How to Calculate the Cost of Goods for RTD Canned Beverages

If you’re a craft brand interested in RTD beverages, understanding the cost of goods is an important part of your business operations. It is especially crucial to provide an accurate calculation of costs to ensure that your prices remain competitive while still giving you a profit margin. In this blog post, we will discuss how to calculate the cost of goods for Ready-To-Drink (RTD) canned products. 

Determining RTD Ingredient Costs 

The first step in calculating the cost of RTD canned products is determining how much each ingredient costs. To do this, you need to look at your supplier’s pricing list and compare it against your own pricing list for ingredients. Once you have determined the cost of each ingredient, add up all the costs to get a total cost for all ingredients used in producing your product. This figure will be used when calculating the cost of goods for your RTD cans.

Calculating RTD Beverage Labor Costs 

In addition to ingredients costs, labor costs also need to be taken into account when calculating the cost of RTD canned products. To determine labor costs, you must include both direct and indirect labor expenses such as wages, benefits, payroll taxes and any other associated overhead expenses related to production. Add up all these figures to get a total labor cost which can then be added to the total ingredient cost number mentioned above. 

Adding Up Other Expenses 

Once you have added up all ingredients and labor costs associated with producing your RTD cans, there are additional expenses that need to be accounted for in order to get an accurate calculation of your product’s total cost of goods sold (COGS). These additional expenses include packaging materials such as cans or bottles; labels; caps; closures; shrink wrap; storage fees; shipping fees; insurance fees; advertising fees; licensing fees and more. Add up all these figures separately from ingredients and labor costs to get a final COGS figure for your product.  

Determining the COGS for RTD canned products involves adding up all ingredient costs plus labor costs plus any additional expenses related to production or distribution such as packaging materials or shipping fees. By accurately calculating these figures, small business owners can ensure that their prices remain competitive while still allowing them enough profit margin on their sales so they can stay profitable over time. Small businesses should consider investing in software designed specifically for tracking inventory and COGS calculations which will help them save time and money in the long run by automating these tedious tasks! With accurate calculations and careful budgeting, craft brand owners can make sure they are staying ahead financially even with fluctuating markets and changing customer trends.

As spirits brand entrepreneurs, we understand the importance of sourcing cost effective ingredients and calculating your overall COGS to stay competitive. If you’re interested in expanding your brand to include RTD offerings, reach out and schedule a time to chat with us.