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ROADMAP

STAGE 1

a) Know Your Market
Continued

‘Identifying the Size of Prize’ Case Study (BeerCo.)

Background:
BeerCo. understood from discussions with key publicans that they wanted beer brands with a fast
rate of sale. They said one keg (50L size) per week turnover would be suicient initially. BeerCo.
targeted the top 50 pubs in their trading area, with a strong presence of their target consumer.
They deployed promotions in each bar to ensure trial & awareness of their new brand to support
a target of 30 pints sold on a Thursday, Friday & Saturday evening.

Revenue Calculation:
BeerCo’s keg (50L size) price to the trade via their distributor is approximately €150 net, which
is 20% premium to value beers and equal to other premium craft beers pricing levels. Supplying
the top bars in year 1 equates to 50 Bars x 52 weeks x 1 keg which totals 2,600 kegs (50L) in
Year 1 (or 1,300 hectolitres). This equates to €390,000 in sales revenue at €150 per keg. Their
plans were to double their number of bars in Year 2 with a further 50% increase in bars in Year
3. The key assumptions in this exercise are key. The rate of growth driven by outlet expansion is
very aggressive. This level of growth is underpinned by a number of key assumptions including:
great quality & consistent beer; a high performing partnership with distributor and signiicant
promotions activity to drive brand awareness, and trial & repeat purchase.

SIZE OF PRIZE:
Year 1: 2,600 Kegs = 1,300 hectolitres = c. €390,000 in net sales (at €150/keg 50L size)
Year 2: 5,200 Kegs = 2,600 hectolitres = c. €780,000 in net sales (at €150/keg 50L size)
Year 3: 7,800 Kegs = 3,900 hectolitres = c. €1,170,000 in net sales (at €150 keg 50L size)

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