Writing the market section of a project report
A good market section answers four things: who buys, through what route, at what price and against whom. It ends in a volume number the plant can actually produce.
Why this section gets challenged first
Everything in the financial model depends on the volume and price drawn from this section. A credit officer or investor knows that, so they read it sceptically. Statements such as "the craft segment is growing fast" without a source add nothing. Statements such as "we visited 40 outlets and collected their price lists" add a great deal.
Avoid quoting market sizes and growth rates unless they come from an official or well-known published source that you cite. For most small drinks projects, a build from your own numbers is more honest and more useful.
Start with the buyer
Describe who will buy the product, where and on what occasion. A brewpub sells to people who come to the venue. A packaged beer sells through shops, bars and online. A premium spirit may rely on gifting. Be specific about the place: the city, the neighbourhoods, the type of outlet.
Responsible marketing matters here. Describe adults who drink legally and follow local advertising rules. Do not target minors or imply that more drinking is better.
Channels and what each takes
Beer and spirits reach the drinker through different routes: direct to venue, through distributors, through a state retail system, through duty-free or online where allowed. In India, alcohol is a state subject, so which channels are open and how much margin each takes differs from state to state and changes. Check the current position with the regulator or a licensing adviser rather than copying another state's rules.
Show the price walk from the shelf or menu price back to what the brewery receives. A hypothetical in neutral units: a bottle sells at 100 on the shelf. Tax takes 30, the retailer margin 15 and the distributor margin 10. The brewery receives 45. If your model uses 100 as the selling price, the revenue line is more than double what you will see.
Build volume from the bottom
Estimate volume by counting the buyers you can reach. A hypothetical: 50 venues, each taking 4 kegs of 30 litres a month, gives 50 x 4 x 30 = 6,000 litres a month. Then ask whether there are 50 suitable venues in your catchment, whether you will win them and how long it takes. Put dates against the plan.
Cross-check against capacity. If demand is far above what the plant can make, the plant may be too small or you may be overconfident. If it is far below, the plant may be too big. See capacity planning in a project report.
Competitors and the price ladder
List the brands a buyer will compare you with: name, style or type, pack, price and where they are sold. Place yourself on the price ladder and say why a buyer will pay that. A craft beer priced well above the local mainstream needs a reason the target drinker accepts, such as freshness, a style they cannot get elsewhere or a venue.
Competitor information is easy to collect on a store visit: shelf price, pack size, position on the shelf. Date it. Prices in a report from six months ago may be stale. Note the brands that are missing too: a gap on the shelf may mean opportunity or may mean the state does not allow that kind of product.
Primary research when the evidence is thin
If your own evidence is thin, commission some. Short consumer surveys, retail audits, competitor price checks and location research can fill gaps at modest cost compared with the plant. Keep samples honest: say how many people were asked, where and how. A survey of 30 friends is not a market study.
Our market research service does this work. Its results can feed straight into your report.
Link the market to the money
End the section with a table: year, volume, net price, revenue and the assumption behind each. This is the handover to the model. It should match exactly. A good test is for a stranger to take your volume and price and reproduce your revenue line. We cover the next step in a project report for expanding an existing brewery, where existing sales provide the best evidence of all.
Common questions
Do I need to quote the size of the market?
Only if you have a reliable, citable source. A bottom-up build from your own outlets and prices is usually more convincing for a small project.
How do I estimate price?
Collect real prices from the outlets you plan to sell in, then deduct tax and trade margins to find what the brewery receives.
Is a survey necessary?
Not always. If your evidence is thin, a small, honest survey or retail audit can help. Say how it was run.
Can I copy a market section from another state?
No. In India, rules, margins and channels differ by state and change, so build it for the state you will sell in.
