Somd brewing business plan v2
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  • less pollution and industrial run off into the Bay. using rain barrels at our facility would help the bay, reducing impervious surfaces (i.e. replacing an old blacktop parking lot with a hop garden) helps the bay. ... instead of dumping kettle trub and excess aqueous yeast down the drain we create a natural spent grain filter and dry out it out for compost and use in our biomass fueled boiler. Kettle trub we’re saving from the bay = insoluble precipitate that results from protein coagulation and simpler nitrogenous constituents + proteins and protein-tannin complexes. <br />
  • Prototyping and design can be done by CTSI <br /> Manufacturing can be done by multiple Quincy, IL companies <br />
  • http://www.navy.mil/navydata/nav_legacy.asp?id=179 <br />
  • 6930 square feet of hop growing space. Plant 3.5 feet apart = 12 x 22 plants per canopy = 264 or a total of 528. @ $10 per rhizome is $5,300. ~172 cubic yards of topsoil @$8 per cubic yard = $1,376. Leasable garden space. Outdoor Kitchen is a food truck. Need to add handicap accessible portable toilet and parking spaces. <br />
  • Roof done in 2007 and 2004 <br />

Somd brewing business plan v2 Somd brewing business plan v2 Presentation Transcript

  • David G. Jones davidjones@md.metrocast.net
  • Overview Goals: Become the first microbrewery in St. Mary’s County Create a cooperative brewing environment for homebrewers to test recipes Partner with an upcoming restaurant to pair craft beer with menu items Partner with a larger contract brewer to proliferate the SOMD brand into the retail market Introduce Create Craft Beer Cuisine Adventure Charters offering a charter sailboat service pairing craft beer and food Become a “test bed” for new brewing technologies, innovations, and alternate brewing processes
  • Problem Description  Small brewers are unique in the more personal nature of the business and the unique history behind their brews. It is a sense of community that compels small brewers to higher standards, as even small changes in the clientele can have massive impacts on their ability to survive collectively as an industry, and individually as businesses.  The microbrewer is faced with the problem of distributing the final product, unlike the brewpub operator who has a captive market.  Maryland doesn’t allow self distribution. Regulations vary from state to state. Some states allow you to sell your brews directly to retailers, while others require you to go through a distributor. Obviously, if you need to use a distributor, you'd better establish that relationship early on  The three-tiered system favors larger established breweries. The three-tier system of alcohol distribution is the system for distributing alcoholic beverages set up in the United States after the repeal of Prohibition. The three tiers are producers, distributors, and retailers. The basic structure of the system is that producers can sell their products only to wholesale distributors who then sell to retailers, and only retailers may sell to consumers. Producers include brewers, wine makers, distillers and importers. Entrance and success for small brewers is hard for the small brewer.  No single American company is focused on exporting / expanding the market for craft beer in foreign markets.
  • Venture History  1995 - First homebrew batch conducted in Quincy, IL basement using a sock filter  1996 - Entered first homebrew competition at Germanfest in South Park  1998 – Attended homebrew classes at the Copper Dragon in Carbondale, IL and equipment procurement at Southern Illinois University  1998 - First all grain batch  1999 - “Beertron” term first coined with vision of automated RIMS  2002 - Design and assembly starts on “Beertron”, an automated 3 keg home brewery  January 2, 2005 “Beertron” comes to life and produces first autonomous batch of homebrew  2007 - Genesis of the “Brewtronix System” and business plan at venture capital classes at Kansas University and the University of Maryland’s Technology Enterprise Institute and Entrepreneurial office, SCORE and Southern Maryland Small Business Development Center  2010 - Joined the Hollywood Hop Heads  2012 – Created SOMD Brewing brand and logo  2012/2013 – Craft Beer Cuisine Adventure Charters conducts research in Lesser Antilles  2013 - Filed LLC paperwork with state of Maryland
  • St. Mary’s County Brewery Legislation went into effect July 1 st 2013  New Legislation allows for  Breweries  Brewpubs  Microbreweries  Distilleries  Farmhouse Breweries  ARTICLE 2B., TITLE 2, SUBTITLE 2. MANUFACTURER'S LICENSES.  § 2-208. Micro-brewery license  St. Mary’s Zoning Regulations through Land Use and Growth Management  Need to wait for the legislation to start - probably in October.  Will do a text amendment and after that breweries are allowed  Working with LUGM to push zoning legislation  Looking at 5 potential locations in the mixed commercial zones. Farmhouse breweries probably only located in Rural Preservation Districts  House Bill 231/Senate Bill 223: Allows for a Class 7 to apply for a Limited Beer Wholesaler license to self-distribute their own beer up to 3,000 bbls annually
  • SOMD Brewing Business Plan  Company Seeded Ready for Startup  Business Planning complete  Logo / Label design complete  Initial marketing started  Initial merchandizing started  Investors secured  12 recipes brewed, evaluated, and revised  LLC documentation in place  Green Brewery Automation Technology Proof of concept  Procurement  1 to 5 BBL Brewing System  Brewing Supplies  Licenses, permits, and insurance  Facility Construction / Retrofitting  Installation of Brewing Vessels  Ventilation of Mash Tun and Boiler  Connect to Fridge or Glycol Cooling system
  • SOMD Brewing Management Team  David Jones - Director, Brewmaster, Manager – 11 years program Analyst/Manager and technical lead. B.S. Mechanical Engineering, Southern Illinois University, Masters in Engineering, Energy and the Environment, University of Maryland. 17 years experience in homebrewing and 7 years experience in Entrepreneurship and company development.  Dave Mahoney. Financial Manager – NAVAIR Calibration Program, VFW Commander, Quartermaster. 15 years experience in Naval Acquisition Logistics, personnel, and technical management. 10 years experience in non-profit organization leadership and management roles. Associates degree in Aviation Electronics Technician, B.S. in Technical Management.  Matt Peluso – Graphic Artist and Marketing. 5 years experience as creative director with www.StimuliDesigns.com  Todd Willis – Product Rep and Marketing – 10 years experience technical management  Mark Abromitis – Marketing – 10 years experience reporter, technical writer, and social media director  Jason Babcock – Historian – 12 years experience research analyst, reporter, and news writer  Hollywood Hop Heads, Brewing and Recipe Consultants – 5 plus years of monthly group brewing discussions and the combined brewing experience of 30 plus active members
