Brewery business plan for starting your own business

Do you know that the global alcohol consumption has increased by as much as 10% from 1990 to 2017. Experts of the industry are predicting an ever faster increase. It is being forecasted that this number will go up another 10% by the end of this decade.

Add to that the fact that the global average consumption for all people over the age of 15 currently stands at 6.5 liters of pure alcohol a year or around 55 1-liter bottles of standard 12% alcohol content wine.

We will be giving you a business plan for brewery that you can use to start a brewery business. Before we tell you how to open a brewery, you need to know that we will be using tried and tested marketing strategies restaurants.

Executive Summary

2.1 The Business

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Joe’s Liquor will be a registered and insured alcohol producer based in Dougherty, Texas. It will be owned by Joe Colombo. The business will make beer, whiskey, and non-alcoholic malted beverages. The products will be supplied all over the state of Texas in the start and the business will expand to other states in the years to come.

2.2 Management of Brewery Business

In order to start a brewery, the first thing you need to do is to have a strong management plan for the business. Joe will hire 5 managers and will himself act as the chief executive of the business.

The managers will be responsible for marketing, procurement, research, sales, and operations. Every one of the managers will be responsible for the people working in his department and will report all important matters to Joe as and when they show up.

All brewery business plans need to allow for innovation. The research manager will be given enough budget to fuel research and come up with new products.

2.3 Customers of Brewery Business

After taking the advice of various business consultants, Joe has decided to provide the following products to the following customers from his brewery business.

  • Bars and pubs.
  • Hotels and casinos.
  • Liquor stores.
  • Grocery stores that sell liquor.

2.4 Business Target

If you want to know how to start a brewery, you need to know the goals and targets.

The target of Joe’s Liquor is to:

  • Establish themselves as a trustworthy brand.
  • Be the largest supplier of liquor in Texas 5 years after starting.
  • Innovating and making drinks specific to them.

Brewery Business Plan Sample - 3 Years Profit Forecast

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Company Summary

3.1 Company Owner

Joe Colombo will be the owner of the company. He is not only the sole financer of this venture but also has a vast experience in the field too. His father owned and operated the largest brewery in the US after prohibition. Joe knows the business inside out.

3.2 Why the Brewery Business is being started?

Joe has a passion for making the best liquor. This brewery business plan example also focuses on the fact that Joe is starting this business because it is a lucrative one. A single barrel of fine beer can bring as much as $150 in revenue and costs under $50 to make.

This means that if Joe’s Liquor manages to make even 100 barrels a week, they can turn in more than $10,000 in profits, every week. This lucrative scope of profit is one of the key reasons Joe is starting a brewery. This plan is easily more profitable than any business plan online store.

3.3 How the Brewery Business will be started?

Step1: Planning Phase

Planning is the first step in starting a craft brewery. In this phase, everything from the location of the plant to the sales and marketing will be tentatively planned. This brewery business plan sample will cover all the aspects of planning needed to start a brewery.

Step2: Establishing a Brand

Unlike an online dating business plan, a brewery needs to make a brand. People only buy booze that is branded. We’ll focus our marketing effort at establishing a strong brand.

Step3: Establish Sales Office  

The moment the brewery starts churning out beer and wine, you’ll have to have a sales office where you can orchestrate the sales form.

Step4: Establish a Web Presence

You need to be present on the internet to make sure that people know of your existence and what your brand is about. Just like a video games business plan, web presence is a must.

Step5: Promote and Market

You will need to market the business good enough for people to know that you mean business, serious business.

