PROJECT REPORT

Of

CRAFT BEER

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding craft beer Manufacturing unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : info@udyami.org.in
Contact : +91 7526000333, 444, 555
 PROJECT AT GLANCE

1 Name of Proprietor/Director XXXXXXXX

2 Firm Name XXXXXXXX
3 Registered Address XXXXXXXX
4 Nature of Activity XXXXXXXX
5 Category of Applicant XXXXXXXX
6 Location of Unit XXXXXXXX
7 Cost of Project 24.00 Rs. In Lakhs
8 Means of Finance
i) Own Contribution 2.40 Rs. In Lakhs
ii) Term Loan 16.55 Rs. In Lakhs
iii) Working Capital 5.05 Rs. In Lakhs
9 Debt Service Coverage Ratio 2.83
10 Break Even Point 38%
11 Power Requiremnet 30 KW
12 Employment 12 Persons
Malt(barley),water,hops and
13 Major Raw Materials
yeast
14 Details of Cost of Project & Means of Finance
Cost of Project Amount in Lacs
Particulars Amount
Land and building Owned/Leased
Plant & Machinery 17.39
Furniture & Fixture -
Other Misc Assets 1.00
Working Capital Requirement 5.61
Total 24.00
Means of Finance
Particulars Amount
Own Contribution 2.40
Term Loan 16.55
Working capital Loan 5.05
Total 24.00
 1. INTRODUCTION

Brewing has been practised since the 6th millennium BC, and archaeological evidence shows that
ancient Egypt and Mesopotamia were among the first civilizations to do so. Cuneiform (the oldest
known writing) from ancient Mesopotamia contains descriptions of several beer recipes. The
brewer's skill was the only occupation in Mesopotamia that had social sanction and divine
protection from female deities/goddesses, especially Ninkasi, who oversaw beer production, Siris,
who oversaw beer consumption, and Siduri, who oversaw beer enjoyment. Women are typically
the primary brewers in pre-industrial eras and in underdeveloped nations.
A craft brewery, sometimes known as a microbrewery, is a brewery that produces modest volumes
of beer, generally less than big breweries, and is typically operated by a single person. Breweries
of this kind are known for emphasising excitement, innovative tastes, and a wide range of brewing
processes. Although traditional artisanal brewing had existed in Europe for centuries and had
extended to other nations, the micro brewing movement emerged in the 1970s in both the United
States and the United Kingdom. The more inclusive idea of craft brewing evolved as the movement
progressed and some brewers increased their output and distribution. A brewpub is a bar that brews
its own beer and sells it on site. Malt, water, hops, and yeast have been used to make beer for
millennia. To put it another way, the sugars in grains are extracted so that yeast may convert them
to alcohol and carbon dioxide, resulting in the ultimate product: beer. While craft brewing is
governed by scientific principles, it also requires creativity, since brewers must experiment with
different mixes of grains, hops, yeast, and extracts to create a variety of styles.
Craft beer is distinguished from mass-produced beer by its commitment to innovation. To decrease
the price of the finished product, the main domestic beer producers utilise less expensive
components, such as rice or maize instead of hops, resulting in a watery, bland beverage. There
are a number of beers that readily fall into the 'craft beer' category. Even if a brewer is tiny,
traditional, and independent, he or she might still create a poor beer. We've tried a lot of them, so
trust us. They are somehow more respected because they are craft brewers, but they still make
lousy beer.

2. PRODUCT DESCRIPTION

2.1 PRODUCT USES

Craft beer has a more complex and unique flavour than mass-produced beer. The majority of craft
brewers are passionate about their beer's taste and flavour.

2.2 MANUFACTURING PROCESS

Beer is more than just water, hops, malt and yeast. In the beer making process various ingredients
are mixed, processed and sometimes the structure of the raw materials is altered. The brewing
process is made up of ten production steps from the fresh barley to the finished beer –steps in more
detail mentioned below.

