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1
Contents
Executive
Summary.........................................................................................................3
Industry
Analysis.............................................................................................................4
Geographical
Area.............................................................................................................................4
Industry
Trends.................................................................................................................................5
Industry
Life
Cycle............................................................................................................................7
Competition.........................................................................................................................................8
Market
Analysis...............................................................................................................11
Target
Market....................................................................................................................................11
Market
Research...............................................................................................................................13
Internal
Analysis.............................................................................................................24
Company
Founder
Profile............................................................................................................24
Strengths..............................................................................................................................................25
Weaknesses........................................................................................................................................26
External
Opportunities.................................................................................................27
Opportunities....................................................................................................................................27
Threats.................................................................................................................................................29
Operational
Plan.............................................................................................................30
Pricing
Strategy................................................................................................................................30
Growth
Strategies............................................................................................................................30
Marketing
Plan..................................................................................................................................32
Financial
Analysis...........................................................................................................33
First
Year
Start
Up
Costs...............................................................................................................33
Break
Even
Point
Analysis...........................................................................................................34
First
Year
Sales
Projections.........................................................................................................36
Works
Cited......................................................................................................................38
2
Executive
Summary
Hit
Brewery
is
a
developing
microbrewery
/
recording
studio
that
combines
music
and
craft
beer
to
deliver
consumers
a
unique
product
that
reimagines
the
way
that
music
is
consumed
and
distributed.
Hit
Brewery
aims
to
counteract
many
problems
facing
the
music
industry
over
the
past
10-‐15
years
by
branding
and
distributing
music
in
an
entirely
new
way
that
restores
consumer
value,
which
has
drastically
diminished
in
recent
years.
The
operations
of
Hit
Brewery
are
comprised
of
two
distinct
elements.
We
operate
as
a
studio,
facilitating
the
recording
and
production
of
musical
projects,
as
well
as
distributing
recorded
music.
In
addition,
we
serve
as
a
fully
functioning
microbrewery
and
brewpub,
developing
and
producing
a
catalogue
of
year
round
and
seasonal
brews
that
are
sold
and
served
within
our
establishment
and
distributed
to
third-‐party
retailers.
Hit
Brewery
is
a
unique
organization
due
to
the
close
relationship
held
by
these
two
cornerstone
operations.
A
third
element
to
Hit
Brewery
is
the
small,
independent
publishing
imprint,
Hit
Brewery
Publishing
(ASCAP),
that
claims
all
publishing
rights
to
the
recordings
owned
by
the
company.
The
products
sold
by
Hit
Brewery
are
typical
beer
packages
(pints,
growlers,
6
packs,
12
packs,
etc.),
along
with
live,
physical,
and
digital
musical
content.
With
this
unique
combination
of
products,
Hit
Brewery
looks
to
add
value
to
the
music
industry
and
once
again
allow
consumers
to
feel
good
about
paying
for
the
music
musical
content
that
they
enjoy.
Hit
Brewery
spans
two
different
industries,
both
operating
in
differing
industry
life
cycles.
In
one
sense,
we
fall
within
the
recorded
music
industry,
which
is
currently
in
the
decline
phase
of
its
life
cycle.
On
the
other
hand,
we
operate
within
the
craft
beer
industry,
which
is
currently
in
its
growth
phase.
Due
to
this
differing
analysis
of
our
two
related
industries,
Hit
Brewery
focuses
the
bulk
of
its
commercial
operations
within
the
more
promising
craft
beer
industry.
The
main
aspect
of
our
operations
fall
within
the
production
and
distribution
of
our
beer,
with
recorded
music
as
a
differentiating
factor
against
the
other
members
of
the
growing
craft
beer
industry.
3
Industry
Analysis
The
craft
beer
industry
is
one
that
has
been
growing
exponentially
within
the
United
States
over
the
past
10-‐20
years.
This
craft
beer
market
varies
by
region
within
the
large
country,
but
the
overall
trend
within
the
industry
depicts
strong
growth
that
is
projected
to
continue
to
climb
in
the
coming
years.
The
following
chart
by
Wall
Street
Journal
&
the
Brewery
Association
depicts
this
growth
trend.
Source:
Wall
Street
Journal
/
Brewery
Association
Geographical
Area
Hit
Brewery
aims
to
be
a
local
company
specializing
within
the
Southern
California
region
of
the
United
States.
This
is
a
region
that
the
company
knows
very
well,
as
the
company’s
founder
is
originally
from
San
Diego,
CA.
The
Southern
California
region
is
one
that
is
very
conducive
to
success
within
the
craft
beer
industry.
San
Diego,
in
particular,
is
known
as
one
of
the
craft
beer
capitols
of
the
United
States,
claiming
host
to
many
of
the
nation’s
top
craft
breweries,
such
as
Carl
Strauss
and
Stone
Brewing.
Furthermore,
neighboring
areas
Orange
and
Los
Angeles
4
counties
are
statistically
full
of
craft
beer
aficionados
and
drinkers
that
enjoy
patronizing
the
craft
beer
companies
that
operate
within
their
local
region.
Hit
Brewery
will
assume
all
operations
within
Southern
California,
most
specifically
within
Los
Angeles,
and
plans
to
capitalize
on
the
immense
popularity
and
strong
consumer
base
within
the
region.
Competitively,
many
of
Southern
California’s
craft
breweries
operate
within
San
Diego
and
Orange
Counties,
leaving
Los
Angeles
as
a
relatively
untapped
craft
beer
home
market.
A
second,
less
prominent
geographical
region
that
Hit
Brewery
looks
to
initially
target
is
the
Las
Vegas
area.
This
area,
known
for
its
prominent
tourism
and
gambling
industries,
is
one
that
has
yet
to
really
develop
much
of
a
craft
beer
background.
There
are
currently
a
small
number
of
craft
breweries
within
Las
Vegas,
and
Hit
Brewery
looks
to
capitalize
on
this
relatively
untapped
craft
beer
market.
Furthermore,
some
of
the
music
of
current
Hit
Brewery
artists
is
strongly
inspired
by
Las
Vegas,
further
promoting
our
brand
and
product
within
the
growing
region.
Industry
Trends
Product
Differentiation
Although
the
consumer
base
of
American
craft
beers
displays
a
year-‐by-‐year
positive
growth
trend,
the
size
of
this
market
is
still
relatively
small
when
compared
to
that
of
macro
brew
consumers.
Because
the
number
of
microbreweries
within
the
United
States
is
continuing
to
grow
each
year
as
well,
competition
is
growing
larger
each
year
as
well,
leading
to
an
overwhelming
trend
of
product
differentiation.
Craft
breweries
spend
a
lot
of
time
and
money
developing
products
that
are
differentiated
from
their
competitors.
Whether
it
is
in
the
taste,
ingredients,
packaging,
marketing,
etc.,
every
brewery
attempts
to
ensure
that
their
product
stands
out
amongst
the
crowded
field.
Hit
Brewery
aims
to
achieve
this
differentiation
within
the
strong
connection
between
the
beer
and
music.
There
are
currently
no
other
breweries
that
operate
with
such
a
strong
musical
connection
and
Hit
Brewery
looks
to
capitalize
on
being
one
of
the
first
to
explore
this
idea.
With
its
strong
musical
roots,
Hit
Brewery
has
been
developed
with
product
differentiation
at
the
forefront
of
its
identity.
