Wrong Take · Oct 26, 2026
Stop grading your year on volume. Grade it on contribution margin.
Three down years have the whole industry scoring itself on barrels and cases, which tells you nothing about whether a sale pays for itself. Run contribution margin by product, package, and channel and you will know which accounts to keep, which to reprice, and which to let go.
The settled position deserves a fair hearing. Volume has been the industry's scoreboard for decades because it works as shorthand: barrels and cases are countable weekly, they absorb fixed costs, they buy you glass and can pricing, and they buy you attention from a distributor who has more brands than reps. When volume grows, almost everything else gets easier. So when craft beer posts a third straight year of declining volume, the reflex reading is a category in decline, and the reflex fix is to chase cases back with discounts, new SKUs, and more accounts.
Here is where that breaks. Volume tells you how much moved, not whether any of it paid you. Matt Gacioch, staff economist at the Brewers Association, makes the point in The New Brewer (September/October 2026, adapted on brewersassociation.org): in the association's Financial Benchmarking study of 2025 data, the median gross profit margin on beer production was 35% while the median operating profit margin was 14%. His line is the one to tape to the wall: "producing beer profitably is not the same as operating a profitable business." A brand can look fine in a keg and lose money in a can. One account can carry a territory while the account next to it quietly eats your freight budget.
The other reflex, raising price to fix the gap, has the same problem. Gacioch notes craft beer is only somewhat price-inelastic, so a price increase will very likely cost you demand.
The honest counterargument: volume still matters, and Gacioch says so. Scale lowers cost per unit, and a low-margin product can earn its place as a loss leader when it pulls people into your taproom or tasting room where the money actually is.
So keep the volume report, and put a second number next to it. Calculate contribution margin (selling price minus the variable costs of that sale) for every product, package, and channel, then weight it by your real sales mix. A winery does this across club, tasting room, and wholesale. A distillery does it across bottle sizes and control states. A retail shop does it by category and by shelf. A distributor rep does it account by account before renewing a program.
Then stress it: what happens at 10% less volume, or 5% higher input costs, and which of your expenses are genuinely variable if the year goes sideways. Do that this month and your next pricing argument stops being a guess.