Ah, beer! Not only is it delicious, it’s also big business. The National Beer Wholesalers Association reports that beer consumption in the U.S. for 2015 was 206.7 million barrels, equal to about 2.8 billion cases containing 24 12-ounce servings. That works out to an average of 27.5 gallons of beer (and cider) consumed per adult American in 2015.
If you are serious about beer and frugal to boot, it’s a good idea to consider whether buying beer by the keg is a better value than purchasing canned beer. As we’ll explain, the answer isn’t always straightforward.
1. Size Matters
Let’s start with a few numbers. The standard size of beer cans and bottles is 12 ounces, which we’ll use for comparisons, although other sizes are available. There are eight commonly used keg sizes available, but several share the same capacity:
- Mini: 1.32 gallons / 169 ounces / 14 cans
- Cornelius: 5 gallons / 640 ounces / 53 cans
- Sixth Barrel: 5.16 gallons / 661 ounces / 56 cans
- Quarter Barrel, Slim Quarter, Rubber Barrel, Beveled Barrel: 7.75 gallons / 992 ounces / 82 cans
- Half Barrel: 15.5 gallons / 1984 ounces / 165 cans
- Full Keg: 16 gallons / 2048 ounces / 171 cans
The 7.75-gallon kegs differ only in their shapes.
As you can see, a mini keg holds less beer than a 24-can case (288 ounces), whereas a full keg will serve a (small) frat house party.
Naturally, you would expect the unit price per ounce to go down as capacity goes up, but kegs have other costs that must be factored in. For this calculation, we compare the unit costs of a domestic beer — a full keg ($110) vs a 24-can case ($16 on sale) purchased at a buying club.
- Full Keg: $110/2048 ounces = $0.054 per ounce
- 24-can case: $16/288 ounces = $0.055 per ounce
Hmm, not much difference. We have to assume that smaller kegs would be more expensive per ounce that the 24-can case. But wait, there’s more:
1. You can drink beer directly from the can, but you need cups or glasses to serve up kegged beer. We’ve already established that you are frugal, so you spring for the cheap plastic cups at the buying club, which run $10 per 300.
2. Unlike our British cousins, Americans drink their beer cold. Assuming a 20-pound bag of ice costs $2.55, you will need 4 bags whether you buy the full keg or the equivalent 7 24-can cases, so it’s a wash. Ice cost: $10.20.
3. Figuring the keg costs including the cups and ice:
a. $110 for the keg + $10 for cups + $10.20 for Ice = $130.20
b. $130.20 / 2048 ounces = $0.0635 per ounce
4. Figuring the 24-case can cost including the ice:
a. 7 cases of beer x $16 per case + $10.20 for Ice = $122.20
b. $122.20 / 2016 ounces = $0.0606 per ounce
There you have it: In this particular example, you save money by hauling off seven cases of beer rather than a full keg.
If life were only that simple. Several other considerations come into play as you mull over the better value:
1. Size of keg
Smaller kegs cost more per ounce of capacity, so the relative cost disparity increases in favor of canned beer as keg size decreases.
There is always the possibility, however remote, that you (and your friends) won’t be able to consume a full keg of beer before it loses its freshness or the ice melts. Wasted beer is costly (as well as inconsolably sad). Leftover cans of beer can be stored in the refrigerator where they can last a pretty long time.
3. Going fancy
Maybe you are a regular keg shopper. When your tax return check arrives, you spring for a keg refrigerator, which will set you back several hundred or thousand dollars, depending on size and features. Then, after the initial outlay, there is the ongoing cost of the carbon dioxide and tanks you need to push the beer out of the keg. Add on those must-have accessories, including cleaning equipment, regulators, couplers, etc., and your conversion to the keg side is complete. Of course, you do save money on ice.
Are we really comparing apples with apples here? We think not! Canned beer can be good, like the better frozen pizzas. Keg beer is draft beer, more like a fresh pizza right out of the oven. A fresh keg of draft beer vs a can of beer is really no contest, unless you belong to the school of thought that believes the best beer is the cheapest beer. Many attend this school, so no shaming, please.
5. Home brewing
OK, what the hell? If you’re going to do it, go all the way! Brewing your own beer is fun and allows you to craft your beer exactly as you want. You can experiment with different recipes and leave your friends awestruck. Buying ingredients is cheaper than buying already-brewed beer, but let’s face it, the payback period for all that equipment (beyond the keg and cooler) may last centuries. Hey, who’s counting?
There you have it. In the end, you puts down your money and you takes your pick. Since we’re talking beer here, we’d say it’s a win-win proposition. Skoal!
Project CRediT sources data from Wealthy Genius including net worth, earnings, and various wealth statistics.