Service Feasibility Plan for Development Distillery

Abstract

Central Question: Is there a market for contract distilling at the craft scale? The craft distilling market has experienced rapid growth in recent years. In many ways, this trend is expected to be similar to the explosion in the craft brewing market, which now holds approximately 10 percent market share. Should craft distilling gain the same market share as their brewing brethren, craft distilling will become a six billion dollar per year market (S&P 2009). This feasibility study explores the opportunity of craft distillers outsourcing of the production of spirits. To focus on the emerging craft distilling market, the size of the contract distilling was scaled down. Start-up distilleries may elect to obtain assistance searching for spirits to add to their portfolio. These start-up distilleries may consider outsourcing the production of test batches of spirits to a development distillery. These test batches could then be tested internally or used as part of a market feasibility study to determine demand. The target market was individuals and start-up distilleries. Large distilleries have the capability to develop their own new products and would require large volumes for market tests. The start-up distillery group was further sub divided into companies with current spirit production and those without, with the focus on distilleries already providing product to consumers. The market research showed significant interest in pursuing teaming arrangements with a development distillery for the production of spirits (71 percent of respondents). However, the size of batch desired was lower than would be desired by a development distillery. Figure 1 shows a summary of the most important attributes of the teaming arrangement to target market, as found during the project research.