Sales projections help

[LupulinMatt]

Working on my business plan for a 15-30 bbl production brewery that will also have a tap room and growler sales. I am wondering how accurate my projections are. I am hoping some seasoned brewers will let me know if my thinking is right or not. My figures look right, and I have them formulated on Xcel, but my per bbl $ number seems much higher than the industry average. I would love for it to be correct though

Here is my first year projections. This is based roughly on 15 bbl system with ~1500 bbl capacity the first year. We will only be packaging in kegs until we decide that we have grown enough to support a bottling/canning line. Probably moving to 750's first with some specialty beers. We will be self-distributing to start into a market with lots of beer bars and not a lot of local beers(right now, but growing like crazy)

Projecting 500 bbl sold first year. I think this may be 500 too low, but I am erring to the low side. We will have capacity if needed up to about 1500 upon start up and can add FV as needed to support more capacity. We are going to be in a market where everyone else is selling every drop of beer they can make.

Breakdown as % of bbl sold as I am projecting(just stabbing into the dark, I have no idea) this is based on 500 bbl with 40% sold at tap room in pints and growlers and 60% to accounts. Numbers are price as a unit and price per ounce.


PINT $4.00 $0.25 20%
REG GROWLER $12.00 $0.19 20%
1/6 BBL $50.00 $0.08 35%
1/2 BBL $130.00 $0.07 25%

When I calculate a weighted average, I come up with $.13 per ounce, which then equates to just over $500 per bbl. This seems higher than it should be, but maybe it is right with ~40% of sales at retail or close to retail. I based the keg pricing of some research and average price. Let me know if it looks right.

Thanks
Matt

[CopperKettle]

Retail numbers are always easy. Every $.50 per pint is ~$100 per BBL. If you focus on tap room sales to that extent you should have no problem hitting $500 per BBL overall. Our tap room sales and range from $850-$1000 per BBL depending on our lineup with combined pints and growler sales. Throw a few limited release special beers throughout the year in at $4-5 for a half pint and a 15BBL batch will gross $25-30,000.

How long it takes to move a whole batch is another issue and is the main difference between retail tap room sales and wholesale distribution. Might take 6-9 months to finish a batch like that, depends how busy your tap room is.

I don't know what your demographics are like or what your tap room will be like but we sell 3-4X as much volume in pints compared to growlers, but we have a very nice tap room that has become a local hang-out. If you plan more of a "tasting room" than a "bar" you will probably do a higher percentage of growlers.

[brewery48]

I too am putting together some financials for a 10 BBL taproom setup and have run into lots of conflicting numbers/opinions. I read in the New Brewer Jan./Feb. issue that a brewpub may expect $700-$800/BBL and I am assuming that this figure represents mostly pint sales on-premise, which would be similar to a taproom concept.

CopperKettle has $800-$1,000/BBL and I am wondering what would be the best number to assume for a business plan.

Also, I have projected annual BBL production of:
Year 1: 750 BBLs (90% sold onsite)
Year 2: 1,000 BBLs (85% sold onsite)
Year 3: 1,250 BBLs (80% sold onsite)
Year 4: 1,500 BBLs (80% sold onsite)
Year 5: 2,000 BBLs (80% sold onsite)

Anyone know whether it is reasonable to assume that a busy taproom (~3,500 sq-ft indoor-outdoor space) can sustain such pint sales on premise?

Thanks in advance.

[CopperKettle]

It's possible, depends on the location and the quality of your products and how well you can market yourself. Just because you HAVE the space doesn't mean you will fill it consistently. If you think you can do 700BBLs in year one and 1,500+ BBLs through a tap room, even after 5 years, I would be very impressed, that's a million and a half a year in retail revenue alone. That is a lot of VERY busy days. There are some places that can do it but the location is critical and you'll pay much higher rent. I think we can do 300-400 BBLs per year in retail eventually but we are in the suburbs, on a very slow side street, and only have an 800 sq ft tap room. Our rent is dirt cheap so even with fewer sales the final margins are still very good with lower sales.

