Hey everyone, Michael here. I wanted to talk to you all today about the numbre of unique inventory items you have to keep and manage, and how to operate around that. On a recent note, we just hit 500+ weekly readers! We're so happy to have all of you here at the ledger, and we hope you'll stick around for more to come.
"Cut SKUs?" is a conversation many brewers resist—I get it. But if you're carrying 30+ SKUs and losing money on half of them, the numbers eventually force the question. Here's a clear way to think about it.
The era of "one of everything" tap lists and dozens of SKUs is giving way to focus. Industry data and advisor feedback point to the same thing: many operations are rationalizing portfolios—cutting low-volume, low-margin SKUs and doubling down on flagships. Industry advisors and brewery financial benchmarking data suggest that many operations are rationalizing their portfolios—cutting low-volume, low-margin SKUs and investing in flagship brands. In a crowded, cost-sensitive market, fewer SKUs can mean stronger margins, clearer positioning, and better operational efficiency.
The Cost of SKU Proliferation
Every SKU has a cost. Recipe development, packaging design, label approvals, inventory carrying cost, and sales effort all scale with SKU count. A brewery with 30 SKUs incurs more complexity than one with 10, even if total volume is the same. Low-volume SKUs—limited releases, one-off sours, experimental batches—often have higher per-unit cost due to smaller batch sizes and less efficient production. When margins compress, those SKUs become candidates for elimination.
What Flagship Focus Delivers
Flagship brands—the core beers that drive volume and recognition—benefit from scale. Larger batch sizes improve brewhouse efficiency. Consistent production improves quality and reduces variance. Sales and marketing can concentrate on fewer SKUs, deepening distribution and awareness. Retailers and distributors prefer simpler portfolios; fewer SKUs can mean better placement and velocity.
How Breweries Are Rationalizing
Rationalization takes different forms. Some breweries cut SKUs entirely—discontinuing slow movers and limited releases. Others consolidate—merging similar styles into a single brand. Still others shift limited releases to taproom-only, avoiding packaging and distribution cost while preserving variety for onsite guests. The common thread is intentionality: SKU decisions are driven by margin, volume, and strategic fit, not by brewing whimsy.
The Tradeoff
Portfolio rationalization has a tradeoff. Fewer SKUs mean less variety, which can reduce taproom novelty and beer-geek appeal. The breweries that succeed with a focused portfolio typically offer a clear value proposition—"we do these few things exceptionally well"—rather than "we have something for everyone." In a market where differentiation is hard, clarity can be a strength.
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BrewLedger helps breweries track batch and SKU performance to inform portfolio decisions. See how it works when you are ready.