
HOW TO DECIDE WHAT SIZE BREWERY TO INSTALL
Installing a brewery is a significant investment. Ensuring it meets the demands of your target market is crucial. Here’s a step-by-step model to help you decide the appropriate size for your brewery once you have selected your brewery location.
Estimating Demand and Capacity
Estimating demand and capacity of your new brewery involves determining how many people are likely to visit your venue and how much beer they might consume. Factors to consider include:
- Foot Traffic
- Vehicle Traffic
- Target Audience
- Marketing Effectiveness
By combining these factors, you can estimate the volume of beer you need to produce and thus determine the appropriate size for your brewery.
As a very basic example:
- In an average month, 5,000 couples walk past your proposed venue
- During the course of a month 3,000 of those couples drop in to have a beer
- If the males consume 3 beers during that time and the females consume 3 beers in the same timeframe, that equates to 18,000 beers in a month
- If the beers consumed are all pints, that would equate to 18000 pints, or approximately 9,000 litres of beer per month
- In order to produce 9,000 litres of beer per month, you would need a brewery that could produce 2,250L in a single brew each week
Conducting Foot Traffic Research
Take a simple “ticker” counter and stand on the footpath where you think you’d like your business to be. Click once for each person who walks past you, and categorize them by gender. Observing the presence of children can also provide insight into family demographics, indicating families who might be looking for a place to relax while their children are with them.
To get the most accurate feel for your potential audience, perform this exercise at different times of the day and on weekends. This will help you understand peak traffic times and the types of potential customers in the area.
Ideally, conducting this exercise for a month will get you the best measure of your audience.
Vehicle Traffic
Just as with foot traffic, analyzing vehicle traffic is essential. These are the people who will see your banner or signage as they drive past your location. Timing is crucial here as well. Conduct this exercise during different times of the day and on different days of the week to get a comprehensive understanding of when the most vehicle traffic occurs.
Utilizing Online Statistics
Once you have gathered your on-ground data, use online resources to supplement your findings. Various websites provide traffic and demographic statistics that can help validate your observations and give you a broader perspective on your potential customer base.
Target Audience
A survey by Statista Research Department in 2022 revealed that the highest share of Australian craft beer drinkers were aged between 30 and 39, accounting for approximately 31 percent of the market. The average beer consumer was found to be male.
However, beer consumption trends can shift annually due to various factors such as economic changes, marketing strategies both for and against alcohol consumption, and evolving lifestyle needs. Consider these variables when identifying your target demographic.
Key questions to answer are:
- What is my target audience? 18-25 years old, 25-40 years old, 40 years old and above?
- How much beer do you estimate your target audience to consume per visit?
Marketing Effectiveness
Review your plans for getting your brand out there for the public to see you, your venue and what you’re offering.
How effective do you estimate your campaigns to be?
Calculating Potential Demand
Once you have conducted your foot and vehicle traffic research, you can estimate your potential customer demand based on your target audience by answering the following questions:
- Based on the foot and vehicle traffic research, on average, how many representatives of your target audience do you estimate to walk/drive past your venue in a given month?
- How many of those do you anticipate to drop in to have a beer?
- How many beers do you estimate they would consume in one visit?
Once you answer these questions, you can use the numbers you have arrived at to estimate the required capacity for your brewery to meet your potential customer demand (see calculation example provided at the beginning of the article).
Starting Up and Scaling Your Brewery
Based on your demand projections, decide on how you would scale your brewery. Consider starting with a smaller setup with the flexibility to expand as needed. This approach allows you to manage costs while still meeting customer demand and building loyalty. The venue should also have enough real estate to be able to accommodate expansion.
Investing in Equipment
Choose equipment that fits your initial production needs but is scalable. This means selecting brewing tanks, fermenters, and other machinery that can grow with your business.
Planning for Growth
While starting small, always plan for future growth. Ensure that your brewery’s location, layout, and equipment allow for easy expansion. The simplest form of expanding capacity is to add fermenter tanks. Make sure you have some space in your venue plans to expand your operation. It’s better to plan this way than experiencing high growth and having to move premises, which is not a simple task as you can imagine due to all of the moving logistics and associated costs.
Conclusion
Deciding the size of your brewery involves thorough research and planning. By conducting foot and vehicle traffic analysis, utilizing online statistics, and understanding your target audience to estimate your demand, you can make an informed decision. Start small with the flexibility to expand, ensuring you meet customer demand while managing costs effectively. With careful planning, your brewery can thrive and grow, becoming a favorite spot for beer enthusiasts.
Questions?
I hope you’ve enjoyed reading this article. If you have any questions, need any clarification, or need help deciding on the size of the brewery to install, please contact me any time using the form below. I’d love to help.
Gavin van Vuuren
Director, Synergy Custom Solutions
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