MARKETING PLAN

FOR
FAT PAULYS HAND-CRAFTED BEER


Submitted By:
Liane Marjorie A. Cantiveros
Haroun Nor B. Mangorsi
Genive B. Gebone
Marielle B. Miguel
Gillian Sofia Samson


Executive Summary
Fat Pauly's Hand-crafted Ales & Lagers is a proud local brand that makes fresh
home-brewed beers using both the finest imported brew grade malt and some local
indigenous ingredients such as Timoga Spring waters and wild Putyukan Honey. The
man behind Fat Paulys is brewmaster Paul Stuart del Rosario, who brews precious small
batches of his hand-crafted beers.
Craft beer is not brewed by one of the corporate or big brewery corporations such
as San Miguel or Budweiser. The Brewer's Association in Boulder, Colorado defines
craft beer as a beer made by a brewer that is small, independent, and traditional which
sums it up well. However, there are some very good beers being made today by brewers
that do not fit these qualifications. So, it should be pointed out that just because beer is or
is not craft beer does not mean that the beer is good or not. The other term for craft beer
is microbrew. Compared to its mass producing counterparts, homemade craft beers
involve more natural ingredients and a more meticulous production process.
The craft beer revolution in the Philippines is at its infancy. Emerging brands like
Katipunan from Manila, Bogsbrew from Bacolod, and Fat Paulys from Iligan are some
of the well-known craft beer brewers in the Philippines. Most of these craft beer brands
started out with the strong love for authentic and premium beer. Despite huge companies
like San Miguel Corporation and Asia Brewery dominating the market, the craft beer
culture takes hold of the premium and high quality niche of real beer lovers and
enthusiasts. It is an industry which has the full potential to blossom here in the
Philippines. The craft beer revolution is tapping and awakening beer enthusiast and beer
lovers all over the country which means more people are becoming aware of the quality
of craft-beers. Therefore, being one of the few craft beer brewers in the country, Fat
Pauly's Hand-crafted Ales & Lagers has the opportunity to take hold of the unsatisfied
craft beer niche in the Mindanao area.
Financial estimates reveal that Fat Paulys has an estimated annual demand of
6,700 liters in the identified strategic locations with a potential of increasing its profit up
to P1.2 million.
Positioning Statement
Fat Pauly's Hand-crafted Ales & Lagers is a proud local brand of fresh home-
brewed beers.
Market and Situation Analysis
Economic environment
The Philippines is generally dominated by low income families who are
categorized in the E socio-economic class which comprises 30% of the population. The
buying power rests with the middle income class or the D and upper C classes which are
comprised of 69% of the total Philippine population in the year 2012. Only 1% of the
countrys population is considered to be within the classification of AB or high income
families. These figures indicate that the market is dominated by the middle class
consumers (Socioeconomic classes (SEC) ABCDE: Percentage of population , 2012).
Beer accounts for around 70% of total alcohol consumption in the Philippines.
The country achieved a GDP growth rate of 6.8% in 2012, followed by 7.8 per cent
growth in the first quarter of 2013. As Filipinos have enjoyed higher incomes and more
jobs, they have had more disposable income to celebrate with, and beer sales have
reached a historic peak that is projected to keep rising. (Maierbrugger, 2013)
Social environment
Filipinos are very social and drinking alcohol has always been part of social
interaction with friends, family, and acquaintances. Alcohol drinking is a big part of the
Filipino merry-making activities. Beer is an essential part of fiestas, birthdays, and
parties. Even when there is no special occasion, many Filipinos hang out together in the
streets, in front of their houses and convenience stores, drinking beer.
Beers are widely available in grocery and convenience stores, while whisky, wine
and other alcoholic drinks are supposedly purchasable only at licensed liquor stores. But
this is not always the case. Due to lax monitoring and implementation, hard drinks can
also be bought in many regular stores, even by teenagers. Philippine law sets the
minimum legal drinking age at 18 but underage drinking is widespread (Valbuena, 2006).