5
Local
/
Natural
Ingredients
The
appeal
of
craft
beer
to
many
of
its
consumers
is
the
ingredients
that
make
up
the
vast
majority
of
all
craft
beers.
Although
macro
brews
like
Bud
Light,
Budweiser,
and
Coors
Light
currently
dominate
the
American
market,
many
consumers
are
beginning
to
be
alerted
to
the
fact
that
these
beers
are
produced
with
genetically
modified
ingredients,
which
are
proven
to
have
cancer-‐causing
properties.1
As
more
and
more
Americans
begin
to
be
faced
with
this
startling
fact,
many
tend
to
resort
to
craft
beers,
as
the
vast
majority
tend
to
be
produced
with
all
natural
and
organic
ingredients
free
of
GMOs.
Hit
Brewery
intends
to
operate
within
this
manner.
The
company’s
founders
are
very
strongly
against
the
presence
of
GMOs
in
beer
and
fabricate
their
beer
according
to
these
values.
By
using
all
natural,
organic,
and
local
ingredients,
Hit
Brewery
looks
to
connect
with
the
consumer
groups
that
strongly
value
an
all-‐
natural
form
of
brewing.
Craft
Beer
&
Music
In
recent
years,
a
strong
connection
between
craft
beer
and
music
has
begun
to
arise
within
the
American
craft
beer
industry.
This
trend
is
evidenced
in
two
forms:
music
inspired
beers
and
craft
beer
music
festivals.
Both
of
these
products
are
a
testament
to
the
growing
link
between
these
two
differing
industries
that
share
cultural
links
within
the
United
States.
The
idea
of
music
inspired
beers
is
one
that
has
begun
to
be
explored
by
craft
breweries
across
the
United
States.
Over
the
past
5
years,
a
small
number
of
breweries
have
released
products
with
musical
themes.
These
musical
inspirations
include
Miles
Davis,
Pearl
Jam,
Thelonious
Monk,
and
others.
The
early
adopters
of
this
craft
beer
trend
have
proven
to
be
successful,
as
musical
inspired
beers
have
been
shown
to
have
a
strong
consumer
market.
While
the
idea
has
already
begun
to
be
explored,
this
idea
is
one
in
which
microbreweries
have
only
scratched
the
1
http://foodbabe.com/2013/07/17/the-‐shocking-‐ingredients-‐in-‐beer/
6
surface,
with
much
more
room
to
grow.
Hit
Brewery
looks
to
capitalize
on
this
early
implementation
and
success,
while
taking
the
idea
to
a
new
level.
The
industry
trend
of
music
combined
with
craft
beer
is
also
evidenced
by
the
numerous
craft
beer
music
festivals
that
continue
to
spring
up
very
quickly
around
the
country.
Examples
of
such
festivals
are
the
Annapolis
Craft
Beer
&
Music
Festival,
Sandton
Craft
Beer
Fair
&
Music
Festival,
and
Traverse
City’s
Microbrew
&
Music
Festival,
among
many
others.
The
presence
and
growing
success
of
these
festivals
is
a
clear
sign
that
craft
beer
consumers
enjoy
combining
their
favorite
beers
with
music.
Having
recognized
this
very
early
industry
trend,
Hit
Brewery
looks
to
jump
to
the
forefront
of
this
movement
within
the
craft
beer
industry
by
providing
a
product
that
is
unparalleled
in
its
connection
with
music.
Industry
Life
Cycle
As
previously
stated,
Hit
Brewery
operates
within
two
distinct
industries,
with
two
very
different
life
cycles.
Although
we
have
a
dual
focus,
we
have
determined,
through
market
research
and
internal
analysis,
that
beer
is
the
main
business
operation
for
Hit
Brewery.
Because
of
this,
our
industry
must
be
defined
as
the
craft
beer
industry
and
not
the
underlying
recorded
music
industry.
The
craft
beer
industry
is
an
industry
that
is
currently
within
the
growth
phase
of
its
life
cycle.
The
craft
beer
industry
has
been
a
viable
industry
in
the
United
States
since
the
1970’s,
when
an
extreme
consolidation
of
the
commercial
beer
industry
led
to
an
emergence
of
home
brewers
and
other
beer
enthusiasts
starting
their
own
brewing
companies.2
Since
this
period,
the
craft
beer
industry
is
one
that
moved
slowly
until
a
recent
growth
boom.
The
growth
phase
of
the
craft
beer
industry
began
in
the
late
1990’s
and
continues
to
this
day.
Many
have
expressed
confidence
in
the
sustained
growth
of
the
craft
beer
industry,
as
the
number
of
craft
beer
consumers
has
only
just
begun
to
grow
at
a
steady
rate
in
the
past
5
years.
2
http://www.brewersassociation.org/pages/about-‐us/history-‐of-‐craft-‐brewing
7
When
compared
to
the
recorded
music
industry,
which
is
currently
in
its
decline
phase,
we
have
determined
beer
to
be
the
main
success
driver
for
Hit
Brewery.
The
analysis
of
the
two
greatly
contrasting
industries
that
we
currently
operate
within
has
been
instrumental
in
the
development
of
our
business.
The
life
cycles
of
these
two
industries
have
led
us
to
definitively
determine
our
company’s
focus
on
beer,
a
very
important
early
distinction
for
us
going
forward.
Competition
Although
there
are
currently
somewhere
around
2,500
operating
craft
breweries
in
the
United
States3,
Hit
Brewery
operates
within
a
sector
of
this
industry
and
that
currently
unique
and
hardly
explored.
The
combination
of
music
and
beer
that
is
strongly
encompassed
by
Hit
Brewery
is
one
that
has
already
proven
to
be
very
complimentary,
with
strong,
early
traction
amongst
producers
and
consumers.
In
order
to
most
accurately
analyze
Hit
Brewery’s
competition,
it
is
extremely
important
to
look
closely
at
the
small
collection
of
companies
that
have
already
begun
to
explore
this
link.
-‐Dogfish
Head
Brewery
Delaware-‐based
Dogfish
Head
Brewery
is
one
of
the
leading
figures
in
the
American
craft
beer
industry.
They
are
a
company
worth
benchmarking
because
of
the
company’s
status
as
the
brewery
that
most
likely
has
the
strongest
current
ties
to
music.
The
company
has
previously
released
two
music
inspired
beers,
the
Miles
Davis
inspired
Bitches
Brew
in
2010
and
the
Pearl
Jam
inspired
Faithfull
Ale
in
2011.
Both
of
these
beers
were
created
in
conjunction
with
the
artists
and/or
record
labels,
and
were
both
met
with
strong
reception
amongst
music
fans
and
craft
beer
aficionados
alike.
-‐North
Coast
Brewing
Co.
3
http://www.brewersassociation.org/pages/business-‐tools/craft-‐brewing-‐statistics/number-‐of-‐breweries
8
Northern
California
based
North
Coast
Brewing
is
another
musically
influenced
microbrewery.
The
company
has
become
very
well
known
for
its
Brother
Thelonious
Ale,
which
is
inspired
by
piano
genius
Thelonious
Monk.
Further
establishing
North
Coast
as
a
noteworthy
competitor
for
Hit
Brewery
is
the
fact
that
they
currently
distribute
a
10-‐track
Thelonious
Monk
tribute
CD
in
conjunction
with
this
beer.
