A brewpub is proposed to offer locals a variety of craft beers and seasonal brews in response to demand for more options beyond mass-produced beers. Research shows the craft beer market is growing, dominated by males age 35-44. While large breweries face issues maintaining quality at scale, smaller breweries can struggle expanding beyond regional markets due to competition. The business model proposes a brewpub selling beer on-site and to retailers, with live music and events to drive sales of $180,000 in year one, forecasted to rise 15% and 20% in subsequent years. Startup costs are estimated at $571,500 with projections of cash flow and balance shown.
1. The Problem Brewpub “I want to drink real beer, not Bud Light.” “I’m tired of drinking the same old beer.” “I would like to get a larger variety of beer.”
2. Solutions Create a Brew Pub that will provide locals with fresh creative craft brews. Give people a selection to what they drink. Offer brews that change with the seasons.
3. Industry According to Beverage Marketing Corporation (www.beveragemarketing.com) 2003- 2008 there was an increase in sales from 205 million barrels to 214.6 million barrels Many breweries such as Sam Adams attempt to remain in the craft brewery market, so that they can maintain the number one seller status. They have become too large.
4. Market Gender: Male- 77%, Female- 23% Age: 21- 27= 23%, 28- 34= 18% 35- 44= 26%, 45 and older= 34% African-American- 12% Caucasian- 74% Hispanic- 11% Other- 3% “I want a real beer that is not mass produced.” Tlapa, C., Miller, R., & Washington, K. (2010). BEER. Restaurant, Food & Beverage Market Research Handbook, 227-232. Retrieved from Business Source Complete database.
5. Competition According to BeerNews.org, Boston Beer Co., Sierra Nevada Brewing Co., and New Belgium Brewing Co., were the top ranked beer companies in 2009 by beer sales. Strength: Produce a quality product. Weakness: Not able to mass produce without compromising quality. Opportunities: Expansion regionally or nationally Threats: Competition from larger breweries.
6. Business Model Create a place for people to drink amazing beer while enjoying music. Seasonal and Traditional brews. Different beers monthly Sell beer to consumers and retailers. Drink specials during sporting events. Live music
7. Pro Forma Statements Startup Expense: $155,500 Startup Assets: $110,000 Cash for Recurring costs: $306,000 Total Startup Costs: $571,500
8. Sales forecast 1 year $500 a day in sales $180,000 first year 15% increase in sales during year 2 20% increase in sales during year 3