Difference between revisions of "Regional Brewery Feasibility Study"
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==Areas of Operation== | ==Areas of Operation== | ||
| + | [[File:Regional.PNG|350px|thumb|right|Area 1]] | ||
Original operations will target "area 1": | Original operations will target "area 1": | ||
:Monmouth (9K population) | :Monmouth (9K population) | ||
| Line 16: | Line 17: | ||
:Champaign-Urbana (86K/42K population, 160 miles from Monmouth) | :Champaign-Urbana (86K/42K population, 160 miles from Monmouth) | ||
Total Population Area 1 = 891K ~ 1M (including smaller communities) | Total Population Area 1 = 891K ~ 1M (including smaller communities) | ||
| − | + | ||
| + | |||
| + | According to http://www.infoplease.com/us/census/data/demographic.html 70% of the US population is over the age of 21. | ||
| + | *So 70% of 1M = ~700,000 adults in the above population. | ||
| + | |||
| + | According to Gallup poll, see link below, 41% of adults drink beer. For each drinker, they consume 4.1 beers (12 oz) per week. | ||
| + | :http://www.gallup.com/poll/174074/beer-americans-adult-beverage-choice-year.aspx | ||
| + | *So 41% of 700,000 = ~287,000 beer drinker | ||
| + | *287,000 each consume 4.1 beers per week = ~1.2M beers per week | ||
| + | *If each beer is 12 oz then 1.2M beers is equal to ~110,000 gal (128 oz) per week or ~5.7M gal per year. | ||
| + | *In brewery terms, 5.7M gal is equal to 185K bbls (31 gal) per year. | ||
| + | |||
| + | '''So, a US population of 1M will consume ~ 185K bbls of beer per year.''' | ||
==Brewing Operations== | ==Brewing Operations== | ||
| − | Brewing operations will be located in Monmouth IL adjacent to interstate 34. | + | Brewing operations will be located in Monmouth IL adjacent to interstate 34. Brewing system will be based on 4-vessel system with fermentation capacity to balance production of 40% ale and 60% lagers. |
| + | |||
| + | '''''Scenario 1:''''' | ||
| + | :15 bbl brewing system, brewing 1 per day, 5 day a week. | ||
| + | ::total production = ~3.90K bbls per year...or ~2.11% of beer market. | ||
| + | |||
| + | '''''Scenario 2:''''' | ||
| + | :15 bbl brewing system, brewing 2 per day, 5 day a week. | ||
| + | ::total production = ~7.80K bbls per year...or ~4.22% of beer market. | ||
| + | |||
| + | '''''Scenario 3:''''' | ||
| + | :30 bbl brewing system, brewing 1 per day, 5 day a week. | ||
| + | ::total production = ~7.80K bbls per year...or ~4.22% of beer market. | ||
| + | |||
| + | '''''Scenario 4:''''' | ||
| + | :30 bbl brewing system, brewing 2 per day, 5 day a week. | ||
| + | ::total production = ~15.60K bbls per year...or ~8.43% of beer market. | ||
| + | |||
| + | '''''Scenario 5:''''' | ||
| + | :50 bbl brewing system, brewing 1 per day, 5 day a week. | ||
| + | ::total production = ~13.00K bbls per year...or ~7.03% of beer market. | ||
| + | |||
| + | '''''Scenario 6:''''' | ||
| + | :50 bbl brewing system, brewing 2 per day, 5 day a week. | ||
| + | ::total production = ~26.00K bbls per year...or ~14.05% of beer market. | ||
| + | |||
| + | '''Summary''' | ||
| + | *Production breweries need to maximize the use of capital investment, so a minimum of 2 brews per day is expected with a max being 4 brews a day during high volume times. | ||
| + | *Scenario 1, 3, and 5 are not desirable due to only 1 brew per day. | ||
| + | *It is very unlikely that scenario 6 (ie. capture 14% of all beer consumption) is feasible. | ||
| + | *Scenario 2 seems most feasible (4% of beer consumption), but thoughts of future expansion (mainly as a contract brewer) would lean towards investing in a 30 bbl brewhouse with future expansion of the fermentation capacity. | ||
| + | |||
| + | '''Conclusion: install 30 bbl brewhouse with fermentation capacity to produce only ~8K bbl/year (4-5% of beer market). Consider brewhouse with dual heating (15/30 bbl) operation.''' | ||
