Top 7 KPIs Every Brewery Must Track - The Key to Brewing Success

Running a successful brewery business in today's market is a challenging task, with increasing competition and evolving consumer preferences. To achieve growth and profitability, it is crucial to track the right metrics and constantly measure KPIs. In this article, we will discuss the top seven brewery KPIs that every passionate brewer should track for better insights and informed decision-making.

• Customer satisfaction: The ultimate goal of any brewery should be to keep their customers happy and satisfied. Measuring customer satisfaction with feedback surveys, online ratings, and reviews can help identify areas of improvement and keep the brewpub on track for success.

• Growth of loyal customer base: Loyal customers are the backbone of any business, and it's crucial to track their growth and retention rates. Use customer retention KPIs to measure customer lifetime value and analyze data to make informed decisions on how to ensure loyal customers are retained and attracted to come back.

• Sales of beer and food: Understanding the trend in sales data is critical when it comes to planning for future business activities. KPIs to track include gross sales by revenue streams, revenue per customer, percentage of food sales, and beer sales trends.

Stay tuned to find out more about the remaining key performance indicators that can ultimately lead your brewery towards success.

Customer satisfaction

As a brewery owner, it's important to keep your customers happy with your products and services. Measuring customer satisfaction is crucial to ensure customer retention and loyalty. Here's everything you need to know about tracking and calculating the Customer Satisfaction KPI.

Definition

Customer satisfaction is a metric that measures how happy a customer is with your brewery's products and services. It indicates how well your business meets or exceeds customer expectations.

Use Case

Knowing the satisfaction level of your customers can help you identify areas to improve, track customer loyalty, and maintain a positive reputation. A high customer satisfaction score can have a significant impact on your brewery's bottom line by increasing repeat customers, word-of-mouth marketing, and establishing your brand's credibility.

How To Calculate KPI

To calculate customer satisfaction, you need to ask your customers how well you're meeting their needs. This can be done through surveys, online reviews, comment cards, or direct feedback.

Calculation Example

Suppose your brewery surveys 100 customers about their satisfaction, and 80 of them report being satisfied. Your Customer Satisfaction KPI would be:

KPI Advantages

• Helps you understand customer needs and preferences
• Can lead to enhanced customer retention and loyalty
• Can improve the quality of your products and services

KPI Disadvantages

• Can be subject to bias and inaccuracies due to the method of data collection
• May not provide detailed insights into the reasons behind customer satisfaction or dissatisfaction
• Can be affected by factors outside of your business's control, such as economic downturns or market competition

KPI Industry Benchmarks

According to a survey by the National Beer Wholesalers Association, customer satisfaction rates in the beer industry range from 75-85%.

Growth of loyal customer base

The growth of loyal customer base is one of the most critical KPI metrics in the brewery industry, reflecting how well a brewery is engaging its existing customers and attracting new ones. This KPI is more important than ever, considering the current scenario where the brewery industry is highly competitive, and brewery owners need to attract new customers and retain the old ones. In this blog post, we will discuss the growth of the loyal customer base KPI metric in detail, including its definition, use case, how to calculate it, calculation example, KPI advantages, KPI disadvantages, and industry benchmarks.

Definition

The growth of the loyal customer base KPI metric reflects the percentage increase or decrease in the number of loyal customers over a specified period. The loyal customer base comprises customers who return to the brewery regularly and introduce new customers to the brewery.

Use Case

The growth of the loyal customer base KPI metric is essential for measuring customer loyalty, which is vital in the brewery industry. It helps determine whether the brewery is retaining the existing customers and attracting new ones to increase its revenue. A brewery with higher loyal customer growth is likely to have higher customer satisfaction levels, which lead to increased profits.

How To Calculate KPI

To calculate the growth of the loyal customer base KPI metric, use the following formula:

Calculation Example

Consider a brewery that had 500 loyal customers at the end of the previous month and 600 loyal customers at the end of the current month. Then, the growth of the loyal customer base KPI for this brewery is calculated as follows:

Therefore, the growth of the loyal customer base for this brewery is 20%.

KPI Advantages

• Helps breweries understand customer retention and attraction trends
• Indicates customer satisfaction levels, which affect the repeat purchase and revenue
• Facilitates decision-making for marketing campaigns and sales strategies

KPI Disadvantages

• Does not account for customers who do not express their satisfaction
• Uses the number of loyal customers as an incomplete measure of customer loyalty
• The KPI does not reflect revenue from new customers

KPI Industry Benchmarks

The industry benchmarks for the growth of the loyal customer base KPI can vary depending on various factors like location, customer demographics, and sales volume. However, on average, a growth rate of 5% to 20% per annum is considered good in the brewery industry.

