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CONTACT INFO
Ron Stone 500 E. Whitestone Blvd. #3182
Cedar Park, TX 78613 512-801-2231
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Table of Contents 1. Executive Summary 2. Company Overview
a. Ron Stone b. The Atlas Network c. Terressentia Corporation
3. Sales and Distribution a. Operations Structure
4. Industry Analysis a. U.S. Whiskey Category b. Market Insights c. Top Selling Whiskey Brands
5. Marketing Plan a. Competitive Market b. The Lesson c. Grassroots Campaign d. Brand Identity e. Marketability f. Mass Appeal
6. Financial Analysis/Growth Plan a. Investment Plan b. Startup Cost Breakdown c. P&L Analysis d. Five Year Sales Projection e. Investor ROI Projections f. Austin Business Market
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Executive Summary
Garage Oil, LLC is a craft spirits company that is located just north of Austin in the city of Leander, TX. This is a new business that is currently in the start-up phase.
We intend to penetrate a multi-billion dollar market that has traditionally proven to be a worldwide recession proof business. Our whiskey will be a high quality product that is competitively priced to maximize sales and customer satisfaction. Garage Oil is a flavored whiskey with a recipe that took over a year to formulate. The Trademark Secret “Hot Rod Flavor” is made up of a precise blend of several different Pure Flavor Extracts added to the base spirit which is 20% Bourbon and 80% Light American Whiskey, (99% corn + 1% Malted Barley aged in used Bourbon barrels for 6 months). The result is one of the smoothest, best tasting, whiskeys you’ll find anywhere at any price.
The custom bottle design, label art, decoration and packaging were all created to give our brand a unique and instantly recognizable identity. With its nod to true Americana car culture nostalgia, the bottle elicits warm and happy feelings before the cap is even cracked open. It will be a true standout on the shelves of every bar and liquor store where it’s sold.
Initial plans are to sell the whiskey in and around the Austin area in precise locations for the purpose of maximizing a very focused marketing and advertising strategy. Going forward the plan is to grow the company responsibly through the same location focused marketing strategy so that the growth of the company works hand in hand with the spread of the advertising campaign.
After saturating the Austin market we will grow to cover all of Central Texas, then the entire state of Texas, the Southwest United States, the entire U.S. and eventually penetrating International markets.
The goal is to become one of the most popular and best selling flavored whiskeys on the market. With our unique, cool styling, our fun story and phenomenal taste we believe our goal is 100% attainable.
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We intend to establish a great presence on the World Wide Web, which will increase the knowledge of our product and brand awareness.
We also intend to make our whiskey available for direct to consumer online sales and home delivery.
Company Overview.
Ron Stone Garage Oil, LLC is a Private Label spirits brand owned by Ron Stone of Austin, TX.
Mr. Stone’s professional resume includes working in almost all departments in the film and television industry. As a Writer/Director/Producer, Mr. Stone has two feature films in current release, “Passing Fancy” and “Ned Venture” which are available for purchase on Amazon and Amazon Prime.
Two notable positions for Mr. Stone in the entertainment industry are working as the past Vice President of Modern City Entertainment and current Owner and President of RJS Entertainment. Mr. Stone has over thirty years of professional experience in the film and television industry.
In addition to his extensive entertainment industry career, Mr. Stone also has more than twenty years of Bar/Restaurant experience working in all departments including management and ownership.
The Atlas Network Mr. Stone is contracting with The Atlas Network for all manufacturing aspects of the bottle and packaging components.
The Atlas Network is a privately held corporation with import/export, mass production, consulting, and logistical focused offerings. With domestic and overseas resources, they provide a full-service mass production experience that is cost effective, holds low MOQ requirements, and meets strict quality control standards.
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By using value creation and risk-based strategies they facilitate innovation while reducing production errors and improving the efficiency of any business.
With their global resources and dedication to quality service The Atlas Network will be a great partnership for Garage Oil as we grow our brand and expand our manufacturing needs. http://www.theatlasnetwork.com/
Terressentia Corporation The distillery for Garage Oil – American Badass Whiskey is the Terressentia Corporation, inventors of the TerrePURE® technology.
Terressentia is a distillery headquartered in North Charleston, South Carolina, which specializes in contract production of distilled spirits. They are producers of spirits for large retail chains, individual brand owners, and other distilleries and exporters.