  • Advantages and Benefits Reduced time to market with structured business in place Increase food sales and total sales from appeal of craft beer Potential for more outward catering opportunities and sales at craft beer festivals with a food / beer truck More merchandizing opportunities and synergy Unique Restaurant specific craft beer brand creation with transferable rights to restaurant owners Food and Craft Beer pairing events and beer paired menu items
  • Other Production Lines and Profit Centers Contracted “throwback brews” recipe research, design, and development for pre-prohibition historic breweries Food and Beer Truck party catering service Merchandizing: T-shirts, can cozies, wooden nickels, glassware, barware, etc. Craft beer and food pairing charter sail Hybrid Brewery Energy Craft Beer Canning Line Brewing Equipment Test and Evaluation
  • Why Our Beer is Better  Autonomous temperature controls and triple decoction mash method allow us to precisely and repeatably brew all types and styles of beer  We can recreate any style of beer... with consistency.  Our mash temperature control technology allows us to make precision mash conversions... i.e. a dry German Pilsner vs. a sweet Munich Helles  We operate a self sufficient green brew house and are actually able to pump electricity back into the grid  By utilizing solar water heaters we are able to reduce electrical/gas water heating demands and increase the efficiency of our Hybrid Brewing Energy System  By burning a portion of our spent grain biofuel we are able to power our entire brewing operations thus decreasing green house gases and our electrical needs  When steam demands are idle we are able to divert energy to powering a microturbine and pump energy back into the grid  By utilizing solar photovoltaic arrays and battery technology we are able to pump energy back into the grid while the brewing operation is offline  By filtering aqueous brewery waste with our organic pressed spent grain filters we can reduce pollution into the Chesapeake Bay and compost the organic waste for an on-site hop farm  We use the freshest of local ingredients  In essence, we are powered by people drinking beer
  • Beer-Powered Brewery Saves $450,000 A Year, Feb 4th 2013 press release • Alaska Brewing Company purchased a $1.8 million furnace that burns the company's spent grain — the waste accumulated from the brewing process — into steam which powers the majority of the brewery's operations. Designers estimates that the spent grain steam boiler will offset the company's yearly energy costs by 70 percent. Awarded nearly $500,000 in a grant from the federal Rural Energy for America Program. Alaskan Brewing Co. makes about 150,000 barrels of beer a year • SOMD Brewing plans to build a smaller, less expensive, high tech version marketable to the 2,386 smaller brewpub and microbreweries US Breweries Operating as of June 2013 Brewpubs = 1,165 Microbreweries = 1,221 Regional Craft Breweries = 97 Total US Craft Breweries = 2,483
  • Patentable and Licensable Technology: Hybrid Brewing Energy Advantages: •Green Energy and Energy Efficient •Energy Management and Thermal Management •Scalable to brewing system •Utilizes existing hybrid technology in new applications •Cost efficient for high load brewing days •Less development time with existing technologies •Venture capitalist have expressed interest •Prototype design by area businesses •Spent grain into energy Prius Drive train $1.4M raised to start this contract brewing company in DC area Control System used on 100 BBL system. Proven Technology. Same technology as original “Brewtronix” Prius Energy management system Micro Steam Turbine PLC Logic Control HP Steam To Boiler Double 55 gal wood stove w/ copper tubing jackets LP Steam Radiant Heat To Mash Tun Hot Water Tank Cold Spring Water Original “Brewtronix” System Prototype Design
  • Patentable and Licensable Technology: Mash Filter Press Alaska Brewing Company was the first craft brewery in the United States to employ this Belgian-based brewing technology, which allows them to reduce the amount of water, malt and hops needed to make beer, while maintaining high quality and consistency. In one year, the mash filter pressed nearly 2 million fewer gallons of water and 6 percent less malt to make the same amount of beer as our traditional brewing process. The unique design of the mash filter press also reduces the moisture content in the spent grains, which further reduces the energy required to dry the grain before it is transported to farms. Today about 25% of the world’s beer volume is produced with a Mash Filter Press. More than 20 years ago when the industrial introduction of the Mash Filter Press took place, only one filter size, was available, mainly sized for large lager brewers. In 2012 at the Craft Brewing Convention in San Diego, supported by an increasing demand from the U.S. Craft Brewing market, Meura decided to introduce a smaller Mash Filter Press suitable for microbreweries. As a matter of interest, nearly 90% of the beer volume produced in Belgium is produced with the Mash Filter Press technology. Utilize Engineering Change Proposal (ECP) process and engineering knowledge base to give Original Equipment Manufacturers (OEMs) product improvement suggestions based on test and evaluations and plant/energy efficiency improvements. Improve design by allowing pressed mash to also filter aqueous sediment from boilers and fermenting vessels to create zero organic aqueous discharge for brew house. SOMD’s brewing processes have been hand pressing mashes and utilizing a mash filter method for over 4 years. No American company manufactures a comparable product and the craft brewing industry is just now catching on… 1 brewery out of 2,483 utilize a Mash Filter Press.