Brewery Business Plan Sample - Starup Cost

Start-up Expenses
Legal $255,000
Consultants $0
Insurance $32,000
Rent $25,000
Research and Development $26,000
Expensed Equipment $56,000
Signs $4,000
TOTAL START-UP EXPENSES $398,000
Start-up Assets $327,000
Cash Required $338,000
Start-up Inventory $52,000
Other Current Assets $202,000
Long-term Assets $248,000
TOTAL ASSETS $1,167,000
Total Requirements $1,565,000
START-UP FUNDING
Start-up Expenses to Fund $370,000
Start-up Assets to Fund $1,167,000
TOTAL FUNDING REQUIRED $1,537,000
Assets
Non-cash Assets from Start-up $1,546,000
Cash Requirements from Start-up $379,000
Additional Cash Raised $43,000
Cash Balance on Starting Date $31,000
TOTAL ASSETS $1,999,000
Liabilities and Capital
Liabilities $30,000
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $42,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $72,000
Capital
Planned Investment $1,537,000
Investor 1 $0
Investor 2 $0
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $1,537,000
Loss at Start-up (Start-up Expenses) $390,000
TOTAL CAPITAL $1,927,000
TOTAL CAPITAL AND LIABILITIES $1,999,000
Total Funding $1,537,000

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Services of Brewery Business

Note

The next thing we need to cover in this brewery business plan template are the services that will be provided by the business. Because, before you can even get to start your own brewery, it is important for you to know the services. .

As a brewery is more of a products business than a services one, making it much like a business plan for an internet startup, the services will be more like products.

Here’s a list of services that Joe’s Liquor will be providing.

  • Beer and Wine Supply to Bars – Bars will be one of the largest consumers of our products. We will supply beer and wine of the highest quality and will make sure that we never delay the delivery. Bars will be our long-term and permanent customers as they have customers who demand the same beer once they start liking it.
  • Liquor Supply to Hotels – The next service we’ll be providing will be supplying beer, alcohol, and other drinks to hotels. These will not be in a large number but each one of them will buy quite a bit of our product. This will make them one of our major streams of revenue.
  • Medical Alcohol Supply – As doctors need a lot of alcohol for different purposes, we will be producing medical grade denatured alcohol to supply to the hospitals. This will establish Joe’s Liquor as a company with concern for the society.
  • Alcohol Supply to End Consumer – We will open factory outlets in different cities to sell our product on a discounted price. This will be done to increase brand awareness and attract more customers.

Marketing Analysis of Brewery Business

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Having an in-depth knowledge of the market you are going to enter is of paramount importance. This brewery business plan model will cover all the aspects of starting a brewery business plan including the marketing analysis.

If we look at the trends on the consumption of alcohol over the last couple of decades, we can notice a steady increase in the consumption of this stuff. However, there are also hundreds of small and large breweries in the US making beer and wine. It makes this industry not so easy to penetrate. If you want to make serious profits, your business plan brewpub needs to focus a lot on innovation and bringing novelty to the game. Running a successful brewery without that is just not possible.

One of the most important steps to opening a brewery include an in-depth study of the following. If you want to know how to start brewery business, you need to focus on these.

5.1 Market Trends

The liquor industry is a mind boggling $1.47trillion dollar market that is going to see a whopping 10% increase in consumption within this decade. If we have a look at the landscape of the industry in the US, it can be noted that people are preferring locally made beer and wine over the exotics. This is a promising fact for anyone trying to enter the liquor market in the USA.

5.2 Marketing Segmentation

The marketing segmentation of Joe’s Liquor will look something like this:

Brewery Business Plan Sample - Marketing Segmentation

5.2.1 Bars and Pubs

Some of the most important and permanent customers of the products of Joe’s Liquor will be the bars and pubs all over the state of Texas. These institutions will buy the product in bulk and will most probably make a long-term business relationship with the manufacturer. We will offer them a discounted rate on bulk purchase.

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5.2.2 Hotels and Casinos

This segment of the market will also be bulk customer, but they will not buy very much at the start. People going to these places generally prefer established brands. We will make a brand in time but we’ll hopefully not get a lot of business from this market segment in the starting years.

5.2.3 Individual Customers

To cater the needs of drinkers we’ll open factory outlets in the major towns where people can buy the stuff. These sales will also be little in the start but will soon grow once we prove the quality.

5.2.4 Medical Facilities

This market segment will be an atypical one. We hope to make a name in this area because there is not much of a competition in this market segment.

Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Bars and Pubs 40% 42,000 43,000 45,000 47,000 48,000 10.00%
Hotels and Casinos 20% 26,000 27,000 29,000 30,000 31,000 10.00%
Individual Customers 25% 32,000 33,000 35,000 37,000 39,000 10.00%
Medical Facilities 15% 14,000 15,000 16,000 17,000 19,000 11.00%
Total 100% 114,000 118,000 125,000 131,000 137,000 10%

5.3 Business Target

  • To be one of the leading beer and wine producers in the US.
  • Opening three new manufacturing units by the end of the first year.
  • Establishing a brand and making a brand image that will drive sales and earn us loyal customers.

5.4 Product Pricing

We will price the products as per the trends of the industry. However, discounts will be provided in the start and to bulk buyers. The discounts for bars, hotel, pubs, casinos, and liquor stores will be negotiated and decided on a case-to-case basis.

Marketing Strategy of Brewery Business

The next thing to include in a brewery business plan marketing strategy is the marketing strategy that we will be adopting. This is because you need to have a solid marketing plan for <staring>starting your own brewery business plan to be successful.

We will aim our marketing efforts at highlighting what we provide that others do not. This is the only way to enter this market. Unlike a business plan for a video game company, this marketing plan needs to rely on strategic marketing owing to the competition.

6.1 Competitive Analysis

  1. Joe’s Liquor will provide the best beer in the whole idea and will offer new flavors that competitors do not offer.
  2. We will keep the prices low in the start to make sure we get customers.
  3. We will focus on delivering consistently good quality throughout the years of us being in the business.
  4. We will specifically focus on the medical market as that is still a relatively untapped segment of the alcohol market.

6.2 Sales Strategy

  • We’ll be using all the digital marketing channels to market the brand.
  • We will offer discounts and promotions for all of the market segments in the start.
  • Our focus in the first year will be to build up sales as best we can even at the least profit margin.

6.3 Sales Monthly

Brewery Business Plan Sample - Sales Monthly

6.4  Sales Yearly

Brewery Business Plan Sample - Sales Yearly

6.5  Sales Forecast

Brewery Business Plan Sample - Unit Sales

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Sales Forecast
Unit Sales Year 1 Year 2 Year 3
Beer and Wine Supply to Bars 45,000 47,700 50,562
Liquor Supply to Hotels 35,000 37,100 39,326
Medical Alcohol Supply 18,000 19,080 20,225
Alcohol Supply to End Consumer 24,000 25,440 26,966
TOTAL UNIT SALES 122,000 129,320 137,079
Unit Prices Year 1 Year 2 Year 3
Beer and Wine Supply to Bars $57.00 $66.12 $76.70
Liquor Supply to Hotels $59.00 $68.44 $79.39
Medical Alcohol Supply $42.00 $48.72 $56.52
Alcohol Supply to End Consumer $50.00 $58.00 $67.28
Sales
Beer and Wine Supply to Bars $2,565,000.00 $3,153,924.00 $3,878,064.95
Liquor Supply to Hotels $2,065,000.00 $2,539,124.00 $3,122,106.87
Medical Alcohol Supply $756,000.00 $929,577.60 $1,143,008.62
Alcohol Supply to End Consumer $1,200,000.00 $1,475,520.00 $1,814,299.39
TOTAL SALES $6,586,000.00 $8,098,145.60 $9,957,479.83
Direct Unit Costs Year 1 Year 2 Year 3
Beer and Wine Supply to Bars $54.00 $61.00 $71.00
Liquor Supply to Hotels $56.00 $64.00 $73.00
Medical Alcohol Supply $38.00 $42.00 $47.00
Alcohol Supply to End Consumer $48.00 $54.00 $62.00
Direct Cost of Sales
Beer and Wine Supply to Bars $2,430,000.00 $2,909,700.00 $3,589,902.00
Liquor Supply to Hotels $1,960,000.00 $2,374,400.00 $2,870,798.00
Medical Alcohol Supply $684,000.00 $801,360.00 $950,565.60
Alcohol Supply to End Consumer $1,152,000.00 $1,373,760.00 $1,671,916.80
Subtotal Direct Cost of Sales $6,226,000.00 $7,459,220.00 $9,083,182.40

Personnel plan

If you need to know how to start a brewery business plan, a personnel plan is one of the most important aspects of it. Unlike starting a virtual assistant business, this business requires a lot of skilled staff to be fully functional.

7.1 Company Staff

  • Joe Colombo will be the CEO.
  • 5 Managers for Operations, Procurement, Liaison, Operations, and sales.
  • 1 Engineer to help with running the plant.
  • 4 Operators to run the plant.
  • 2 Truck drivers.
  • 3 Car drivers.
  • 3 Peons.
  • 3 Security guards.

7.2  Average Salary of Employees

Personnel Plan
Year 1 Year 2 Year 3
Managers $75,000 $82,500 $90,750
Engineer $14,000 $15,400 $16,940
Operators $42,000 $46,200 $50,820
Truck Drivers $24,000 $26,400 $29,040
Car Drivers $23,000 $25,300 $27,830
Peons $24,000 $26,400 $29,040
Security Guards $21,000 $23,100 $25,410
Total Salaries $223,000 $245,300 $269,830

Financial Plan

The last and probably the most important thing needed to make this business plan is to have an estimate of start a brewery cost. Although the actual costs can only be known once the business starts, here are some that you need to keep in mind.

  • The cost of leasing/buying the land to set up the brewery.
  • The cost of machinery needed to make the plant operational.
  • The salaries of the staff for the first year.
  • The cost of marketing and promotion.
  • The cost of buying/leasing vehicles for delivery.
  • The cost of equity if the business is being started on loaned money.

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8.1 Important Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.23% 8.25% 8.28%
Long-term Interest Rate 8.38% 8.40% 8.44%
Tax Rate 23.81% 24.02% 24.34%
Other 0 0 0

8.2 Break-even Analysis

Brewery Business Plan Sample - Break-even Analysis

Break-Even Analysis
Monthly Units Break-even 5344
Monthly Revenue Break-even $132,200
Assumptions:
Average Per-Unit Revenue $234.00
Average Per-Unit Variable Cost $0.66
Estimated Monthly Fixed Cost $163,500

8.3 Projected Profit and Loss

Pro Forma Profit And Loss
Year 1 Year 2 Year 3
Sales $6,586,000 $8,098,146 $9,957,480
Direct Cost of Sales $6,226,000 $7,459,220 $9,083,182
Other $0 $0 $0
TOTAL COST OF SALES $6,226,000 $7,459,220 $9,083,182
Gross Margin $360,000 $638,926 $874,297
Gross Margin % 5.47% 7.89% 8.78%
Expenses
Payroll $223,000 $245,300 $269,830
Sales and Marketing and Other Expenses $118,000 $120,000 $124,000
Depreciation $2,290 $2,350 $2,450
Leased Equipment $0 $0 $0
Utilities $2,900 $3,000 $3,200
Insurance $2,000 $2,000 $2,100
Rent $2,700 $3,000 $3,300
Payroll Taxes $31,000 $32,000 $33,000
Other $0 $0 $0
Total Operating Expenses $381,890 $407,650 $437,880
Profit Before Interest and Taxes ($21,890) $231,276 $436,417
EBITDA ($21,890) $231,276 $436,417
Interest Expense $0 $0 $0
Taxes Incurred ($4,378) $46,255 $87,283
Net Profit ($17,512) $185,020 $349,134
Net Profit/Sales -0.27% 2.28% 3.51%

8.3.1 Profit Monthly

Brewery Business Plan Sample - Sales Monthly

8.3.2 Profit Yearly

Brewery Business Plan Sample - Profit Yearly

8.3.3 Gross Margin Monthly

Brewery Business Plan Sample - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Brewery Business Plan Sample - Gross Margin Yearly