Filipinos are the heaviest drinkers of alcoholic beverages in Southeast Asia,
according to study by the Department of Health (DOH). The study's findings showed that
11% of the population aged 15 to 74 regularly drink alcoholic beverages at an average
rate of about four or more days in a week. The study also said that 24% of Filipinos aged
15 to 19 years old are regular teen drinkers (abs-cbnNEWS.com, 2009).

Technical environment
From 1998 to 2010, households with Internet connection in the National Capital
Region have ranged from 7% to 18%. In provincial areas, Internet penetration remains
well below 10% while Internet penetration in urban households has gradually increased
from 3% in 1998 to 10% in 2010. By socio-economic class, Internet penetration among
households in classes ABC has ranged from 12% to 29%, in contrast to households in
class D where it ranged between 1% and 6%, and in class E where Internet penetration
was zero until 2009 (Internet Use in the Philippines , 2011).
Most of the activities of Filipinos when using the internet involves social media.
Despite the huge number of households that do not have internet connection, people from
different socioeconomic classes are still able to access the web through affordable means
such as internet cafs, WIFI hotspots, and PISO-net machines. This supports the fact that
most of the Filipino population already has exposure to online information and may have
social media accounts on either one of the top social media platforms.
I ndustry environment
Beer is the most consumed alcoholic beverage in the Philippines and amounts for
a 70% share of the domestic alcoholic drink market in terms of volume in 2005. Between
2003 and 2004, the Philippines showed the fastest growth rate in beer consumption in the
world with 15.6%. With a consumption rise from 1.22 to 1.41 million liters, the
Philippines was the 22nd largest beer market in the world in 2004 (Plopinio, 2008). A
Filipino will drink an average of nearly 20 liters of beer a year (Salazar, 2008).
Beer companies are looking for new opportunities for growth in a very mature
market. Major breweries in the Philippines are San Miguel Brewery and Asia Brewery,
which hold a combined 99% share of beer volume sales. In an attempt to renew this
growth, local manufacturers have invested into bringing more imported premium lager
brands such as Asahi and Kirin (euromonitor, 2013 ).
Competitive environment
As for the competition between San Miguel and Asia Brewery, it has not been
much of a competition at all so far. In 2011, 88% of the domestic beer sold in the
Philippines came from San Miguel, with Asia Brewery providing the remaining 12 per
cent. The reason for San Miguels market dominance is its much greater age and
reputation. San Miguel opened its first brewery, the first in Southeast Asia, in 1890 and is
currently one of the biggest beer producers in the world. It has such strong ties to Filipino
culture that San Miguel is used as a synonym for beer in the Philippines. San
Miguels advertisements feature the hottest young Filipino celebrities celebrating the
Filipino way of life, and they have been all over television screens, magazines, and
billboards for a very long time.

The well-known craft beer brewers in the Philippines are Katipunan Craft Beer
(Manila), Craftpoint Brewing (Manila), Fat Paulys (Iligan City), Bogs Brew (Bacolod),
Pivo Praha (Manila), GPoint (Manila), and Great Islands Craft Brewery (Manila). Craft
beers are often produced in smaller quantities compared to ordinary mass produced beer
that dominate the market. Each brand has its unique style and flavor. Competition among
present craft beer brands in the Philippines is almost non-existent; this is because these
brands do not usually compete against each other since they pride themselves as a part of
a group with the same passion. Furthermore, Fat Paulys is the only craft beer brewer in
Mindanao which is already distributing and selling products. It has virtually no
competition in the Mindanao area which means that it has the opportunity to grab hold of
the local craft beer market.