Sales of Beer and Food

One of the most important KPIs for a brewery is measuring the sales of its beer and food. This KPI can help the brewery understand how much revenue is being generated and which products are most popular among customers.

Definition

The sales of beer and food KPI measures the amount of revenue generated by the brewery's beer and food products over a certain period of time.

Use Case

Tracking sales of beer and food is critical to understanding the performance of a brewery. It helps the business understand how much revenue is being generated, which products are most popular, and which ones may need some attention to boost sales.

How to Calculate KPI

To calculate the sales of beer and food KPI, use the following formula:

Calculation Example

Let's say a brewery's total revenue for the month was $100,000. During this time, they sold $75,000 worth of beer and $25,000 worth of food.

KPI Advantages

• Measures how well the brewery's beer and food products are performing in terms of generating revenue.
• Helps identify the most popular products among customers.
• Allows the brewery to understand how much revenue is being generated from both beer and food sales.

KPI Disadvantages

• Does not take into account the cost associated with selling each product.
• May not accurately represent the profitability of each product.
• Not useful for understanding the individual performance of beer or food sales.

KPI Industry Benchmarks

Industry benchmarks for the sales of beer and food vary depending on the size and location of the brewery. However, on average, breweries typically expect to generate 60-80% of their revenue from beer sales and 20-40% from food sales.

Number of Brewery Tour Attendees

Brewery tours have become a popular way for breweries to showcase their facilities, promote their brands, and provide an immersive experience for visitors. The number of attendees on these tours is a crucial KPI that helps breweries analyze the attractiveness of their facilities and gauge visitor interest. Knowing how to track and calculate this KPI can provide valuable insights for brewery operations and marketing teams.

Definition

The number of brewery tour attendees is a KPI that measures the total number of visitors who take a guided tour of a brewery facility over a specified time period. This KPI is an important measure of visitor engagement and brand awareness in the brewery industry.

Use Case

The number of brewery tour attendees is used by breweries to:

• Evaluate the popularity of their facilities with visitors
• Identify marketing opportunities to attract more visitors
• Optimize visitor experience by adjusting tour schedules and offerings
• Compare performance against industry benchmarks

How To Calculate KPI

The number of brewery tour attendees can be calculated using the following formula:

Calculation Example

Let's say Brewery ABC offers guided tours of their facility and had the following data in a given month:

• Total number of visitors: 5,000
• Number of visitors who took a brewery tour: 1,000

To calculate the number of brewery tour attendees, we would use the formula:

Therefore, the number of brewery tour attendees for Brewery ABC in this given month is 1,000.

KPI Advantages

The number of brewery tour attendees provides several advantages:

• It helps breweries evaluate the success of their marketing efforts
• It provides insights into visitor engagement and interest in the brewery brand
• It helps breweries optimize tour schedules and offerings to improve visitor experience

KPI Disadvantages

Despite its advantages, the number of brewery tour attendees has some disadvantages:

• It may not accurately represent the revenue generated by visitors
• It may not reflect the effectiveness of marketing efforts if visitors do not take tours
• It may not reflect the potential of increased revenue from visitors who do not take tours

KPI Industry Benchmarks

The number of brewery tour attendees varies depending on the size and popularity of the brewery. However, according to industry benchmarks, a brewery can expect an average of 10-20% of total visitors to take a guided tour.

Number of retail outlets selling our beer

The number of retail outlets selling our beer is an essential KPI for breweries to track. It shows how successful a brewery is in distributing its products across various outlets.

Definition

Number of retail outlets selling our beer is defined as the total number of unique retail locations where a brewery's beer is sold.

Use Case

This KPI is critical because it helps breweries to evaluate the effectiveness of their distribution strategy. A low number of outlets selling a brewery's beer could indicate that it's not reaching enough people or that it needs to explore additional distribution channels. In contrast, a high number of outlets selling a brewery's beer indicates that its distribution strategy is effective.

How To Calculate KPI

To calculate this KPI, breweries need to add the total number of unique retail outlets selling their beer. The formula is as follows:

Calculation Example

Let's say a brewery has its beer sold in 150 unique retail outlets across the country. The number of retail outlets selling their beer is 150.

KPI Advantages

• The KPI helps breweries to evaluate the effectiveness of their distribution strategy and adjust it accordingly.
• A high number of retail outlets selling a brewery's beer indicates that it's reaching a large audience and is well-distributed.
• The KPI can help identify opportunities for expansion into new markets or the development of new distribution channels.

