Among the various strengths of investing in a new brewpub is having the ability to create one’s beer brand. There are various reasons why this is an advantage, including controlling the quality, variety, and saving money (Fereja & Demeke, 2019). Being a business and having to serve the customers with a product someone produces themselves, it is important to check the quality and improve depending on the consumers’ feedback (Fereja & Demeke, 2019). Buying from other manufacturers means that the brewpub customers are treated to a particular quality determined by the producer. In case they do not appreciate it, it would be hard to maintain the customer base since there are limitations to what the brewpub’s owner can do (Fereja & Demeke, 2019). Additionally, the cost of producing beer at the brewpub is lower than what someone has to spend to obtain from other brands (Fereja & Demeke, 2019). Lastly, buying beer from outside the brewpub restricts the variety in terms of flavor. However, this can change if it is manufactured inside the establishment.
Partnership with Various Restaurants for Distribution
Partnering with other businesses allows the brewpub a chance to offer the customers products or foodstuff that cannot be found in the establishment. Additionally, when consumers see this, it creates an idea that the restaurants have formed a supportive system, which then cultivates a good image (Almashhadani & Almashhadani, 2022). A good reputation is important and responsible for loyalty from buyers, thus, guaranteeing continuous earning of profits.
Easy Access and Large Population
Alston is considered a residential area in addition to the various restaurants available in the location. A business exists to produce profits for the owner (Almashhadani & Almashhadani, 2022). This is only possible if there are people willing to purchase or consume foodstuff from the establishment. The large population, due to the residential homes, would offer a strong customer base. Additionally, the other businesses in the area of the same type would allow for easier partnering in case the new brewpub lacks certain products for the clients.
Weaknesses: Seasonal Variation in Sales
Apart from profitability, a business should be able to show consistency in sales, something that the brewpub does not guarantee. For instance, in financial year 1, it recorded 278511.25, 296480.25 the following fiscal year, and 323433 in the third year. The problem with these figures is that they are seasonal, which means that if anything happens during the season’s peak, the business will suffer losses.
A High-Cost Rate
The cost of running the establishment would be a challenge since it would force the management to offer higher prices than what the consumers to which are accustomed. For example, data suggests that in financial year 1 only, the marketing costs consist of $38,000 at the start, $41,000 after the first cycle, and another $41,000 after the second cycle (Gurung, 2021). If one considers other expenses, such as rent and paying salaries, it appears that the brewpub would be expensive to own.
High Distribution Costs
Producing one’s brand of beer means that one must find consumers for the product. This requires proper marketing or promotion using different channels, such as offline advertising on television, radio, and newspaper, and on social media (Damron & Woods, 2021). After the first and second cycles of financial year 1, the owner is supposed to pay $20000 each (Damron & Woods, 2021). When one considers that they have other expenses to deal with and still desire profit and a return for the money they invested, it appears that it is impossible to acquire a new brewpub.
As suggested earlier, the goal of a business is to generate income for the owner through profits. This is possible when there is a market for the product. In Boston, the market for craft beer is growing year after year (Fereja & Demeke, 2019). This presents an opportunity for the brewpub brand to sell outside the establishment and earn more sales (Fereja & Demeke, 2019). It is difficult to depend on the customers from the brewpub only, and having more avenues to sell the item is better.
In the business location, there are multiple restaurants serving customers from the area. Being in such a place would mean that there is an increased competition that the owner would need to deal with (Gurung, 2021). Since the demand for food in a restaurant is not as high as it should be, it implies that there is a threat of being forced to offer prices lower than allowed (Gurung, 2021). This would lead to losses or minimal profit margins, rendering the investment irrelevant.
Increasing Consumer Interest in Health
Customers have become more conscious of the type of food that they consume. The main reason behind this is due to the efforts by medical agencies to educate the community on the value of their diet and its impact on their health. There are many illnesses or disorders that are caused by poor diet, which has resulted in people preferring food prepared at home. Additionally, beer is seen as one of the items that lead to health problems (Zwanka, 2020). Therefore, the produced beer in the brewpub faces the threat of not being purchased.
Almashhadani, M., & Almashhadani, H. A. (2022). The impact of ownership on profitability: An conceptual study. International Journal of Business and Management Invention, 11(6), 01-06. Web.
Damron, T. S., & Woods, K. (2021). Crafting community: A case study for Kings Bluff Brewery social media marketing. Global Journal of Business Pedagogy, 5(1), 15-18. Web.
Fereja, T., & Demeke, L. B. (2019). Factors determining consumer beer brand preference. International Journal of Economics and Business Research, 3(1), 140-157. Web.
Gurung, T. (2021). Customer satisfaction in restaurant business: An initiative for a successful business. [Thesis]. Centria University of Applied Sciences.
Zwanka, R. J. (2020). Beer uses and attitudes in the craft era. Journal of International Food & Agribusiness Marketing, 32(1), 1-12.