Problem Definition
BrewCraft is a premium craft beer company headquartered in Bristol, UK, with annual revenue of £45 million and a loyal following among beer enthusiasts. The company operates two breweries and distributes through 1,200 independent pubs, 400 specialty retail shops, and a growing direct-to-consumer online channel. BrewCraft is known for its bold IPAs and seasonal ales, commanding a price premium of roughly 30% over mainstream beer brands.
Over the past two years, the CEO has noticed a significant shift in consumer behaviour. Non-alcoholic beer has moved from a niche afterthought to a visible shelf presence in supermarkets, pubs, and restaurants. Several mainstream brewers have launched NA lines, and dedicated NA brands are attracting venture capital. BrewCraft's own taproom staff report a steady increase in customers asking whether the company offers a non-alcoholic option. The CEO believes BrewCraft's brand equity in craft brewing could translate into a credible NA product, but she is unwilling to invest without understanding the size of the prize.
Before committing capital to recipe development, new equipment, and a go-to-market campaign, the CEO has engaged your team to answer three questions: How large is the UK non-alcoholic beer market today? Which consumer segments represent the best opportunity for BrewCraft specifically? And how should the company price its NA craft beer to maximize both penetration and margin?
Additional InformationAsk for more dataHide data
If asked, please share that:
- BrewCraft's current gross margin on alcoholic craft beer is 55%, and EBITDA margin is 14%
- The company's brand awareness is strong among 25-45-year-old craft beer drinkers but weak outside that demographic
- BrewCraft has no experience in non-alcoholic brewing; the process requires a dealcoholisation unit costing approximately £2 million
- The UK grocery channel (Tesco, Sainsbury's, Waitrose, etc.) accounts for roughly 70% of all NA beer sales; on-trade (pubs and restaurants) accounts for 20%; online direct-to-consumer is 10%
- BrewCraft currently has no presence in the major grocery chains
- UK alcohol duty on beer is approximately £0.54 per pint; NA beer below 0.5% ABV is duty-free, creating a meaningful cost advantage
Question 1Structuring
How would you approach estimating the size of the UK non-alcoholic beer market?
Hint · Structuring
Build 3–4 branches that are specific to this client and question, not a generic framework. Check they don't overlap and together cover the problem.
Additional InformationAsk for more dataHide data
- UK population is approximately 67 million
- Drinking-age population (18+) is approximately 52 million
- The UK beer market as a whole is worth approximately £20 billion at retail
- NA beer has been growing at 25-30% per year in the UK for the past three years
Try it first, then checkShow model answerHide model answer
A strong structure would include two parallel approaches:
Approach 1: Demand-Side (Bottom-Up from Consumers)
- a) Start with UK drinking-age population (52M)
- b) Segment into drinker vs. non-drinker pools
- c) Estimate NA beer penetration within each pool (what % have tried or regularly buy NA beer?)
- d) Estimate consumption frequency (occasions per week or month)
- e) Estimate average price per unit
- f) Multiply to get total market value
Approach 2: Supply-Side (Top-Down from Market)
- a) Start with total UK beer market value (£20B)
- b) Estimate NA beer share of total beer market (by volume or value)
- c) Cross-check with known growth rates and industry data
Key assumptions to flag:
- How to define "the market" --- does it include NA beer sold in pubs at on-trade prices, or only retail?
- Whether to use volume (litres) or value (£) as the primary metric
- The difference between trial penetration and regular consumption
- Seasonal variation (Dry January spikes vs. baseline consumption)
What the interviewer is looking forShow guidanceHide guidance
A good candidate will propose a logical segmentation of the population and work top-down from demographics. A strong candidate will suggest using both a demand-side approach (population, penetration, frequency, price) and a supply-side cross-check (total beer market, NA share). An excellent candidate will also identify which assumptions are most sensitive and flag them for discussion before diving into arithmetic.
Push back if the candidate immediately starts multiplying numbers without first laying out the structure. Ask: "Before we calculate, can you walk me through the logic of your approach?"