 Malting: Malting is the first stage in the manufacture of beer. Fresh barley is first soaked in
water before being placed in so-called germination boxes to sprout. The enzymes (amylase)
required for starch separation are produced during this phase. The drying process then
interrupts the germination process at just the right time (kilning). The green paints are
meticulously dried at 80 degrees Celsius and have a somewhat pleasant flavor when dry. The
malt sugar is subsequently used to feed yeast cells, which produce alcohol.
 Milling: Milling is the second step in the brewing process. The final malt is milled, similar
to how wheat is made, to improve its water absorption. Malt mills generate a variety of
 crushed malt grades, including husks, groats, meal, semolina, and powder (from the coarse
to the finest).
 Mashing: Mashing is the third step in the brewing process. In the mash procedure - mashing-
in - the milled malt is combined with water. Sugar, protein, and tannin are released as the
starch in the grist dissolves. This mashing procedure yields the so-called malt extract.
 Lautering: The loudest phase in the beer-making process is the fourth. In the lauter tun, the
mash is filtered as the husks sink and the liquid is separated from the solids (spent grains).
The term is then utilized in the brewing process, with the wasted grains often being used as
cattle fodder.
 Sparging: Water is added during lautering to extract more of the fermentable sugars from
the grain.
 Word Boiling: Boiling is the fifth step in the brewing process. The word is boiled and the
hops are put in the brewing pan or word kettle. The kind and number of hops used determine
the beer's flavour: the more hops used, the bitterer the beer. The word is condensed to the
original word when the water evaporates, the malt enzymes are deactivated, and tannin and
protein components are separated to create the so-called trub.
 Word Classification: Word clarity, also known as drawing off, is the sixth phase in the
brewing process. The word is then fed into the vortex, which begins to revolve. Hop particles
that haven't dissolved and protein, known as trub, create a cone in the centre of the container,
and the clear word may be tapped off to the side. The clear word is then cooled to between
10 and 20 degrees Celsius in the word cooler.
 Fermentation: The alcoholic fermentation process is the seventh phase in the beer-making
process. This takes place in a fermentation tank with the addition of specific brewing yeast.
The malt sugar is converted to alcohol and carbon dioxide by the yeast. The yeast sinks and
is collected as soon as the malt sugar has fermented. A top or bottom fermented beer is created
depending on the type of yeast and the word preparation employed.
 Conditioning: The yeast in beer goes inactive throughout the conditioning process and
settles out of the brew, accumulating at the bottom of the tank. Any residual yeast and big
proteins are subsequently filtered out of the brew.
 Filtration: Filtration is the ninth step in the brewing process. Any components left over after
fermentation and secondary fermentation, including as yeast particles, hop resin, and protein,
are removed at this stage, and the beer is given its final clear color.
  Packaging: The beer is bottled once it has finished conditioning. Beer comes in a variety of
containers, including bottles, cans, and kegs. Brewers commonly forcibly carbonate their beer
prior to packing since CO2 is allowed to escape during the fermentation process owing to the
building of pressure, which may cause the tanks to explode.

3. PROJECT COMPONENTS

3.1 Land & Building

The land required for this manufacturing unit will be approx. around 2000 square feet. Land
Purchase and Building Civil Work Cost have not been considered as part of the cost of project. It
is expected that the premises will be on rental and approximate rentals assumed of the same will
be Rs.30,000 per month.
 Workshop Area- This area includes the setup and foundation space for all equipment’s,
work floor area, etc. Total workshop area is approx.1000 Sqft.

 Inventory Area- This area includes the storage space for all the raw materials and finished
goods. Total inventory area is approx. 500 Sqft.

 Office Area – This space includes staff working region, their accommodation space. Total
workshop area is approx. 300 Sqft. This may be considered above the ground floor.

 Parking Space, Electric Mounting Space, and Others. This could be approx. 200 Sqft.

Land and building requirement may vary depending on the size of project.
3.2 Plant & Machinery

 Malt Mill: Brewery malt mills (malt crushers) are devices that squeeze malt grains finely
without harming the grain's outer layers.
 Mash tun- Mash tuns are important parts of a brewhouse because they mix grain that has
been cracked in a grain mill with metered hot water to convert complicated starches into
more easily fermentable simple sugars.