Their spirits have received numerous medals recognizing their superior quality in national and international taste competitions over the years. These competitions have included consumer preferences, professional tasters, and completely blind taste tests. The numerous awards, across all distilled spirit types, is thanks to their revolutionary TerrePURE® technology. https://www.terressentia.com/
Sales and Distribution Once the first run of Garage Oil – American Badass Whiskey has been produced and bottled the company will seek to make the best possible distribution deal for our product. There are many reputable distribution companies of distilled spirits and we intend to present Garage Oil to those distributors whom we believe will be the most useful in getting our brand to market quickly and efficiently.
After completing a sale with our chosen distributor, the distributor will then use its existing client and new sales channels to distribute our product to retailers such as, liquor stores, bars and restaurants who will in turn make it available to the general public.
Some of the companies we will be targeting for distribution are:
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Southern Glazer's Wine and Spirits. http://www.southernglazers.com/
Republic National Distribution Company https://www.rndc-usa.com/
Mexcor - International Wine & Spirits http://www.mexcor.com/
Virtuoso Wine and Spirits http://www.vws.vin/
United Distributors https://udiga.com/
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Operations Structure
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Industry Analysis
Jan 24, 2019 (Heraldkeeper via COMTEX) -- The global distilled spirits market was valued at US$ 25.98 Billion in 2017, Global Distilled Spirits Market, by Product Type (Whiskey, Vodka, Rum, Gin, Tequila, Brandy, and Others), by Distribution Channel (Supermarkets, Hypermarkets, Specialty Stores, Drug Stores, Online, and Others), and by Region (North America, Latin America, Asia Pacific, Europe, Middle East, and Africa), – Insights, Size, Share, Opportunity Analysis, and Industry Forecast till 2025 published by Coherent Market Insights.
The global Distilled Spirits Market is projected to reach US$ 38.08 billion by 2026, exhibiting a CAGR of 4.40% during the forecast period. Increasing demand for alcoholic beverages among steadily growing adult and young demographic worldwide is a major factor propelling growth of the market due to increasing popularity for alcoholic beverages such as whiskey, rum, brandy etc. among millennial population (above the legal drinking age). According to Millennial Engagement Initiative Report 2017, in 2014, over 36% of the U.S. workforce comprised millennial generation and nearly half (46%) of all the U.S. work force is projected to be millennial by 2020.
The Distilled Spirits Council today reported at its annual economic briefing that 2018 marked the ninth straight year of record spirits sales and volumes, reflecting continued market share gains.
Supplier sales were up over 5.1 percent, rising $1.3 billion to a total of $27.5 billion, while volumes rose 2.2 percent to 231 million cases, up 5.0 million cases from the prior year.
In 2018, spirits gained market share versus beer and wine with sales rising seven-tenths of a point to 37.4 percent of the total beverage alcohol market. It is the ninth straight year of market share gains overall, where each point of market share is worth $740 million in supplier sales revenue.
“These robust results show adult consumers are continuing to favor spirits over beer and wine, particularly among millennials,” said Distilled Spirits Council President and CEO Chris Swonger.
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U.S. Whiskey Category
America’s thirst for whiskey is strong, and shows no sign of diluting. U.S. whiskey sales are up 4 percent in the past year.
Sales of American whiskey grew 8.1 percent in 2017, jumping $252 million to $3.4 billion, according to the Distilled Spirits Council. Total sales outpaced sales of other adult beverages in the same year, including tequila, cognac and Irish whiskey.
Market Insights
The global whiskey market is expected to reach USD 7.40 billion by 2023, witnessing a CAGR of 5.3% during 2018-2023 (forecast period). Whiskey is considered as an affordable luxury item, leading many whiskey manufacturing companies to launch more premium and super premium products into the market.
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Top Selling Whiskey Brands
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Marketing Plan When it comes to launching a new distilled spirits brand the question isn’t whether or not it will sell because the answer is of course, yes. Humans have always drunk alcohol and they always will. As long as the product has a decent taste and is offered at a fair price that gives the consumer a great sense of value they will buy the product.
The question of how big the sales can get and how large the company can grow becomes all about the company’s ability to build brand awareness through a smart and focused marketing campaign.
The Garage Oil brand marketing methods will included traditional platforms such as TV, Radio, and Print combined with a heavy emphasis on Social Media Campaigns, Event Hosting, Internet Ad Buys, and In Person Tasting Presentations for retail owners and general consumers.
