Brew Presentation

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This is a proposal for a beer tasing room in San Luis Obispo created as a quarter-long entreprenuership project at Cal Poly.

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  • Brew Presentation

    1. 1. MICROBREWS “For the curious” Chaz Daum Richard Herbert Annie Ljunggren Jessica Sisco
    2. 3. Definition Microbrew/Craft Beer <ul><li>SMALL : Less than 2 million barrels/year </li></ul><ul><li>INDEPENDENT : Max 25% ownership of non-microbrewer </li></ul><ul><li>TRADITIONAL : has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor </li></ul><ul><li>America’s World Class Beer. http://www.samueladams.com/company.aspx </li></ul>
    3. 4. BEER Spending <ul><li>CA ranked #1 for beer shipped per capita </li></ul><ul><li>CA ranked only 45 th in the nation for per capita </li></ul><ul><li>CA consumption 26.9 gallons per person/year. </li></ul><ul><li>Craft and specialty beers are growing </li></ul><ul><ul><li>Michelob Ultra dominates by volume. </li></ul></ul><ul><li>Beer Institute, Shipment of Malt Beverages and Per Capita consumptions. http://www.beerinstitute.org/BeerInstitute/files/ccLibraryFiles/Filename/000000000738/03-07%2021%2B%20Per%20Cap.pdf </li></ul><ul><li>Johnson, Julie. &quot;What's brewing? Consolidation, pricing pressures, new flavors, light brew strength, superpremium power, more distributor involvement--it all adds up to positive sales growth and a changing landscape for the U.S. beer market.(Cover story).&quot;  Beverage Dynamics  120.5 (Sept-Oct 2008): 22(7).  Expanded Academic ASAP . Gale. CSU San Luis Obispo. 15 Oct. 2008  </li></ul>
    4. 5. Market Growth <ul><li>The American beer market - stagnant for several years -- domestic beer sales were down 0.4% from last year. </li></ul><ul><li>However, not the case for microbrewers </li></ul><ul><li>Goral, Tim, Annual Microbrewery report. Bnet Business Network, 1993. http://findarticles.com/p/articles/mi_m3469/is_/ai_13977664 </li></ul>
    5. 7. Market Growth, cont’d <ul><li>Continuous growth since 1980’s </li></ul><ul><li>2006 Growth rate: 11.7% </li></ul><ul><li>3 year Growth Rate: 29.5% </li></ul><ul><li>The microbrews stand for about 8% of national beer production. </li></ul><ul><li>&quot;The microbrewery movement is going like hot cakes, especially on the west coast. You keep thinking it is going to top off but it still hasn't, and it doesn't look like there is an end in sight yet“ - Steve Dinehart, president of Chicago Brewing Co </li></ul>
    6. 8. Microbrew Market Growth Year 1947-2006 Brewer’s Almanac 2007
    7. 9. Market Growth cont’d <ul><li>The future looks bright for the microbrew industry </li></ul><ul><li>As with any &quot;new&quot; industry, there will likely be a period of adjustment. </li></ul><ul><ul><li>Segments: </li></ul></ul><ul><ul><li>Solid core of consumers who will continue to buy the brands. </li></ul></ul><ul><ul><li>The other segment is based on trend, and could artificially inflate demand before the trend wears off. </li></ul></ul><ul><ul><li>Example: Corona </li></ul></ul>
    8. 10. Competitiveness of the Industry <ul><li>Porter’s 5 forces </li></ul>
    9. 11. Rivalry Among Existing Firms <ul><li>Bars have to compete for customers </li></ul><ul><li>Very little fierce rivalry, no price wars </li></ul><ul><ul><li>Lots of product differentiation </li></ul></ul><ul><ul><li>Bars attract different customers and don’t have to interact with each other much. </li></ul></ul>
    10. 12. San Luis Obispo Competition <ul><li>Direct competitors </li></ul><ul><ul><li>Beer tasting rooms </li></ul></ul><ul><ul><ul><li>Central Coast Brewing </li></ul></ul></ul><ul><ul><ul><li>Monterey Street Wine Company </li></ul></ul></ul><ul><ul><li>Weekly beer tasting events at some places </li></ul></ul><ul><li>Indirect competitors </li></ul><ul><ul><li>Approx 12 successful bars </li></ul></ul><ul><ul><li>Approx 20 wineries offering wine tasting. </li></ul></ul><ul><li>San Luis Obispo Country Wineries. http://www.sanluisobispocounty.com/listings/index.cfm?action=showsub&catId=8&subcatID=37 </li></ul>
