost data), and then that person is going to have resentment. It creates all these team issues.”
With all the challenges facing a craft brewer these days, the last thing you need is your team not to be there for each other. Investing in solutions that make everyone’s lives easier can help create a culture your brewery needs to overcome any challenges ahead.
Curious about a brewery cost-tracking alternative to spreadsheets? Get in touch to learn how Crafted ERP can help improve your brewery’s cost efficiency.
