Target Market

Craft Beer is booming. The UK sales of PBAs are currently in excess of £500 million per year, where six bottles are consumed every second!

Characteristics of target market

Ever since the early nineties the renaissance of craft beer has been gaining momentum in the UK; the upsurge in microbreweries in the UK from companies such as Brewdog and Beavertown has been nothing short of incredible.

But what is craft beer? Although the term has no legal definition in the UK, many would say that the phenomenon of craft beer is defined by flavour and diversity. Craft beer has been said to actively promote “the culture of better beer.” The US craft beer market has often been referred to as the catalyst for craft beer innovation and trial. The average American lives within 10 miles of a brewery. As a nation, the U.S. now has more beer styles and brands to choose from than any other market in the world. This has not always been the case if you look at the history of beer in the U.S. prior to 1980. Total sales revenues have grown by over 18% in 2014, representing 11% of the total US beer volume, which equates to 22.2 billion barrels (117.35 litres per barrel).

It is well documented, through both social media and the national press, that craft beer in the UK is a high growth market. One interesting statistic to support this growth is that 38% of Londoners over 18 years of age have consumed craft beer in the past 6 months; furthermore craft beer prices are rising to levels that would have been unthinkable only a few years ago, and people seem to be prepared to pay a premium for quality.

The total on-trade craft beer market showed sales of £225m in 2013. However even with this performance, craft beer only represented 1.9% of total beer volume sold yet showed phenomenal growth of 84% on draught and 40% for packaged craft beer. The overall growth of the craft beer market was measured at 79% 2012-2013 (source: Big Hospitality).

We believe it is clear that there is considerable scope for craft beer to increase its market share and widen its appeal further outside of its core 25-45 age group following.

The Brewery Shop Brand

We aim to position our Brewery Shop brand outlets within the visible edge of high street areas, within close proximity to railway stations.The general theme will be that of a retail and bar crossover. We strive for our outlets to be functional, yet quirky but not overly lavish or gimmicky. In premises, where space permits, there will be larger areas of seating and opportunities for private hires and educational events.

We will be marketing the business using a mixture of social networking and conventional marketing techniques.

We aim to use events and festivals to promote the brand of The Brewery Shop brand.

Red Squirrel Group (RSG) Brands

Quality of distribution will be the primary focus, and aim to continue developing craft keg and branded 330ml cans to work in tandem with this strategy. The company is looking to broaden its distribution base in the United Kingdom in order to cement the company’s long-term position. We hope the export market will play a part in the revenue development – we hope for volumes to account for around 8% of total revenue sales.

Competition strategy

At present we feel there is a significant gap in the market for our Brewery Shop brand concept, as we have only seen a few fledgling craft beer crossover businesses that are operating in the market successfully. We believe the ownership of an existing craft brewery and building established relationships with other brewers is our USP, and will be key to the expansion of our model.