    11. 13. Threat of New Entrants <ul><li>Growing demand since end of 1980’s </li></ul><ul><li>The supply of draft beer has doubled the number of microbreweries and brewpubs since 1995. </li></ul><ul><li>An increased frequency of brewpubs indicates a moderate threat of new entrants but also greater opportunity through increased interest from consumers. </li></ul><ul><li>California Brewpubs and Microbreweries. http://www.beer100.com/brewpubs_a_to_k/california.htm </li></ul>
    12. 14. Threat of Substitute Products <ul><li>Other beer tasting rooms </li></ul><ul><li>Bars/Nightclubs </li></ul><ul><li>Wine tasting rooms </li></ul><ul><li>Wineries </li></ul><ul><li>Liquor stores that sell craft beer at comparable prices </li></ul><ul><ul><li>Many potential substitutes, but we are generally the cheaper alternative </li></ul></ul>
    13. 15. Bargaining Power of Suppliers <ul><li>Small-scale, local production </li></ul><ul><ul><li>E.g. Cayucos Beer </li></ul></ul><ul><li>Relatively weak financial bargaining power from small suppliers </li></ul><ul><ul><li>BUT! </li></ul></ul><ul><ul><li>Delivery </li></ul></ul><ul><ul><li>Payments </li></ul></ul><ul><ul><li>Logistics </li></ul></ul>
    14. 16. Bargaining Power of Buyers <ul><li>Considering the large number of craft beers on the market, the bargaining power of buyers is strong . </li></ul><ul><li>More likely to buy “conventional” beer rather than craft beer. </li></ul><ul><ul><li>Anheuser-Busch </li></ul></ul><ul><li>Our business is about trying new things, not coming in for the same brews </li></ul><ul><ul><li>Buyer power may not be relevant </li></ul></ul>
    15. 18. Target Market <ul><li>People from the age of 25-35 </li></ul><ul><ul><li>66% of the people in San Luis Obispo County are over the age of 25. </li></ul></ul><ul><ul><li>This age group is out of college with a steady and reliable income. </li></ul></ul><ul><li>Mature college students  </li></ul><ul><ul><li>Cal Poly had approximately 19,777 students in 2007. </li></ul></ul><ul><ul><li>Have a limited income but usually are willing to spend money on alcohol. </li></ul></ul><ul><ul><li>Substitute for wine tasting and beer hopping. </li></ul></ul><ul><li>Cal Poly Public Affairs. Quick Facts About Cal Poly, 2007. http://calpolynews.calpoly.edu/quickfacts.html </li></ul><ul><li>U.S. Department of Commerce, U.S. Census Bureau. (2007). San Luis Obispo Education. http://factfinder.census.gov/servlet/STTable?_bm=y&- context=st&-qr_name=ACS_2007_1YR_G00_S1501&-ds_name=ACS_2007_1YR_G00_&-tree_id=307&-redoLog=true&-_caller=geoselect&- geo_id=05000US06079&-format=&-_lang=en </li></ul>
    16. 19. Cal Poly Consumption <ul><li>46.5 percent of students reported drinking alcohol multiple times per week, with 8.7 percent drinking almost daily (2005). </li></ul><ul><li>Compared to other California colleges, Cal Poly stands out as above average . </li></ul><ul><ul><li>&quot;When we look at alcohol consumption by students, Cal Poly is among the highest in the CSU system,&quot; said Martin Bragg, psychologist and director of Cal Poly Health and Counseling Services. </li></ul></ul><ul><li>Barbieri, Patrick, Poly’s alcohol consumption above average. Mustang Daily, May 2008. http://www.mustangdaily.net/home/index.cfm?event=displayArticlePrinterFriendly&uStory_id=9a716084-35b2-4d4b-91b3-7268d96a82a1 </li></ul>
    17. 20. San Luis Obispo Population U.S. Department of Commerce, U.S. Census Bureau. (2007). San Luis Obispo Population. http://factfinder.census.gov/servlet/ACSSAFFPeople?_sse=on&_submenuId=people_1&_ci_nbr=&qr_name=&ds_name=&reg=&_industry= Age Category Total Population (Percent Male (Percent) Female (Percent) Total 262,436 136,467 (52%) 125,969 (48%) 18-24 41,397 (16%) 23,098 (56%) 18,299 (44%) 25 and over 171,755 (65%) 87,170 (51%) 84,585 (49%) 25-34 33,098 (13%) 18,953 (57%) 14,145 (43%) 35-44 32,789 (12%) 17,235 (53%) 15,554 (47%) 45-64 68,086 (26%) 34,267 (50%) 33,819 (50%) 65 and over 37,782 (14%) 16,715 (44%) 21,067 (56%)
