P.O. Box 267814, Chicago, IL 60626 U.S.A. Tel: 1-773-465-7285 | Fax: 1-773-465-7387 E-Mail: abt@abtonline.com

EXECUTIVE SUMMARY

The microbrewed beer industry is an attractive area for new business investment. Aggregate market factors (e.g.: growth, stage in industry life cycle, cyclicity, seasonality and profitability) are overwhelmingly favorable; while industry and environmental factors (e.g.: threat of new entrants, rivalry, pressure from substitutes, technology, regulatory restrictions, social attitudes) are, on balance, neutral. Brewpubs have several advantages over microbreweries (which are generally not integrated with distribution channels), and over regular taverns (which are not integrated with product production); and should therefore be more profitable than a brewery or tavern of the same size.

According to a report presented by the Association of Brewers (the microbrewery trade association) at the 1996 National Craft Brewers Conference the typical brewpub patrons are younger (23 - 45 on the average), better educated (76% with at least two years of college-level education), have more disposable income and lead a more active social life (82% surveyed "dine out or have drinks" two or more days per week) than the average beer drinker. They appreciate and are willing to pay a premium for the full flavor, freshness and purity of pub-brewed beer. Although students have relatively low incomes, they tend to spend a high percentage of their incomes on social activities. Students, particularly graduate students at the University of Southern Missouri have all the attributes of the "ideal' brewpub patron.

There are 22 licensed hospitality establishments within the Central Business District. Of these seven are perceived as competitors for the class of customers that SBG will be catering to. SBG will distinguish itself by presenting a clear, consistent and distinctive public image; combining a comfortable and attractive interior with a moderately-priced broad appeal menu and high quality, fresh microbrewed beer. These goals will be achieved by a management team with 15 years of collective experience in hospitality management and operations working in tandem with the nation's leading microbrewery support services company. These elements combined with a prime high-traffic location directly adjacent to the USM campus will combine to create a successful and profitable brewpub.

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