This
CD
is
performed
by
the
Brother
Thelonious
Quintet,
a
quintet
formed
specifically
by
the
brewery,
that
is
made
up
of
Thelonious
Monk
Institute
of
Jazz
alumni.
The
CD
was
released
in
2012
and
is
sold
on
their
website,
with
all
proceeds
benefiting
the
Thelonious
Monk
Institute
of
Jazz.
-‐Lagunitas
Brewing
Company
Lagunitas
Brewing,
another
Northern
California
company,
is
the
only
other
competing
company
to
have
previously
offered
a
series
of
original
brews
inspired
by
one
musical
figure.
Their
Zappa
Series
beers
were
comprised
of
5
seasonal
beers
inspired
by
the
music
of
Frank
Zappa.
Although
a
popular
collection
of
beers,
especially
amongst
Frank
Zappa’s
passionate
fan
base,
the
beer
was
discontinued
at
the
request
of
Frank
Zappa’s
widow
in
2009.
Although
the
company
had
properly
secured
a
partnership
with
the
Zappa
Family
to
distribute
the
beer,
the
family
decided
to
abruptly
end
the
relationship.
Lagunitas
has
not
yet
revisited
the
idea
of
music
inspired
beers.
-‐MmmHops
MmmHops
is
the
latest
example
of
craft
beer
mixed
with
music.
Just
this
past
year,
the
beer
was
produced
and
released
by
the
1990’s
“one-‐hit-‐wonder”
Hanson.
The
beer
is
branded
based
upon
the
band’s
hit
“MmmBop”
and
features
the
three
Hanson
brothers
as
the
faces
of
the
product.
This
beer
has
been
released
to
very
little
critical
acclaim
and
has
been
viewed
as
mainly
a
gimmick
by
a
band
that
is
looking
to
capitalize
on
their
fading
celebrity.
However,
this
beer
is
worth
noting,
as
it
is
the
only
other
beer
to
be
currently
distributed
along
with
a
free
recording.
Every
beer
sold
allows
for
the
download
of
a
new
Hanson
song,
which
most
closely
emulates
the
model
implemented
by
Hit
Brewery.
9
In
analyzing
the
competition
field
for
Hit
Brewery,
3
big
observations
immediately
jump
out
that
make
our
establishment
and
potential
very
encouraging.
1.)
These
products
mainly
exist
in
a
novelty/commemorative
fashion
for
legacy
music
2.)
These
products
are
mere
one-‐time
collaborations
between
artists,
labels
and
breweries
3.)
The
idea
of
selling
recorded
music
in
conjunction
with
beer
is
one
that
has
hardly
been
explored
While
not
entirely
brand
new,
the
idea
of
mixing
craft
beer
with
music
is
an
idea
that
competing
breweries
have
only
scratched
the
surface
of.
Further
encouraging
is
the
strong
success
that
the
combination
of
craft
beer
and
music
has
had
within
the
live
music
field.
Over
the
past
few
years,
a
large
number
of
craft
beer
music
festivals
have
arisen
across
the
United
States,
with
great
success.
Finally,
Hit
Brewery
is
further
separated
from
competitors
by
the
background
of
the
company
founders
and
team.
Founded
by
musicians
and
music
business
students,
the
company
will
be
one
of
the
first
music
inspired
craft
breweries
operated
by
individuals
with
a
strong
understand
of
and
experience
within
the
music
industry.
This
factor
will
be
very
important
in
differentiating
Hit
Brewery
from
other
breweries
that
are
simply
making
beer
to
compliment
pre-‐existing
music.
When
further
analyzing
the
competitive
field
for
Hit
Brewery,
prominent
microbreweries
and
brewpubs
within
the
Southern
California
&
Las
Vegas
regions
must
be
looked
at
as
well.
This
industry
sector
includes:
-‐BJ’s
Brewpub
-‐A
successful
chain
of
commercial
brewpubs
that
serve
lunch
and
dinner
along
with
original
brews.
The
restaurant
is
very
popular
in
Southern
California.
-‐Stone
Brewery
-‐The
most
popular
and
successful
local
craft
brewery
in
Southern
California.
The
company
is
operated
in
North
County
San
Diego
and
also
has
a
number
of
popular
brewpubs
in
the
San
Diego
area.
10
-‐New
Belgium
Ale
-‐An
extremely
popular
craft
brewery
from
Colorado,
that
specializes
in
seasonal
beers.
Their
beer
is
distributed
throughout
the
United
States
and
is
very
popular
in
Southern
California.
-‐Sin
City
Brewing
Co.
-‐Las
Vegas’
most
prominent
local
craft
brewery.
Their
beers
have
become
virtually
the
only
craft
beer
brand
that
is
sold
in
Las
Vegas’
casinos.
The
brewery
is
slowly
growing
in
market
share
and
popularity
in
Las
Vegas.
Outside
of
Las
Vegas,
the
brewery
is
not
popular.
-‐Yard
House
-‐A
commercial
American
restaurant
chain,
owned
by
Darden’s
Restaurant
Group,
that
is
known
for
their
extremely
large
collection
of
draft
beers
that
includes
commercial,
craft,
and
imported
beers.
The
restaurant
has
a
slight
music
theme,
as
the
restaurant
prominently
plays
classic
rock
music
during
operating
hours.
These
companies,
while
operating
with
a
main
emphasis
of
craft
beer,
are
not
considered
to
be
direct
competitors
to
Hit
Brewery,
as
these
companies
lack
a
strong
connection
with
music.
They
are
all
worth
noting,
however,
due
to
their
current
dominance
within
the
craft
beer
industry
in
Southern
California
and
Las
Vegas.
All
products
from
Hit
Brewery
will
be
indirectly
competing
with
each
of
these
companies
as
we
look
to
enter
these
markets.
Market
Analysis
Hit
Brewery
has
identified
a
collection
of
3
types
of
individuals
as
our
target
market.
These
market
groups
are
as
follows:
11
1.
Dual
craft
beer
&
hip
hop
aficionados.
This
market
segment
is
our
ideal
customer.
Although
not
exclusively
a
hip
hop
company,
hip
hop
music
makes
up
the
bulk
of
our
current
releases
and
identity.
This
target
market
is
very
well
versed
in
hip
hop
culture,
while
also
strongly
appreciating
and
frequently
consuming
craft
beer.
While
initially
skeptical
of
the
existence
of
this
market,
early
research
and
market
outreach
has
revealed
a
strong
early
presence
of
such
consumers.
Both
hip
hop
music
and
craft
beer
are
interests
that
have
very
faithful
and
passionate
fans.
Through
our
research,
we
have
already
found
that
fans
of
both
hip
hop
and
craft
beer
are
extremely
passionate
about
both,
with
these
elements
often
comprising
each
individual’s
2
most
prominent
passions.
This
market
segment
can
be
demonstrated
by
some
of
our
early
interactions
on
Twitter.
2.
Craft
beer
aficionados,
with
underlying
appreciation
for
hip
hop
music.
The
craft
beer
consumer
market
in
America
is
a
fast
growing
and
extremely
passionate
group.
The
majority
of
craft
beer
consumers
hold
craft
beer
as
one
of
their
strongest
passions
and
consider
the
product
to
be
a
strong
identifying
factor
in
their
lives
and
personalities.