    18. 21. Education (Bachelor’s Degree or Higher) U.S. Department of Commerce, U.S. Census Bureau. (2007). San Luis Obispo Population. http://factfinder.census.gov/servlet/ACSSAFFPeople?_sse=on&_submenuId=people_1&_ci_nbr=&qr_name=&ds_name=&reg=&_industry=
    19. 22. GDP <ul><li>Total GDP for San Luis Obispo-Paso Robles in all industries: $10,141 million. </li></ul><ul><ul><li>Food services and drinking places: $284 million </li></ul></ul><ul><li>U.S. GDP - real growth rate: 3.2% (USA 2006 est.) </li></ul><ul><li>U.S. GDP - per capita: purchasing power parity - $44,000 (USA 2006 est.) </li></ul><ul><li>  In 2006 the per capita of personal income was: </li></ul><ul><ul><li>San Luis Obispo-Paso Robles, CA (MSA) $35,872 </li></ul></ul>Bureau of Economic Analysis. Regional Economic Accounts, Chart CA1-3, April 2008. http://www.bea.gov/regional/reis/drill.cfm Bureau of Economic Analysis. Regional Economic Accounts, GDM by metropolitan area, 2008. http://www.bea.gov/regional/gdpmetro/action.cfm The World Fact book. US Central Intelligence Agency, October 2008. https://www.cia.gov/library/publications/the-world- factbook/print/us.html
    20. 23. External Uncontrollables Economic issues: Recession <ul><li>With roughly $50 billion in annual sales, the beer industry and alcohol industry are fairly recession-resistant. </li></ul><ul><ul><li>“ You don’t want to punish yourself just because the economy is bad” </li></ul></ul><ul><li>13% of consumers said the economic downturn had significantly affected how much they spend on beer, but almost 50% said there had been no effect on how many six-packs they were purchasing </li></ul><ul><li>More than 16 million barrels of domestic beer were sold in the United States in July, and annual sales through that month were up 1.4% </li></ul><ul><li>Sales of craft and “super-premium” beers such as Michelob and Rolling Rock have jumped by double digits this year. </li></ul>Mui, Ylan Q, Bad Time Brewing? LA Times, 2008. http://articles.latimes.com/2008/sep/11/business/fi-beer11
    21. 24. <ul><li>Overall alcoholic beverage consumption has been in decline for more than a decade </li></ul><ul><ul><li>Beer consumption peaked at 36.6 gallons per capita in 1980 and has declined ever since. </li></ul></ul><ul><ul><li>Current CA beer consumption is 26.9 gallons per person/year. </li></ul></ul><ul><li>Increasing number of people who are anti-drunk driving. </li></ul><ul><li>Demographics: </li></ul><ul><li>Since the early 1980s, The beer industry’s core market, males aged 21–34, has been shrinking for years. </li></ul><ul><li>Kalorama Information, The Market for Craft and Specialty Beer. March 1997. http://mythic.lib.calpoly.edu:2352/search/results.asp?prid=897840883&query=specialty+beer&categoryid=165&cmdgo=Go </li></ul>External Uncontrollables Social Trends: Health Consciousness
    22. 26. Mission Statement <ul><li>We strive to break from the established mold and offer a wide </li></ul><ul><li>variety of innovative </li></ul><ul><li>brews for the curious </li></ul><ul><li>to enjoy and explore lesser known microbreweries. </li></ul>
    23. 27. Primary Business Challenge <ul><li>Differentiate ourselves from bars and liquor stores </li></ul><ul><li>Select appropriate microbrews to partner with </li></ul><ul><li>Find an affordable space in the downtown area with enough storage space </li></ul>
    24. 28. Specific Objectives <ul><li>Open a beer tasting business in downtown SLO </li></ul><ul><li>Maintain steady growth and profitability </li></ul><ul><li>Promote unknown microbrews and help people discover the enormous variety of brews </li></ul><ul><li>Obtain a customer base </li></ul><ul><li>Create a sophisticated yet enjoyable environment comparable to wine tasting rooms </li></ul>
