Trinity River Brewing Company.

Trinity River Brewing Company (TRBC)

1.

The Company and the Opportunity

A. Products: Craft Beer Company, based in Dallas that focuses on brewing beers that will be
aged in previously used spirit and wine barrels including wine, bourbon, whiskey, etc. The
product will be available in bottles and on draft throughout the state of Texas.
B. Services: TRBC is a brewing company with top-of-the-line brewing equipment to produce
some of the finest beers available in Texas. As part of our services, we will offer tours of our
brewerys barrel room and brewing areas. A separate tasting room where customers may come
in and sample/drink beers on site, as well as take home a growler of beers will also exist.

http://www.essentialstyleformen.com/advice/advice-guy-gift-guide-beer-growler/

The additional services we will provide will be for the accounts that carry our beers on
draft. These services will include delivery of new beers, cleaning draft lines, and co-organizing
special events at our draft accounts premises.
C. Size of business: Trinity River Brewing Company will operate under the brewpub license,
which limits annual production to 10,000 barrels, or 310,000 gallons of beer. We would expect
our production to be under this amount for at least the first five years. With this capacity, we will
likely only service the Texas market. Discussion of venturing out of the Texas market could be
discussed at a later date. If that occurs, we will need to switch to a production brewery license
which increases our capacity, but no longer allows for off-site sales to occur (growlers).
D. Equipment
Building with a loading dock
Brewing Equipment (brewhouse)
Fermenters
Hot Liquor Tank
Brite Tanks
Barrels
Kegs
Bottling Line
Bottles
Keg and Bottle Sanitation Equipment
Delivery Truck
Draft Equipment for our Tasting Room and Tap Rooms
Cold Room Storage
Computers
Brewhouse Software
Accounting Software
Office Furniture
Tap Room Furniture (tables, seating, and a bar)
Personnel
Head Brewmaster
Assistant Brewmaster/Barrel Master
Owner/President/Sales
Bottling Line/Carpenter/Handyman
E. Background of Entrepreneur(s)
The two entrepreneurs that will be starting up this business include a beer festival organizer and
a local craft beer enthusiast and homebrewers with a passion for craft beer.
2. The Unmet Need
While there are several craft breweries in North Texas, none are regularly producing
barrel-aged beers. In addition, several metro areas much smaller than DFW (such as Portland)
have 50-60 craft breweries, and there are only 18 operating in DFW as of October 2014 so

there is room in the industry in general. More specifically however, while the local craft
breweries in North Texas occasionally produce 1 barrel-aged beer here and there, these
occasional beers always sell out immediately and are not readily available. Barrel-aged beers
are one of the most sought after styles of beer worldwide amongst craft beer consumers.
3.
Product- Wooden barrels are used to age wine, as well spirits such as bourbon, cognac,
port, rum, and brandy. These barrels, once finished in the spirit or wine aging process, are no
longer used for their original purpose. These barrels absorb some of the liquid that they
previously contained. We seek to repurpose these vessels by filling them with what would
normally be a finished beer. This causes the beer to take on additional complexity, aromas, and
flavors from barrels original liquid.
For example, a wine barrel-aged beer might take on flavors of cherries, grapes, and other fruits
or wine tannins, plus flavors of the oak wood barrel itself. A bourbon barrel-aged beer might take
on flavors and aromas of vanilla, chocolate, toasted marshmallows, graham crackers and
caramel.
Technology- TRBC will be using top of the line brewing equipment that will include our Brew
House, Fermenters, Brite Tank, and Hot Liquor Tank. All of these things are essentials to any
brewery and must be maintained and cleaned regularly for the brew process. After the brewing
process is done the beer will be transferred to the wooden keg barrels that we must receive
from distilleries and wineries that used them in their processes. The beer must be then sit in
these barrels for an adequate time (between 6 to 24 months) for the beer to take characteristics
from the barrel. Once the beer is ready then the beer must be bottled and kegged which we will
have a bottling line and keg line that will be able to transfer the beer to. Like all things in this
process, the kegs and bottles must be sanitized so we will have a station solely for those two
things. Finally once the beer is bottled and keg, we will manage which ones go to our draft
accounts and which ones will stay on premise to sell to consumers.
Value Proposition- Our company will be focusing on bringing customers a high quality
product that does not readily exist in the marketplace today. This product will be sold at a higher
cost, but the benefits of quality and taste will surpass the cost to the consumer due to the
scarcity of our product.
Business Model- The business model consists of four different streams of revenue.
Bottles- Our primary revenue stream is direct bottle sales to consumers. By selling
750ml bottles will afford us the highest profit margin. This is due to us controlling selling to the
end consumer and by cutting out the retailer we can achieve our highest margin.
Draft Accounts- The next revenue stream will be selling kegs to draft accounts. This
includes selling our beer in kegs to bars and restaurants that will be sold in their establishments.
This will allow our product to be sold in a wider area but at a lower profit margin.