Starting and marketing a new alcohol product is much easier than starting a new innovative product with an unproven track record because you don’t have to spend massive amounts of marketing dollars educating the public on the virtues and uses of your product.
People know alcohol, people consume alcohol, and people spend a lot of money to enjoy alcohol, which is what makes it a great business. About 50% of the world's population drinks alcohol. When you consider that 35% of the world's population belong to religions that do not permit drinking alcohol and 26% of the world's population is under the age of 15, it seems that everyone who can drink alcohol does.
Competitive Market
Garage Oil – American Badass Whiskey is a Flavored Whiskey. The flavored whiskey category is growing rapidly as more and more people are choosing whiskey as their first spirit of choice.
The Garage Oil flavor profile is unlike any other whiskey because it’s not just a one-note flavor such as Cinnamon, Apple, Maple, etc… The recipe of pure flavor extracts that are added to the Garage Oil base spirit is a well researched and developed combination of several flavors that make up its unique and delicious flavor.
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It took Mr. Stone almost a year to hit on just the right flavor additive combination that he calls “Hot Rod Flavor.” The specific ingredients shall remain a trade secret, however, all the extracts were chosen to enhance the natural flavor qualities inherent in American Whiskey making it one of the smoothest, best tasting whiskeys on the market.
The number three best selling whiskey in the United States is “Fireball Cinnamon Whisky” and it is the number one best selling flavored whiskey. This brand is the target competition for Garage Oil.
We believe Garage Oil is a much better tasting product with a far superior branding and marketing opportunity because of its unique and instantly identifiable bottle and label design.
For Garage Oil to compete with, and eventually out sale Fireball, we need to understand the secret of their success.
You probably couldn’t help but notice the insanely popular spirit popping up left, right, and center at your local bar over the last 10 years. The Canadian-born, flavored whiskey originally debuted in the 1980s, but has enjoyed a surge in popularity over the last few years, overtaking Jameson Irish Whiskey, Patron tequila, and even Jagermeister in U.S. sales volume. But how did it happen?
In other words: How did a lower-proof spirit that tastes like licking a hot cinnamon stick become the best-selling liquor in decades? There’s not one simple answer.
In 1984, in its earliest stages, Fireball was branded and sold as “Doctor McGillicudy’s Fireball Whisky,” and was available only in Canada until the brand was sold to the Sazerac Company in 1989. For the next 18 years, the Louisiana-based spirits company didn’t do much with it — they didn’t even get rid of the “Doctor McGillicudy” branding. But in 2007 everything changed.
A new marketing campaign and a new name and branding, “Fireball Cinnamon Whisky,” kickstarted sales of the re-vamped liquor as Sazerac pushed aggressively to take control of the spirit market.
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With a grassroots marketing campaign, Fireball reps visited bars in Nashville, Tennessee and Austin, Texas to give away shots and promote what was essentially flavored schnapps as a cool new go-to shot for college students and partiers in the town. Once a footprint had taken hold, the marketing moved onto other college towns to spread the cinnamon-soaked gospel.
By 2011, Fireball was selling 45,000 cases a year and racking up around $1.9 million in shelf sales. Two years later, it would top $61 million. (Neither of those numbers account for bar purchases, either.) IRI, a research group that tracks analytics, estimates that by 2014 the brand was doing more than $800 million in sales both off the shelf at liquor stores, and in the bar.
The Lesson The Fireball story is a perfect example that illustrates the power of good branding and effective marketing. When the distilled spirit now known as "Fireball Cinnamon Whisky" was initially released as “Doctor McGillicudy’s Fireball Whisky" in 1984 it floundered in the market for over twenty years. The enormous difference in earnings for the product in the last ten years has nothing to do with the taste because their recipe has not been changed at all. The only thing that changed
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was the name of the product, (rebranding it) and then implementing a concise marketing campaign that focused on a target market. With the new name and plan in place Fireball went from a mid to low performing product all the way up to the number one selling flavored whiskey in the nation.