    25. 29. <ul><li>Licensing and Taxation </li></ul><ul><li>Beer license is $200 with a $226 annual renewal fee. </li></ul><ul><ul><li>A lot of paperwork is involved but not as difficult to obtain as a liquor license </li></ul></ul><ul><li>Business license in SLO downtown: assessment fee and new applicant tax totals $294 </li></ul><ul><li>Beer tax burden for consumers is 65% higher than average tax for the US </li></ul><ul><ul><li>Often because it’s produced in the US with inputs from the US “Sin taxes” on beer </li></ul></ul>Department of Alcoholic Beverage Control. http://www.abc.ca.gov/Permits/Priority_Summary%2014Oct08.pdf 2008 San Luis Obispo Priority drawing notice. http://www.abc.ca.gov/Permits/2008_Priority/2008%20San%20Luis%20Obispo%20Drawing%20Notice.pdf SLO Chamber of commerce. http://www.slocity.org/finance/businesstax/businesstaxintroduction.asp#How%20much%20is%20the%20license The beer institute. Te tax burden on the brewing industry. http://www.beerinstitute.org/BeerInstitute/files/ccLibraryFiles/Filename/000000000726/The%20Tax%20Burden%20on%20The%20Brewing%20Industry.pdf
    26. 30. <ul><li>Product and atmosphere. </li></ul><ul><li>Range from high-end foreign imports to homegrown local startup brews. </li></ul><ul><li>The variety is refreshing and appeals to the thirst for change in an established industry. </li></ul><ul><li>Few businesses allow lesser known brews. </li></ul><ul><li>To compete you have to be one of the big guys and the niche for upscale brews is even smaller. </li></ul><ul><li>Consumers get variety </li></ul>4 P’s Product
    27. 31. <ul><li>$5 Tasting fee for 10 2oz beer tastes </li></ul><ul><ul><li>Priced based on market value (wine and beer tasting competitors) </li></ul></ul><ul><li>6-packs average $7-$18 to purchase </li></ul><ul><li>Our 6-pack prices will be slightly higher than liquor and grocery stores but will have a greater variety and quality to offer </li></ul><ul><li>Raw materials costs have increased </li></ul><ul><ul><li>Energy costs and aluminum have prompted brewers to raise prices and sales have fallen by 8% in 2007. </li></ul></ul>4 P’s Price
    28. 32. <ul><li>Currently 4-6 possible locations available </li></ul><ul><li>Smaller businesses average $1-3.50/sq foot </li></ul><ul><li>The average rent available downtown is: </li></ul><ul><li>3440 S. Higuera Ste. 130; 1718 sq feet; $3200/mo </li></ul><ul><li>570 Higuera Ste. 120; 1040 sq feet; $1872/mo </li></ul><ul><li>570 Higuera Suite 110; 1963 sq feet; $3435/mo </li></ul><ul><li>1357 Monterey; 2265 sq feet; $2831/mo </li></ul><ul><li>Rents in downtown SLO has been experiencing upward pressure; by next year rent may be $4 per square foot compared to an average of 2$ due to construction to make buildings earthquake safe. </li></ul><ul><li>City of San Luis Obispo Economic Development. http://www.ci.san-luis-obispo.ca.us/economicdevelopment/retailspace.asp </li></ul>4 P’s Place
    29. 33. <ul><li>Website with our extensive variety </li></ul><ul><ul><li>Membership Opportunities with special discounts and exclusive information </li></ul></ul><ul><li>Weekly specials and showcases </li></ul><ul><li>Group discounts </li></ul><ul><li>Variety Pack Sampler $10 for 20 tastes </li></ul><ul><ul><li>Ex: Sierra Nevada Brewery has sample platter of 18 2oz cups for $11 </li></ul></ul><ul><li>A lot of our advertising will also come from microbreweries advertising their own products. </li></ul>4 P’s Promotion Sierra Nevada Brewery, Chico, Ca
    30. 34. SMART <ul><li>Specific : Open business, maintain steady growth, promote microbrews, obtain customer base, create appropriate environment </li></ul><ul><li>Measurable : Successful opening and partnering with breweries, customer loyalty program to keep track of customer base </li></ul><ul><li>Attainable : Steady growth may be difficult in the current state of the economy, will need more experience in industry to accomplish goals of partnerships </li></ul><ul><li>Realistic : It will be expensive to start up </li></ul><ul><li>Timely : Once we get the finances it should be approximately one year before the business could be up and running </li></ul>
