How Much Does a Nitro Cold Brew Coffee Program Cost?

//How Much Does a Nitro Cold Brew Coffee Program Cost?

How Much Does a Nitro Cold Brew Coffee Program Cost?

As a business considering adding nitro cold brew to your lineup, you need to know what your COGS are going to be. You also want to know what your profits might be.

This post will lay out some COGS scenarios, along with our suggestions on pricing your new beverage selection. Based on these pricing recommendations we will also lay out some profit scenarios.

First, some information that is applicable to all scenarios. 


How Our Nitro Cold Brew Beverage Program Works

There are two simple components to the program: the kegs and the equipment.

Kegs

Keg Type: Sankey D
Keg Volume: 5.16 gallons | 661 oz

We get the kegs from Bona Fide Brewing Co. They start with perfect water, and use a proprietary brewing process that their founder created and perfected. The process happens in a sterile, airtight environment. The first time the product sees air is when the tap handle is pulled and it’s pouring into the glass.

Nitro cold brew shelf life:

  • 30 days (if stored at ambient temperature)
  • 90 days (if refrigerated)
Image of Sankey keg that holds 5 gallons of nitro cold brew

Bona Fide Craft Draft Kegs

For additional detail on Bona Fide’s process and who they are, watch this video:

OR click here to watch directly on YouTube.

Equipment

We provide a Single Keg Triple Faucet Commercial Grade Kegerator to each new client (you can get more than one kegerator if your volume demands it).

Image of nitro cold brew 3 tap kegerator unit with kegs visible

3 Tap Kegerator Unit

This “keg mini fridge” holds three kegs, one nitrogen tank, and has three taps (one for each keg).

The unit measures 23 inches wide, 30 inches deep and is 39 inches tall (the lip at the top is 1 inch tall – underneath that one inch lip the unit measures 22 inches wide). It’s on wheels so it can be mobile within your commercial kitchen or other staging area.

Your Nitro Cold Brew Beverage Program Includes

You get regular keg delivery and regular maintenance. You and your staff simply need to pull the taps to serve.

Weekly Keg Delivery

We communicate with you as you figure out how quickly the coffee moves out of your kegs into your happy customers’ cups. We deliver what you need, on a schedule.

Kegerator Maintenance

Once a week, we go over your Kegerator. To make sure the lines are clear, the glass is shiny, the nitro is full. You and your staff let us know about any particularities and we address them. We also, at installation, show you which simple daily cleaning tasks maximize the taste of every single serving.

Nitro Refills

We do the readings and swap out your nitro tank when needed.


How You Can Profit From Your Nitro Program

Let’s face it: costs don’t really mean much unless you put them into context. This section will give you some potential profit scenarios based on our pricing recommendations.

Recommended Pricing:

We recommend the following introductory pricing for up to 90 days:

12 oz cup $3.00
16 oz cup $4.00

 

After 90 days we recommend:

12 oz cup $4.00
16 oz cup $5.00

 

Pours Per Keg

Each keg contains volume for:

12 oz cup 66 pours
16 oz cup 49 pours

 

We need to say at this point that we know the below scenarios are somewhat simplistic. For example, we’ve not taken into account line items like sales tax, special discounts, or the cost of to go cups or glassware.

These are intended to show, at a glance, what is possible, and then leave you to confirm your own calcs given your own specific set of circumstances.


Scenario #1: (3-9 Kegs Per Month)

A. Introductory Pricing (pouring 12 oz only)

Scenario #1 A and B include a $50 keg service fee (which disappears when you sell 10+ kegs per month).

Parameters Used:

12 oz serving  66 servings per keg (10 oz actual pour)
Price point $3
Keg cost $110 per (minimum 3 keg order)
Keg volume 3-9

Monthly Cost Ranges

Kegs $330-$990
Service Fee $50
Cost per serving $1.75-$1.91

Monthly Revenue and Profit Ranges

Gross Revenue $594-$1782
Profit (dollars) $214-$742
Profit (margin) 36%-41%
Profit per serving $1.09-$1.25

B. Permanent Pricing after ramp up (pouring 12 oz only):

This scenario is low volume selling at a higher price point.

Parameters Used:

12 oz serving  66 servings per keg (10 oz actual pour)
Price point $4
Keg cost $110 per (minimum 3 keg order)
Keg volume 3-9

Monthly Cost Ranges

Kegs $330-$990
Service Fee $50
Cost per serving $1.75-$1.91

Monthly Revenue and Profit Ranges

Gross Revenue $792-$2376
Profit (dollars) $412-$1336
Profit (margin) 52%-56%
Profit per serving $2.09-$2.25

Scenario #2: (10-19 Kegs Per Month)

A. Introductory Pricing (pouring 12 oz only)

This scenario is intermediate volume selling at the lowest recommended introductory price point.

Parameters Used:

12 oz serving  66 servings per keg (10 oz actual pour)
Price point $3
Keg cost $110 per (minimum 3 keg order)
Keg volume 10-19

Monthly Cost Ranges

Kegs $1100-$2090
Service Fee $0
Cost per serving $1.67

Monthly Revenue and Profit Ranges

Gross Revenue $1980-$3672
Profit (dollars) $880-$1582
Profit (margin) 44%
Profit per serving $1.33

B. Permanent Pricing after ramp up (pouring 12 oz only):

This scenario is intermediate volume selling at a higher price point.

Parameters Used:

12 oz serving  66 servings per keg (10 oz actual pour)
Price point $4
Keg cost $110 per (minimum 3 keg order)
Keg volume 9-19

Monthly Cost Ranges

Kegs $1100-$2090
Service Fee $0
Cost per serving $1.67

Monthly Revenue and Profit Ranges

Gross Revenue $2640-$5016
Profit (dollars) $1540-$2926
Profit (margin) 58%
Profit per serving $2.33

To Wrap Up This Cost and Profit Article

We hope by this point you have a vision of what your nitro cold brew numbers could look like. If you have questions or comments please complete the form below and we’ll respond in one (or more) of three ways:

  1. We’ll likely answer your question directly via email within 2-4 business days.
  2. We may update this article based on new points your question or input brings up.
  3. We will likely thank you publicly on Instagram – to show our appreciation of the time it took to read this article and articulate a genuine, relevant, well thought out question or input (you can let us know in the form below if you do NOT wish us to do this – we respect your privacy above all else).

[wpforms id=”3849″ title=”true”]

By |2017-02-26T21:06:08+00:00February 9th, 2017|Nitro Cold Brew|0 Comments

About the Author:

Leave A Comment