 Filtration system- For basic, medium, and fine beer filtration, kieselguhr filters are the
most often used method. The filtering media is diatomaceous earth (kieselguhr). This is a
coarsely crushed combination of ancient seaweed shells.

 Heat exchanger- A heat exchanger is a brewery piece of equipment that swiftly raises or
lowers the temperature of wort or beer.
 Beer fermentation Tank- Fermentation Containers, commonly known as fermenters or
FVs (and sometimes written fermenters), are the tanks, barrels, or other vessels in which
wort ferments into beer.

 Kiln- Kilning is the process of drying and developing malty, biscuit-like tastes from
sprouted barley. Pale malt makes up the majority of malt in today's beers.

 Lauter Tun- The Lauter Tun is a vessel used to separate the wort from the mash solids. It
usually has a false bottom with a slotted, perforated floor that retains the spent milled grains
while enabling the wort to filter through the grain bed and gather in the area beneath; the
wort then flows to the brew kettle.
  Beer filling Machine: Packaging of bottled beer typically involves drawing the product
from a holding tank and filling it into bottles in a filling machine (filler), which are then
capped, labeled and packed into cases or cartons.

Machine Quantity Price

Malt Mill 1 2,80,000

Mash Tun 1 1,50,000
Filtration System 1 1,00,000
Heat exchanger 1 2,74,000

Beer fermentation Tank 1 85,000

Kiln 1 3,20,000
Lauter Tun- 1 2,50,000
Beer filling Machine 1 2,80,000
TOTAL 17,39,000
Note: Total Machinery cost shall be Rs 17.39 lakhs (Approx.) excluding GST and
Transportation Cost.

4 LICENSE & APPROVALS

Basic registration required in this project:

 MSME Udyam registration

 GST registration

 NOC for fire safety board and Pollution Control Board

 Trade License

 Factory License (Optional)

 Liquor License

 Import/Export License (Optional)

 Choice of a Brand Name of the product and secure the name with Trademark if required .
Projected Balance Sheet
(in
PROJECTED BALANCE SHEET Lacs)

2nd 3rd 4th

PARTICULARS 1st year year year year 5th year
Liabilities
Capital
Opening balance 2.70 4.71 7.18 9.96
Add:- Own Capital 2.40
Add:- Retained Profit 5.30 7.11 8.57 11.38 13.21
Less:- Drawings 5.00 5.10 6.10 8.60 10.20

Closing Balance 2.70 4.71 7.18 9.96 12.97

Term Loan 14.71 11.03 7.36 3.68 -
Working Capital Limit 5.05 5.05 5.05 5.05 5.05
Sundry Creditors 0.75 0.84 0.93 1.03 1.14
Provisions & Other Liability 0.20 0.24 0.29 0.35 0.41
TOTAL : 23.41 21.87 20.81 20.06 19.57
Assets
Fixed Assets ( Gross) 18.39 18.39 18.39 18.39 18.39
Gross Dep. 2.76 5.10 7.10 8.79 10.23
Net Fixed Assets 15.63 13.29 11.29 9.60 8.16

Current Assets
Sundry Debtors 2.90 3.33 3.69 4.08 4.50
Stock in Hand 3.46 3.85 4.26 4.69 5.14
Cash and Bank 0.22 0.10 0.17 0.19 0.17
Loans & Advances /Other Current Assets 1.20 1.30 1.40 1.50 1.60
TOTAL : 23.41 21.87 20.81 20.06 19.57
Projected Profitability
(in
PROJECTED PROFITABILITY STATEMENT Lacs)

2nd 3rd 4th

PARTICULARS 1st year year year year 5th year
Capacity Utilisation % 50% 53% 56% 59% 62%
SALES
Gross Sale
Craft Beer 87.00 99.98 110.68 122.51 134.94