    31. 35. SWOT Analysis: Strengths <ul><li>Standard bars do not accommodate small microbrews but we do. </li></ul><ul><li>Location gives us the opportunity to attract seasoned wine tasters curious about brews </li></ul><ul><li>Advertising done by microbreweries help promote our business with little cost to us </li></ul><ul><li>Can understand and reach to target market because similar to ourselves </li></ul><ul><li>Not as expensive as wine tasting with risk of wasting opened bottles </li></ul><ul><li>Unique idea gives us instant appeal </li></ul>
    32. 36. SWOT Analysis: Weaknesses <ul><li>No experience and limited knowledge of the industry. </li></ul><ul><li>On-hand inventory requires substantial storage. </li></ul><ul><li>No customer loyalty or well known company name to appeal to customers. </li></ul><ul><li>Economies of scale </li></ul><ul><li>Purchasing power of our consumer segment is relatively low. </li></ul><ul><li>One-time-experience? </li></ul>
    33. 37. SWOT Analysis: Opportunities <ul><li>New niche </li></ul><ul><li>No actual competitors in SLO county, wine tasting and bars attract different customers </li></ul><ul><li>Large college population between the ages of 21-26 (many beer drinkers) </li></ul><ul><li>Availability of many local breweries to partner with </li></ul><ul><li>Cheaper alternative to wine tasting </li></ul><ul><li>Growing population and downtown expansion in SLO </li></ul><ul><li>Internet expansion opportunities </li></ul><ul><li>Downtown real estate available </li></ul>
    34. 38. SWOT Analysis: Threats <ul><li>Large established bars = competition </li></ul><ul><li>Have to get permission from community </li></ul><ul><li>High start up costs </li></ul><ul><li>Downtown real estate is expensive. </li></ul><ul><li>The economy is in recession </li></ul><ul><ul><li>Beer is a luxury good. </li></ul></ul><ul><li>Reliant on suppliers. </li></ul>
    35. 40. Target vs Non-target Gender Demographics The target market contains more males than females, but both genders show interest in the business. Target Non-target (N=146) (N=254) Male 70% 62% Female 30% 39%
    36. 41. Our target market drinks several times a week significantly more than the rest of the population. Target Non-target (N=146) (N=254) Several Times a Week 56.2% 45.3% Once a Week 22.6% 24.8% Several Times a Month 5.8% 8.5% Once a Month 5.5% 11% Never 0% 0.4% Target vs Non-target Frequency of drinking alcohol
    37. 42. The majority of the people surveyed live in San Luis Obispo and about 15% live in the surrounding areas. Target Non-target (N=146) (N=254) SLO 85.6% 85.8% Morro Bay 3.4% 2.8% Pismo Beach 3.4% 2.8% Avila Beach 0% 0% Los Osos 2.7% 2.8% Other North County 2.7% 4.3% Other South County 2.1% 1.6% Target vs Non-target Where consumers live
    38. 43. Target vs Non-target Age range of consumers The main age range of the people surveyed are between the ages of 21-25. There are slightly more people in the targe group between 26-30. Target Non-target (N=143) (N=250) 21-35 73% 75% 26-30 15% 14% 31-35 4% 3% 36-40 1% 1% 41-45 2% 2% 46-50 3% 1% 51-55 2% 2% 55 and over 2% 1%
    39. 44. Both the target and non-target consumers drink alcoholic beverages in similar locations. Non-target consumers prefer to go to wineries more than target consumers. Target Non-target (N=143) (N=250) Bar or Pub 74% 72% Friend’s house 70% 65% Home 57% 56% Party 53% 55% Restaurant 39% 35% Wine Bar 3% 2% Winery 3% 6% Target vs Non-target Where consumers drink alcoholic beverages
    40. 45. Target vs Non-target Drink beer when drinking alcohol The Target rates draft and bottled beer and a wider selection of microbrews significantly more important than the non-target, otherwise both groups have similar preferences. Target Non-target (N=143) (N=250) All the time 42% 30% Most of the time 33% 33% Some of the time 18% 25% Rarely 6% 11% Never 1% 0%