| + | |||
| + | ==Labor Force== | ||
| + | ===Brewing Operations=== | ||
| + | '''''Scenario 3''''': 30 bbl brewhouse, 1 brew per day; 8K bbl/yr production | ||
| + | *Head brewer | ||
| + | *Assistant brewers (2) | ||
| + | *Fermentation hall/yeast manager (1) | ||
| + | *QC lab manager/technician (1) | ||
| + | *Facilities Manager (1) | ||
| + | *Assistant facilities manager (1) | ||
| + | *Packaging | ||
| + | :*Bottling line manager | ||
| + | :*Bottling line operators (4-6) | ||
| + | |||
| + | Note: Assistant brewers and fermentation hall manager are trained on all brewhouse/fermentation operations. | ||
| + | |||
| + | Note: QC lab manager and facilities personnel (2) will be trained on packaging operations. QC lab manager will also be trained on fermentation operations. | ||
| + | |||
| + | ===Administration/Sale/Marketing=== | ||
| + | *CEO | ||
| + | *CFO | ||
| + | *Assistant CEO | ||
| + | *Sales (4) | ||
| + | *Marketing (2) | ||
| + | |||
| + | ===Legal=== | ||
| + | |||
| + | |||
| + | ==Finances== | ||
| + | '''''Scenario 3''''': 30 bbl brewhouse, 1 brew per day; 8K bbl/yr production | ||
| + | |||
| + | ===Sales=== | ||
| + | *8K bbl/year at ~$300/bbl ($5.45/6-pk) = $2.4M in sales | ||
| + | |||
| + | ===Material cost=== | ||
| + | 8K bbls @ ~$50/bbl = $400K/yr | ||
| + | |||
| + | ===Labor cost=== | ||
| + | *CEO = $100K/yr | ||
| + | *Assistant CEO = $60K | ||
| + | *CFO = $100K/yr | ||
| + | |||
| + | *Head Brewer = $60K/yr | ||
| + | *Assist. Brewer = $38K/yr (x2) = $76K/yr | ||
| + | *QC manager - $38K/yr | ||
| + | *Facilities manager = $50K/yr | ||
| + | *Assist Facilities manager = $38K/yr | ||
| + | *Packaging Manager = $38K/yr | ||
| + | *Packaging personel = $28/yr (x4) = $112K | ||
| + | |||
| + | *Sales = $38K/yr (x2) = $76K | ||
| + | *Marketing = $60K/yr (x2) = $120K | ||
| + | *Legal = $100K/yr | ||
| + | |||
| + | '''Total Labor Cost/yr = $968K/yr''' | ||
| + | |||
| + | ===Capital Cost=== | ||
| + | |||
| + | ===Overhead=== | ||
| + | *Property Tax = $6K | ||
| + | *Electricity/Gas = $20K | ||
| + | *Water = $5K | ||
| + | |||
| + | ==Strategies== | ||
| + | :Brew 2-3 "flagship" ales / brew 4-6 "flagship" lagers / 2-3 "specialty" beer for general distribution | ||
| + | :Contract brew for 3-5 smaller breweries | ||
| + | :Can and bottle product | ||
| + | :tap room on site | ||
| + | :offer beers to ball parks (Quad Cites, Peoria, Burlington) | ||
| + | :Guest brewers/resident brewer | ||
| + | :Brew school/lab??? | ||
Latest revision as of 15:31, 17 December 2016
This page is a workspace to consider the feasibility of opening a "regional" brewery in Monmouth, IL to serve initially the Central Illinois region. Future plans to expand would include the 7 Midwest states (MI, IN, IL, MO, IA, NM, WI) but NOT "beer-rich" areas such as Chicago or St. Louis.
Areas of Operation
Original operations will target "area 1":
- Monmouth (9K population)
- Galesburg (31K population, 16 miles from Monmouth)
- Macomb (18K population, 33 miles from Monmouth)
- Peoria (115K population, 67 miles from Monmouth)
- Rock Island (38K population, 50 miles from Monmouth)
- Moline (42K population, 50 miles from Monmouth)
- Bloomington-Normal (78K/54K population, 110 miles from Monmouth)
- Springfield (116K population, 120 miles from Monmouth)
- Decatur (73K population, 150 miles from Monmouth)
- Quincy (41K population, 100 miles from Monmouth)
- Rockford (148K population, 165 miles from Monmouth)
- Champaign-Urbana (86K/42K population, 160 miles from Monmouth)
Total Population Area 1 = 891K ~ 1M (including smaller communities)
According to http://www.infoplease.com/us/census/data/demographic.html 70% of the US population is over the age of 21.
- So 70% of 1M = ~700,000 adults in the above population.