TapRoom- Our third revenue stream will be our tap-room. The taproom will allow people
to come to our brewery and allow people to buy beers to consume onsite in a friendly, inviting,
and comfortable environment. This is an important stream of revenue to us because we can
directly sell our products to consumers but at a slightly lower profit margin.

Tours- Our fourth and final revenue stream will be selling tours of our brewery. While it is
our lowest profit margin, it is important to teach consumers about our process and let them meet
the problem behind the scenes. Because craft beer is a local community based project we feel it
is important to meet the people who visit our brewery as well as the people who work for our
brewery.

4.

Industry and Market Analysis

A. Future Outlook and trends
The craft beer industry has seen growth in the total beer market share for the past 5
years. In 2009 craft beer held only 4.4% of the total beer market, and almost doubled from 2009
to 2013, capturing 7.8% total market share last year.
Retail sales show that there was a 20% increase in dollars from 2012 to 2013. When
considering that the total beer market is approximately $100 billion, craft beer owns 14.3% of
those dollars.

Perhaps the most important statistic in terms of craft beer growth, is that overall craft
brewer volume grew by 18%, despite the total beer market being down 1.9%, which firmly
establishes a trend towards an increase.

Source: The Brewers Association http://www.brewersassociation.org/pressreleases/brewers-association-announces-2013-craft-brewer-growth/ - SOMEONE PLEASE

CITE THIS AND CREATE THE SOURCES

In more specific terms, Texas is the 2nd largest beer revenue state, but ranks only 42nd per
capital in number of breweries. When you consider the category growth, paired with the relative
lack of breweries in Texas, this opportunity is easy to recognize.

Source: The Brewers Association http://www.brewersassociation.org/statistics/by-state/?

state=TX
SOMEONE PLEASE CREATE CITATION AND ADD TO SOURCES
B. Analysis of competitors
In North Texas, there are 18 craft breweries. Out of these 18, only 4 even produce a barrel-aged
beer. These include Lakewood Brewing, Community Beer, Rahr & Sons Brewing, and Deep
Ellum Brewing. Amongst these 4, 2 of the beers these breweries produce are only partially aged
in barrels. Each of the 4 only produces 1 or 2 seasonally-released barrel aged beers, which are
not only hard to come by, but available only on occasion.

C. Market segmentation
Our marketing plan is to target current craft beer consumers, but also current wine and spirit
drinkers who enjoy the flavors of those beverages. Our market generates approximately $100
billion in revenue with craft beer responsible for 14.3%. We are offering a premium product to a
niche market. Even tapping into a small portion of this market will be enough for TRBC to be
profitable and expand to a national level for future development.
Industry and market forecasts
The Market Development Committee of the Brewers Association projects that by 2022, craft
beer will make up 22% of the total beer market, which would be a 300% increase over the next
9 years. The market is rich in opportunity and continues to see explosive growth.

E. Possible challenges: Because the brewery will be based upon making beers which need to
age in barrels between 6 - 24 months, the initial challenge is obviously revenue stream. We will
need time to produce our first products. We will also have space constraints because we will
need lots of space to store barrels to continue growth. Because we will need more space in the
future, finding an expandable site is also critical. (When we do this in the Prezi, its probably
easiest to bulletize this.)
F. Sales Projections
In 2013 Texas craft brewers produced 833,191 barrels with nearly 18% growth from 2012 to
2013. This number is expected to increase from 2013 to 2014 as the demand for specialty beer
increases.
1st Year Sales
1st Year productions is estimated at 1000 Barrels yielding approximately 145,000 750ml bottles.
The average price per bottle is $16 (ranges from $12 to $25). The initial six months are

production intensive, thus revenues will begin at month seven after production rollout. The
increase in sales is 15% per annum, projected just below market average growth of 18%.
Month

Sales Forecast

January

$ 195,233.78

February
$ 270,219.77

March
April

$ 229,686.81

$ 317,905.61

May

$ 374,006.60

June

$ 440,007.77

July

$ 517,656.20

August

$ 609,007.29

September

$ 716,479.17

October

$ 842,916.67

November

$ 991,666.67

December

$ 1,166,666.67

Based on 15% growth rate.