    41. 46. Target vs Non-target Expected amenities The Target rates draft and bottled beer and a wider selection of microbrews significantly more important than the non-target, otherwise both groups have similar preferences. Target Non-target (N=143) (N=250) Draft and bottled beer 81% 70% Snack/Appetizer menu 64% 60% Large selection microbrews 44% 33% TV screens 49% 43% Waitress/Waiter service 36% 37% Pool table 32% 28% Live entertainment 26% 28% Full food menu 23% 23% Large wine list 13% 16% Video games 2% 4%
    42. 47. Target vs Non-target Weekly alcohol spending A greater portion of the target market spends over $30/week than the non-target market and a smaller portion of the target market spends less than $20 per week than the non-target market. Target Non-target (N=143) (N=250) Under $10 13% 21% $10-$20 29% 31% $20-$30 20% 17% $30-$40 18% 14% $40-$50 11% 8% Over $50 11% 9%
    43. 48. Target vs Non-target Type of beer consumers drink Customers in the target market prefer more Imported and specialty beers than the non-target, but both groups have similar ranked preferences for the beers they consumer. Target Non-target (N=143) (N=250) Imported beers 83% 74% Specialty beers 83% 66% Light beers 75% 74% Domestic Microbrews 73% 53% American lagers 59% 47% Imported microbrews 51% 37% Malt Liquor 22% 16%
    44. 49. Target vs Non-target Attributes of beer to purchase The target market and non-target market both have similar rankings of important attibutes in purchasing beer. It is more important for target consumers that it is available on draft, and the calories in the beer are less important to the target consumer. Target Non-target (N=143) (N=250) Taste 96% 91% Low Price 48% 48% Available on draft 46% 35% Available in groceries and bars 42% 39% Brand Reputation 34% 34% % alcohol 27% 22% Imported 15% 15% Exclusive image 15% 10% Calories 12% 17% Limited production 12% 9%
    45. 50. Agree Completely 41.4% 27.9% Agree Somewhat 52.4% 51.0% Disagree Somewhat 4.1% 15.9% Disagree Completely 2.1% 5.2% Target Non Target (N=145) (N=251) Target vs Non-target Worth extra money for hand crafted brew The target market believe hand crafted brews are worth the extra money more than the non-target.
    46. 51. Target vs Non-target Interest in SLO Microbrews Our target market is more likely to use our service over the non-target market. Target Non-target (N=146) (N=254) Certain will use 37% 21% Almost certain will use 40% 20% Very probable will use 28% 16% Probably will use 13% Good possibility will use 11% Fairly good possibility will use 4% Fair possibility will use 0% Some possibility will use 5% Slight possibility will use 4% Very slight possibility will use 5% No chance will use 0%
    47. 52. Target vs Non-target Reasons for attending SLO Microbrews Our target market and non target market have similar views of why they would attend our business. Target Non-target (N=146) (N=254) Go with a group of friends 63% 60% Take a date to it 4% 5% Go with friends like a bar at night 20% 16% Dinner experience 3% 4% Special occasion place 10% 17%
    48. 53. Target vs Non-target Prospected visits in three-month period Our target market would come more times in a month than our non-target market customers. Target Non-target (N=146) (N=253) One to two times 40% 56% Three to four times 35% 26% Five to six times 22% 13% Seven to nine times 2% 1% More than nine times 1% 1% I would never use it 0% 3%
    49. 54. Surveyed points of interest “ A local and easy way to taste beers you wouldn’t get at a bar” “ A cool way to try new beers and support local brewers” “ A good alternative to wine tasting” “ I like to drink beer” “ Learn about new beers... Try rare beers” “ Sounds like fun”
    50. 56. Hourly Forecast Optimistic 15 customers/hour $15/customer Open 8 hours 15*15*8= $1,800/day $50,400/month $604,800 Likely 8 customers/hour $10/customer Open 8 hours 8*10*8= $1,152/day $32,256/month $387,072/year Pessimistic 5 customers/hour $5/customer Open 8 hours 5*10*8= $400/day $11,200 $134,400 Assumptions: Hours of operation: 1pm-9pm Estimated 28 days/month
