Sales/Revenue Projections

[Doug Robertson]

Hello,

I am currently in the startup phase of a Distillery in Texas and am trying to project Sales and Revenue. We will have a tasting room and primarily be depending on it for bottle/drink sales at the beginning. I have structured the projections so far with the number of people for tours and walk-ins with conversion rates for drink/bottle sales. I am trying to get data on both what percentage of customers buy drinks/bottles, how many drinks/bottles per customer, and the number of people expected when starting.

So far I am using something like this:

Walk-ins Drink Conversion Rate	90%
Walk-ins Bottle Conversion Rate	10%
Tour Drink Conversion Rate	50%
Tour Bottle Conversion Rate	25%

Would anyone be willing to help with some numbers, data, or resources for this (database, etc.)?

Regards,

Doug Robertson

[Aux Arc]

I am in the planning stages, trying to firm up a site in the next week.  So definitely have zero expertise but would share the following observations based upon the tours I have taken:

If the tour is free and no free tasting, the majority of the tour takers are going to buy drinks. They are in a distillery because they like and drink alcohol.

If the tour, paid or unpaid, includes a free tasting, your bottle sales will probably be higher if your product is quality.  Your drink sales will probably be lower. 

Your Walk-ins (non-tour takers) are likely to be mostly repeat customers who are there specifically to buy your bottles. (assuming you are not in a heavy foot-traffic tourist location)

 

Hopefully some of the veterans on here will give you some experienced knowledge.  Best of luck in this venture.

 

[bluefish_dist]

We had a 75-80% bottle conversion rate per group.  Paid tasting ~100% conversion.  Those that didn’t taste were simply stopping in for a bottle.  

The bigger question is how much traffic can you get to the tasting room.   I found Groupon was a good driver to the tasting room and we had about a 60% conversion of purchases.   

[Blackheart]

Your specific location drives all of these numbers.  Off the beaten path? Probably more bottles and tours vs. cocktails. In a high-traffic area? Probably more tours and tastings vs. bottles (maybe, depending on what times you're open, etc.).

Groupon helps, but like before, location matters.  These are often deal-seeking customers.  Your product and deal (and the products) needs to be affordable or they'll bounce without buying a thing.  It's helped us drive traffic to our shop, but the conversions have been sub 40%.  They're just not big spenders, unfortunately, and we're in a value-conscious (not affluent) area.     

[Rum]

In Florida we cannot charge for tours or for samples. Both are free. We cannot sell drinks. That model works really well if you can get a lot of people to your location and if they like your products. I don't know the exact % that buy but it is pretty high. Today was a great day. Only 126 people registered for tours so I wasn't expecting a lot. We still did $4,500 in sales after subtracting out sales tax. That's a better than average day for that level of registrations. If the Saturday tours are all full or close to it (180 registrations) that would be a pretty average number. So that's about $25 per registered person normally. [edit - I looked at some more actual numbers. Seems to be closer to $30 per registered tour attendee] There are a lot of walk-ins as well. We are not in an easy to find location so the walk-ins have to seek us out. 

We offer a lot of tours during the week to fit our visitor's schedules. The tasting room is open 7 days a week. Tours are 4 days a week (soon to be 5). We would do tours 7 days a week but we are usually bottling on Thursday and Friday making it difficult to do our tours. 

As mentioned above, traffic to your tours/tasting room is critical. Then you need a good tour and good products.

[Thatch]

2 hours ago, Rum said:

That's a better than average day for that level of registrations. If the Saturday tours are all full or close to it (180 registrations) that would be a pretty average number.

What's your secret?  How do you get 180 people to you facility on a Saturday (or 126 during the week)?  Since you are in the resort area of Siesta Key, is this only in season?  How large a group do you allow?  How far apart do you space tours?  Do you register online?  

[Rum]

We allow up to 60 per tour but we don't check tickets when they arrive. In season we usually have extras show up. This time of year we are busier than the summer months. We have three tours on Saturdays. Two on Sundays. We just increased Tuesday and Wednesday to three tours from two. We are in the process of hiring another tour guide so we can have them on Mondays. In the off-season we will cut the number of tours back a bit. 

We are fortunate in that I started pretty early in the craft distilling scene. We have a ton of word of mouth in the area. We also have good internet search results. For example, we are listed as the #1 Thing to Do in Sarasota on Trip Advisor.

We are not the biggest in Florida when it comes to a busy tasting room. That would be St. Augustine Distillery. They are located in the middle of a tourist area and on the main tourist trolley route. We are probably the biggest Florida craft distillery when it comes to distribution though. I would love to be in a better location instead of the scary industrial park we are in currently. I started on a relatively tight budget and took the cheapest rent that I could find. Now it's a major project and expense to move.

On days with three tours we have them at 11:00, 1:00, and 3:00. We use Eventbrite for registrations. 

I've attached two images from this last Tuesday. It was crazy busy for some reason. All day long, not just the tours. 

 

 

[Thatch]

Your story is amazing and you never even mentioned using a Groupon to bring people in.  Do you do any other advertising beyond what you have already mentioned?

[Rum]

Since the tours and samples are free I never saw much benefit in using Groupon. We don't like to run sales on the rum itself. Our main business is distribution and we don't want to alienate our retailers by undercutting them regularly. 

We run ads on Facebook. We don't get nearly the viral reach we did early on due to their algorithms changing. If you are willing to pay you can still get great reach for a relatively low cost. Other than that we pretty much just make sure we are listed on websites like our local tourism bureau, etc. Our main strengths have been making certain that people have a fun time when they visit and making rum that they love. It's just built up over time.

 

OP - Sorry to take your thread on a tangent. Hopefully this is helpful info for you as well.

 

[Thatch]

Sorry OP, Thanks Rum