Craft Distillery Break-Even Analysis: $38K Per Month

Break-Even Metric Cards

Fixed costs $32.1K/mo Year 1 base

Contribution margin 83.7% After variable costs

Break-even revenue $38.3K/mo Monthly target

Break-even timing Month 2 Early ramp

Break-Even Calculator

Break-even calculator

Test monthly revenue against variable costs and fixed overhead to see when the distillery covers its month-to-month cost base.

Lean Base Full

Monthly revenue Revenue sets the pool that pays direct costs and overhead. $ Low sales High sales Variable expenses These rise with output, shipments, and selling volume. $ Low costs High costs

Money available to cover fixed costs $108,431 $123,842 revenue - $15,411 variable expenses

Margin ratio

88%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that contribution margin must cover. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which distillery expenses are fixed, and which move with sales?

Cost classification

Clean classification keeps fixed overhead out of per-bottle margin and keeps per-bottle costs out of overhead. That matters because break-even divides fixed costs by contribution margin, the cash left after variable costs.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent/Mortgage	Fixed	Use $4,500 per month in fixed overhead from Month 1 through Month 60.	Spreading rent across bottles and making break-even look easier at higher volume.
Business Insurance	Fixed	Use $500 per month as fixed overhead within the normal planning range.	Dropping it from the break-even model because it doesn’t touch production.
Utilities Electricity Water Gas	Semi-variable	Start with the $1,500 monthly base, then test increases when production days rise.	Treating the full bill as fixed while mash, distillation, and cleaning hours grow.
Tasting Room Operational Supplies	Semi-variable	Use the $300 monthly base, with added spend tied to higher foot traffic.	Assuming tasting room traffic scales without more glassware, cleaning, and service supplies.
Raw Materials Grain/Botanicals/Fruit	Variable	Subtract the per-bottle material amount from contribution margin; inputs range from $1.00 to $4.00 per unit.	Averaging all spirits together and hiding higher input cost for fruit and aged products.
Federal Excise Tax	Variable	Model at 1.5% of revenue, so it rises directly with sales.	Entering it as a flat monthly tax and overstating margin when sales increase.
Distribution & Logistics Fee	Variable	Apply the fee to revenue, starting at 2.5% in the first year and declining to 2.0% by the fifth year.	Using the fifth-year rate too early and overstating near-term contribution margin.
Tasting Room Staff	Semi-fixed	Step payroll up as staffing rises from 1.0 FTE in the first year to 3.5 FTE in the fifth year.	Treating tasting room capacity as free once the build-out is complete.

How does break-even shift from a lean launch to a base build and full-scale distillery?

Scenario table

Higher volume spreads rent and payroll, so break-even improves as output climbs. Still, channel mix matters a lot because tasting room and wholesale sales carry different margins and fees.

Planning case only; pricing, channel mix, and costs can move break-even fast.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean distillery	$52.7k	$8.6k	$32.1k	83.8%	$12.0k	Break-even sits near $38.3k/month, so launch clears it.
Base distillery	$123.8k	$19.4k	$43.5k	84.4%	$61.0k	Break-even sits near $51.6k/month, so the base case has room.
Full distillery	$197.9k	$29.5k	$51.6k	85.1%	$116.8k	Break-even sits near $60.7k/month, leaving the widest cushion.

What breaks this distillery’s break-even plan?

Stress test

The base plan clears break-even, but the cushion gets thin fast if tasting room traffic slows or bottle, freight, and rent costs rise. A 15% revenue drop, a 10% fixed-cost jump, or a 5-point margin slip all push the floor up fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$383k	$144k cushion	Base case clears break-even with room.
Revenue shortfall	Monthly revenue falls 15% to about $448k.	$383k	$64k cushion	Slower tasting room traffic cuts the buffer fast.
Fixed-cost pressure	Fixed costs rise 10%.	$422k	$105k cushion	Rent increases or hiring ahead of demand lift the floor.
Margin pressure	Contribution margin falls 5 points to 78.75%.	$408k	$119k cushion	Bottle, freight, and wholesale discount pressure push break-even higher.
Combined pressure	Revenue falls 15%, margin drops to 78.75%, and fixed costs rise 10%.	$448k	$0 cushion	Almost no cushion is left.

What should the founder verify before signing the lease and buying the stills?

Founder checklist

The model reaches operating break-even in Month 2, but cash still bottoms at about $562K in Month 9. So the real test is whether the site, equipment, staffing, and launch demand can all support that burn before you sign anything.

1Site Fit$4.5K/mo

Confirm the site can handle stills, fermentation tanks, barrels, bottling, storage, and tasting traffic before the monthly rent starts.

2Fixed Load$32.1K/mo

Here’s the quick math: $8.1K of monthly overhead plus about $24.0K of Year 1 wages sets the fixed cost floor before variable costs.

3Unit Margin84% CM

Check supplier quotes for grain, botanicals, fruit, bottles, labels, corks, barrels, yeast, and enzymes so contribution margin stays near the model.

4Staff Ramp5.0 FTE

Stage tasting room staffing to traffic, because Year 1 starts at 5.0 FTE and payroll should not outrun visitor count.

5Cash Buffer$562K

Protect cash through Month 9, when the model hits its low point and the build, equipment, and inventory spend are still landing.

6Launch Demand$52.7K/mo

Verify first-year sales can average about $52.7K a month from the 12,000-bottle plan before adding wholesale discounts or extra shifts.