Market Analysis and Plan
Research and Analysis
Trends show that quality of drink selection and proximity are the prime decision makers when
choosing a brewery. According to the Brewers Association, demographics of breweries are
transitioning from 40-year old white males in highly concentrated areas to a more diverse crowd.
Young women (21-34) are coming into craft beer accounting fo 15% of total craft volume. 3 The
bottom 60% of households now consume 40% of craft volume. There are currently 243 craft
breweries in the state of Florida producing over 1.4 million barrels of craft beer per year. 4
Based on our surveys we determined that the three biggest drivers for consumers is Quality of
Product, Proximity to Home, and the Atmosphere of the venue. GCB will be poised to meet all
of these needs by placing ourselves within a large population center and offering quality
Market Segmentation and Size/Target Market 2
GCB plans to market primarily to Escambia and Santa Rosa counties. The veteran population
currently comprises 11% of the total population within the two counties, along with over 2
million annual visitors to the Pensacola Bay Area. Outside of veterans and tourist, we plan to
stay on trend targeting the traditional craft beer drinker. Our target market equals approximately
89,000 people within the two counties.
State Considerations: The state of Florida and the Pensacola / Escambia county area are
underserved in terms of volume of beer brewed per capita. Florida is seen by many as ripe for
brewery market expansion given its strong history with breweries such as Cigar City and Funky
Buddha gaining national prominence. Additionally, laws passed in 2015 allowed brewers to fill
64 ounce growlers on site, opening up a large revenue stream for brewpubs. Historically, the
Florida legislature has been more lenient in permitting beer licenses, while liquor licences have
been limited to a greater degree. Therefore the threat of substitution from liquor distilleries is
Local Considerations: There are relatively few brewpubs per capita in the Pensacola / Escambia
county area. In our assessment, Pensacola is relatively underdeveloped in terms of beer and
brewery sophistication. There does not exist a major craft brewery competitor such as Cigar City
or Funky Buddha who have national recognition but are headquartered in other cities in Florida.
Our research methodology into existing competitors included in-person visits, surveys, and
online reviews. We identified four main competitors with each competitor utilizing the brewpub
model. Three of the competitors are located near Pensacola Beach. Given the high rent prices
and geographic saturation, we have decided to operate just north of Pensacola Beach, near Ferry
In researching our competitors we identified Perfect Plain Brewing Company as our primary
competitor in the local market. Perfect Plain is a hyper local brewpub targeted at a niche, hip
crowd, yet is able to attract the general population with its quality and variety of beer. Moreover,
Perfect Plain has a strong charitable focus with a monthly partnership with local non-profit
organizations. While we view Perfect Plain as a competitor, we also view them as a proof of
concept regarding a hyper local brewpub with a strong mission orientation and non-profit ties.
In order to successfully enter the local brewery market, our strategy will entail a multi-channel
approach to build a strong, loyal base of customers. Central to building a loyal customer base in
the beer market is having a compelling beer menu. We believe we will be able to offer a strong
initial lineup of beer styles including IPAs, lagers, and ales. Prior to the opening of the brick and
mortar brewpub, we plan to test several recipes with friends and family, as well as with other
brewmasters and brewery associations. The multi-channel approach for building awareness and
customer base will entail engaging local veteran associations, non-profits, and bases to introduce
the idea of a veteran-centric brewery. Furthermore we will utilize traditional marketing tactics
such as building social media awareness, creating pop-ups, and pursuing traditional advertising.
The current pricing strategy for breweries in the area is as follows:
Lower Quality Product: $5.00 per pint
Medium Quality Product: $6.00 per pint
Higher Quality Product: $7.00+ per pint
As such, for our estimations, we used $6.00 per pint as an estimate for revenue. We will produce
medium to high quality, perceived, products and price them accordingly.
GCB will host Stock Market Nights at least once a quarter where we will utilize variable
pricing based on customer demand. The less a beer is requested, the lower the price goes, while
a more requested beer increases its price. We will still utilize the $6.00 – $7.00 pricing scheme
as our baseline for the start of each round.
Future Product Offerings
In the craft industry, the best way to remain relevant is to continuously offer new products. We
will invest heavily in Research and Development (R&D) and utilize current market trends and
customer feedback to develop new flavors and offerings. Sour beers are becoming increasingly
popular as well as barrel aged products. As such, these offerings are less differentiators and have
more requirements to compete.
As we increase our capacity, we will open our systems up to local homebrewers. These
homebrewers will be afforded the opportunity to brew on a commercial system and get their
product into the market. GCB will recoup our cost for the venture and take a cut of the revenue
generated by the homebrewer tap. GCB will retain exclusive production rights and license the
recipe from the homebrewer; in the event the beer is popular both entities will be able to generate
revenue from the collaboration.
GCB plans to collaborate with other breweries in the area on collaborative beers and market
focused promotional nights. To build the market, we need collaboration among the other
breweries to grow network effects. This will require Coopetition from all of the players.
The majority of GCBs sales will come from its taproom. The contribution margins are 100%
compared to working through a distributor. Due to Florida alcohol laws, we will have to work
through a distributor if we sell any product off of the premises. Doing so reduces our
contribution margins significantly, to roughly 17%. Instead of earning approximately $700.00
per keg, we would only earn around $130.00 through a distributor.
As such, we will limit our off-premise sales to special circumstances and targeted opportunities.
We plan to collaborate with local restaurants and bars to produce exclusive specialty offerings to
build lasting relationships.
Additionally, we will collaborate with local restaurants to offer them an opportunity to increase
their customer outreach by serving their food at our location. Although we wont generate any
revenue directly from this relationship, this will facilitate an increase in volume sales with people
more willing to spend extended periods of time on-premise. GCB will be the only authorized
beverage seller on-premise so as not to cannibalize our revenue.
GCB wants to relinquish as little ownership of the company as possible in order to prevent the
dilution of its owners. The Founders will hold 90% collectively of the company leaving 10%
ownership for the Employees.
Initially, the company will seek support from Friends and Family in an initial attempt to raise
capital. We are hoping to raise approximately $200,000 – $500,000 from in order to fund
operations during the initial roll out and through the year. Ideally, we would accept the funds as
a donation for a good cause; however, we anticipate our friends and family would like to reap a
benefit. As opposed to relinquishing equity stake, we will treat these like loans with a repayment
date of no later than five years with an interest rate equal to the current market return. If we are
unable to repay the debt in the alloted time, the debt will be converted to equity shares, taken
from the owners shares, based on the current value of the company at the fifth year.
We are taking advantage of two loan options available to us. The first, a traditional Small
Business Administration (SBA) loan in the amount of $350,000. This will be used to purchase
the brewerys production equipment; the Brewhouse, Fermentation and Conditioning Tanks,
Packaging Equipment, etc. The second loan is provided to veterans, called the Patriot Loan, in
the amount of $500,000. This will be used for a down payment on the building and support the
buildout of the taproom, outdoor entertainment space, and the quality control laboratory.
We want our customers to feel like an extension of our family. As such, we plan to offer
ownership stake up to 20% for our most loyal customers. No customer may own more than 1%
stake individually. The 20% will come from the Owners Shares reducing overall ownership to
70%. The purpose of this offering will be two-fold. First, it will enable us to raise capital for
future expansion opportunities such as increasing production volume, expanding our physical
footprint, etc. Second, it will build a stronger core customer group and increase our relationship
with the surrounding community. Although there is no planned exit currently, if an owner
decides to exit the venture, we would offer up those shares to our employees and the public;
effectively handing over the brewery to those most loyal to the brand.