This
group
enjoys
connecting
with
other
craft
beer
fans
via
social
media,
using
Instagram,
Twitter,
and
the
craft
beer
centric
social
media
platform
Untappd.
This
group
picks
their
favorite
brands
and
products
depending
on
quality
and
strongly
understand
the
makeup
and
identifying
factors
of
good
beer.
This
group
very
much
enjoys
discovering
new
products.
Our
ideal
member
of
this
12
group
displays
all
of
these
traits
common
to
craft
beer
fans,
while
also
appreciating
hip
hop
music
to
some
extent.
This
group
will
view
the
musical
side
of
Hit
Brewery
to
be
appealing,
as
they
will
gain
added
value
due
to
the
fact
that
they
enjoy
our
music.
3.
Craft
beer
aficionados,
with
little
to
no
interest
in
hip
hop
music.
Hit
Brewery
also
aims
to
target
its
products
to
members
of
the
craft
beer
community
that
have
little
to
no
interest
in
hip
hop
music.
This
group
displays
all
of
the
typical
traits
of
craft
beer
fans;
strong
passion,
enjoyment
of
online
connections,
strong
beer
knowledge,
and
extreme
willingness
to
discover
new
products.
However,
due
to
their
lack
of
interest
in
hip
hop,
Hit
Brewery
will
be
careful
not
to
alienate
this
group
by
making
its
operations
not
solely
focused
on
hip
hop.
As
we
grow,
we
plan
to
diversify
our
genre
offerings
to
deliver
and
associate
with
a
wide
range
of
music
that
will
appeal
to
music
fans
of
all
kinds.
4.
Hip
hop
/
music
aficionados,
with
underlying
appreciation
for
craft
beer.
This
final
target
market
segment
consists
of
passionate
hip
hop
fans,
who
view
the
musical
content
as
their
main
draw
to
Hit
Brewery.
This
group
does
not
necessarily
view
craft
beer
as
a
desirable
product
to
consume,
however,
will
be
interested
in
Hit
Brewery
due
to
our
musical
offerings.
The
music
of
Hit
Brewery
will
act
as
the
main
draw
to
these
consumers,
who
will
most
likely
view
the
beer
as
added
value.
These
fans
will
consist
of
beer
drinkers
that
are
not
passionate
about
the
style
and
variety
of
beer
that
they
consume.
Although
we
initially
aim
to
target
the
growing
and
passionate
craft
beer
consumer
base,
we
view
this
final
group
as
very
important,
as
they
will
consist
of
our
strongest
base
of
early
adopters,
based
solely
upon
the
music.
Market
Research
To
properly
analyze
the
thoughts,
preferences,
and
habits
of
typical
Hit
Brewery
consumers,
a
survey
was
conducted
within
the
markets
of
Southern
California
and
Southern
Nevada.
The
results
of
the
survey
are
very
encouraging
and
represent
a
strong
early
appeal
of
our
products
and
brand
to
our
consumers.
13
Survey
participants
were
asked:
“Do
you
prefer
craft
beer
to
commercial
beer?”
The
results
from
this
initial
question
are
very
exciting.
Upon
establishment,
Hit
Brewery
had
been
operating
with
the
assumption
that
craft
beer
has
indeed
experienced
a
growing
demand
over
the
past
few
years,
but
the
fact
remains
that
commercial
beer
still
greatly
outsells
craft
beer.
Upon
completing
our
survey
and
proving
definitively
that
nearly
78%
of
our
respondents
prefer
craft
beer,
we
are
very
encouraged
by
offering
a
style
of
product
that
consumers
indeed
are
beginning
to
prefer
in
large
percentages.
14
Survey
participants
were
asked:
“Would
a
brewpub
that
prominently
features
original
live
&
recorded
music
appeal
to
you?”
Perhaps
the
most
encouraging
result
from
the
online
survey
is
the
overwhelmingly
positive
response
to
this
particular
question.
The
survey
was
designed
to
test
the
consumer
appeal
of
a
number
of
different
ideas
for
the
operations
of
Hit
Brewery
in
order
to
see
what
consumers
found
most
attractive.
We
were
thrilled
to
see
that
the
local
brewpub
format,
which
has
been
our
main
and
ideal
business
idea,
was
extremely
popular
amongst
consumers.
95%
of
our
respondents
stated
definitively
that
this
concept
of
a
live
and
recorded
music
oriented
brewpub
would
appeal
to
them.
This
positive
response
has
allowed
us
to
move
forward
with
developing
the
company
with
this
specific
premise,
with
strong
optimism
to
its
potential
success
within
our
target
markets.
15
Survey
participants
were
asked:
“What
is
your
favorite
genre
of
music?”
The
question
of
favorite
genre
is
one
that
is
extremely
important
to
us,
as
we
want
to
make
sure
that
we
do
not
alienate
music
fans
by
only
focusing
on
one
specific
genre.
This
is
one
of
the
biggest
early
concerns
for
Hit
Brewery,
as
our
music
currently
falls
predominately
within
the
genre
of
hip
hop,
as
it
is
the
main
style
of
our
founder
and
associated
artists.
The
results
of
this
question,
however,
prove
that
we
must
strive
to
develop
a
very
eclectic
mix
of
genres
associated
with
Hit
Brewery.
If
we
continue
to
be
an
organization
that
is
solely
associated
with
hip
hop,
then
we
will
surely
alienate
the
30%
that
prefer
rock
and
indie.
Achieving
this
balanced
mix
of
associated
music
will
be
one
of
the
key
goals
for
Hit
Brewery
moving
forward.
16
Survey
participants
were
asked:
“if
you
purchased
a
beer
that
included
a
download
code
for
free
musical
content,
would
you
use
it?”
The
results
of
this
question
were
very
interesting,
as
it
is
one
of
a
series
of
questions
that
will
help
us
determine
how
to
properly
distribute
the
music
that
is
released
with
our
beer.
This
is
another
one
of
the
major
operational
factors
that
is
constantly
evolving
and
still
up
for
grabs
as
we
continue
to
develop
and
grow.
Positively,
the
vast
majority
of
respondents
expressed
some
interest
in
this
idea.
The
45%
definitive
approval
rate
is
high,
but
not
overwhelmingly
so.
However,
the
early
support
for
the
idea
of
digital
distribution
through
download
codes
on
beer
bottles
is
positive
as
we
look
to
revolutionize
the
way
that
music
is
distributed
in
a
way
that
appeals
to
consumers.
17
Survey
participants
were
asked:
“If
money
spent
at
a
brewpub
resulted
in
music
related
rewards,
would
you
be
encouraged
to
eat/drink
there?”
This
question
additionally
tests
the
consumer
appeal
for
our
early
distribution
ideas.
An
in-‐store
rewards
system
is
another
idea
that
is
currently
being
explored
at
Hit
Brewery,
and
we
are
encouraged
to
see
that
this
idea
is
also
appealing
to
consumers,
and
even
slightly
more
popular
than
download
codes.
The
presence
of
the
past
two
questions
and
the
positive
responses
to
both
are
very
encouraging
that
we
are
on
the
right
track
to
developing
a
music
distribution
system
that
is
appealing
to
consumers.
