Chartered Financial Analyst with 15+ years experience in agricultural business and consumer packaged goods (CPG) finance.
Find your winery’s breakeven point. Enter any three variables—Monthly Fixed Costs, Avg. Price per Bottle, Variable Cost per Bottle, or Breakeven Bottles Sold—to solve for the fourth.
Winery Breakeven Calculator
Winery Breakeven Formula
The breakeven formula for a winery finds the total number of bottles (Q) you must sell in a month for your total revenue to cover all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Bottle (P):
P = (F / Q) + V
Solve for Variable Cost per Bottle (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., property mortgage/taxes, winemaker/staff salaries, barrel aging costs, equipment depreciation, utilities).
- Avg. Price per Bottle (P): Your average *revenue* per bottle sold (combining tasting room, wine club, and distribution sales).
- Variable Cost per Bottle (V): The average cost directly tied to selling one bottle (e.g., the glass bottle, cork, label, wine taxes, packaging, and shipping).
- Breakeven Bottles Sold (Q): The total number of bottles you need to sell each month to reach $0 in profit.
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What is a Winery’s Breakeven Point?
A **Winery’s Breakeven Point** is the exact number of bottles (Q) you must sell each month to cover all of your operating costs. It is the minimum sales volume required to cover both your fixed overhead and the direct costs of producing and selling each bottle. Knowing this number is essential for setting prices, managing production, and determining the profitability of your wine labels.
**Fixed Costs (F)** are your consistent monthly overhead, regardless of how much wine you sell. This includes your vineyard or winery mortgage/rent, property taxes, equipment payments (tanks, presses, bottling line), salaried employees (winemaker, tasting room manager), and utilities.
**Variable Costs (V)** are costs incurred *only* when you produce and sell a bottle. This includes the “dry goods” (glass bottle, cork, capsule, label), excise taxes, packaging, and commissions or distributor fees. The cost of the grapes/juice can also be considered variable if purchased, or a fixed cost if you own the vineyard.
The **Contribution Margin** (P – V) is the profit from a single bottle that goes toward paying your fixed costs. If your average bottle price is $30 (P) and your variable cost is $8 (V), your contribution margin is $22. This calculator finds how many $22 “profit chunks” you need to cover your total fixed costs.
How to Calculate Winery Breakeven (Example)
Let’s calculate the breakeven point for a small winery.
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Identify Monthly Fixed Costs (F):
Your monthly mortgage, staff salaries, barrel costs, and utilities total $25,000.
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Identify Avg. Price per Bottle (P):
After blending tasting room, wine club, and distribution sales, your average revenue per bottle is $30.
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Identify Variable Cost per Bottle (V):
You calculate that the bottle, cork, label, taxes, and packaging cost $8 for every bottle sold.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per bottle: $30 (P) – $8 (V) = $22.
Next, divide the fixed costs by this margin:
Q = $25,000 / $22 = 1,136.36 -
Conclusion:
You must sell 1,137 bottles (rounding up) each month to cover all costs. Any bottle sold after that (e.g., bottle #1138) directly contributes $22 to your profit.
Frequently Asked Questions (FAQ)
It depends on your business model. If you *own the vineyard*, the cost of farming (labor, water, etc.) is a **Fixed Cost (F)**. If you *purchase* grapes or juice from another grower, that cost is a **Variable Cost (V)** tied to production.
You must find a *weighted average* price. If you sell 50% of your wine at $20 and 50% at $50, your (P) is `$10 + $25 = $35`. You must also find the weighted average (V) for those bottles. Alternatively, calculate the breakeven point *in dollars* (Total Fixed Costs / Contribution Margin Ratio).
Tasting room revenue is a separate revenue stream. This calculator is best used to find the breakeven on *bottle sales*. You could, however, calculate a separate breakeven for your tasting room (F = Tasting room staff, P = Avg. tasting fee, V = Avg. wine cost per tasting).
A distributor will lower your (P) significantly (e.g., from $30 retail to $15 wholesale). This *raises* your breakeven point. This calculator can show you how many *more* bottles you must sell through distribution to make the same profit as selling direct-to-consumer (DTC).