SWOT Analysis
Strengths

Quality and premium taste
Made with natural and premium
Ingredients
Locally made
No artificial extenders or synthetic
ingredients

Weaknesses

Expensive ingredients
Meticulous production process
Expensive end product
Opportunities

No current competition for handcrafted
beers in Mindanao
Local premium niche for beers are
unsatisfied
The increase of the A and Bs buying
power

Threats

New beer named Asahi by Asia
Brewery is entering the premium beer
market in the Philippines
Imported beers may be chosen over
locally produced craft beer
The sin tax implemented in year 2013
will continue to push the price increase
of alcoholic beverages.


Political environment
The Politics of the Philippines takes place in an organized framework of a
presidential, representative, and democratic republic whereby the president is both the
head of state and the head of government within a pluriform multi-party system.
Age regulations on alcohol consumption have been passed and implemented by
the government but actual reinforcement and implementation is weak. However, just last
year President Aquino signed the Republic Act No. 10351 which is the Act of
Restructuring the Excise Tax On Alcohol and Tobacco Products or known simply as Sin
Tax. Sin Tax is a kind of sumptuary tax: a tax specifically levied on certain generally
socially proscribed goods like alcohol and tobacco. This act declares that fermented
liquors which are brewed and sold at micro-breweries or small establishments such as
pubs and restaurants shall be subject to the rate of Twenty-eight pesos (P28.00) per liter
effective on January 1, 2013: Provided, That this rate shall be increased by four percent
(4%) every year thereafter effective on January 1, 2014, through revenue regulations
issued by the Secretary of Finance.
Market Segmentation and Customer Analysis
Market Segmentation



The market segments shown above are the potential consumers of Fat Paulys craft beers.
Beer lovers and beer enthusiasts are the main target market. Other segments are also part
of the target market which will be considered in making different types of Fat Paulys
craft beers based on their characteristics and main considerations.
Beer Lovers and Beer Enthusiasts: These people will be drawn to pubs because of their
love and passion for beer. The main appeal to this segment will be a number of hard-to-
find beers that are available to establishments.
Young Professionals: The general bar-attending public. This group will be drawn to
pubs after work to relax in a friendly and classy atmosphere.
COLLEGE STUDENTS
PARTY LOVERS
YOUNG
PROFESSIONALS
BEER LOVERS&
BEER ENTHUSIASTS
GENERAL PUBLIC
(18 45 YRS OLD)
SEC A, B & UPPER C
Love to experiment and
explore on beer types
Young who want to
socialize to relieve stress
More on socializing and are
particular on taste

Young who want to
mingle for fun
Party Lovers: This group consists of young individuals who love to go to bars and pubs
to party and mingle for fun.
College Students: University College students usually engaged in drinking beers with
friends and classmates to relieve stress.
Target market/segment characteristics
Geographic: Phase 1. Iligan City, Cagayan de Oro City, General Santos City,
and Davao City.

Phase 2. Manila, Boracay, Quezon City, Butuan, Camuigin,
Siargao, and other cities in the Philippines

Climate of the Philippines is tropical and characterized by
relatively high temperature, oppressive humidity and plenty of
rainfall.
Demographic:
General in terms of gender, ages 18 to 40 years old;
Younger adult demographics such as university students and young
professionals who love beer

Psychographic and Behavioural:
Socio-economic classes A, B and upper C
Beer lovers and beer enthusiasts

Market research findings
The proponents have conducted an online and offline survey on beer consumption
within the Mindanao area. The survey had a total of 82 respondents comprised of 52%
male and 48% female, and 93% were beer drinkers. Most of the respondents were 25 to
40 years old with the percentage of 45% and ages 18 to 24 years old with 43%. Most of
the respondents were currently located in Mindanao (77%), followed by Luzon (11%),
and Visayas (5%). Sixty Two percent 62% of the respondents were college graduates,
21% were undergraduates, 9% was high school level graduates, and only 7% were post
graduates. Forty three percent 43% of them earned 15,000 to 30,000 a month, 27%
earned 7,000 to 15,000, 15% earned only 7,000 a month, 10% earned 30,000 to 50,000,
and 4% earn about 50,000 a month. Most of the respondents drank beer for socializing
(40%), to have fun (24%), to relieve stress (14%), to ease boredom (11%), health benefits
(4%) and other reasons (6%). They usually consumed beer with friends (73%);
officemates (10%); others like family, boyfriends, girlfriends, and others (9%); alone
(7%); and with classmates (1%). They bought and drank beer at bars, pubs and events
(41%); at their house or house of a friend (17%); convenience stores (15%); restaurants
(11%); sari-sari stores (10%); and other places (6%).

