Mountain Man Brewing Company: Bringing the Brand to Light Student Spreadsheet Supplemen

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Created 1/8/2020
Exhibit 1 Mountain Man 2005 Income Statement

Net Revenues $50,440,000 100.0% 97 66.93 71.62 Lger SP

COGS 34,803,600 69.0%
Gross Margin 15,636,400 31.0%
SG&Aa 9,583,600 19.0%
Other Operating Expenses 1,412,320 2.8%
Operating Margin 4,640,480 9.2%
Other Income 151,320 0.3%
Net Income Before Taxes 4,791,800 9.5%
Provision for Income Taxes 1,677,130 3.3%
Net Income After Taxes $3,114,670 6.2%
 520000
23038.257
543038.26

0.0540789
Exhibit 2 Profile of Beer Drinkers by Beer Type by Key Demographics, 2005

Domestic Domestic Mountain

Light Beer Premium Beer Man Lager
Gender
Male 58% 68% 81%
Female 42% 32% 19%

Age
21-24 9% 8% 2%
25-34 20% 20% 15%
35-44 24% 23% 19%
45-54 22% 23% 32%
55-64 14% 14% 19%
65+ 12% 12% 13%

Household Income
under $25k 14% 16% 20%
$25k-49.9k 25% 24% 27%
$50k-74.9k 21% 21% 25%
$75k-99.9k 16% 15% 15%
$100k+ 24% 23% 13%
Exhibit 3 Competitive Market Shares in Barrels by Brewer

East Central Region

Anheuser-Busch 15,620,252 42.0%
Miller 8,553,948 23.0%
Coors 3,347,197 9.0%
Other 2nd tier Premium & Popular Brewers 4,648,885 12.5%
Craft/Specialty Brewers 557,866 1.5%
Imports 4,462,929 12.0%
Total 37,191,077 100%

10041591
Exhibit 4 Beer Consumption by State, 2000 to 2005 (shipments in barrels)

STATE 2000 2001 2002 2003 2004 2005

Illinois 9,038,323 9,165,381 9,268,188 9,108,157 9,032,851 9,063,267
Indiana 3,954,209 3,947,446 4,021,685 3,905,265 3,993,643 3,998,855
Kentucky 2,517,894 2,486,731 2,564,013 2,490,928 2,591,949 2,555,739
Michigan 6,761,561 6,695,665 6,854,064 6,774,702 6,746,578 6,700,174
Ohio 8,493,144 8,601,604 8,682,331 8,760,272 8,702,382 8,584,283
West Virginia 1,274,626 1,311,838 1,360,589 1,348,527 1,373,205 1,359,231
Wisconsin 4,741,019 4,784,791 4,890,122 4,855,313 4,877,662 4,929,529
East Central Region 36,780,776 36,993,456 37,640,992 37,243,164 37,318,270 37,191,078
TOTAL U.S. 197,609,645 200,146,800 202,605,792 202,586,016 204,318,220 203,515,148
Exhibit 5 Consumption by Type of Beer and by Origin/Packaging , 2005

A. Consumption by Type of Beer

EAST
CENTRAL 6-year
REGION % Total CAGR
Light Beer 18,744,303 50.4% 4%
Premium Beer 7,326,642 19.7% -4%
Popular 4,351,356 11.7% -5%
Imported Premium 4,462,929 12.0% 6%

Superpremium (craft
and high-end
domestics) 2,305,847 6.2% 9%
Total Barrels 37,191,077 100.0%

B. Consumption by Origin/Packaging
EAST
CENTRAL
REGION % Total
Imported 4,462,929 12.0%
Domestic - Packaged 29,618,974 79.6%
Domestic - Draught 3,109,174 8.4%
Total Barrels 37,191,077 100.0%
Exhibit 6 Light beer Market Shares and Dominant Brands

A. B.
Light Beer Competitive Market Shares Leading Domestic Light Beer Brands
2005
Market
East Central Region 2005 Market Share East Central Region Share
Anheuser-Busch 49% Bud Light 32.9%
Miller 24% Miller Lite 17.8%
Coors 11% Coors Light 14.7%
Other brands 14% Natural Light 9.8%
Imports 2% Busch Light 6.4%
Total Light Beer 100% Michelob Ultra 5.6%
Milwaukee’s Best Light 3.4%
Other domestic brands 9.4%
Total 100%
C.
Leading Imported Light Beer Brands

Brand 2005 Market Share

Corona Light 57%
Amstel Light 26%
Labatt Blue Light 15%
Other imported brands 2%
Total 100%
Exhibit 7 U.S. Beer Advertising Expenditures by Medium (in millions of dollars), 2005

Medium 2005

Network television $382.3

Cable television 72.1
Spot television 144.3
Syndicated television 5.5
Spot radio 22.4
Network radio 1.2
Total Broadcast $627.80

Magazines 23.2
Newspapers 6.6
Newspaper supplements –
Outdoor 51.5
Total Print $81.30

TOTAL $709.10
 2005 2006 2007 2008 2009
Mountain Man Lager 520000 509600 499408 489420 479631
Light beer market in east region 18,744,303 19494075 20273838 21084792 21928183
Mountain man light 0 48735 101369 158136 219282
S.P per barrel MMLAGER and Light 97 97 97 97 97
Revenue MMLAGER 50440000 49431200 48442576 47473724 46524250
Revenue MM Light 0 4727313.2 9832811 15339186 21270338
C.P of MM lager 66.93 66.93 66.93 66.93 66.93
C.p of MM Light 71.62 71.62 71.62 71.62
Fixed Costs for MMLight 1650000 900000 900000 900000
Mountain Man lager Expense 34803600 34107528 33425377 32756870 32101732
Mountain Man Light Expense 0 3490414.2 7260061 11325696 15704965
Total GM 15636400 15323672 15017199 14716855 14422517
Advertisement expense 10995920 10776002 10560482 10349272 10142286
Net GM if they don’t do anything 4640480 4547670.4 4456717 4367583 4280231
NPV ₹ 15,822,354.40
Cannabilization (5%) cost 73273.355 152408.6 237757.4 329690.2
Now, Net GM 4061296.1 5977058 7243315 8615914
NPV ₹ 24,753,835.92
Cannabilization (20%) cost 293093.42 609634.3 951029.5 1318761
Now, Net GM 3841476 5519833 6530043 7626843
NPV ₹ 22,327,212.24
Cannabilization (100%) 1465467.1 3048172 4755148 6593805
Now, Net GM 2669102.4 3081295 2725925 2351799
NPV ₹ 9,385,219.29
 2010 SUM(2006-2010)
470039
22805311
285066
97
45593765
27651439
66.93
71.62
900000
31459698
20416454
14134067
9939441
4194626 ₹ 21,846,827.42

428597.3
10101014 ₹ 35,998,597.51

1714389
8815222 ₹ 32,333,416.93

8571946
1957665 ₹ 12,785,787.21
Light beer sales CAGR 4%
Traditional premium beer declining -4%

Cannabalization
5% 20%
 2004 2005 2006 2007 2008
Mountain ManRevenue $ 50,000,000.00
Barrels 520000
US market $ 76,725,000.00 $ 75,000,000.00
Advertisement cost $ 750,000.00
SG & A cost $ 900,000.00

MM Lager cost per barrel $ 66.93

MM Light cost per barrel $ 71.62
2009 2010