According to Gallup poll, see link below, 41% of adults drink beer. For each drinker, they consume 4.1 beers (12 oz) per week.
- So 41% of 700,000 = ~287,000 beer drinker
- 287,000 each consume 4.1 beers per week = ~1.2M beers per week
- If each beer is 12 oz then 1.2M beers is equal to ~110,000 gal (128 oz) per week or ~5.7M gal per year.
- In brewery terms, 5.7M gal is equal to 185K bbls (31 gal) per year.
So, a US population of 1M will consume ~ 185K bbls of beer per year.
Brewing Operations
Brewing operations will be located in Monmouth IL adjacent to interstate 34. Brewing system will be based on 4-vessel system with fermentation capacity to balance production of 40% ale and 60% lagers.
Scenario 1:
- 15 bbl brewing system, brewing 1 per day, 5 day a week.
- total production = ~3.90K bbls per year...or ~2.11% of beer market.
Scenario 2:
- 15 bbl brewing system, brewing 2 per day, 5 day a week.
- total production = ~7.80K bbls per year...or ~4.22% of beer market.
Scenario 3:
- 30 bbl brewing system, brewing 1 per day, 5 day a week.
- total production = ~7.80K bbls per year...or ~4.22% of beer market.
Scenario 4:
- 30 bbl brewing system, brewing 2 per day, 5 day a week.
- total production = ~15.60K bbls per year...or ~8.43% of beer market.
Scenario 5:
- 50 bbl brewing system, brewing 1 per day, 5 day a week.
- total production = ~13.00K bbls per year...or ~7.03% of beer market.
Scenario 6:
- 50 bbl brewing system, brewing 2 per day, 5 day a week.
- total production = ~26.00K bbls per year...or ~14.05% of beer market.
Summary
- Production breweries need to maximize the use of capital investment, so a minimum of 2 brews per day is expected with a max being 4 brews a day during high volume times.
- Scenario 1, 3, and 5 are not desirable due to only 1 brew per day.
- It is very unlikely that scenario 6 (ie. capture 14% of all beer consumption) is feasible.
- Scenario 2 seems most feasible (4% of beer consumption), but thoughts of future expansion (mainly as a contract brewer) would lean towards investing in a 30 bbl brewhouse with future expansion of the fermentation capacity.
Conclusion: install 30 bbl brewhouse with fermentation capacity to produce only ~8K bbl/year (4-5% of beer market). Consider brewhouse with dual heating (15/30 bbl) operation.
Labor Force
Brewing Operations
Scenario 3: 30 bbl brewhouse, 1 brew per day; 8K bbl/yr production
- Head brewer
- Assistant brewers (2)
- Fermentation hall/yeast manager (1)
- QC lab manager/technician (1)
- Facilities Manager (1)
- Assistant facilities manager (1)
- Packaging
- Bottling line manager
- Bottling line operators (4-6)
Note: Assistant brewers and fermentation hall manager are trained on all brewhouse/fermentation operations.
Note: QC lab manager and facilities personnel (2) will be trained on packaging operations. QC lab manager will also be trained on fermentation operations.
Administration/Sale/Marketing
- CEO
- CFO
- Assistant CEO
- Sales (4)
- Marketing (2)
Legal
Finances
Scenario 3: 30 bbl brewhouse, 1 brew per day; 8K bbl/yr production
Sales
- 8K bbl/year at ~$300/bbl ($5.45/6-pk) = $2.4M in sales
Material cost
8K bbls @ ~$50/bbl = $400K/yr
Labor cost
- CEO = $100K/yr
- Assistant CEO = $60K
- CFO = $100K/yr
- Head Brewer = $60K/yr
- Assist. Brewer = $38K/yr (x2) = $76K/yr
- QC manager - $38K/yr
- Facilities manager = $50K/yr
- Assist Facilities manager = $38K/yr
- Packaging Manager = $38K/yr
- Packaging personel = $28/yr (x4) = $112K
- Sales = $38K/yr (x2) = $76K
- Marketing = $60K/yr (x2) = $120K
- Legal = $100K/yr
Total Labor Cost/yr = $968K/yr
Capital Cost
Overhead
- Property Tax = $6K
- Electricity/Gas = $20K
- Water = $5K
Strategies
- Brew 2-3 "flagship" ales / brew 4-6 "flagship" lagers / 2-3 "specialty" beer for general distribution
- Contract brew for 3-5 smaller breweries
- Can and bottle product
- tap room on site
- offer beers to ball parks (Quad Cites, Peoria, Burlington)
- Guest brewers/resident brewer
- Brew school/lab???