    51. 57. Sales Forecast (Optimistic) <ul><li>Hours of operation: 1pm-9pm </li></ul><ul><li>(so people can still eat dinner afterwards at a reasonable hour and main intention is not to be part of bar hopping) </li></ul><ul><li>Pricing: $5 tasting fee $8 avg for a six pack. Assume $15/person </li></ul><ul><li>Target Market: 14% aged 25-34; 14% of 262,436= 36,741 </li></ul><ul><li>(Assume 70% of population drink alcohol) </li></ul><ul><li>=25,719 </li></ul><ul><li>(Assume 50% awareness) </li></ul><ul><li>=12,860 customers </li></ul><ul><li>(trial interest is 56%) </li></ul><ul><li>=12860*.56=v </li></ul><ul><li>(Assume customers go twice a month) </li></ul><ul><li>=v*2*$15 </li></ul><ul><li>= $/month or $/year </li></ul>
    52. 58. <ul><li>Hours of operation: 1pm-9pm </li></ul><ul><li>(so people can still eat dinner afterwards at a reasonable hour and main intention is not to be part of bar hopping) </li></ul><ul><li>Pricing: $5 tasting fee $8 avg for a six pack. Assume $10/person </li></ul><ul><li>Target Market: 14% aged 25-34; 14% of 262,436= 36,741 </li></ul><ul><li>(Assume 70% of population drink alcohol) </li></ul><ul><li>=25,719 </li></ul><ul><li>(Assume 35% awareness) </li></ul><ul><li>=9002 customers </li></ul><ul><li>(Assume customers go once a month) </li></ul><ul><li>=9002*1=9002*$10 </li></ul><ul><li>= $90,002/month or $1,080,024/year </li></ul>Sales Forecast (Most Likely)
    53. 59. <ul><li>Hours of operation: 1pm-9pm </li></ul><ul><li>(so people can still eat dinner afterwards at a reasonable hour and main intention is not to be part of bar hopping) </li></ul><ul><li>Pricing: $5 tasting fee $8 avg for a six pack. Assume $5/person </li></ul><ul><li>Target Market: 14% aged 25-34; 14% of 262,436= 36,741 </li></ul><ul><li>(Assume 70% of population drink alcohol) </li></ul><ul><li>=25,719 </li></ul><ul><li>(Assume 25% awareness) </li></ul><ul><li>=6430 customers </li></ul><ul><li>(Assume customers go once every couple months) </li></ul><ul><li>=6430*.5= 3215 customers/month*$5 </li></ul><ul><li>= $16,075/month or $192,900/year </li></ul>Sales Forecast (Pessimistic)
    54. 60. Positioning Statement <ul><li>To recent college graduates between the ages of 25-34, SLO Microbrews is a beer tasting room that offers unique microbrews for a great price. </li></ul>
    55. 61. Marketing Promotional Tools <ul><li>Website showcasing our extensive variety </li></ul><ul><ul><li>Club membership with discounts, exclusive beers, and quarterly shipments </li></ul></ul><ul><li>Monthly specials </li></ul><ul><ul><li>Email list </li></ul></ul><ul><ul><li>Newspaper ads </li></ul></ul><ul><ul><li>Display board inside </li></ul></ul><ul><li>Merchandise with logo- t-shirts </li></ul><ul><li>Slogan “for the curious” </li></ul><ul><ul><li>Strengthens brand and provokes interest </li></ul></ul>
    56. 62. Marketing Based on New Data… <ul><ul><li>60% of the people surveyed claimed they would go to SLO Microbrews to hang out with friends </li></ul></ul><ul><ul><ul><li>Discounts for groups of 8 or more people </li></ul></ul></ul><ul><ul><li>~90% of consumers surveyed said taste is the deciding factor when choosing a beer </li></ul></ul><ul><ul><ul><li>Market campaigns focus on the variety of flavors available </li></ul></ul></ul><ul><ul><li>Specialty and imported beers were the most frequently preferred beers </li></ul></ul><ul><ul><ul><li>These will be available </li></ul></ul></ul>
    57. 63. Risk Analysis <ul><li>Economic recession decreases spending </li></ul><ul><li>May not be able to get financing because people less willing to loan money in recession </li></ul><ul><li>Competition from established beers, may start providing their own beer tasting in addition to the other services they have (wouldn’t be difficult for them to do) </li></ul><ul><ul><li>First mover advantage isn’t strong </li></ul></ul>