For the frequency of drinking beers, 40% of the respondents drank once every 2
months or less, 29% one to three times per month, 22% once a week or more, and 9% do
not drink beer at all. The main preferences of beer drinkers were taste (34%) which
ranked first, then brand (18%), alcohol content (12%), availability (11%), price (9%), low
alcohol volume percentage, low calorie content, high alcohol volume percentage, and
others. Majority of the respondents liked to drink light beer (39%), strong beer (21%),
and flavored beer (16%). Others liked dark beer (12%), lager (7%), and other type of beer
(5%). The most well-known beer/s or brand/s which had the highest market share were
Red Horse beer and San Miguel beer, both got 35% share among the respondents. Then
Heineken, Colt 45, Carlsberg, Manila beer, Beer na Beer, Gold Eagle beer, other beers.

The second part of our questionnaire was dedicated toward knowing the current
perception of beer drinkers toward hand-crafted beer and Fat Paulys Ales and Lagers
products. About 70% of the respondents have not tried hand-crafted beers and only 30%
of them have tried it. But if they were available, majority said they will try the products
(55%), only 13 % said they would not try, and 32% said maybe they will try.

Fat Paulys hand-craft beer is yet to introduce itself to the beer lovers and beer
enthusiasts considering that only 27% of the respondents had knowledge and awareness
of its product while about 73% were not aware of the brand and its products. However,
63% of the respondents said they would support local breweries. Fat Paulys would have
the confidence to pursue and venture the industry with its great passion for craft beers.

Objectives and Goals Where the business needs to be

Mission Statement
Fat Pauly's Hand-crafted Ales & Lagers aims to satisfy craft beer lovers and
enthusiasts with the premium high quality hand-crafted beers. It also aims to be one of
front line microbreweries to flare up the calling for a Philippine craft beer revolution in
Mindanao.
Objectives
To be recognized as the leading craft beer brewer in the Mindanao Area.
To satisfy the demand for a more premium and natural beer for craft beer
enthusiasts and lovers in the A, B, and upper C socioeconomic classes in
the Philippines.
To share the art of beer brewing to future brewing enthusiast in the
country

Strategies and Tactics

Pricing strategy
It has been stated that craft beers are often times more expensive compared to
regular beers. Fat Paulys makes sure that the ingredients which go into the brewing
process are premium and natural. They import hops from Mabton, Washington and also
gather indigenous ingredients from different parts of the Philippines. Fat Paulys 335ml
bottles costs about Php 120 to Php 150 and 750ml bottles costs around Php 350 to Php
380. The high prices of Fat Paulys beers are testament to its value and prestige as a craft
beer for a posh crowd comprised of beer lovers and enthusiasts.



