How Much Does It Cost To Run A Still?
Distillery overhead is sometimes hard to pin down because each product has different variable costs. Fixed costs are relatively easy to calculate since you’re likely not hiring new employees or buying new equipment every month but if you are you’re hopefully making enough money that you’re not reading articles about calculating operating costs. The variable costs on the other hand can be a completely different story.
Your equipment and facility cost aside from utilities should be fairly straightforward to account for. One-time expenses should be amortized along the usable life of the equipment and there is a baseline for power and water that could be considered “fixed” even though there may be some jitter month to month. Payroll and personnel costs shouldn’t change much if you work a steady schedule but can be wildly thrown off by changing production demands or meeting large contracts or sales obligations. Ideally, those swings in costs should be net positives due to the increased revenue, as long as they’re planned out properly.
Your grain bill can be a big source of variability in your final product. Someone using silage corn versus a rare heirloom variety can have a drastic difference in operating expenses to run their still. Similarly, if you can do your run in 4 hours you may have lower operating costs than someone who takes 12 hours or more to make the same amount of spirits. Sometimes skimping on the materials or equipment can help you spend less start-up money but the personal hours or inefficiencies in the system can add up to cost more in the long run. ROI can be positive or negative so you’ve got to sit down and do the math for what makes sense for your operation.
The most difficult costs to account for ahead of time are by far the opportunity costs. If you decide to get a very simple setup and only run a pot still you’ll miss out on the flexibility to make gin and vodka and if you can’t sell a white spirit you’ll have to wait on the cash flow from your aged spirits. Hindsight is 20/20 so don’t beat yourself up for what you didn’t know at the time. Learn from your mistakes, try not to repeat them too often, and keep moving forward. None of us have a crystal ball to see the future but we can choose whether or not we want to persevere.
How much does it cost to run a still? As much as it takes to make as much product as you’re planning on at the quality you’re planning on making it! Balancing costs can be tough and cash flow is even more difficult with inflation being what it is today. The trick is to make wise decisions on where to spend and where to save without “saving” yourself for the poor house. Leave us a comment below to talk about your current needs or future plans or give us a call and we’ll be more than happy to discuss your options.