 Trinity river brewing company sales revenue should flourish based on the industry
contribution of $33.9 billion to the U.S economy.
The consumer demanding high quality full-flavored beers should provide a high-level
production outcome generating profitability.
By focusing on our primary revenue stream of bottle sales to consumers, our initial profits
should be met.

References
750ml Plastic Beer Bottles (dozen). (2014). Retrieved October 12, 2014, from
http://www.brewshop.co.nz/plastic-beer-bottles-750.html
BA Insider: Growth in the Craft Beer Segment: Sky Is the Limit - Brewers
Association. (2014, September 2). Retrieved October 12, 2014, from
http://www.brewersassociation.org/news/ba-insider-growth-craft-beer-segment-skylimit/
Berman, A. (2014, March 31). Brewers Association Announces 2013 Craft Brewer
Growth - Brewers Association. Retrieved October 12, 2014, from
http://www.brewersassociation.org/press-releases/brewers-association-announces2013-craft-brewer-growth/
Celebration 750 ml Glass Beer Bottles in Cases. (n.d.). Retrieved October 12, 2014,
from http://buyourbottles.com/amber-glass-bottles/glass-750ml-celebration
Community Beer Company: A first look. (n.d.). Retrieved October 12, 2014, from
http://www.examiner.com/article/community-beer-company-a-first-look
Craft Beer Production by State. (2013). Retrieved October 12, 2014, from
http://www.brewersassociation.org/statistics/by-state/?state=TX
Deep Ellum Brewing Co. | Love Runs Deep. (n.d.). Retrieved October 12, 2014, from
http://www.deepellumbrewing.com/
Lakewood Brewing Company loves craft beer. (2014). Retrieved October 12, 2014,
from http://lakewoodbrewing.com/
Navigation. (2010). Retrieved October 12, 2014, from
http://specificmechanical.com/products-services/brewery-systems

Rahr & Sons Brewing Company. (2014). Retrieved October 12, 2014, from
http://rahrbrewing.com/
Schrader, N. (2011, December 13). ADVICE: Guy Gift Guide, Beer Growler.
Retrieved October 12, 2014, from
http://www.essentialstyleformen.com/advice/advice-guy-gift-guide-beer-growler/
Shikes, J. (2011, May 10). Upslope Brewing toasts its new tap room and cans a new
beer. Retrieved October 12, 2014, from
http://blogs.westword.com/cafesociety/2011/05/upslope_brewing.php
Thurmond, M. A. (2013, March 13). Stories Tagged Chelsea Brewing Company From
Everywhere. Retrieved October 12, 2014, from http://guestofaguest.com/tag/chelsea-brewingcompany

Risk Assessment
(http://www.thehortongroup.com/Insurance_Library/Top__Threats_to_Craft_Beer_Microbrew_S
tartups)
Cost Structure: could potentially be high due to tighter FDA regulations on how the spent grain
is utilized. (http://www.brewersassociation.org/press-releases/statement-from-the-brewersassociation-on-fda-proposed-rulemaking-on-spent-grain/)
Technical Risk: According to the website I have posted under Risk Assessment, a potential risk
is the welfare of employees. Since our brewery will not have hundreds of employees all at once,
employee welfare becomes a bigger responsibility since it is easily investigated. Also, since there
are few employees, losing significant, key people could have an adverse effect on the business.
Market Risk: Craft Brewing is a rising industry; there are now more than 2500 breweries
operational.Thus the need to differentiate ourselves from the competition becomes more
important.
For the most part our premium services and niche products differentiate us from the competition
giving us a unique marketing position, and that of a first mover in our market.
(http://www.beallinsurance.com/insurance-news/2013/11/risk-concerns-for-craft-breweries)