So What? cascade:
- Level 1: the market is a certain size in pounds
- Level 2: growth rate matters as much as current size --- a £350M market growing at 25% will be £700M within three years
- Level 3: the relevant addressable market for BrewCraft is much smaller than total market size, because BrewCraft lacks grocery distribution
Question 2Numeracy
Let us work through the demand-side estimate. Using the data I will share, estimate the annual UK non-alcoholic beer market size in pounds.
Hint · Numeracy
Write the formula before you plug in numbers, keep units and zeros explicit, and sanity-check the order of magnitude at the end.
Additional InformationAsk for more dataHide data
Share the following data points one at a time as the candidate asks or needs them:
- UK drinking-age adults (18+): 52 million
- Of these, approximately 25% do not drink alcohol at all (13 million abstainers)
- Of the 39 million who do drink alcohol, approximately 15% have purchased NA beer in the past year (5.85 million, round to 6 million)
- Of the 13 million abstainers, approximately 8% have purchased NA beer in the past year (roughly 1 million)
- Combined NA beer buyers: approximately 7 million
- However, only 40% of these are regular buyers (purchase at least once per month); the rest are occasional (1-2 times per year, e.g., Dry January)
- Regular buyers: 2.8 million, consuming on average 2 bottles per week
- Occasional buyers: 4.2 million, consuming on average 6 bottles per year
- Average retail price per bottle (330ml): £3.00
Try it first, then checkShow model answerHide model answer
Step 1: Identify buyer pools
| Segment | Population | NA Beer Penetration | NA Beer Buyers |
|---|---|---|---|
| Alcohol drinkers (75%) | 39M | 15% | 5.85M (~6M) |
| Non-drinkers (25%) | 13M | 8% | 1.04M (~1M) |
| Total | 52M | ~7M |
Step 2: Separate regular vs. occasional buyers
- Regular buyers (40% of 7M): 2.8 million
- Occasional buyers (60% of 7M): 4.2 million
Step 3: Calculate annual volume
| Buyer Type | Count | Frequency | Annual Bottles |
|---|---|---|---|
| Regular | 2.8M | 2 per week x 52 weeks = 104/year | 291.2M |
| Occasional | 4.2M | 6 per year | 25.2M |
| Total | 316.4M |
Step 4: Calculate market value
- 316.4 million bottles x £3.00 per bottle = £949.2 million
Wait --- this seems high. Let us sanity-check.
Step 5: Supply-side cross-check
- Total UK beer market: £20 billion
- NA beer is approximately 1.5-2.0% of total beer by value
- 2% of £20B = £400 million
- Our demand-side estimate of ~£950M is roughly 2.4x the supply-side figure
Step 6: Reconcile the gap
The discrepancy suggests "2 bottles per week" is peak consumption, not the population average across all regular buyers. Many also drink alcoholic beer and substitute NA on only some occasions. Adjusting to an effective rate of ~1 bottle per week:
| Buyer Type | Count | Adjusted Frequency | Annual Bottles |
|---|---|---|---|
| Regular | 2.8M | 1/week x 52 = 52/year | 145.6M |
| Occasional | 4.2M | 6/year | 25.2M |
| Total | ~117M (blended, accounting for lighter regular buyers) |
Best estimate: £350-400 million, aligning with the supply-side cross-check at approximately 1.8-2.0% of the total beer market.
Key insight: The sizing is highly sensitive to the frequency assumption. Even halving weekly consumption nearly halves the estimate. A candidate who flags this sensitivity early demonstrates strong analytical judgment.
What the interviewer is looking forShow guidanceHide guidance
The candidate should work through the arithmetic methodically. The key test is whether they separate regular from occasional buyers --- candidates who use a single blended frequency will get a significantly wrong answer. A strong candidate will also do a quick sanity check against the supply-side number.
If the candidate is moving too fast, slow them down: "Can you walk me through each step so I can follow your logic?"
If the candidate gets stuck, prompt: "Think about whether all 7 million buyers consume at the same rate."
Reality check: the answer should land in the range of £300-400 million. If the candidate gets a number above £1 billion or below £100 million, prompt them to re-examine their assumptions.
Question 3Judgement & Insights
Please review Exhibit 1. Which one or two customer segments should BrewCraft prioritize for its NA beer launch, and why?
Hint · Judgement & Insights
Read the exhibit title, axes and units first. Lead with the ‘so what’, then back it with one or two numbers.
Additional InformationAsk for more dataHide data
- Share Exhibit 1 (Customer Segment Analysis)
- If asked, confirm that BrewCraft's brand is strongest among 25-45-year-old craft beer enthusiasts
- BrewCraft's current distribution is skewed toward independent pubs and specialty shops, not grocery
- The company has a direct-to-consumer online shop with 35,000 active customers
- BrewCraft's marketing budget for the NA launch is limited to £1.5 million
Exhibit 1UK Non-Alcoholic Beer Customer Segments
| Segment | Est. Size (M) | Avg. Consumption Frequency | Willingness to Pay (per bottle) | Primary Purchase Channel | Brand Loyalty |
|---|---|---|---|---|---|
| Health-Conscious Millennials (25-40) | 1.8 | 1.5 bottles/week | £3.50 | Specialty retail, online | High |
| Sober-Curious Gen Z (18-27) | 2.0 | 1 bottle/week | £2.80 | Grocery, online | Low |
| Designated Drivers | 4.5 | 1-2 occasions/month (1 bottle each) | £3.20 | On-trade (pubs) | Very Low |
| Pregnant / Nursing Women | 0.6 | 0.5 bottles/week | £3.50 | Grocery, online | Medium |
| Muslim Consumers | 1.2 | 0.7 bottles/week | £2.50 | Grocery | Medium |
Note: "Designated Drivers" reflects adults who occasionally choose NA beer when driving. Frequency captures only NA beer occasions, not total social outings.
Source: BrewCraft case file
Try it first, then checkShow model answerHide model answer
Priority 1: Health-Conscious Millennials (25-40)
This segment is the clear top target for three reasons:
-
Highest revenue potential. At 1.8 million buyers consuming 1.5 bottles per week at £3.50 willingness to pay, this segment generates the largest annual revenue pool (~£491M across the market). High frequency is the key driver.
-
Best brand fit. BrewCraft's existing customer base is 25-45-year-old craft beer enthusiasts. Health-conscious millennials overlap significantly with this demographic --- they already know the brand and are willing to pay a premium for quality. This means lower customer acquisition costs.
-
Channel alignment. This segment shops at specialty retailers and independent pubs where BrewCraft already has distribution. They also over-index on direct-to-consumer online purchases, where BrewCraft has 35,000 active customers ready to cross-sell.
Priority 2: Sober-Curious Gen Z (18-27)
This is a strategic play for long-term brand building:
-
Strong volume. At 2.0 million buyers consuming weekly, this segment offers significant volume, though at a lower price point (£2.80).
-
Trend alignment. Gen Z is driving the moderation movement, and their habits are forming now. Capturing them early creates lifetime brand loyalty.
-
Social media amplification. This segment is highly active on social media, providing organic reach that stretches BrewCraft's limited £1.5M marketing budget.
Why NOT Designated Drivers (the trap):
At first glance, 4.5 million consumers looks compelling. However, a Designated Driver consumes NA beer only 1-2 times per month, and only on specific social occasions. Their annual consumption per person (~18 bottles) is less than one-quarter of a Health-Conscious Millennial's (~78 bottles). Moreover, their purchase is situational and brand-agnostic --- they grab whatever the pub has on tap. BrewCraft cannot build a sustainable business on impulse purchases by consumers who feel no brand loyalty in this category.
What the interviewer is looking forShow guidanceHide guidance
This question tests whether the candidate can see beyond surface-level segment size. The exhibit contains a deliberate trap: "Designated Drivers" appear to be a large segment (4.5 million) with decent willingness to pay, but their consumption frequency is extremely low (1-2 occasions per month, and only 1 bottle per occasion). A candidate who selects this segment based on population size alone is falling for the trap.
So What? cascade:
- Level 1: each segment has a size, willingness to pay, and frequency
- Level 2: annual revenue potential = size x frequency x price, not just size x price. Low-frequency segments generate surprisingly little revenue
- Level 3: BrewCraft's right to win varies by segment. Brand fit, channel overlap, and marketing efficiency matter. A small segment where BrewCraft has a natural advantage beats a large segment where it must build from scratch
Key calculation the candidate should perform (or approximate):
| Segment | Buyers | Annual Bottles/Buyer | WTP | Annual Revenue Potential |
|---|---|---|---|---|
| Health-Conscious Millennials | 1.8M | 78 (1.5/week) | £3.50 | £491M |
| Sober-Curious Gen Z | 2.0M | 52 (1/week) | £2.80 | £291M |
| Designated Drivers | 4.5M | 18 (1.5/month) | £3.20 | £259M |
| Pregnant/Nursing Women | 0.6M | 26 (0.5/week) | £3.50 | £55M |
| Muslim Consumers | 1.2M | 36 (0.7/week) | £2.50 | £108M |
Despite having the largest population, Designated Drivers rank only third in revenue potential due to extremely low frequency.
Question 4Synthesis
How should BrewCraft price its non-alcoholic craft beer? What is your recommendation to the CEO?
Hint · Synthesis
Answer first: the recommendation, two or three reasons with numbers, then risks and next steps.
Additional InformationAsk for more dataHide data
- Share Exhibit 2 (Competitive Landscape) and Exhibit 3 (Distribution Coverage)
- BrewCraft's estimated production cost for NA craft beer (after dealcoholisation investment): £0.90 per bottle
- Alcohol duty savings on NA beer: approximately £0.30 per bottle compared to equivalent alcoholic beer
- BrewCraft's alcoholic craft beer retails at £3.80-£4.20 per bottle in specialty shops
- Major grocery chains typically demand a 35-40% retail margin
- BrewCraft's specialty retail partners typically take a 25-30% margin
Exhibit 2UK Non-Alcoholic Beer Competitive Landscape
| Brand | Price per Bottle (330ml) | Market Share (Value) | Positioning | Primary Channel | Taste Rating (out of 5) |
|---|---|---|---|---|---|
| Heineken 0.0 | £1.80 | 28% | Mainstream lager | Grocery, on-trade | 3.2 |
| Peroni Nastro Azzurro 0.0 | £2.00 | 15% | Premium lager | Grocery, on-trade | 3.5 |
| BrewDog Punk AF | £2.40 | 12% | Craft IPA | Grocery, specialty | 3.8 |
| Lucky Saint | £2.80 | 8% | Premium unfiltered lager | On-trade, specialty | 4.1 |
| Big Drop Brewing | £3.00 | 4% | Craft specialist (NA only) | Specialty, online | 4.3 |
| Athletic Brewing (import) | £3.50 | 2% | Premium craft (NA only) | Specialty, online | 4.4 |
| Erdinger Alkoholfrei | £1.60 | 5% | Traditional wheat beer | Grocery | 3.0 |
| Other / Own-label | £1.20-1.50 | 26% | Value | Grocery | 2.5 |
Taste ratings from independent consumer panel (2025). Market share by value, UK off-trade and on-trade combined.
Source: BrewCraft case file
Exhibit 3BrewCraft Distribution Coverage vs. NA Beer Market Distribution
| Channel | BrewCraft Current Coverage | Share of UK NA Beer Sales | Gap |
|---|---|---|---|
| Major grocery chains (Tesco, Sainsbury's, Waitrose, Asda) | 0% | 58% | Critical |
| Convenience / forecourt (Co-op, Spar, BP) | 0% | 12% | Significant |
| Independent pubs and bars | 1,200 venues (8% of UK total) | 14% | Partial |
| Specialty beer shops / bottle shops | 400 shops (35% of UK total) | 6% | Strong position |
| Online DTC | Own site (35K customers) | 7% | Moderate |
| Restaurants | 0% | 3% | Low priority |
| Total addressable through current channels | 27% |
Gap analysis: BrewCraft can currently access channels representing only 27% of NA beer sales. Grocery entry would unlock the remaining 70%, but requires listing fees, volume commitments, and lower margins.
Source: BrewCraft case file
Try it first, then checkShow model answerHide model answer
Recommended pricing strategy: "Premium but Accessible"
1. Positioning logic
BrewCraft should price its NA craft beer at a slight discount to its own alcoholic range but at a meaningful premium to mainstream NA brands. This achieves three things:
- Signals quality without creating a barrier to trial
- Protects BrewCraft's premium brand positioning
- Exploits the duty-free cost advantage to deliver superior margins
2. Recommended price points by channel
| Channel | Recommended Price | Rationale |
|---|---|---|
| Specialty retail (bottle shops) | £3.50 | 10-15% below BrewCraft alcoholic (£3.80-4.20), well above mainstream NA (£1.80-2.20). Aligns with health-conscious millennial WTP of £3.50 |
| Online DTC | £3.30 (or £36 for a 12-pack) | Slight discount to drive trial among BrewCraft's existing 35K customers; bundle pricing encourages repeat purchase |
| On-trade (pubs) | £4.50-5.00 per pint/bottle | Standard pub markup; positions alongside craft alcoholic pints |
| Grocery (future) | £2.80-3.00 | Lower to compete on shelf; still premium vs. Heineken 0.0 at £1.80 |
3. Margin analysis at £3.50 specialty retail price
| Component | Per Bottle |
|---|---|
| Retail price | £3.50 |
| Retailer margin (28%) | -£0.98 |
| Revenue to BrewCraft | £2.52 |
| Production cost | -£0.90 |
| Gross profit | £1.62 |
| Gross margin | 64% |
Compare to alcoholic craft beer at £4.00 retail:
| Component | Per Bottle |
|---|---|
| Retail price | £4.00 |
| Retailer margin (28%) | -£1.12 |
| Revenue to BrewCraft | £2.88 |
| Production cost | -£0.85 |
| Alcohol duty | -£0.30 |
| Gross profit | £1.73 |
| Gross margin | 60% |
The NA beer delivers a higher gross margin percentage (64% vs. 60%) despite a lower retail price, thanks to zero alcohol duty. This is a rare and powerful dynamic: BrewCraft can price below its alcoholic range, appear more accessible, and earn better margins.
4. Overall recommendation to the CEO
BrewCraft should enter the NA craft beer market with a focused launch targeting health-conscious millennials and sober-curious Gen Z consumers. The market is approximately £350-400 million and growing at 25%+ annually. BrewCraft should:
- Price at £3.50 in specialty retail and £3.30 online to signal premium quality while staying below its own alcoholic range
- Launch through existing channels first (1,200 pubs, 400 specialty shops, online DTC) to minimise go-to-market cost and test demand before pursuing grocery distribution
- Invest the £2M in dealcoholisation equipment, which will pay back within 12-18 months if BrewCraft captures even 1% of the NA beer market (~£3.5-4M revenue)
- Avoid competing on price with mainstream NA brands (Heineken 0.0, Peroni 0.0) --- BrewCraft wins on craft credibility, not shelf price
Contributed by CaseDrill practice community
What the interviewer is looking forShow guidanceHide guidance
This question tests whether the candidate can integrate market data, competitive positioning, cost structure, and channel strategy into a coherent pricing recommendation. A good candidate will identify the relevant price range from Exhibit 2 and pick a point. A strong candidate will differentiate pricing by channel and justify the premium over mainstream NA brands. An excellent candidate will connect pricing back to the target segments identified in Question 3 and explain how pricing supports the overall market entry strategy.
Push back if the candidate proposes a single price without considering channel differences: "Would you charge the same price in a Waitrose as in a craft beer shop?"
So What? cascade:
- Level 1: the price should be between £X and £Y based on competitors
- Level 2: pricing signals positioning --- too low undercuts BrewCraft's premium brand, too high limits trial in a market where most buyers are still experimenting
- Level 3: the duty-free advantage on NA beer means BrewCraft can price at a slight discount to its own alcoholic range while earning a higher margin per bottle, which is a rare and powerful position