Grassroots Campaign One of the most effective components of the Fireball marketing campaign was the idea of taking their newly rebranded liquor directly to the public in the form of promotional tastings at popular venues and liquor stores. We here at Garage Oil intend to employ that same hands-on approach as a large part of our marketing strategy as well. We know that generating a strong word-of-mouth factor to our marketing campaign is not only a cost effective approach, it is also one of the most powerful marketing tools because alcohol drinkers who experience the great taste of Garage Oil and become fans make the biggest impact on their friends, family, and co-workers when they talk to them about how good Garage Oil - American Badass Whiskey is.
This type of grassroots personal approach will dovetail seamlessly with our Social Media channels and advertising.
Brand Identity One of the most important factors to the success and long-term growth of any new product is establishing a strong Brand Identity. A good brand identity is how a brand differentiates itself from its competitors and cements awareness in the minds of its customers and potential customers. It includes distinguishable brand elements that are used to promote the business. Even though the brand name, logo, and tagline are an important part of it, a brand’s identity isn’t limited to just that. It includes all the visual and emotional elements that give rise to the brand experience.
A brand identity is the visual representation tool used to express a brand’s personality. Garage Oil has visual personality in spades with its distinctive and unique bottle design, Hot Rod label artwork, memorable name, and the fun tagline: "Keep Your Parts Lubed," Garage Oil - American Badass Whiskey has all the makings of an unforgettable and iconic brand.
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Marketability The styling of our product was purpose driven to maximize marketability. Garage Oil has a fond Americana feel with a nostalgic nod to good times celebrated with a rebellious spirit.
The Hot Rod theme was much more than just an artistic design choice. It was a well thought out plan to create an instant connection to millions upon millions of consumers who love and participate in the car culture.
Automobile admiration is a worldwide phenomenon with hundreds of millions of people each year passionately participating in car shows, car collecting, building, and customizing.
Even for folks that are seeing the Garage Oil bottle for the first time it feels familiar, warm, and inviting.
Having an instant connection with a consumer base made up of hundreds of millions of people will give Garage Oil a leg up on other
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new liquor brands making our path to gaining significant traction in the marketplace easier and faster.
Garage Oil was created with a true identity, a soul if you will. Once you've seen it for the first time it's instantly recognizable from then on. The same is true for the taste; once you've experienced its delicious flavor you'll never forget it.
The great thing about the car lover’s connection to our product is that it is just the jumping off point as far as marketing goes. It gives us a built-in platform for creating brand awareness by attending many of the hundreds of car shows put on each year as a vendor and a sponsor.
These shows are a perfect venue for a personalized marketing approach that we believe will create brand loyalty and exponential sales growth.
For an example of how many car show events are put on each year in the United States, please visit the Car Club Directory website: http://www.carclubdirectory.com/
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Mass Appeal With all that said, we want to make it clear that the complete vision for our brand is to create mass appeal for our whiskey that goes far beyond just car enthusiasts. We look at it like this; everyone can appreciate when a cool, sexy, beautiful car rolls by, not just the enthusiasts.
We are selling much more than just flavored whiskey, we are selling an attitude, a lifestyle, freedom, and most of all, we are selling cool.
Garage Oil - American Badass Whiskey is super cool and everyone loves cool.
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Financial Analysis / Growth Plan Alcohol is a strong business to invest in. The alcohol industry has one of the highest profitability levels of any industry. A comprehensive, and very informative, analysis was made by Philip Campbell in 2018 which compares profitability metrics across industry sectors. The range is huge and shows the importance of comparing profitability between companies within rather than across sectors. Tobacco is first with an operating margin of 43%. Tobacco is followed by some financial and internet software stocks from positions 2 to 6, and the alcohol sector is in 7th place among all businesses in the world with an operating margin of 21%.
Investment Plan
Garage Oil, LLC is seeking a three hundred thousand dollar investment in exchange for a 20% equity stake in the company.
The capitol will be used to fund the manufacturing of the glass bottles, packaging, (artistic decoration such as labeling and injection molded
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pieces) shipping costs, boxes, and enough of the finished distilled spirit to complete the first order of roughly 20,400 750 milliliter bottles of Garage Oil whiskey.
A portion of the investment will be used to fund the first round of the marketing campaign.