Total 87.00 99.98 110.68 122.51 134.94

COST OF SALES
Raw Material Consumed 45.00 50.35 56.00 61.95 68.20
Electricity Expenses 2.88 3.05 3.23 3.40 3.57
Depreciation 2.76 2.34 1.99 1.69 1.44
Wages & labour 16.08 18.01 20.17 22.19 24.41
Repair & maintenance 1.31 1.50 1.66 1.84 2.02
Packaging 4.35 5.00 5.53 6.13 6.75
Cost of Production 72.37 80.26 88.58 97.19 106.39
Add: Opening Stock - 2.41 2.68 2.95 3.24
Less: Closing Stock 2.41 2.68 2.95 3.24 3.55
Cost of Sales 69.96 79.99 88.31 96.91 106.08
GROSS PROFIT 17.04 19.99 22.38 25.61 28.86
19.59% 19.99% 20.22% 20.90% 21.39%
Salary to Staff 4.14 4.55 5.10 5.36 5.89
Interest on Term Loan 1.63 1.43 1.03 0.62 0.22
Interest on working Capital 0.56 0.56 0.56 0.56 0.56
Rent 3.60 3.78 3.97 4.17 4.38
Selling & Administrative Exp. 1.74 2.00 2.21 2.45 2.70
TOTAL 11.66 12.32 12.87 13.15 13.74
NET PROFIT 5.38 7.67 9.51 12.45 15.12
6.18% 7.67% 8.59% 10.16% 11.20%
Taxation 0.08 0.55 0.94 1.08 1.91
PROFIT (After Tax) 5.30 7.11 8.57 11.38 13.21
Projected Cash Flow Statement

PROJECTED CASH FLOW STATEMENT (in Lacs)

1st 2nd 3rd 4th

PARTICULARS year year year year 5th year
SOURCES OF FUND
Own Margin 2.40
Net Profit 5.38 7.67 9.51 12.45 15.12
Depreciation & Exp. W/off 2.76 2.34 1.99 1.69 1.44
Increase in Cash Credit 5.05 - - - -
Increase In Term Loan 16.55 - - - -
Increase in Creditors 0.75 0.09 0.09 0.10 0.10
Increase in Provisions & Oth labilities 0.20 0.04 0.05 0.06 0.07
-
TOTAL : 33.09 10.14 11.64 14.30 16.73
APPLICATION OF FUND
Increase in Fixed Assets 18.39
Increase in Stock 3.46 0.39 0.41 0.43 0.45
Increase in Debtors 2.90 0.43 0.36 0.39 0.41
Repayment of Term Loan 1.84 3.68 3.68 3.68 3.68
Loans & Advances /Other Current
Assets 1.20 0.10 0.10 0.10 0.10
Drawings 5.00 5.10 6.10 8.60 10.20
Taxation 0.08 0.55 0.94 1.08 1.91
TOTAL : 32.87 10.25 11.58 14.28 16.75

Opening Cash & Bank Balance - 0.22 0.10 0.17 0.19

Add : Surplus 0.22 (0.11) 0.06 0.03 (0.02)
Closing Cash & Bank Balance 0.22 0.10 0.17 0.19 0.17
DSCR

CALCULATION OF D.S.C.R

1st 2nd 3rd 4th 5th

PARTICULARS year year year year year

CASH ACCRUALS 8.06 9.46 10.56 13.07 14.65

Interest on Term Loan 1.63 1.43 1.03 0.62 0.22

Total 9.68 10.89 11.59 13.69 14.87

REPAYMENT

Instalment of Term Loan 1.84 3.68 3.68 3.68 3.68

Interest on Term Loan 1.63 1.43 1.03 0.62 0.22

Total 3.47 5.11 4.71 4.30 3.90

DEBT SERVICE COVERAGE

RATIO 2.79 2.13 2.46 3.18 3.82
AVERAGE D.S.C.R. 2.83
Repayment schedule

REPAYMENT SCHEDULE OF TERM LOAN

Interest 11.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
1st Opening Balance

