In Part I of this article, we discussed reasons why a brewery owner would want a professional, independent appraisal and how to hire an appraiser. In the case study, we looked at the valuation of a large (~18K bbl) operation, and explained the valuation process in some detail. In this installment, we’re going to dive right into the valuation.
The Valuation Case Study
BigBrewCo is a large, regional brewery/taproom operation that opened in 2011. They do about $5.8MM in sales, brew around 18K bbls. (with current capacity for about 27K bbls), and distribute to restaurants, package stores and major grocery chains in a 6-state area. Their product line-up is broad and complex, encompassing a wide range of styles with planned new releases and rotations throughout the year. BigBrewCo currently has two existing taprooms; at the time of the valuation, they were completing the build-out of a third.
If all we were valuing was BigBrewCo’s existing business, it wouldn’t present any great challenges. However, BigBrewCo’s owners have some very aggressive growth plans: they plan to expand into another two states for their distributed product and open another seven taprooms by 2027.