The document proposes creating a Brewery Incubator and Taproom in Houston to foster the local craft beer industry. It would provide professional brewing equipment and training for homebrewers and new breweries. Members would pay $3,000 or $500 annually for access. The incubator would be located in a 6,373 square foot building purchased for $600,000. Financial projections show the business would break even within 15 months and be profitable, with estimated sales reaching over $3 million by year three. The document concludes the local demographics support such a business and surveys found interest in memberships.

1. Brewery Incubator
and Taproom
By: Bill Burkey

2. Executive Summary / Business Proposal
 Provide community-centric taproom to Houston
and its surrounding areas
 Tap into burgeoning homebrewing market through
the creation of a Brewery Incubator and Taproom
 Foster the continued development of craft beer in
Texas through the Brewery Incubator and Taproom
 Over 1 million Americans brew beer at home
 Craft breweries make up 11% of the market

3. Why create a 6th Ward Brewery Incubator?
 Homebrewers make 1% of beer
brewed in US
 2 million bbl’s beer a year
 Two-thirds of homebrewers
began brewing in 2005 or later
 Over 1,300 homebrewers in
homebrew clubs in Houston

4. 6th Ward Brewery Incubator Membership
 Professional equipment and sales outlet
 Full access to brewery on your brew days
 Assigned fermenter
 Taps in our Taproom
 Beer Dinners to promote your beer and brewery
 Business workshops
 Board member seat on the 6th Ward board
 Price: $3,000
 Negotiated commission on all sales of beer, merchandise etc.

5. 6th Ward Aspiring Brewer Membership
 Ideal for new homebrewers
 Learn to brew alongside our brewers
 Help gain experience on professional equipment
 Discounts
 Brewing equipment and supplies
 Taproom (Beer and Swag)
 Price: $500

6. Homebrewer Demographics
 Average age: 40 years old
60% between 30 – 49
 78% are married/domestic partnership
 69% have a college degree
 60% have household incomes of $75,000 +
 Location – West 31%; South 26%; Midwest 23%;
Northeast 17%
 Spend $800/year on supplies, equipment, ingredients

7. 6th Ward taproom
 Brewpub License: Cannot
exceed 10,000 bbl./yr.
 Self-Distribution License:
 Cannot exceed 40,000 bbl./yr.
 Growlers permitted under
brewpub license: Yes
 Average beer consumer:
 80% White (non-Hispanic)
 Over half in the 21 – 44 years old
 Over 75% earned $50,000/yr.
 43% college educated

8. Location of 6th Ward Taproom
and Brewery Incubator
 4910 Darling St. Houston TX
 Land: 10,632 SF; Building: 6373 SF
 Price: $600,00000

9. Demographics of 6th Ward Incubator

10. Demographics around 6th Ward Incubator
1-mi. 3-mi. 5-mi
2013 Population 16,104 127,085 406,978
2013 Adult Population 13,617 108,784 332,410
2013 Total Population: Median Age 34 36 35
2013 Total Employees 16,643 100,652 564,219
Population Change 2010-2013 +778 +5,009 +16,716
2013 Household Income: Median $91,068 73,727 61,367
2013 Household Income: Average $108,958 $95,452 $86,209
2013 Housing Units 5,078 55,398 170,271

11. Houston Beer Map – Texas Beer Growth

12. Best Beer States – Room to grow in Texas
Rank State
Annual Beer
Consumption
Per Capita,
Gallons
Breweries
per
100,000
People
Bars per
100,000
People
Beer Excise
Taxes per
Gallon
1 Montana 41 4.63 59.3 $0.14
2 Wisconsin 36.2 2.56 52.99 $0.06
3 Wyoming 33 4.29 29.52 $0.02
4 Oregon 30.3 5.29 21.07 $0.08
5 Vermont 35.3 6.38 15.8 $0.27
6 North Dakota 45.8 1.24 58.34 $0.39
18 Texas 34.4 0.44 9.8 $0.20

13. Growth of the Local Breweries
Company 2013 BBLS 2014 BBLS Growth
Saint Arnold 58,000 66,000 14%
Karbach 19,000 60,000 216%
8th Wonder 2,500 5,000 100%
Buffalo Bayou 750 2,000 167%

14. Competitor Analysis
 Saint Arnold
 Taproom – Limited hours; Unable to
take beer of premises
 46th largest brewing co. in the US
 Longevity in marketplace
 Karbach
 Taproom – Newly open; Unable to
take beer of premises
 One of the fastest growing breweries
 Focused on everyday beers
 8th Wonder
 Taproom – Expanded hours; unable
to take beer of premises
 Only on draft
 Owner teaches Brewing Science at
University of Houston
 Buffalo Bayou
 No Taproom; only Saturday tours
 Unconventional beer styles
 Smallest of the Houston breweries

15. Market Need Analysis
 96 Total Respondents
 96% Caucasian
 70% Married
 40 respondents are
homebrewers
 78% were between the ages
of 25 and 44

16. Identify the need for a Incubator/Taproom
Interested in learning about beer?
Are you a craft beer drinker?
Do you like to drink beer?
How much beer do you drink in a week?

17. Analysis of Beer drinkers in Houston
How often do you go to a bar?
How often do you visit a brewery?
Where do you drink beer?