KPI Disadvantages

• The KPI does not account for the size of each retail outlet or the volume of beer sold in each outlet. Hence, a brewery might have its beer sold in many outlets but only achieving low sales volume.
• The KPI does not take into account the quality of retail outlets. For example, if a brewery's beer is sold in retail outlets that do not fit its target customer base, it may not be effective even with a high number of retail outlets selling their beer.

KPI Industry Benchmarks

The industry benchmark for the Number of retail outlets selling our beer varies depending on a brewery's size, product offerings, and target market. However, in general, a brewery should strive to have its beer sold in as many retail outlets as possible while ensuring the quality of those outlets matches the target customer base.

Amount of revenue generated from events/activities

As a brewery owner, tracking your business's performance is crucial for growth and success. One essential metric to track is the amount of revenue generated from events and activities. This KPI measures the profit gained from various events or activities, such as tastings, tours, or private events.

Definition

Amount of revenue generated from events/activities measures the total amount of money earned from events and activities hosted by the brewery.

Use Case

This KPI helps brewery owners to identify which events or activities generate the most revenue. By understanding this, owners can plan and execute more profitable events and activities, improving the brewery's overall financial performance.

How To Calculate KPI

Calculation Example

KPI Advantages

• Helps to identify which events or activities generate the most revenue
• Assists in planning and organizing profitable events
• Improves overall financial performance of the brewery

KPI Disadvantages

• Does not account for variable costs associated with events and activities
• Does not measure customer satisfaction with events
• May not consider external factors that affect revenue generation, such as location or competition

KPI Industry Benchmarks

Industry benchmarks for the amount of revenue generated from events/activities vary based on the brewery's size and location. However, the average revenue generated from events and activities within the craft beer industry is approximately 5% to 10% of total brewery revenue.

Variety of craft beer options offered.

Craft breweries thrive on variety. With so many modern brewing techniques, specialized ingredients, and experimental recipes, breweries have an unparalleled capacity to offer beer enthusiasts a broad spectrum of beers. However, with a vast array of options comes the challenge of striking the balance between innovation and sustainability. That’s why improving this KPI takes a combination of creative and analytical thinking.

Definition

Variety of craft beer options offered is a KPI that measures the range of beers that a craft brewery has available for its customers. This KPI is crucial for gauging the brewery’s level of creativity, consumer satisfaction, and market competitiveness.

Use Case

For customers, a brewery’s variety is usually a deciding factor when choosing a beer. Offering a wide range of drinks keeps customers coming back and attract new ones. From a business perspective, monitoring this KPI can indicate the effectiveness of the brewery’s marketing and innovation strategies.

How To Calculate KPI

The variety of craft beer options offered KPI calculation measures the number of unique beer styles produced by the brewery. To calculate, sum up the total number of different beer styles produced by the brewery in a specific duration, usually monthly or quarterly. Divide this total by the total number of beer styles offered and multiply by 100 to get a percentage value. The formula is as follows:

Calculation Example

Let’s say a brewery produced 10 unique beer styles out of 50 in its inventory in a month. The variety of craft beer options offered KPI calculation would be:

KPI Advantages

• It can help a brewery to tailor its production schedule to satisfy the preferences of its patrons while ensuring overall quality standards.
• It permits breweries to determine how effectively its marketing campaigns are boosting product innovation and creativity.
• Determining a KPI offers a way to provide comparisons with the assortments of different competitors in the craft brewery industry.

KPI Disadvantages

• Measuring varieties of this KPI doesn’t necessarily correlate with the number of sales or revenue.
• Some beer enthusiasts have specific tastes and preferences, limiting the degree of diversity a brewery can practically offer in its selection.
• A brewery can sacrifice quality over variety, producing multiple styles that do not appeal to customers, decreasing returns and reputation damage.

KPI Industry Benchmarks for the KPI: ' Variety of craft beer options offered.'

Currently, there are no published industry benchmarks for this KPI, and its worth goes beyond quantitative measures.

Running a brewery business requires immense dedication and passion to crafting exceptional beers that customers will love. However, that alone does not guarantee business success. One of the most important aspects of running a thriving brewery involves measuring and tracking Key Performance Indicators (KPIs).

By tracking the right metrics, a business can make informed decisions that drive growth and profitability. The first three critical KPIs that every brewery should focus on are customer satisfaction, growth of loyal customer base, and sales of beer and food.

Understanding customer needs, measuring their happiness, and growing a loyal customer base are crucial to building a sustainable business model. Additionally, tracking sales of beer and food gives an insight into the profitability of the brewery.

It is imperative to continually track and analyze KPIs to make informed decisions that can help optimize business strategies, boost sales, and retain customers. In the subsequent article series, we'll dive even further into the remaining critical KPIs that breweries should track to achieve long-term success in today's evolving market.

Stay tuned for more insightful content!