Product strategy
Fat Paulys craft beers are uniquely Filipino-made, infused with local flavors on
certain recipes like wild pukyutan honey, mangrove barks, wild tuba yeast
strains, biasong or Philippine lime, kulikot chillies, locally grown crops and fruits,
Malagos chocolates from Davao, strawberries from Bukidnon, and Timoga spring waters.
Most of these ingredients are indigenous yet germane to the farmlands of Iligan.
However, sometimes imported ingredients like Lebanese roses and smoked wood are
being used. These craft beers tend to be rich in taste, with a strong character, playful in
some ways, and ever-changing in form. There is always a chance for a new variant to
develop, depending on seasonal conditions or even the brewers latest idea. This will give
beer lovers and beer enthusiasts a tastier alternative to experience beers with wilder and
bolder flavors as to enjoy the journey of pleasure.
Place strategy
Fat Paulys has already expanded to select areas in the Philippines. This proposed
marketing plan is composed of a two phase place strategy. The first phase concentrates
on taking hold on select major cities located on Mindanao. These cities include Iligan
City, Cagayan de Oro, General Santos, and Davao City. The craft beer niche on these
areas has the potential to grow bigger through proper educational marketing and
information drive. We have conducted a study which had a total of 82 respondents and
77% of whom were individuals located in Mindanao. Based on the survey, 63% said YES
when asked the question: would you support local breweries in the Philippines who are
selling premium hand-crafted beer? 55% also said YES and 32% answered MAYBE
when asked the question: Would you buy hand-crafted beer if it's available? This data
supports the potential growth that Fat Pauly can obtain in Mindanaos craft-beer niche.

The phase two of the place strategy focuses on strengthening Fat Paulys
influence and market share in places where it already had tapped into like Manila and
other parts of the Philippines. Fat Paulys beers are currently available in few bars in
Manila such as Barley Gastropub in Quezon City and The Bottle Shop of Global Beer
Exchange in Paseo de Magallanes. Del Rosario is already exploring partnerships to
supply the beer to different restaurants and resorts in areas like Butuan, Camuigin,
Siargao and Boracay. This signifies the increase in demand for alternative brews in
different parts of the country.

Promotion strategy
Fat Paulys have already tried various marketing strategies from its peers in the
craft beer industry, local and abroad. The main strategy of this proposed plan is through
social media. There is a need to tweak a few things that will fit local beer culture. Many
beer drinkers are comfortable with mainstream brands and a little coaxing may persuade
more individuals to try craft beer through educational marketing by educating them on
what is craft beer. Fat Paulys beers would be best promoted though events, print ads,
meal pairing with selected upper middle class restaurants, websites and social media.
City Fiestas and October fests are strategic occasions where Fat Paulys could
seek exposure. Fat Pauly could either set up booths or associate with culinary
competitions and other events that involve Filipino beverages and food. Another way to
promote Fat Paulys beers is to partner with upper middle class restaurants to pair craft
beer with their menu items. Generally beer is as versatile as it is diverse, providing both
complementary and contrasting experiences when paired with food.
Here are great examples of craft beer food pairing that could be added to the
menus of partner restaurants:
Green Salads, Fish, and Pale Ale
Roast Chicken and Pale Ale
Roast Beef and Pale Ale
Curry Dishes and Lager
Hamburger and Lager

In addition to meal pairing, Fat Pauly may also partner up will middle class to high end
pubs and bars, making Fat Paulys beers available on tap via medium to large kegs of
craft beer. Hopefully this would encourage people to sample or buy Fat Paulys beers in
small quantities.
Fat Paulys hand-crafted Ales and Lagers will also be promoted through different
online and social media platforms such as Facebook, Twitter, and Instagram. The fact
that most craft brewers in the Philippines are spreading the word of the craft beer
revolution on online channels makes it crucial to build noise and interaction on social
media and blogs.

People strategy
In order to flourish in the craft beer market industry, Fat Paulys Hand-crafted
Ales & Lagers should tie up and maintain good relationship with reliable beer distributors
as well as with Global Beer Exchange as their partners for growth. It has to establish new
exciting relationship with its prospective bar and restaurant owners as well as staff by
providing variety of special offers and products that help promote the products of these
partners as well as Fat Paulys like product pairings.
Process strategy

Upon expansion, Fat Paulys hand-crafted Ales and Lagers should retain its
original quality despite the increase in production. In addition, Fat Paulys should have a
regular and stable supply for all distribution channels. Orders should also be delivered in
a timely manner in order to ensure that customers and partners are well satisfied.









