Reasonable Amount of Cases Year 2-3?

[Backset]

I am just wanting to know what would be a reasonable amount of cases a distillery with a 300 gallon hybrid still, filling roughly 1-2 barrels a week, could sell in their first year after releasing product? Let's say it is mostly self distribution locally, tasting room sales, and maybe 35% - 40% of cases going to a distributor. 

Thanks.

[daveflintstone]

Well you could sell all of them.  Or you could sell none of them.  This is a ridiculous unanswerable question.

[Sudzie]

If remember right, around 80% of the craft distilleries the United States sell less than 500 cases a year. 

[Thatch]

We sold less than 150 cases our first year

[Foreshot]

If you're in the middle of Alaska, probably not many. If you're in the middle of downtown NYC, probably a lot. Asking that question without any context as to location, product, marketing experience, foot traffic, retail size, still capacity, your experience level with distilling, etc etc is a waste of time. Give us some context and we'll give you a somewhat meaningful answer.

[Glenlyon]

Ironically, you could conceivably sell more cases in Alaska than NYC! It all boils down to a few questions really: How good is your product? How engaging is your establishment? How good are your sales staff? Do you have effective marketing & advertising in place? And, what is your brand reputation? We are well off the beaten track and it takes work to find us - yet, we consistently outsell local more easily accessed competitors and people will actively travel quite a long distance to visit us.  

[Backset]

- Large tourist destination: Skiing in the winter, hiking/biking/fishing/camping in the summer, hunting in the fall. Only times we don't see tourists are in the shoulder seasons (April/early May/October/November).

- Producing only whiskey and some rum, and have first whiskey release at 1.5 years. This would be attached to a brewery so beer would pay the bills while whiskey and rum ages. There will be a cocktail program. We can also self distribute locally and beyond in our state.

- Competition: 2 breweries locally, 1 other distillery (I happen to be the head distiller here). I obviously know how many cases a year we produce, but we've been around for 12 years. I was mainly looking for some average data to add to my business plan for starting numbers. 

- Marketing: Will be fairly aggressive at least locally, good portion of our budget will go to this.

Location: about 6 miles outside of downtown, but in an area thats building its own commercial district with current thriving businesses. Lots of old time tourists and locals alike coming here to get away from the July/August tourism madness down the road.

I understand we could sell it all or sell none, I'm not that dense, I just wanted to know if all the pieces line up, is 500-1000 cases in the first year of release a fair number? I see two people posted 150 cases year 1 and 500 for another. 

[Foreshot]

- How many beer sales do you make?  If X% buy a bottle how many bottles are you going to sell?  If you have both a brewery and distillery you'll probably see an increase in foot traffic. How much? No idea.

- I would go off of a % of your sales for the Brewery. Will it be 50/50? Probably not. Look at your average sale for the brewery and split it to how you see it - so if they spent  an average of $40 on beer before the distillery maybe they spend $20 - $30 on beer and add in a bottle of spirits. This will vary wildly per sale but eventually you'll have an average. It's hard to know before you start. Your average sale will probably go up. You know your numbers, I don't. The lower your average sale the harder it will be to get people to buy a bottle of spirits. Your average ticket probably won't double or triple or something like that. People have internal limits on how much money they spend. They won't go above that often.

- You're going to cannibalize some sales from the brewery - see above for the example. So for every X% of spirits sales you're going to lose brewery sales. What that percentage is unknown. That should be a factor.

- 500 cases of 6 is 3000 bottles. At $30 average that's $90,000. Change that for what you think your average bottle will sell for. How does that compare to your sales for the brewery? If you're selling $1,000,000 of beer then you're likely to hit that goal. If you're selling $100,000 of beer you're going to have a harder time.

- You already already have an existing company and have marketing set up - this helps significantly.

 

 

 

 

[Backset]

On 8/18/2020 at 7:26 AM, Foreshot said:

- How many beer sales do you make?  If X% buy a bottle how many bottles are you going to sell?  If you have both a brewery and distillery you'll probably see an increase in foot traffic. How much? No idea.

- I would go off of a % of your sales for the Brewery. Will it be 50/50? Probably not. Look at your average sale for the brewery and split it to how you see it - so if they spent  an average of $40 on beer before the distillery maybe they spend $20 - $30 on beer and add in a bottle of spirits. This will vary wildly per sale but eventually you'll have an average. It's hard to know before you start. Your average sale will probably go up. You know your numbers, I don't. The lower your average sale the harder it will be to get people to buy a bottle of spirits. Your average ticket probably won't double or triple or something like that. People have internal limits on how much money they spend. They won't go above that often.

- You're going to cannibalize some sales from the brewery - see above for the example. So for every X% of spirits sales you're going to lose brewery sales. What that percentage is unknown. That should be a factor.

- 500 cases of 6 is 3000 bottles. At $30 average that's $90,000. Change that for what you think your average bottle will sell for. How does that compare to your sales for the brewery? If you're selling $1,000,000 of beer then you're likely to hit that goal. If you're selling $100,000 of beer you're going to have a harder time.

- You already already have an existing company and have marketing set up - this helps significantly.

Foreshot, thanks for the very helpful info.

 

On 8/18/2020 at 7:26 AM, Foreshot said:

 

 

 

 

 

[adamOVD]

We are right outside a ski town as well. Probably smaller than you. If you are making a quality product at a reasonable price point, and actively pushing sales, I think 500-1000 cases is a reasonable goal. We sold 500 cases at year 2, just out of the tasting room, and had little to no marketing or sales calls. Starting slow on purpose. Limited distribution as well, and a whole lot of bottles going into cocktails. Don't recall those numbers. We may have hit 500 cases year one combining all of that, but I doubt it.

If you are only selling whiskeys and products at a high price point, it is going to be a lot harder. However the beer sales may make up your lower price point sales, and give you greater flexibility, and flexibility is pretty key these days.

To me a case is 6 750ml bottles. Just to be sure I'm on the same page. 80% of distilleries selling fewer than 500 cases seems strange to me, as we are about as small as seems feasible.

[captnKB]

Id agree with @adamOVD 500-1000 cs is a reasonable goal for your second year. As a few folks have said, there are many factors that will drive the acheivement of this goal. Sales through your tasting room or as cocktails will bring in much bigger dollars than sales to your distributor. 

Some combo brewstilleries kill it on bottle and cocktail sells and dont worry about bid distro. Others do the exact opposite. Something critical to your plan to consider is what sales avenue you intend to move most of your sales through.

Cheers,

---KB

[Glenlyon]

We're pretty small as well and we are currently selling about 1200 cases (6x750) a year. Our biggest limitation is that demand far outstrips supply and even though we've increased output considerably, we still struggle to keep up.