What do your local pint prices look like? New Brewer assumes $4 pints, our standard pints are $5. Don't forget the high ABV beers at $4-5 for a smaller pour size which gross $1500+ per BBL.

[Bainbridge]

When I was in planning stages I did a lot of work with Excel to help us think things through. Set up a little spreadsheet that had variables I could change: price per pint, percent of different types of taproom sales (pints, growlers, schwag), number of seats, number of turns, number of pints per patron average, days open, etc..

Then I set up variables for the brewery: bbls brewed, % split between wholesale, retail, taproom, etc., prices, and so on. Then I set up a little section that was average check, based on the number of pints in the taproom (no food here). Did that 'average' feel reasonable to me based on my own lengthy and personal barstool experience? Would I come back if my two pints were $20? Would it be reasonable to expect each patron will have three pints? Or is it more likely some will have five, some one, and the average will be somewhere around two?

Most importantly I did sort of a 'Reality Check'. Stats like: is it reasonable to assume these many patrons, drinking this many pints, in this many hours open, paying this sort of average check. Messed around with all these variables till I got numbers that I thought seemed reasonable enough. It's one thing to say "We expect $xxx,xxx taproom sales." but quite another to see it as "In order to reach that we'll need to serve 1000 pints daily in a 12 person taproom...Ooops." At that point you can lower your expectations and then you can tweak your keg sales/taproom mix to see roughly how many wholesale kegs you need to sell per week/month/etc. to cover the gap. But you can also find that level where your taproom pays the bills and wholesale kegs start be where the profit comes in.

Find a nice conservative estimate where you can still make it, then be pleasantly surprised when you do better, I say. We open in about a month, so we'll see how accurate that turns out to be...

[ChesterBrew]

Russell, I'm currently doing my plan and am doing the same thing as you suggest. The only thing I'd add for the original poster to consider is creating your daily calculations also as hourly calculations for pints, etc. sold. I've seen some tap rooms open for 8 hours, 12 hours, and some just 4 hours. The hourly calculation can give you an idea of the number of people you could reasonably expect to need coming through the door...

[Bainbridge]

Russell, I'm currently doing my plan and am doing the same thing as you suggest. The only thing I'd add for the original poster to consider is creating your daily calculations also as hourly calculations for pints, etc. sold. I've seen some tap rooms open for 8 hours, 12 hours, and some just 4 hours. The hourly calculation can give you an idea of the number of people you could reasonably expect to need coming through the door...

Absolutely! I wrote a little thing about that in there but it started to get too long. It's one thing to expect to sell 200 pints a day if you're open 12 hours, versus 4 hours. But it could also turn out that you typically sell 180 of those pints in a busy 4 hour window! Ah business planning... We ourselves are going to start out doing four days of 4-5 hours, a day of 8 hours, one day off, and two days of 10. Which is about 7.5 hours a day average. But it's more likely weekends will be busier and so on. So whether the weekly average, or breaking it down by days, is more helpful to you is one reason why everyone should set up their own personalized spreadsheet. Only as useful to you as you make it.

One last thing I'd suggest is have a series of cells in a little box that break down your projected annual production into smaller units. "1000 bbls. Wooo! 2000 sankes! Wooo... 62,000 growlers... Yikes. 248,000 pints! Sweet Jeebus..." It's both exciting and terrifying. Good motivation!

[cheier]

One last thing I'd suggest is have a series of cells in a little box that break down your projected annual production into smaller units. "1000 bbls. Wooo! 2000 sankes! Wooo... 62,000 growlers... Yikes. 248,000 pints! Sweet Jeebus..." It's both exciting and terrifying. Good motivation!

Out of curiosity, in the projections and planning, do you account for spillage on the pints? I'm in the process of planning my brewery as well, but I've had conversations with bar managers where they get dinged real bad on spillage, and some information I've come across say as much as 20% of tap sales can be lost due to spillage. Heck, even today at a pub dedicated to craft beer and operated by the owner of a brewpub had a decent amount of foam going down the drain when he poured me my IIPA.