19. Thoughts on Concept Statement and Name
6th Ward Incubator/Taproom Concept Statement
Thoughts on Incubator Concept
Thoughts on the 6th Ward Name

20. Membership in the 6th Ward Incubator
Interested in joining the 6th Ward Incubator? Interested in Aspiring Brewer Membership?
How much for Incubator Membership? How much for Aspiring Brewer Membership?

21. Membership in the 6th Ward Incubator
How often would you visit 6th Ward? Interested in Incubator Beer-to-go?
Would you visit 6th Ward more often if we
served food or food truck

22. Marketing
 Open brew days for potential
homebrewers
 Showcase current Incubator brewers at
local pubs, festivals and beer dinners
 Free samples at Beer/Wine Stores
 Movie Nights

23. Financials
Item Start-up Cost
Land and Building $600,000
15 BBL System $250,000
Building Remodel $100,000
Taproom Furniture $10,000
Computer Hardware / Software $3,000
Set-up, Installation and Consulting Fees $5,000
Legal and other professional fees $10,000
Business licenses and permits $2,500
Advertising and promotion for opening $10,000
Signage $5,000
Operating Cash $50,000
Other $25,000
Total $1,070,500
 Includes fermenters and
bright tanks, glycol, grain
milling, plumbing, valves,
pumps, automation, etc.
 Remodel old office building
and warehouse into
Brewery and Taproom
 Bar, Barstools, tables,
chairs
 Square Register POS
system integrated on iPads

24. Forecasted Demand
2,000
2,450
3,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2016 2017 2018
6th Ward Demand Forecast (BBL)

25. Revenue of Membership & Breakeven
2016 2017 2018
Brewery Incubator Membership 10 14 18
Revenue @ $3,000 per member $30,000 $42,000 $54,000
Aspiring Brewer Membership 150 200 250
Revenue @ $500 per member $75,000 $100,000 $125,000
Total $105,000 $142,000 $179,000
Total Revenue 2016 2017 2018
Merchandise $63,936 $94,897 $123,218
Membership $105,000 $142,000 $179,000
Beer Sales $1,984,000 $2,380,800 $2,976,000
Total $2,154,952 $2,619,714 $3,280,236
Breakeven Analysis
-$1,070,500 Start-Up Cost
$849,058 Net Income 2016
-$221,442 Total
$104,532 Jan 2017
-$116,910 Total
$104,532 Feb 2017
-$12,378 Total
$104,532 Mar 2017
$92,153 Breakeven March 2017

26. Gross Sales $3,280,236
Net Sales $3,280,236
Ingredients $258,000
Merchandise $80,000
Kegs $10,500
Cost of Goods Sold $348,500
Gross Profit (Loss) $2,931,736
Rent $54,000
Utilities $38,220
Depreciation $49,000
Insurance $20,000
Legal and Professional Fees $7,500
Miscellaneous $25,000
Office Expense $15,000
Payroll Taxes $50,000
Repairs and Maintenance $17,500
Supplies $8,000
Healthcare $28,000
Travel $20,000
Vehicle Expenses $8,000
Wages $495,000
Total Expenses $835,220
Net Operating Income $2,096,516
Federal $21,000
State $26,820
Excise $18,600
Sales $270,619
Total Taxes $337,039
Net Income (Loss) $1,759,477
Expenses
Other Income
Income Statement
2018
Revenue
Cost of Goods Sold
Gross Sales $2,154,952
Net Sales $2,154,952
Ingredients $199,000
Merchandise $50,000
Kegs $157,500
Cost of Goods Sold $406,500
Gross Profit (Loss) $1,748,452
Rent $54,000
Utilities $27,330
Depreciation $49,000
Insurance $15,000
Legal and Professional Fees $5,000
Miscellaneous $20,000
Office Expense $10,000
Payroll Taxes $35,000
Repairs and Maintenance $10,000
Supplies $5,000
Healthcare $22,000
Travel (Fest / Shipping / Distribution) $15,000
Vehicle Expenses $5,000
Wages $405,000
Total Expenses $677,330
Net Operating Income $1,071,122
Federal $14,000
State $17,880
Excise $12,400
Sales $177,784
Total Taxes $222,064
Net Income (Loss) $849,058
Expenses
Other Income
Income Statement
2016
Revenue
Cost of Goods Sold
3YearProForma
Gross Sales $2,619,714
Net Sales $2,619,714
Ingredients $220,800
Merchandise $55,000
Kegs $10,500
Cost of Goods Sold $286,300
Gross Profit (Loss) $2,333,414
Rent $54,000
Utilities $31,636
Depreciation $49,000
Insurance $17,000
Legal and Professional Fees $6,000
Miscellaneous $22,000
Office Expense $12,000
Payroll Taxes $40,000
Repairs and Maintenance $15,000
Supplies $8,500
Healthcare $26,000
Travel (Fest / Shipping / Distribution) $15,000
Vehicle Expenses $7,500
Wages $453,000
Total Expenses $756,636
Net Operating Income $1,576,778
Federal $16,800
State $21,456
Excise $14,880
Sales $269,262
Total Taxes $322,398
Net Income (Loss) $1,254,380
Expenses
Other Income
Income Statement
2017
Revenue
Cost of Goods Sold

27. Conclusion
 Demographics and area are perfect for a brewery
 Despite large start-cost, breakeven happens
within 15 months
 Survey respondents were receptive to Incubator
concept and membership and interested in joining
 Build out a kitchen/food truck for growth and
attract customers
 Consider expansion of Brewery based on
projected demand