The "recession brewing" episode of The Session kind of hit home for me. I'd kind of like to see what other listeners think about how homebrewing is actually saving them money.
Since I work in the energy services industry I am accustomed to defining money-saving opportunities in terms of "simple payback". You usually see this in the example of using a 13-watt compact fluorescent screw-in lamp in place of a 100-watt incandescent bulb. Even though the CFL costs more than the incandescent bulb initially, the CFL uses less energy and lasts longer. You calculate how much you would have spent to power the incandescent lamp over a year, and then calculate how much it costs to operate the CFL over a year - the difference is how much you save. You then divide the cost of the lamp by the amount you save and you'll have the time in years it takes for the savings to pay for the lamp - that's the simple payback in years, the amount of time it takes for that energy-saving bulb to pay for itself.
Since I'm an engineer by trade I punch everything into a spreadsheet, so naturally I set up a spreadsheet to figure out the payback on my homebrewing hobby. I have been tracking everything I spend on equipment and ingredients (except for water and propane), and that currently adds up to about $3020. Now the product of each batch is approximately equivalent to two cases. If I were to equate my product to Newcastle Brown Ale my avoided cost would be about $35/case, if I were to equate it to Natty Light it's more like about $15/case. To be honest, when I'm not drinking my homebrew I usually buy Yuengling Lager at about $24/case of 24x16-oz. I kind of arbitrarily decided to use $22/case as my avoided cost - figuring I wouldn't drink as much if I didn't have all this homebrew around, the homebrew is equivalent to higher-priced commercial beer, there's some entertainment-value to the brewing hobby, I probably wouldn't be drinking as much quality brew if I wasn't brewing it, wash all that together and I just called it $22/case (or $44/batch). Anyway, after 3-1/2 years I've brewed 73 batches, or 146 cases for an avoided cost of $3212.
That means a couple of things. First, the homebrewing product has completely paid for all of my equipment and ingredients with $194 left over. Alternatively, I've been drinking (and giving away) beer for the last 3.5 years at an average cost of under $21/case. Another way to look at it is that my beer and homebrewing hobby has been free up to now, and it's given me almost $200 to invest in more homebrewing equipment.
I should also say at this point that I brewed extract for about the first year and a quarter, but now I brew all grain at full-volume. I still buy ingredient kits. I could cut my cost per batch down quite a bit by buying base malt in bulk and buying flavor grain and hops a couple of pounds at a time and working from recipes, but of course I'd need to invest in a mill.
Anyway - that's my brewconomics. I'd like to see how everyone else is dealing with the recession, and how they justify continuing their hobby.
Cheers!
-JAI