Budgets and Controls

Forecasts for the increase in Fat Paulys sales are based on the proposed strategy which is
to concentrate on taking hold of the Mindanao craft beer niche. This forecast includes the
four strategic locations identified, namely Iligan City, Cagayan de Oro City, Davao City,
and General Santos City.

Demand Estimates

Iligan CDO Davao
General
Santos Total
Target Key Cities Population
1
86,108 301,790 401,604 222,208 1,011,710
Approximated Beer consumers
2
93% 93% 93% 93% 93%
Expected Beer Consumers 80,080 280,665 373,492 206,653 940,890
Per capita consumption (in L/yr)
3
1.29 1.29 1.29 1.29 1.29
Potential Consumption (in L) 103,303 362,058 481,805 266,582 1,213,748
Exp target market for craft beers
4
1% 1% 1% 1% 1%
Expected craft beer consumers 1,033 3,620 4,818 2,666 12,137
Exp target market for Fat Pauly's
5
55% 55% 55% 55% 55%
Exp demand of Fat Paulys (in L) 568 1,991 2,650 1,466 6,676
Exp demand of Fat Paulys
(in 335mL bottles) 1,705 5,974 7,950 4,399 20,027
Exp demand of Fat Paulys
(in 750mL bottles) 758 2,655 3,533 1,955 8,901

The estimated annual demand of Fat Paulys handcrafted ales and lagers in Iligan,
Cagayan de Oro, Davao and General Santos is around 6,600 liters or 20,000 bottles of
335mL or 8,900 bottles of 750 mL.

1
Approximated 2014 urban population for aged 18 to 45 yrs old (based on 2010 census of the NSO and
NSCB applying the population annual growth rate per city)

Iligan Cagayan Davao Gen San
2010 Population 322,821 602,088 1,449,296 538,086
Growth Rate 1.25% 2.69% 2.36% 2.71%
% of urban population 61% 100% 57% 83%
% of population aged 18-40 42% 45% 44% 45%
2
Based on the market survey result, 93% of the respondents are beer drinkers
3
Based on World Health Organization survey on pure alcohol consumption among adults in litres per
capita per year
4
Based on the market survey for Philippine Market for wines and craft beers of USDA Agricultural Service
(http://apeda.gov.in/agriexchange/marketreport/Reports/Sin_Tax_Reform_Ushers_in_Higher_Wine_and_B
eer_Prices_in_2013_Manila_Philippines_1-10-2013.pdf)
5
Based on market survey, 55% of the respondents are willing to buy a craft beer if it is available

Costs and Break-Even
With the increase in the demand, the following are the estimated increase in fixed cost:

Estimated increase in Fixed Costs
Equipment Expansion P 300,000
Additional Promotional Costs 200,000
Increase in General and Administrative Cost 100,000
Total Fixed Cost 600,000
Estimated Variable Cost
Per 335 mL Per 750 mL
Ingredients and labor 50.00 112.50
Packaging Cost 6.00 13.50
Shipping Cost 4.00 9.00
Taxes 25.00 60.00
Total Variable Cost 85.00 195.00

Using the P135 average price of a 335 mL bottle (price ranges from P120 to P150), then
the break-even volume is 12,000 bottles of 335 mL, assuming that all sales are 335 mL
bottle of beer. Using the assumption that all sales are 750 mL bottles, with an average
price of P365 per 750 mL bottle (price ranges from 350 to 380), then the break-even
volume is 3,530 bottles.

Break even volume (in 335 mL bottle) = Fixed cost / (Price Variable Cost)
= P600,000 / (135 85)
= 12,000 bottles
Break-even volume (in 750 mL bottle) = P600,000 / (365 195)
= 3,530 bottles

Considering that the projected demand in the four identified strategic location is higher
than the break-even volume, then it is most likely that Fat Paulys will easily reach a
profitable volume ranging up to P1.2million, which can be turned into profit and
reinvested for future growth and expansion. Below are the graphs of Fat Paulys sales and
total costs at different volume of sales.