The
best
piece
of
information
that
we
can
gather
from
these
responses
is
that
consumers
would
indeed
enjoy
receiving
recorded
music
and
other
music
related
content
through
the
consumption
of
beer,
validating
our
entire
premise
as
a
company.
18
Survey
participants
were
asked:
“Would
a
connection
with
explicit
(Parental
Advisory)
music
turn
you
off
of
your
favorite
beer?”
The
opinion
of
our
consumers
as
related
to
explicit
music
is
another
very
important
consideration
for
Hit
Brewery
going
forward.
While
we
will
strive
to
operate
while
offering
a
vast,
eclectic
collection
of
associated
music,
hip
hop
will
always
play
an
important
role
in
the
operations
and
identity
of
Hit
Brewery.
By
nature,
hip
hop
music
can
be
very
explicit
and
offensive
to
some,
so
we
wanted
to
see
whether
this
would
deter
potential
customers.
We
were
very
happy
to
see
that
the
vast
majority
of
respondents
(87%)
do
not
have
a
problem
with
an
association
with
explicit
music.
While
we
will
naturally
alienate
some,
we
are
encouraged
to
be
able
to
proceed
with
offering
certain
artists
and
recordings
that
feature
explicit
material
with
confidence
that
we
will
not
alienate
very
many
of
our
potential
customers.
19
Survey
participants
were
asked:
“Would
you
still
drink
one
of
your
favorite
beers
if
it
were
associated
with
music
you
did
not
like?”
This
particular
question
aimed
to
gauge
which
aspect
of
our
operations
was
more
important
to
consumers;
our
beer
or
our
music.
Throughout
the
early
stages
of
our
company
development,
we
have
been
operating
with
the
assumption
that
beer
will
be
our
defining
and
most
prominent
factor,
however,
we
needed
definitive
confirmation
in
order
to
proceed.
Our
findings
were
overwhelmingly
positive
as
92%
of
respondents
stated
that
they
would
still
drink
our
beer
even
if
they
did
not
like
the
music
that
was
associated
with
it.
This
information
is
very
important
for
Hit
Brewery
going
forward,
as
we
will
be
able
to
continue
to
make
beer
the
main
focus
of
our
company,
with
the
music
as
an
added
bonus.
We
are
encouraged
by
the
fact
that
as
long
as
our
beer
is
appealing
in
the
eyes
of
our
consumers,
we
will
continue
to
have
their
business
regardless
of
their
opinions
of
our
music.
The
response
to
this
question
proves
to
us
that
it
is
paramount
to
make
our
beer
as
good
as
it
can
be
in
order
to
retain
this
beer
focused
consumption.
20
Survey
participants
were
asked:
“Would
you
drink
a
beer
that
is
not
among
your
favorites,
but
is
associated
with
music
you
really
enjoy?”
Contrary
to
the
previous
question,
we
also
gauged
whether
consumers
would
drink
our
beer
based
upon
a
strong
appreciation
of
our
music.
This
question
also
aimed
to
determine
what
our
main
focus
should
be.
The
responses
to
this
question
were
both
encouraging
to
our
music
operations,
while
also
further
strengthening
the
results
of
the
previous
question.
Although
the
responses
were
mostly
positive,
they
were
nowhere
near
as
positive
as
the
overwhelming
results
of
the
last
question.
Because
of
the
higher
percentage
of
consumers
who
would
not
drink
our
beer
regardless
of
their
opinion
of
our
music,
it
is
further
confirmed
that
our
beer
must
be
high
quality
and
meet
the
standards
of
our
consumers.
With
that
said,
it
is
still
very
encouraging
to
see
that
65%
of
respondents
would
continue
to
drink
our
beer
if
it
was
not
necessarily
their
favorite,
proving
that
the
quality
of
our
music
does
play
a
strong
role
in
our
success.
21
Survey
participants
were
asked:
“Is
the
presence
of
organic/natural
ingredients
important
to
you
when
shopping
for
food/beverage?”
We
wanted
to
determine
the
importance
of
natural
and
organic
ingredients
amongst
our
consumers
in
order
to
determine
our
ingredient
philosophy
going
forward.
Initially,
we
desired
to
establish
ourselves
as
strong
proponents
of
organic,
natural
and
local
ingredients,
but
did
not
fully
know
how
important
this
is
to
consumers.
Our
survey
found
that
we
are
on
the
right
track
with
our
ingredient
philosophy,
as
55%
of
respondents
confirmed
our
initial
belief
of
this
importance.
While
a
27%
negative
response
rate
is
fairly
high,
we
are
encouraged
by
the
fact
that
the
presence
of
organic
ingredients
will
not
deter
this
group
if
our
beer
tastes
good,
nor
will
the
“no
opinion”
group
(17%).
We
must
continue
using
organic
and
natural
ingredients,
however,
as
the
majority
group
(55%)
would
most
likely
pass
on
our
beer
if
we
did
not
include
these
ingredients,
which
are
very
important
to
them.
22
Participants
were
asked:
“How
likely
are
you
to
try
a
new
beer
brand?”
Finally,
the
question
of
whether
consumers
would
even
consider
trying
a
new
beer
brand
is
of
utmost
importance
to
Hit
Brewery.
If
the
majority
of
beer
drinkers
are
already
set
on
the
brands
they
currently
enjoy,
then
our
entire
operations
would
be
a
failure.
However,
we
were
very
excited
to
find
that
100%
of
our
respondents
would
indeed
consider
trying
a
new
brand.
Of
this
100%,
the
vast
majority
(72%)
would
try
a
new
brand
without
any
conditions
related
to
quality
or
appeal.
This
is
perhaps
the
most
encouraging
response
from
our
entire
survey,
as
we
can
now
move
forward
with
the
assurance
that
our
market
is
out
there,
and
meet
nearly
all
of
our
pre-‐conceived
notions
about
what
our
market
desires
in
a
product
such
as
ours.
23
Internal
Analysis
Company
Founder
Profile
Trevy
“Pappagiorgio”
Kiy
–
Founder
&
CEO:
Trevy
Kiy
is
a
23-‐year-‐old
musician,
songwriter,
and
entrepreneur,
and
is
currently
the
sole
proprietor
of
Hit
Brewery.
He
is
originally
from
San
Diego,
CA,
which
has
one
of
the
biggest
and
most
rapidly
growing
craft
beer
scenes
in
the
United
States.4
Trevy’s
personal
background
in
San
Diego
is
also
advantageous,
as
the
city
has
recently
been
named
by
Forbes
as
2014’s
#1
city
to
launch
a
start-‐up
company
in
America.5
Trevy
has
been
first
and
foremost
a
musician
for
the
vast
majority
of
his
life,
beginning
with
jazz
piano
study
at
age
12.
By
13,
he
was
beginning
to
explore
the
world
of
music
production
and
songwriting,
as
well
as
beginning
to
record
as
a
solo
hip
hop
artist.
This
early
study
of
and
work
within
music
in
middle
and
high
schools
eventually
led
him
to
Berklee
College
of
Music
in
Boston,
MA
in
2010,
where
he
was
a
piano
principle
and
Songwriting
major.
In
2012,
Trevy
finished
the
4-‐year
B.A.
program
in
an
accelerated
2
½
years,
with
Magna
Cum
Laude
honors.
Following
graduation,
he
continued
his
music
studies
at
Berklee’s
sister
campus
in
Valencia,
Spain,
where
he
received
an
M.A.
in
Global
Entertainment.
