Beer budget cycles and how planners set the volume plan

The number everyone starts from

A beer company plans in hectolitres. One hectolitre is 100 litres, about 154 bottles of 650 ml or roughly 13 cases of 12. The annual volume plan says how many hectolitres the company expects to sell, by brand, pack and market. Finance turns it into revenue and cost. Sales turns it into targets. Production turns it into brews, tanks and packaging runs.

In India most companies plan on the financial year, April to March. The planning round usually starts a few months earlier. Sales, marketing, finance, supply chain and the brewery each bring a view. The plan is the compromise.

Top-down and bottom-up

Two approaches meet in the middle.

Top-down starts with an ambition. Leadership may set a growth target for the year, based on strategy, last year's result and what the company wants to show investors. It is expressed as a total volume and a share of a market.

Bottom-up starts with the field. Regional sales teams forecast what they expect to sell state by state and brand by brand, given distribution, competitor moves and planned promotions. These forecasts are added up.

The two rarely match on the first pass. The gap is the negotiation. A good planner looks at it with curiosity: does the top-down target need distribution that does not exist, or is the bottom-up view too cautious? The final plan is a number everyone has argued over, which is why it is worth understanding what is behind it.

What goes into the forecast

A bottom-up forecast starts from history and adjusts for what will be different. Planners usually look at:

• Past volumes by month, brand, pack and state.
• Seasonality. Beer demand rises in the hot months and falls in the monsoon in much of India. Our guide to beer seasonality for demand planners covers the pattern.
• Price changes and state pricing rules. Our note on how MRP is set state by state explains why a price move may be outside the company's control.
• New launches, new states and new pack formats.
• Festive calendars, local events and holidays.
• Competitor activity and any known supply constraints.

Units matter. Sales may think in cases, finance in rupees and the brewery in hectolitres of beer. Our short guide to hectolitres, cases and units helps you move between them.

Where the brewery pushes back

A volume plan is only useful if the brewery can make it. This is where beer differs from many consumer goods. A lager spends several weeks from brew day to packaging. The fermenters are a fixed number. If the plan puts the peak in April and May, the tanks must be filling in February and March.

Planners therefore test the volume plan against capacity. Take the plan month by month and convert it to brews. Compare it with the tank days and packaging hours available. If summer demand needs more tank days than exist, there are only a few answers: build stock earlier, shift the mix towards faster beers, buy capacity from a contract brewer or accept lost sales.

Raw materials come next. Malt, hops, cans and bottles have their own lead times. Some are imported. A late order can shut a line as surely as a breakdown.

Why the plan changes by June

Almost no beer plan survives the year untouched. A weak early summer, an unplanned state price change, a supply failure or a competitor launch will all move the numbers.

Many companies therefore run a monthly planning meeting, often called sales and operations planning or S&OP, where the latest view of demand meets the latest view of supply. Some keep the original budget fixed for reporting and use a rolling forecast for operations. That creates two numbers: the budget and the current best guess. When a dashboard shows a gap, check which one it compares against.

Questions to ask when you see a plan

If you work in finance, analytics or technology and a volume plan lands on your desk, a few questions get you to the substance quickly:

• Is this number sales out, to consumers, or sales in, to distributors?
• Which units is it in? Were they converted consistently?
• What does it assume about price, distribution and weather?
• Does the brewery have the tank days and packaging time to make it?
• How much of the plan depends on products that have not launched yet?

Often one answer reveals most of the risk. A plan that assumes a hot summer and a new pack at the same time is two bets, not one.

Where product knowledge helps

Anyone can read a volume plan. People who have seen beer made read it with sharper eyes, because they know why a tank cannot be rushed and why a late forecast change costs more than the spreadsheet suggests. We build that understanding into programmes for planners, analysts and finance teams so the numbers on their screens stay linked to the plant behind them.

Common questions

What is a beer volume plan?

It is the annual forecast of hectolitres the company expects to sell by brand, pack and market. Finance, sales and production all work from it.

What is the difference between top-down and bottom-up planning?

Top-down starts with a leadership target. Bottom-up adds up the field's own forecasts. The final plan is the agreed gap between them.

Why does the plan need a capacity check?

Beer takes weeks to make and tanks are fixed. A plan that ignores tank days and packaging time cannot be delivered.

Why do beer plans change during the year?

Weather, price changes, supply issues and competitor moves shift demand. Most companies revise through a monthly planning meeting or rolling forecast.