-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
i
n

P
e
s
o
s

Volume (in thousands)
Total Cost (in 335 mL Sales (in 335 mL)
-
1,000,000
2,000,000
3,000,000
4,000,000
1 2 3 4 5 6 7 8 9 10
i
n

P
e
s
o
s

Volume (in thousands)
Total Cost (in 750 mL Sales (in 750 mL)

Contingency plans and risk management

Fat Paulys is faced with three major risks: the regulatory/political risk, the
economic risk and the environmental risk.

Being in the beer industry, Fat Paulys is subject to a number of tax regulations,
such as sin tax, value-added tax, and import duties. This exposes Fat Paulys to
regulatory/political risk. Any change in the tax rates or regulations imposed by the
government is beyond the control of the company. Thus, in order to mitigate this risk, Fat
Paulys should be familiar with the different regulations imposed by the government.
Also, any increase in tax rates means an increase in the prices of beer in general, thus, Fat
Paulys should have an effective pricing strategy in order for the company to be not
significantly affected if tax rates slightly increase.

Economic risk involves risks in foreign exchange fluctuations and increase in
inflation rate. Since Fat Paulys is highly dependent on the imported raw ingredients, then
any changes in the exchange rate can significantly affect its business. Fat Paulys may
enter into hedging transaction in order to protect the business from foreign exchange
fluctuations and increase in inflation rate. However, if it is deemed expensive to enter
into a hedging transaction with a financial institution, then Fat Paulys may create a
strong partnership with the supplier in order to secure a viable resource of ingredients
despite the fluctuations in the economy.

Since Fat Paulys is being manufactured in Iligan, then it highly relies on the
trucking and transport industries for on time delivery of its ingredients and of its product
to its partners (restaurants, pubs, etc.), thus Fat Paulys is highly exposed to
environmental risk. Any occurrence of calamities (e.g. typhoon and earthquake) can
cause significant delays to the production which if converted, can lead to significant
losses in Peso. In order to mitigate this risk, Fat Paulys should incur additional insurance
cost for its raw ingredients and its finished product.
Bibliography
abs-cbnNEWS.com. (2009, February 27). Pinoys heaviest beer drinkers in SE Asia.
Retrieved March 09, 2014, from http://www.abs-cbnnews.com/: http://www.abs-
cbnnews.com/lifestyle/02/27/09/pinoys-heaviest-beer-drinkers-se-asia-doh-study
euromonitor. (2013 , September ). Beer in the Philippines. Retrieved 03 10, 2014, from
euromonitor: http://www.euromonitor.com/beer-in-the-philippines/report
Maierbrugger, A. (2013, July 4). Asahi shaking up the Filipino beer market. Retrieved
March 09, 2014, from investvine: http://investvine.com/asahi-shaking-up-the-filipino-
beer-market/
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Food and Agri Business Monitor : http://ats-sea.agr.gc.ca/asean/4333_e.htm
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Retrieved 03 10, 2014, from Philippine Daily Inquirer:
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love-of-drinking-inspired-Vitamin-Beer
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Definition of Terms

Microbrewery or craft brewery is a brewery that produces a limited amount of beer.
Exact definitions vary, but the terms are typically applied to breweries that are much
smaller than large-scale corporate breweries and are independently owned. Such
breweries are generally characterized by their emphasis on flavor and brewing technique.
Lager (German: storage) is a type of beer that is fermented and conditioned at low
temperatures
Ale is a type of beer brewed from malted barley using a warm fermentation with a
strain of brewers' yeast.[1][2] The yeast will ferment the beer quickly, giving it a sweet,
full bodied and fruity taste.
Premium beer is a term used to refer to malt beers of around 5% abv. There is no legal
definition for premium beer, and the term is used by brewers to market their products. It
was first used in an advertising campaign which targeted consumers who are looking for
a light beer but want something different from ordinary lager.
Appendix A
Summary of Survey Result

Total respondents = 82
Gender:

Age:
13 - 17 yrs. Old 0 = 0%
18 24 yrs. Old 34 = 43%
25 40 yrs. Old 36 = 45%
41 55 yrs. Old 9 = 11%
above 55 yrs. old 1 = 1%
Currently you are located in:







Male 42 = 52%
Female 39 = 48%


Luzon 9 = 11%
Visayas 4 = 5%
Mindanao 63 = 77%
outside Philippines 6 = 7%

Educational attainment

Monthly Income:
below 7,000 12 = 15%
more than 7,000 15,000 22 = 27%
more than 15,000 30,000 35 = 43%
more than 30,000 50,000 8 = 10%
more than 50,000 3 = 4%
Still a student 2 = 2%
Do you drink beer?

How often do you drink beer?



High school Graduate 7 = 9%
College Undergraduate 17 = 21%
College Graduate 51 = 62%
Masters Graduate 6 = 7%
Other 1 = 1%


Yes 76 = 93%
No 6 = 7%


Once a week or more 18 = 22%
1 to 3 times a month 24 = 29%
Once every 2 months or less 33 = 40%
Dont drink beer 7 = 9%


You drink beer due to the following reason:
Socializing 56 = 40%
Health benefits 6 = 4%
To relieve stress 20 = 14%
To ease boredom 15 = 11%
To have fun 34 = 24%
Other 9 = 6%

You usually drink beer with:

Where do you often purchase and consume your beer?
House/house of a friend 21 = 17%
Bars, pubs and events 51 = 41%
Restaurants 14 = 11%
Convenience stores 18 = 15%
Sari-Sari stores 12 = 10%
Other 8 = 6%

What are your preferences in drinking beer?
Price 14 = 9%
Taste 50 = 34%
Alcohol content 18 = 12%
Brand 26 = 18%
Availability 16 = 11%
Low calorie content 4 = 3%

Alone 6 7%
Friends 59 73%
Officemates 8 10%
Classmates 1 1%
Other 7 9%

Low Alcohol Vol% 12 = 8%
High Alcohol Vol% 2 = 1%
Other 6 = 4%
What is the type of beer you usually drink?
Light Beer 48 = 39%
Dark beer 15 = 12%
Flavored beer 20 = 16%
Lager 9 = 7%
strong beer 26 = 21%
Other 6 = 5%
What are the brands of beer you usually drink?
San Miguel Beer 52 = 35%
Red horse beer 52 = 35%
Beer na beer 4 = 3%
Colt 45 8 = 5%
Heineken 12 = 8%
Carlsberg 6 = 4%
Gold Eagle 1 = 1%
Manila Beer 4 = 3%
Other 9 = 6%

Craft beer is a specialty beer produced in limited quantities.
Have you ever tried hand-crafted beer?




Yes 25 = 30%
No 57 = 70%

Would you buy hand-crafted beer if it's available?




Have you heard about Iligan's Fat Pauly's hand-crafted beer?




Would you support local breweries in the Philippines who are selling
premium hand-crafted beer?




yes 50 = 63%
no 3 = 4%
Maybe 27 = 34%


Yes 45 = 55%
No 11 = 13%
Maybe 26 = 32%


Yes 22 = 27%
No 59 = 73%

Appendix B
Projected Profit (Under the assumption that Fat Paulys will meet the
entire annual demand)



Assuming Sales will
be purely 335mL
Assuming Sales will
be purely 750 mL
Sales (in volume) 20,000 bottles 8,900 bottles
Average Selling price per unit P135/bottle P365/bottle
Estimated Cost per unit P85/bottle P196/bottle

Sales (inclusive of VAT) 2,700,000 3,248,500
Cost of sales 1,700,000 1,735,500
Gross Margin 1,000,000 1,513,000
Increase in Promotional cost 200,000 200,000
Increase in General and
Administrative costs 100,000 100,000
Increase in Net Income 700,000 1,213,000