Outside
of
music,
Trevy
has
been
actively
studying
and
working
in
brewing
since
2013.
4
http://www.sandiegohistory.org/journal/v59-‐1/v59-‐1schiff-‐liwag.pdf
5
http://www.forbes.com/sites/tompost/2014/03/13/the-‐best-‐places-‐to-‐launch-‐a-‐startup-‐in-‐2014/
24
Throughout
his
academic
career,
Trevy
has
maintained
strong
activity
as
an
entrepreneur
within
the
music
and
entertainment
industries.
Since
2004,
he
has
managed
his
own
career
as
a
musician
that
has
seen
him
release
6
albums
and
EP’s
as
a
solo
artist,
2
different
hip
hop/R&B
duos,
and
a
Ska/Reggae
band.
Throughout
this
time,
Trevy
has
handled
all
of
the
business
operations
of
an
independent
artist
including
copyright
registration,
distribution,
and
marketing,
among
others.
On
top
of
his
career
as
an
independent
musician,
he
founded
Moose
Entertainment,
a
live
entertainment
company,
in
2006
that
specialized
in
live
DJ
production
and
performance.
This
company
operated
within
the
San
Diego
area
from
2006-‐2010,
when
it
was
acquired
by
another
local
entertainment
company.
Strengths:
•
Strong
musical
identity
&
background
Hit
Brewery
is
a
company
that
is
founded
and
run
by
musicians.
The
company’s
founder
and
early
team
all
come
from
strong
music
backgrounds
that
include
years
of
private
music
study,
vast
experience
within
music
production
and
performance,
and
collegiate
careers
at
Berklee
College
of
Music.
Throughout
all
of
this
experience,
the
musical
identity
of
Hit
Brewery
has
been
formed,
which
will
help
establish
the
company
as
a
prominent
figure
within
the
American
independent
music
industry
for
years
to
come.
This
strength
and
identity
is
one
that
separates
Hit
Brewery
from
other
music
influenced
craft
beer
competitors,
as
none
of
these
competitors
are
run
by
musicians.
Music
is
one
of
the
cornerstones
of
Hit
Brewery
and
music
is
what
the
early
members
of
Hit
Brewery
know
best.
•
Large
pre-‐existing
musical
catalogue
As
Hit
Brewery
begins
to
launch
its
core
product
of
beer
with
attached
musical
content,
one
main
hurdle
could
be
the
need
to
keep
up
with
the
development
of
the
music,
which
is
a
creative
process
that
requires
much
time
and
energy.
Another
strength
of
Hit
Brewery
is
the
current
pre-‐existing
musical
content
25
already
held
by
its
founder
and
early
team.
In
the
initial
stages
of
the
company’s
launch,
we
will
rely
heavily
on
this
already
completed
content
to
begin
to
properly
introduce
our
unique
product
to
consumers,
while
providing
a
good
amount
of
variety.
•
Experience
and
knowledge
of
craft
&
international
beer
On
top
of
a
strong
music
background,
the
current
team
associated
with
Hit
Brewery
displays
strong
passion
for
and
knowledge
of
beer.
Our
team
knows
a
lot
about
the
various
styles
of
beer
and
the
various
production
processes
associated
with
each.
Our
team
is
very
familiar
with
both
macro
and
microbreweries
within
the
United
States
and
the
various
products
and
business
strategies
of
these
competitors.
Finally,
our
team
members
are
also
very
familiar
with
international
beer
and
beer
styles
and
bring
extensive
knowledge
from
personal
beer
related
experiences
in
Spain,
Italy,
United
Kingdom,
Belgium,
Mexico,
and
numerous
other
prominent
brewing
nations.
•
Hit
Brewery
brand
One
of
the
first
elements
of
Hit
Brewery
to
come
to
fruition
has
been
the
development
of
a
unique
and
appealing
brand
that
best
represents
our
product.
Through
our
early
market
research
and
promotional
product
launches,
we
have
found
the
consumer
response
to
our
brand
to
be
extremely
positive,
further
reinforcing
the
strength
of
our
brand.
Our
brand
name
and
artwork
perfectly
represent
our
mix
of
craft
beer
and
music
in
a
very
simple
way.
Weaknesses:
•
Small
product
development
capabilities
26
Currently,
Hit
Brewery
operates
on
a
very
small
scale.
We
currently
produce
5-‐gallons
of
beer
each
month,
which
are
only
packaged
in
12-‐ounce
bottles.
As
we
look
to
make
the
production
and
distribution
of
our
beer
the
core
operation
of
our
business,
our
current
small
product
quantities
will
be
a
weakness
until
we
grow.
In
order
to
truly
realize
our
potential,
we
need
to
invest
in
brewing
equipment
with
larger
capacities
and
begin
to
produce
a
higher
amount
of
products.
•
Requirement
to
move
brewery
operations
from
Spain
to
California
As
Hit
Brewery
looks
to
the
future,
the
fact
that
we
have
begun
to
implement
early
operations
in
Valencia,
Spain
is
one
current
weakness.
While
the
company
was
indeed
founded
in
Valencia,
all
Hit
Brewery
operations
will
be
moved
to
Southern
California
in
August
2014.
The
transition
period
that
is
required
of
such
a
move
will
bed
detrimental
to
Hit
Brewery
in
the
months
after,
as
our
operating
location,
equipment,
and
routine
will
be
shaken
up.
•
Required
further
education
in
brewing
science
While
a
strong
music
education
and
background
is
a
current
strength
of
Hit
Brewery,
the
company
is
currently
weak
on
the
brewing
side.
In
order
to
truly
develop
Hit
Brewery
into
a
viable,
commercial
microbrewery,
the
company’s
founder
must
continue
to
learn
the
science
of
brewing.
This
is
a
top
priority
for
Hit
Brewery
going
forward.
External
Analysis
Opportunities:
•
Growing
popularity
of
music
&
craft
beer
combination
As
previously
stated,
the
combination
of
music
and
craft
beer
is
one
that
is
currently
being
explored
by
a
small
number
of
other
brewing
companies.
Within
Hit
Brewery’s
target
market
of
Southern
California,
companies
are
beginning
to
arise
experimenting
with
this
fusion.
This
concept
is
one
that
is
beginning
to
gain
significant
traction
amongst
the
local
community.
Despite
a
music
connection,
these
27
companies
merely
feature
common
themes
such
as
vinyl
records
decorating
establishment
walls
and
classic
rock
soundtracks.
The
success
of
these
establishments
represents
an
opportunity
for
Hit
Brewery,
as
we
look
to
capitalize
on
this
rising
popularity
by
establishing
ourselves
as
the
top
innovator
in
music
themed
brewing.
•
Local
ties
to
America’s
“Craft
Beer
Capital”
Over
the
past
few
years,
San
Diego,
CA
has
quickly
established
itself
as
one
of
America’s
best
cities
for
craft
beer.
While
many
people
debate
about
the
true
top
American
craft
beer
destination,
many
publications,
such
as
TIME
Magazine,
have
referred
to
San
Diego
as
“America’s
Craft
Beer
Capital.”6
Fortunately,
Hit
Brewery’s
founder,
Trevy
Kiy,
is
originally
from
San
Diego
and
looks
to
capitalize
on
the
strong
popularity
of
craft
beer
in
his
hometown
to
help
establish
Hit
Brewery
as
a
major
brand
within
the
craft
beer
industry.