Startup Cost Breakdown
One Time Fees Injection Molds & Design ------------------------------------------- 6,500 Recipe Recreation & TTB Approvals ------------------------------- 10,000 Licensing ------------------------------------------------------------- 4,451
Fixed Costs Bottle Manufacturing & Shipping (20,400 pcs x 2.85) ----------- 58,140 Bottle Shipping NY to SC (20,400 pcs x .15) ---------------------- 3,000 Bottle Shipping SC to TX (20,400 pcs x .15) ---------------------- 3,300 Whiskey, Bottling, & Closure (20,400 btls x 3.65) --------------- 74,460 Pure Flavor Additives ----------------------------------------------- 3,000 Warehousing ------------------------------------------------------- 12,000 Marketing ---------------------------------------------------------- 75,000 Travel Expenses ----------------------------------------------------- 5,000 Labor (6 months) -------------------------------------------------- 35,000 Sub Total --------------------------------------------------------- 288,851 Contingence ------------------------------------------------------- 11,149 Total ------------------------------------------------------------- $300,000
P&L Analysis This analysis is based on a suggested retail price of $39.95 per 750ml bottle. A Profit Margin of 25.832%, and a five year sales volume growth reaching approximately two million bottles sold in year five.
Target Retail Price $39.95
$39.95 - 30% retailer margin ($11.99) = $27.96
$27.96 - 25% distributor wholesale margin ($6.99) = $20.97
$20.97 - Freight & state tax (approximately $1.85) = $19.12
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$19.12 = F.O.B. to distributor price.
$19.12 - Cost of goods ($6.50) = $12.62
$12.62 - Federal Excise Tax ($2.30) = $10.32
Profit Margin = 25.832%
Five Year Sales Projection Year 1 20,400 bottles (1 container) x $39.95 per bottle = $814.980 in sales.
25.832% profit margin of $814.980 = $210,525 in gross profit.
Year 2 (150% sales increase) 51,000 bottles (2.5 container) x $39.95 per bottle = $2,037,450 in sales. 25.832% profit margin of $2,037,450 = $526,314 in gross profit.
Year 3 (200% sales increase) 153,000 bottles (7.5 container) x $39.95 per bottle = $6,112,350 in sales. 25.832% profit margin of $6,112,350 = $1,578,942 in gross profit.
Year 4 (250% sales increase) 535,500 bottles (26.25 container) x $39.95 per bottle = $21,393,225 in sales. 25.832% profit margin of $21,393,225 = $5,526,297 in gross profit.
Year 5 (250% sales increase) 1,874,250 bottles (91.875 container) x $39.95 per bottle = $74,876,287 in sales. 25.832% profit margin of $74,876,287 = $19,342,042 in gross profit.
The company projects a 35% operating and advertising budget.
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Investor ROI Projections
*100% of the profits will be reinvested back into the company for sales growth, marketing, and brand building in years 1 and 2 resulting in a break-even bottom-line for the first two years. Year 1 20% Investor’s profit = $0.00
Year 2 20% Investor’s profit = $0.00
Year 3 20% Investor’s profit of $1,578,942 = $315,788 – 35% operating costs = $205,263 Investor’s ROI.
Year 4 20% Investor’s profit of $5,526,297 = $1,105,259 – 35% operating costs = $718,419 Investor’s ROI.
Year 5 20% Investor’s profit of $19,342,042 = $3,868,408 – 35% operating costs = $2,514,466 Investor’s ROI.
Five Year Investor’s Total ROI = $3,438,148 (1,046% return on investment)
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Austin Business Market
Austin Texas is a great place to start a new business, especially in the Distilled Spirits industry. Please visit the website links below to read about two, (of many) liquor company success stories started right here in Austin Texas.
First is the story of Deep Eddy Vodka that sold for nearly $400 Million Dollars after being in business for just 5 years. http://fortune.com/2016/01/26/deep-eddy-vodka-coke-vc-firm/
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Next is the story of how Bert (Tito) Beveridge started Tito's Handmade Vodka in the garage of his Austin home and then grew his business into a company worth 2.5 Billion Dollars. https://www.forbes.com/sites/noahkirsch/2017/10/17/inside-titos-vodka-how-a-man-named-beveridge-built-a-2-5-billion-fortune/ - 648a9f303a0b
The projections that are forecast in this business plan are just that, projections and estimates. The actual sales for the company are going to be what they're going to be based on producing a great product, executing an aggressive and focused marketing plan, and following proven business policies.
The examples of Tito's and Deep Eddy illustrate that it is possible, indeed probable, to build a billion dollar liquor brand from humble beginnings through hard work, dedication, and belief.
Please Visit our website: http://garageoilspirits.com/
Thank You
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