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

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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.

Money available to cover fixed costs $108,431 $123,842 revenue - $15,411 variable expenses
Margin ratio
88%
Covers fixed costs
Yes
Break-even chart Revenue Total costs
Plan Break-even $0 $0

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.


Disclaimer

Financial Models Lab provides this article and its calculators for educational and business-planning purposes only. They are not personalized financial, accounting, tax, legal, investment, or lending advice. Figures shown are illustrative planning estimates based on publicly available sources, observed market information, and stated assumptions; they are not guaranteed benchmarks, forecasts, quotes, or expected results. Actual startup costs, revenue, expenses, margins, funding needs, and break-even timing vary by location, date, business size, operating model, financing, and execution. Review the cited sources and replace sample assumptions with current local data, supplier quotes, and your own operating inputs. Calculator and financial-model outputs change when assumptions change. Consult qualified professional advisers before making material commitments. Financial Models Lab sells related templates and may link to its own products. Please report suspected errors through our contact page.