    58. 64. <ul><li> To Taste, Or not to taste?? </li></ul><ul><ul><li>Growing Industry and growing consumer interest </li></ul></ul><ul><ul><li>Good fit in SLO (57% of people surveyed would very probably go) </li></ul></ul><ul><ul><li>Threats: high volume of substitutes and indirect competitors </li></ul></ul><ul><ul><li>Weaknesses: Inexperience, costly, need a location </li></ul></ul>Conclusion
    59. 65. Bibliography <ul><li>America’s World Class Beer. http://www.samueladams.com/company.aspx </li></ul><ul><li>California Brewpubs and Microbreweries. http://www.beer100.com/brewpubs_a_to_k/california.htm </li></ul><ul><li>The Free Encyclopedia, Microbrewery. http://en.wikipedia.org/wiki/Microbreweries </li></ul><ul><ul><li>San Luis Obispo Country Wineries. http://www.sanluisobispocounty.com/listings/index.cfm?action=showsub&catId=8&subcatID=37 </li></ul></ul><ul><li>Goral, Tim, Annual Microbrewery report. Bnet Business Network, 1993. http://findarticles.com/p/articles/mi_m3469/is_/ai_13977664 </li></ul><ul><li>Cal Poly Public Affairs. Quick Facts About Cal Poly, 2007. http://calpolynews.calpoly.edu/quickfacts.html </li></ul><ul><li>U.S. Department of Commerce, U.S. Census Bureau. (2007). San Luis Obispo Education. http://factfinder.census.gov/servlet/STTable?_bm=y&-context=st&-qr_name=ACS_2007_1YR_G00_S1501&-ds_name=ACS_2007_1YR_G00_&-tree_id=307&-redoLog=true&-_caller=geoselect&-geo_id=05000US06079&-format=&-_lang=en </li></ul>
    60. 66. Bibliography Continued U.S. Department of Commerce, U.S. Census Bureau. (2007). San Luis Obispo Population. http://factfinder.census.gov/servlet/ACSSAFFPeople?_sse=on&_submenuId=people_1&_ci_nbr=&qr_name=&ds_name=&reg=&_industry= Bureau of Economic Analysis. Regional Economic Accounts, Chart CA1-3, April 2008. http://www.bea.gov/regional/reis/drill.cfm Bureau of Economic Analysis. Regional Economic Accounts, GDM by metropolitan area, 2008. http://www.bea.gov/regional/gdpmetro/action.cfm The World Fact book. US Central Intelligence Agency, October 2008. https://www.cia.gov/library/publications/the-world-factbook/print/us.html Department of Alcoholic Beverage Control. http://www.abc.ca.gov/Permits/Priority_Summary%2014Oct08.pdf 2008 San Luis Obispo Priority drawing notice. http://www.abc.ca.gov/Permits/2008_Priority/2008%20San%20Luis%20Obispo%20Drawing%20Notice.pdf SLO Chamber of commerce. http://www.slocity.org/finance/businesstax/businesstaxintroduction.asp#How%20much%20is%20the%20license
    61. 67. Bibliography Continued <ul><li>The beer institute. Te tax burden on the brewing industry. http://www.beerinstitute.org/BeerInstitute/files/ccLibraryFiles/Filename/000000000726/The%20Tax%20Burden%20on%20The%20Brewing%20Industry.pdf </li></ul><ul><li>Beer Institute, Shipment of Malt Beverages and Per Capita consumptions. http://www.beerinstitute.org/BeerInstitute/files/ccLibraryFiles/Filename/000000000738/03-07%2021%2B%20Per%20Cap.pdf </li></ul><ul><li>Johnson, Julie. &quot;What's brewing? Consolidation, pricing pressures, new flavors, light brew strength, superpremium power, more distributor involvement--it all adds up to positive sales growth and a changing landscape for the U.S. beer market.(Cover story).&quot; Beverage Dynamics 120.5 (Sept-Oct 2008): 22(7). Expanded Academic ASAP. Gale. CSU San Luis Obispo. 15 Oct. 2008  </li></ul><ul><li>City of San Luis Obispo Economic Development. http://www.ci.san-luis-obispo.ca.us/economicdevelopment/retailspace.asp </li></ul><ul><li>Mui, Ylan Q, Bad Time Brewing? LA Times, 2008. http://articles.latimes.com/2008/sep/11/business/fi-beer11 </li></ul><ul><li>Kalorama Information, The Market for Craft and Specialty Beer. March 1997. http://mythic.lib.calpoly.edu:2352/search/results.asp?prid=897840883&query=specialty+beer&categoryid=165&cmdgo=Go </li></ul><ul><li>Barbieri, Patrick, Poly’s alcohol consumption above average. Mustang Daily, May 2008. http://www.mustangdaily.net/home/index.cfm?event=displayArticlePrinterFriendly&uStory_id=9a716084-35b2-4d4b-91b3-7268d96a82a1 </li></ul>

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