The
opportunity
to
have
a
hometown
advantage
in
the
introduction
of
Hit
Brewery
is
vital
to
the
company’s
future
success.
•
Growth
opportunities
in
Los
Angeles
and
Las
Vegas
Although
San
Diego’s
thriving
craft
beer
scene
will
be
one
of
Hit
Brewery’s
first
target
markets,
the
markets
of
Los
Angeles
and
Las
Vegas
represent
strong
growth
opportunities,
as
each
of
these
cities
are
much
less
populated
with
craft
beer
than
San
Diego.
Both
cities
represent
their
own
unique
opportunities.
Los
Angeles
represents
the
best
example
of
a
very
strong
craft
beer
market,
with
plenty
of
room
for
future
growth,
with
limited
competitors.
Los
Angeles
is
America’s
2nd
biggest
metropolitan
area
and
many
of
these
residents
are
fans
of
craft
beer.
Los
Angeles
features
many
trendy
bars
that
offer
some
of
America’s
best
craft
beer
brands.7
Despite
such
a
strong
craft
beer
presence,
Los
Angeles
is
surprisingly
light
on
local
microbreweries.
Los
Angeles
has
simply
become
a
place
6
http://style.time.com/2012/12/05/in-‐san-‐diego-‐a-‐craft-‐beer-‐scene-‐emerges/
7
http://www.gq.com/food-‐travel/restaurants-‐and-‐bars/201210/best-‐beer-‐cities-‐october-‐2012
28
where
many
of
San
Diego’s
top
breweries
enjoy
a
strong
market
share.
Hit
Brewery
looks
to
capitalize
on
this
lack
of
local
L.A.
microbreweries
by
focusing
on
establishing
our
1st
full-‐time
brewery
in
Los
Angeles,
to
differentiate
ourselves
from
the
crowded
San
Diego
market.
Hit
Brewery’s
final
initial
target
market,
Las
Vegas,
NV,
represents
an
even
greater
opportunity.
The
city’s
craft
beer
market
is
the
smallest
of
the
three,
but
is
also
currently
growing.
A
number
of
small
microbreweries
have
been
established
within
the
city,
but
none
have
really
dominated
the
market.
With
Hit
Brewery’s
strong
personal
and
musical
connection
to
the
city
of
Las
Vegas,
this
market
is
viewed
as
one
where
our
product
could
potentially
thrive.
Threats:
•
Increasing
number
of
craft
breweries
and
brewpubs
in
the
U.S.
It
is
no
secret
that
the
American
craft
beer
industry
is
a
rapidly
growing
one.
Although
this
potentially
bodes
well
for
the
success
of
Hit
Brewery,
this
can
also
be
viewed
as
a
threat.
Every
year,
more
and
more
microbreweries,
brewpubs,
and
bars
are
opened
in
the
United
States,
raising
the
barriers
of
entry
for
Hit
Brewery
higher
with
each
passing
year.
In
order
to
alleviate
the
strength
of
this
threat,
it
is
paramount
for
Hit
Brewery
to
begin
operations
and
continue
growing
within
our
target
markets
as
soon
as
possible.
•
Fluctuating
price
of
required
brewing
commodities
The
production
of
beer
requires
a
standard
combination
of
ingredients
that
is
actually
mandated
by
United
States
law.
These
ingredients,
including
barley,
hops,
and
wheat,
are
subject
to
fluctuations
in
price,
which
could
potentially
be
harmful
to
the
management
of
Hit
Brewery’s
production.
29
Operations
Plan
Pricing
Strategy
Hit
Brewery
will
follow
a
very
straightforward
pricing
plan
that
is
properly
aligned
with
the
rest
of
the
craft
beer
industry.
Amongst
all
of
the
current
craft
beer
products
currently
on
the
market,
there
is
very
little
pricing
differentiation
between
each
competitor.
Because
of
this
fact,
Hit
Brewery
must
align
with
the
rest
of
the
industry.
With
our
initial
product
line,
we
have
adopted
the
following
pricing
strategy.
•
Beer
Products
-‐Individual
bottled
beer:
$2.50
-‐Individual
draft
beer:
$4.99
-‐6-‐pack:
$13.99
-‐Case
(24
beers):
54.99
•
Merchandise
-‐T-‐Shirts:
$15.00
-‐Pint
Glasses:
$15.00
•
Studio
-‐Hourly
Sessions:
$45.00/hour
Growth
Strategies
Strong
growth
over
the
next
1-‐5
years
is
very
important
for
the
future
success
of
Hit
Brewery.
As
the
company’s
current,
very
early,
development
phase,
long-‐term
success
cannot
be
maintained.
Hit
Brewery
must
continue
to
grow
into
its
ideal
business
model
in
order
to
truly
be
a
competitive
name
within
the
craft
beer
and
independent
music
industries.
30
One
major
growth
category
for
Hit
Brewery
is
in
beer
production.
Initially,
Hit
Brewery
will
be
producing
beer
on
a
very
small
scale,
which
will
classify
the
company
within
the
beer
industry
as
a
nanobrewery.
While
this
initial
small
scale
production
will
allow
for
the
company
to
get
started
and
begin
to
gain
traction
within
our
target
markets,
the
beer
production
must
continue
to
grow
over
the
years
to
truly
become
a
fully
operating
microbrewery.
Another
growth
opportunity
for
Hit
Brewery
is
in
the
consistent
growth
of
our
studio
operations.
Although
not
the
primary
business
operation
of
Hit
Brewery,
the
hourly
rental
of
recording
facilities
are
projected
to
be
a
very
important
financial
pillar
for
the
company.
Additionally,
our
studio
operations
act
as
very
important
promotion
for
our
beer
products.
Initially,
Hit
Brewery’s
studio
will
be
set
up
to
specialize
in
vocal
and
drum
set
recording,
with
the
possibility
of
recording
all
styles
of
music
and
all
sizes
of
ensembles
separately.
However,
while
very
practical
upon
start
up,
there
is
significant
growth
potential
for
our
studio.
In
the
future,
the
eventual
move
to
a
permanent
stand-‐alone
recording
facility
will
be
paramount
for
the
sustainability
of
studio
operations.
Additionally,
we
aim
to
grow
our
studio
facilities
to
also
incorporate
a
strong
presence
of
beer.
These
additions
include
draft
beer
systems,
refrigerators,
and
Hit
Brewery
signage
and
other
branding.
Finally,
the
most
important
growth
opportunity
for
Hit
Brewery
is
the
establishment
of
a
fully
operational
brewpub.
Over
the
coming
years,
the
company
looks
to
build
toward
this
goal
of
a
local
brewpub
based
distribution
plan.
The
establishment
of
a
brewpub
would
represent
the
culmination
of
all
of
the
elements
of
the
core
ideas
and
aspects
behind
Hit
Brewery.
A
Hit
Brewery
brewpub
would
offer
various
Hit
Brewery
beers
on
tap,
provide
consumers
with
a
designated
place
to
consume
Hit
Brewery
beer,
and
allow
us
to
incorporate
the
company’s
unique
musical
element
in
the
best
way
possible.