Financial Risk: get the proper insurances listed on this website. There is also the
unpredictability of the Agriculture market since we are dependent on them for ingredients our
cost may increase depending on droughts or government subsidies.
http://www.riskmanagersinc.com/commercial-products/coverage-for-specific-industries/craftbrewery-insurance) keep a differentiation margin to compete against other breweries;
(http://www.rmmagazine.com/2012/06/02/trouble-brewing/)
Operations Risk: beer leakage due to unforeseen circumstances. This risk can be minimized
through financial planning we can budget and set aside for overhead cost and deprecation of our
equipment. This will lessens the impact from unforeseen circumstances. . (i.e.: problems with
machinery) (http://www.hanover.com/linec/docs/114-1255.pdf)

Sources of funding
We believe we need 1.5 million dollars to start this business
Personal/Family/Friends investments-$250,000 (non-equity)
SBA Loan- work to get a $500,000 loan
Pre-money Evaluation: $3.5 Million (1st Year Revenue x 3)
Private Investor- $750,000 for 20% stake
Projected Returns
Investors can get their money back 6 months after breakeven ($4$)
For investors who wish to get a return and cash out, 3 years after break even will return
the money at 1.5 times.
Longer Term Return on Investment (TBD)

4B.
Quality

Availability

Atmosphere

Price

Trinity River

10

10

Lakewood

Community

Deep Ellum

Rahr and Sons

Jester King

10

Real Ale

Firestone Walker

N/A

Timeline:

Before TRBC can open (time zero):

Funds must be acquired (mix of personal investments, SBA loans, and money from investor(s))
Find personnel - engineers, architects, contractors, banker, lawyer, accountant, etc)
Network with others already in the industry
Create/finalize marketing plan
Check with the Secretary of State and the United States Patent and Trademark Office (USPTO)
to make sure that TRBC is an available name, and beer names are available
Form an entity
File for a Trademark with the USPTO (This can take 1 - 1.5 years)
File for Trademarks for the Beer Names (you can do this up to 36 months before the beer is
meant to be sold) This must be done for each new beer
Find property/building
Purchase all necessary equipment
Apply for Brewers Notice with Alcohol and Tobacco Trade and Tax Bureau (TTB) (This can
take 6-12 months)
Apply for applicable state and local licenses
At start (assuming equipment has been installed and all regulations have been met):
Submit recipes to TTB - must be done for each new recipe
Begin brewing beer (brewing will be a continuous event, as beers will be in brewing, fermenting,
or aging stage all throughout the year)
at 3 weeks : Move first beer from fermenters to barrels they will age in, and place them in
in aging area
Form draft accounts
Begin offering tours
at 6 months : Bottle and keg first beer assigned to be opened
Send designated product to draft accounts
open Tap Room
at ~17 months:Break-Even
at 23 months: Investors at break-even
at 24 months: Longest aged beer can be opened
at 60 months: Investors can cash out at 1.5X investment
consider expanding past Brewpub license

Management Team

Owner/president/Sales team-ownership, streams of revenue.

Head Brew Master- brewery operations.
Barrel Master-barrel division.
Bottling line- the front line/Shipment.

Revenues

Year 1

Year 2

Year 3

Year 4

Year 5

$
1,376,666.67

$
1,916,870.67

$
2,261,907.39

$
1,419,650.00

$
1,442,545.00

1,166,666.67
Costs

$
1,273,361.18

Net
Gain/Loss

$
1,303,333.34

1,624,466.67
$
1,398,833.34

(106,694.51)

73,333.34

225,633.33

497,220.67

819,362.39

Column1

Q1

Q2

Q3

Q4

Revenue

$ 270,219.77

$ 440,007.77

$ 716,479.17

$ 1,166,666.67

Cost

$
189,153.07

$
719,689.00

$
965,355.74

$
1,273,361.18

Marketing (Jett & Chad - no input from Yazz at this time)

Target Market:
Craft Beer Drinkers
Dallas/Fort Worth and Surrounding Residents
Tourists looking for Local Beer
Anyone 21+ interested in quality barrel aged beer
Marketing Model and Advertising:
Brewery Events
Bar Events
Retail Store Tastings
Beer Festivals
Market Positioning:
100 People Surveyed from Craft Beer Forums

Distribution: