IMPORTANT: LMAO! You didn't think I would stay quiet for long? On the contrary! Went back to digging. So here's what's up.
Where are my beer biz people? C'mon! You guys know this! Economics 101! Kenny clues at their finest. He wasn't talking to us about the beer. He was talking to "those other guys."
First off...those FOUR distributors he mentioned? They represent more than HALF of the entire Michigan beer market. So this BS about 2 retail accounts "selected" out of an entire county of 800,000 is just that...BS.
Second...2% of the MI beer market? Folks, I'm here to tell you, that is UNHEARD OF in the beer business for a first year brand, or any year brand, to command 2% of ANY beer market. ANY company that grabs 2% of ANY beer market is an IMMEDIATE buyout candidate. Try being the CEO of InBev and SAB and conducting YOUR CC. You proceed to tell your shareholders all about slumping sales and the economy and then you "slide in" the fact that one of your bigger markets lost 2% market share. Then it happens again...and again...and again in every state in the country. "Buy that company DKAM or my *ss will be on the chopping block with the Board and the shareholders!"
Third...did you catch it? 2.9 BILLION 2.25 gallon cases of beer sold in the US last year. Out of that total, right at 100 million cases were sold in the Michigan market. So, 2% is 2 million cases. Now that I know what the cases are selling for, that is over $30 million in sales. But here again, there is that ALL important point. THAT IS ONLY, I REPEAT ONLY 147,000 PEOPLE DRINKING KID ROCK'S BEER.
Fourth...No my friends. MI will command at least a 4-5% market share. MBC is producing all they can as fast as they can. It sold out on the launch. It is selling out as quickly as the distributors can get it. The DISTRIBUTORS are the ones saying it is a 4%-5% market share brand.
Fifth...ummmm. There are 49 other states. Any OTHER state have Kid Rock fans? All of them. Or truckers, harley riders, blue collar workers, average joes looking for a good AMERICAN BEER? all of them. That same 2% market share translates quite simply into 58,000,000 cases of total annual sales of Kid Rock's Badass Beer. That is right at $1 BILLION in total annual sales.
Sixth...Beer transacts at $50 a case WITHOUT A BREWERY or roughly 3 times annual sales. I don't make up what a calculator says or what the sector has proven time and time again. You know how many cases. You know how much per case. You know the OS shares. Yes sir, that is $29 a share.
Seventh...OK, not going to do it? Tell me where to trim? Is it the fact that Kenny is taking 1-2 years to do it and a MAJOR beer company could put it out today nationwide and generate $1 billion in annual sales TODAY? Or, is it the numbers that 2% is actually 4-5%? Or, is it the fact that Kenny doesn't have 3-4 other breweries handling the excess demand today but a MAJOR beer company does? Is it the fact that the company has too many shares or too many arbitration claims that will prevent the distributors from selling or the people from buying? Is it the fact that the company never comes through on their promises when they never made a promise about this because you don't have to promise what is happening by simple economics? Oh! I know. It's the numbers which are clear and concise. OK! We'll ignore what IS ACTUALLY HAPPENING and say "just cuz" it is less. How much less? 30 million cases? Then you also have to IMMEDIATELY testify that a buyout suitor would be willing to pay less than the average $50 per case for a beer company they were buying. Less than the average rate for a company that is IMMEDIATELY stealing 2% of their market share. Go ahead, cut all you want. I'll still be collecting my $29 a share while you do.
Eight...October 2008 and December 2008 "We are building a $billion dollar beverage company."
Nuff said.
