DavidButlerHSSK’s experts take pride in providing in-depth insight to clients across a range of industries, including craft beer, food and beverages. Our Houston office’s very own David “Beau” Butler once again dug into craft brewery valuation, this time shifting his focus to larger operations. In his most recent online article for the Craft Beer Brewing Industry Guide, Beau uses the hypothetical “BigBrewCo” to detail how the valuation process becomes more complex with larger breweries. View a preview of his article:

“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.

This situation effectively requires two different valuations: one for the distribution segment of the business and a second for the taproom segment. Why is that? First, the gross margin structure is completely different: roughly 30% for the distribution business versus almost double (59%) for the taproom business. Second, sales are forecasted to grow three-fold over the next decade, with almost three quarters of that growth from taprooms that have yet to be opened. Third, the cash flow risks are quite different.”

While Beau emphasizes the complexity of such processes, he notes that proper valuation is possible — and worth it. You can read the full article on the Craft Beer Brewing Industry Guide website. As it is the second of a two-part piece, be sure to read Part 1, as well. Of course, if you would like to know more about the valuation process for craft beer breweries, you can always This email address is being protected from spambots. You need JavaScript enabled to view it. directly.