8.4 Projected Cash Flow

Brewery Business Plan Sample - Projected Cash Flow

Pro Forma Cash Flow
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $54,000 $58,320 $62,986
Cash from Receivables $16,000 $17,280 $18,662
SUBTOTAL CASH FROM OPERATIONS $70,000 $76,300 $82,404
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $71,000 $80,000 $86,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $34,000 $36,000 $38,000
Bill Payments $17,000 $19,000 $19,200
SUBTOTAL SPENT ON OPERATIONS $51,000 $55,000 $57,200
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $52,000 $56,160 $60,653
Net Cash Flow $15,000 $16,000 $17,000
Cash Balance $25,000 $26,000 $27,000

 

8.5 Projected Balance Sheet

Pro Forma Balance Sheet
Assets Year 1 Year 2 Year 3
Current Assets
Cash $273,000 $305,760 $336,336
Accounts Receivable $25,000 $28,000 $31,472
Inventory $4,300 $4,816 $4,900
Other Current Assets $1,000 $1,000 $1,000
TOTAL CURRENT ASSETS $298,000 $333,760 $375,146
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $19,000 $21,280 $23,940
TOTAL LONG-TERM ASSETS $23,000 $25,760 $28,980
TOTAL ASSETS $301,000 $337,120 $379,260
Liabilities and Capital Year 4 Year 5 Year 6
Current Liabilities
Accounts Payable $19,000 $21,280 $23,919
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $15,600 $17,472 $19,639
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $15,000 $16,800 $18,883
Paid-in Capital $30,000 $30,000 $30,950
Retained Earnings $53,000 $57,770 $63,547
Earnings $195,000 $212,550 $233,805
TOTAL CAPITAL $277,100 $302,039 $332,243
TOTAL LIABILITIES AND CAPITAL $292,100 $337,120 $379,260
Net Worth $283,400 $308,906 $339,797

8.6 Business Ratios

Ratio Analysis
Year 1 Year 2 Year 3 INDUSTRY PROFILE
Sales Growth 7.23% 8.01% 8.88% 3.00%
Percent of Total Assets
Accounts Receivable 9.25% 10.25% 11.36% 9.80%
Inventory 5.37% 5.95% 6.59% 9.90%
Other Current Assets 2.90% 3.21% 3.56% 2.40%
Total Current Assets 150.01% 152.00% 152.00% 158.00%
Long-term Assets 11.40% 11.44% 11.57% 12.00%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.94% 4.98% 5.03% 4.34%
Long-term Liabilities 0.00% 0.00% 0.00% 0.00%
Total Liabilities 7.61% 7.67% 7.74% 7.38%
NET WORTH 100.00% 100.80% 101.73% 110.00%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 93.70% 96.23% 98.92% 99.00%
Selling, General & Administrative Expenses 94.20% 96.74% 99.45% 97.80%
Advertising Expenses 1.54% 1.58% 1.63% 1.40%
Profit Before Interest and Taxes 42.00% 43.13% 44.34% 33.90%
Main Ratios
Current 34 35 36 32
Quick 34 36 36.9 33
Total Debt to Total Assets 0.18% 0.18% 0.17% 0.40%
Pre-tax Return on Net Worth 73.90% 74.70% 75.59% 75.00%
Pre-tax Return on Assets 96.00% 100.80% 105.84% 111.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 33.10% 34.13% 35.18% N.A.
Return on Equity 55.50% 57.22% 58.99% N.A.
Activity Ratios
Accounts Receivable Turnover 7.7 7.8 7.8 N.A.
Collection Days 100 100 100 N.A.
Inventory Turnover 32.2 33.81 33 N.A.
Accounts Payable Turnover 15.7 16 16.5 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 2.5 2.5 2.6 N.A.
Debt Ratios
Debt to Net Worth -0.04 -0.03 -0.04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $240,600 $254,074 $268,302 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0.85 0.86 0.87 N.A.
Current Debt/Total Assets 1% 0% 0% N.A.
Acid Test 28.8 29 29.09 N.A.
Sales/Net Worth 2.2 2.2 2.3 N.A.
Dividend Payout 0 0 0 N.A.

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