Namely,
the
brewpub
would
be
attached
to
our
recording
studio,
offering
views
of
the
recording
facilities
and
an
inside
look
into
the
making
of
records
to
all
consumers,
acting
as
a
competitive
advantage.
Finally,
a
brewpub
would
also
allow
for
us
to
stage
live
music
events.
31
Marketing
Plan
Hit
Brewery’s
marketing
plan
consists
of
mainly
social
media
marketing
efforts,
especially
within
our
initial
stages
of
our
development
as
a
company.
Our
target
market,
and
the
craft
beer
community
as
a
whole,
spends
a
lot
of
time
online
and
is
very
active
on
many
social
media
platforms,
engaging,
commenting,
and
networking
through
these
platforms
based
upon
beer
preferences
and
experiences.
As
beer
is
a
very
visual
product,
the
most
important
platforms
for
our
marketing
efforts
are
visual
platforms.
We
will
invest
in
such
platforms,
namely
and
to
capitalize
on
the
visual
aspect
of
beer.
We
will
also
be
active
on
in
order
to
engage
in
a
written
manner
with
our
audience.
Finally,
our
initial
marketing
efforts
will
also
include
Untappd,
a
social
platform
designed
for
beer.
Within
our
home
region
of
Southern
California,
Hit
Brewery
will
also
be
very
active
within
the
local
music
scene
in
order
to
connect
with
those
consumers
who
will
be
attracted
to
Hit
Brewery
based
upon
our
music
background.
Hit
Brewery’s
founder
will
be
very
active
within
this
period
as
a
solo
hip
hop
artist,
further
marketing
the
Hit
Brewery
brand
with
every
show.
Another
extremely
important
form
of
marketing
will
be
the
word
of
mouth
and
the
loyalty
of
repeat
customers.
When
marketing
Hit
Brewery,
we
will
be
very
focused
on
those
consumers
that
act
as
early
adopters
and
influencers.
By
effectively
reaching
these
individuals,
we
will
begin
to
expand
our
reach
as
these
early
customers
begin
to
spread
the
word
about
Hit
Brewery
throughout
their
personal
networks.
Finally,
Hit
Brewery
will
initially
be
very
focused
on
the
distribution
of
promotional
beer
and
the
hosting
of
promotional
events
within
our
target
markets.
Through
personal
experience
and
preferences,
we
are
operating
under
the
assumption
that
our
potential
consumers
are
very
receptive
to
free
beer.
We
anticipate
the
distribution
of
free
beer
and
the
hosting
local
events
with
our
beer
to
be
our
strongest
initial
marketing
effort,
although
initially
losing
out
on
our
beer
production
investment.
We
view
these
loses
within
the
distribution
of
free
beer
as
simply
a
re-‐investment
in
our
marketing
that
doesn’t
require
any
additional
capital.
32
Financial
Analysis
First
Year
Start-‐Up
Costs
During
the
first
year
of
operation,
Hit
Brewery
aims
to
maintain
and
implement
initial
operations
in
a
very
small-‐scale
manner.
In
order
to
grow
into
the
ideal
company
and
realize
all
of
our
goals
for
the
next
1-‐3
years,
we
have
opted
to
keep
our
initial
start-‐up
costs
relatively
low,
while
maintaining
a
production
schedule
that
is
still
very
productive.
Our
first
year
start-‐up
costs
can
be
broken
down
as
follows:
33
A
large
chunk
of
the
first
year
start-‐up
costs
are
the
initial
investment
in
upgraded
brewing
equipment.
Upon
initially
purchasing
this
equipment,
we
will
continue
to
use
it
over
the
next
handful
of
years,
diminishing
our
costs
in
the
following
years.
The
same
can
be
said
for
are
studio
costs.
At
the
initial
start-‐up,
we
will
be
investing
in
a
couple
of
small
studio
pieces,
but
the
vast
majority
of
the
required
studio
equipment
is
already
owned
by
Hit
Brewery
founders
and
its
partners.
A
small
portion
of
our
costs
will
also
be
devoted
to
marketing,
namely
in
the
production
of
t-‐shirts
and
pint
glasses,
which
we
will
use
as
promotional
giveaways,
but
also
selling
as
merchandise.
Finally,
the
bulk
of
our
first
year’s
costs
are
in
the
actual
production
of
beer.
Beer
ingredients,
bottles,
and
labels
are
essential
items
that
will
represent
the
vast
majority
of
our
fixed
costs
during
each
operating
year.
Break
Even
Point
Analysis
Given
our
first
year
costs
of
$6,332,
we
have
determined
our
first
year
break
even
point
based
upon
initial
production
and
sales
estimates.
In
the
first
year
of
operation,
Hit
Brewery’s
revenue
streams
will
be
broken
down
into
3
main
components;
bottled
beer,
draft
beer,
and
hourly
studio
rentals.
Based
upon
our
initial
pricing
strategy,
we
have
found
our
break
even
point,
averaged
and
divided
evenly
amongst
our
3
main
business
operations.
The
table
above
shows
the
first
year
costs
total
as
a
whole
and
as
divided
evenly
between
our
3
main
operations.
The
table
further
shows
how
many
units
of
each
component
are
required
to
reach
the
total
of
$2,100
that
is
required
of
each.
Our
break
even
point
is
very
easily
obtainable
based
upon
our
first
year
production
schedule.
34
Based
upon
the
available
equipment,
supplies,
and
manpower,
we
have
developed
this
production
schedule
for
our
first
year
of
operation.
After
an
initial
starting
month
that
yields
only
100
beers
due
to
the
initial
time
needed
to
produce
beer,
all
subsequent
months
will
follow
a
carefully
planned
schedule
with
all
available
fermenters
full
at
all
times,
on
a
rotating
schedule
with
new
brews.
This
production
schedule
will
yield
400
beers
each
month,
further
broken
down
into
100
beers
each
week.
Further
speaking
to
the
success
and
growth
potential
of
Hit
Brewery
in
the
early
stages
is
the
breakdown
of
our
second
year
costs.
Because
we
no
longer
are
in
the
market
for
beer
production
and
studio
equipment
in
the
second
year,
our
costs
are
decreased
by
over
$1,000,
positively
benefiting
our
business
and
drastically
lowering
our
break
even
point.
35
1st
Year
Sales
Estimates
Based
upon
our
revenue
model,
production
schedule,
and
first
year
costs,
we
have
identified
the
following
sales
estimates
for
our
first
year
of
operation.
The
fairly
even
revenue
distribution
between
each
of
our
three
main
business
components
is
very
encouraging
to
the
strength
of
our
initial
business
model
and
our
future
success
potential.
36
After
reaching
our
first
year
break
even
point
of
$6,332,
our
production
schedule
allows
for
significant
profits.
The
sale
of
bottled
beers,
draft
beers,
and
studio
rentals
account
for
the
bulk
of
our
revenue,
while
the
sale
of
merchandise
items,
such
as
t-‐shirts
and
pint
glasses,
provides
added
revenue.
In
total,
we
estimate
to
achieve
a
first
year
profit
of
$18,395.
These
sales
estimates
are
also
on
pace
to
grow
as
equipment
costs
decrease
in
subsequent
years
and
production
and
sales
continue
to
grow.
37
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2014.
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2014.
anniversary-‐ales-‐by-‐lagunitas/>.
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"In
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39
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