1st month - 16.55 16.55 - - 16.55

2nd month 16.55 - 16.55 0.15 - 16.55

3rd month 16.55 - 16.55 0.15 - 16.55

4th month 16.55 - 16.55 0.15 16.55

5th month 16.55 - 16.55 0.15 16.55

6th month 16.55 - 16.55 0.15 16.55

7th month 16.55 - 16.55 0.15 0.31 16.24

8th month 16.24 - 16.24 0.15 0.31 15.94

9th month 15.94 - 15.94 0.15 0.31 15.63

10th month 15.63 - 15.63 0.14 0.31 15.33

11th month 15.33 - 15.33 0.14 0.31 15.02

12th month 15.02 - 15.02 0.14 0.31 14.71

1.63 1.84
2nd Opening Balance

1st month 14.71 - 14.71 0.13 0.31 14.41

2nd month 14.41 - 14.41 0.13 0.31 14.10

3rd month 14.10 - 14.10 0.13 0.31 13.79

4th month 13.79 - 13.79 0.13 0.31 13.49

5th month 13.49 - 13.49 0.12 0.31 13.18

6th month 13.18 - 13.18 0.12 0.31 12.87

 7th month 12.87 - 12.87 0.12 0.31 12.57

8th month 12.57 - 12.57 0.12 0.31 12.26

9th month 12.26 - 12.26 0.11 0.31 11.95

10th month 11.95 - 11.95 0.11 0.31 11.65

11th month 11.65 - 11.65 0.11 0.31 11.34

12th month 11.34 - 11.34 0.10 0.31 11.03

1.43 3.68
3rd Opening Balance

1st month 11.03 - 11.03 0.10 0.31 10.73

2nd month 10.73 - 10.73 0.10 0.31 10.42

3rd month 10.42 - 10.42 0.10 0.31 10.11

4th month 10.11 - 10.11 0.09 0.31 9.81

5th month 9.81 - 9.81 0.09 0.31 9.50

6th month 9.50 - 9.50 0.09 0.31 9.20

7th month 9.20 - 9.20 0.08 0.31 8.89

8th month 8.89 - 8.89 0.08 0.31 8.58

9th month 8.58 - 8.58 0.08 0.31 8.28

10th month 8.28 - 8.28 0.08 0.31 7.97

11th month 7.97 - 7.97 0.07 0.31 7.66

12th month 7.66 - 7.66 0.07 0.31 7.36

1.03 3.68
4th Opening Balance

1st month 7.36 - 7.36 0.07 0.31 7.05

2nd month 7.05 - 7.05 0.06 0.31 6.74

3rd month 6.74 - 6.74 0.06 0.31 6.44

 4th month 6.44 - 6.44 0.06 0.31 6.13

5th month 6.13 - 6.13 0.06 0.31 5.82

6th month 5.82 - 5.82 0.05 0.31 5.52

7th month 5.52 - 5.52 0.05 0.31 5.21

8th month 5.21 - 5.21 0.05 0.31 4.90

9th month 4.90 - 4.90 0.04 0.31 4.60

10th month 4.60 - 4.60 0.04 0.31 4.29

11th month 4.29 - 4.29 0.04 0.31 3.98

12th month 3.98 - 3.98 0.04 0.31 3.68

0.62 3.68
5th Opening Balance

1st month 3.68 - 3.68 0.03 0.31 3.37

2nd month 3.37 - 3.37 0.03 0.31 3.07

3rd month 3.07 - 3.07 0.03 0.31 2.76

4th month 2.76 - 2.76 0.03 0.31 2.45

5th month 2.45 - 2.45 0.02 0.31 2.15

6th month 2.15 - 2.15 0.02 0.31 1.84

7th month 1.84 - 1.84 0.02 0.31 1.53

8th month 1.53 - 1.53 0.01 0.31 1.23
9th month 1.23 - 1.23 0.01 0.31 0.92
10th month 0.92 - 0.92 0.01 0.31 0.61
11th month 0.61 - 0.61 0.01 0.31 0.31
12th month 0.31 - 0.31 0.00 0.31 -
0.22 3.68
DOOR TO DOOR 60 MONTHS
MORATORIUM
PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
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