Working out the cost of a bottle of craft gin

Start with the bottle, not the batch

Cost per bottle is the total cost of a batch divided by the bottles you can actually sell from it. Not the bottles you hoped for. Losses in distillation cuts, filtration, filling and breakage all reduce the denominator.

Work from a real batch plan. How much neutral spirit goes into the still? What strength and volume come out as hearts? How much water do you add to reach bottling strength? How many 700 ml or 750 ml bottles does that fill?

The lines in the sum

For each bottle, list:

• Neutral spirit, including losses.
• Botanicals: juniper, coriander seed, angelica and citrus peel are common, but your recipe decides.
• Dilution water and treatment.
• Glass, closure, label and carton (see packaging costs founders underestimate).
• Labour for distilling, filling and packing.
• Energy and consumables.
• Share of overheads: rent, licences, insurance, accounts.
• Duty and taxes, which depend on your jurisdiction and are often charged on alcohol content or volume.

Get a written quote for every line. A friend's memory of a price is not a cost.

A worked illustration

These are hypothetical round numbers in a neutral unit, only to show the method. Say neutral spirit is 20 per bottle, botanicals 4, glass 12, closure 3, label and carton 6 and labour with overheads 10. That totals 55 before duty and taxes.

If your distributor and retailer each need a margin, the shelf price must climb from that 55 plus duty through two more steps. Work backwards from a shelf price and you will often find nothing left for you. Our guide on pricing and positioning a craft gin shows how to do that backward sum.

Where the sum goes wrong

Four errors turn up again and again:

• Ignoring losses, so the real yield is below the plan.
• Costing botanicals at a bulk price you cannot get at your volume.
• Leaving out duty, which can be the largest line.
• Spreading overheads over a volume you will not reach in year one.

Fixed costs per bottle are highest when volume is lowest. A founder who divides overheads by an optimistic volume gets an optimistic cost.

Contract or own still

With a contract distiller, your cost per bottle is usually a toll or a per-litre fee plus your own materials. With your own still, you carry equipment, labour and utilities. Compare them at the same volume. See contract-distilled gin for the questions that change the price.

Cost at three volumes

Run the same sheet at three volumes: a cautious year, an expected year and a good year. Variable costs per bottle stay roughly steady. Fixed costs per bottle fall as volume rises.

With the hypothetical 55 from above for variable cost and fixed costs of 60,000 a year, a thousand bottles carries 60 of fixed cost each and ten thousand carries 6. The same gin goes from 115 to 61 per bottle before duty. The point is not the numbers. It is that your first-year volume decides whether the bottle makes sense at all.

Check it against the shelf and keep it alive

Once you have a cost, compare it to the prices of gins you are competing with in the shops and bars you plan to enter. Do this by visiting and writing prices down. If your cost plus a fair margin lands well above that range, you either need a story that justifies it or a cheaper route to make it. Do not hope the drinker will not look.

Update it every time a quote changes. A cost sheet that sits in a drawer is a cost sheet that lies. If you want it checked against a full cash flow, that is part of our project report work.

Packaging and the stage most people skip

Dry goods are bought before the gin is sold, so they sit as cash on the shelf. Glass often comes in pallet quantities and labels in print runs, which means your first order is larger than your first batch needs. Build that tied-up cash into your funding plan as well as your unit cost.

Also count the unglamorous lines: cartons, tamper seals, pallets, freight inward, lab checks, samples for the trade and the bottles you pour at tastings. None is large alone. Together they move the cost enough to matter.

Common questions

What is the biggest cost in a bottle of gin?

It depends on your market. Duty or tax is often the largest line. Work out the order from your own quotes rather than from a rule of thumb.

Should I cost per 700 ml or per litre?

Both are useful. Per bottle matches what you sell. Per litre helps you compare spirit and contract quotes.

How do I allow for losses?

Track the volume at each stage of a real batch and divide the total cost by the bottles that actually leave the building.

Do botanicals cost much?

Per bottle they are usually a small line, but quality and sourcing affect consistency. See our botanicals sourcing guide.