What Does Contract Distilling Cost in South Africa?
By Benedikt Blomendahl, Master Distiller
There is no single price, because the liquid is usually the smallest part of your cost. The commercial minimum is 800 bottles of 750ml, and what you pay per bottle comes down to four things: your alcohol strength and base spirit, your packaging choices, the excise on the alcohol, and your batch size.
Most distilleries won't discuss numbers publicly. We think that is unhelpful, because you cannot plan a business on "contact us for pricing". So here is the structure, honestly, with enough detail that you can build your own model before speaking to anyone.
Why nobody quotes a flat price
Two clients ask for a gin. One wants 40% in a standard 750ml flint bottle with a paper label. The other wants 43% in custom moulded glass with a screen printed design, a wax dip and a printed carton. Same liquid, same still, same day, and the second one can cost more than double per bottle.
What moves the price:
ABV, because you are charged and taxed on alcohol, so 43% costs more than 40%. Base spirit, where bought in neutral cane spirit is the cheap route and our own grape based spirit costs more and tastes it. Botanicals, where juniper and coriander are cheap and saffron and vanilla are not. Maturation, which adds the cost of the barrel plus years of capital sitting still. Packaging, usually your biggest controllable cost. And batch size, because fixed costs spread across more bottles.
The cost lines, biggest first
Packaging, often 40 to 60% of your unit cost (excluding excise tax)
This surprises everyone. Bottle, closure, label and carton frequently cost more than the spirit inside them. A standard locally sourced bottle is a fraction of the cost of a custom mould with a minimum order in the tens of thousands. Screen printing beats paper labels on shelf presence and costs more. Wax dips look wonderful and slow bottling right down.
For run one, use a good standard bottle and put the money into label design. Move to custom glass in run three, once you know the brand sells.
Excise, non negotiable and bigger than expected
SARS charges excise per litre of absolute alcohol. On a 750ml bottle at 40% that is currently over R90 which you cannot design or negotiate away, and it is payable whether or not the bottle ever sells. Model it explicitly. It scales with ABV, so taking a product from 43% to 40% is a genuine cost lever if it doesn't hurt the liquid.
The liquid
Base spirit, botanicals, water. Cheaper than most first timers assume, and the one line where spending more usually shows up in the glass and on the awards table.
Production, bottling and labelling
Charged per batch and covering distillation time, bottling line setup, labelling and quality control. This is exactly why the 800 bottle minimum exists. A 400 bottle run costs nearly as much to set up as an 800 bottle run, so the per bottle number stops making sense.
Development, once off
Recipe work in the laboratory plus any trial batches. Spread this across your first two or three production runs in your model rather than loading it all onto run one.
Logistics and storage
Pallets, delivery, and somewhere to keep stock that isn't your lounge. Insurance too, which is the line everyone forgets.
Building your own model
Work forwards from cost, not backwards from a shelf price you like the sound of.
Liquid + excise + packaging + production + (development ÷ runs) + logistics
= your landed cost per bottle
Then add, in order: your margin, the distributor's margin if you use one, the retailer's margin (commonly 20 to 30%), and VAT. That gives you a shelf price.
Now go and check that price against real competitors on a real shelf. If your gin lands at R520 and comparable gins sit at R350, you either need a genuinely premium story or a cheaper build. That ten minute exercise has saved more brands than anything else we do.
What about small volumes?
Trial batches of under 200 bottles exist for recipe validation and market testing. The per bottle cost is high by design, because this is research spend rather than a commercial run. Use it to win your first stockists and to check the label works before you commit to 800.
Corporate gifting with your own label can also work at smaller volumes, because the economics are different. A gifting client is buying a branded object, not competing on shelf price.
Where the money is actually made
Two levers matter far more than negotiating a few cents off your production quote.
Volume. Going from 800 bottles to 2,000 changes your per bottle cost more than any haggling over the liquid ever will.
Channel. Selling direct through your own venue, your own online shop or events keeps the retailer's 20 to 30% in your pocket. Plenty of small brands survive comfortably on 400 direct bottles a month, while a shelf only brand needs several times that.
What we do differently
We publish the structure, we run trial batches, and because Benedikt is a chartered global management accountant as well as a Master Distiller, we will sit down and stress test your model before you spend a rand on glass. If the numbers don't work we would rather say so at the start than sell you 800 bottles you cannot move.
Want a real number for your project? Send us the brief with spirit type, volume, packaging idea and target shelf price, and you will get a proper quote plus an honest opinion on whether it stacks up.