  • Patentable and Licensable Technology: Beer Canning Line Oskar Blues started the Canned Beer Apocalypse In 2002 Oskar Blues became the first brewery to can beers in the craft brewing industry. They started canning their beer with a manual canning system. Both craft brewers and craft beer drinkers are coming around to the idea of cans. More affordable supplies and canning equipment also are helping the boom. In 2002, just one craft brewery was using cans. Now around 300 different breweries offer close to 1,000 beers in cans. Utilize Engineering Change Proposal (ECP) process and engineering knowledge base to give Original Equipment Manufacturers (OEMs) product improvement suggestions based on test and evaluations and plant/energy efficiency improvements. Advantages: Low capital cost to enter the packaging market for cans One of the most productive uses of capital for small packagers Easy to operate Small footprint Compact design Only 12% of US Craft Breweries utilize a canning line. In 2002, just 1 brewery used a canning line.
  • Funding Programs • We are approaching venture capitalists, angels, and MD state grant programs: • Craftfund.com, CrowdBrewed.com, Kickstarter.com, Startups.co, Angels List, Angel Soft, National Venture Capital Association, Funding Post, Et al… • TEDCO – RBI2, Rural Business Improvement Program • Funds to assists start up and small technology-based businesses in the rural areas of Maryland • Maryland Clean Energy Center ($100,000 to $500,000) • Maryland Commercial Clean Energy Grant Program (DISRE) (SWH $5,000) • Two programs that have not been announced yet but will be coming out in the next 6 months. One is for the commercial and industrial sector and the other is for the agricultural sector • Maryland Agricultural & Resource-Based Industry Development Corporation (MARBIDCO) ($1,000) • Low-interest (4%) "micro" loans for energy efficiency projects. Maximum loan amount is $30,000 with 10% grant incentive • Southern Maryland Agricultural Development Commission • Grants for hops • Community Development Corporation • Business Loan Guarantee Program - Designed to support start-up or early stage companies • Lexington Park Property Landscaping Program - Matching grants for landscaping commercial properties located in the Lexington Park Revitalization District • Microloan Program • Provides very small loans to start-up, newly established, or growing small business concerns. Direct Loans and Guarantees • Maryland Venture Fund • The Fund makes direct investments in technology and life science companies and indirect investments in venture capital funds • Maryland Economic Development Assistance Authority and Fund (MEDAAF) • Offers five different loan programs available to businesses and political jurisdictions and creates loans to help industry create jobs and economic opportunities within the state • Bootstrapping…
  • Potential SOMD Prototyping and R&D Partnerships  CTSI = Prototyping and Fabrication  Amelex = Hardware and Software Engineering  Integrated Program Solutions = Program Management and cost analysis  AR Systems, Inc. = Electronics Manufacturing, circuit boards, and wiring diagrams  ARINC Engineering Services = Systems engineering, system design, prototyping, modeling              and simulation Heron Systems Inc. = Software development and electrical engineering, programming Triton Metals, Inc. = Precision machine, sheet metal, and job shop AMEWAS = Systems Engineering, modeling and simulation Specialty Systems, Inc. = Hardware/Software Engineering, system prototype development Spiral Technology, Inc. = Modeling and Simulation DRW Technologies = Automation, electronics, and system design Pioneering Decisive Solutions, Inc. = Automation, system design, software DCS Corporation = systems engineering, modeling and simulation J.F. Taylor = electronic engineering, software systems design, system fabrication Platform Systems = mechanical design and engineering Vulcan Engineering and Manufacturing = Precision metal prototypes, fabrication Westwind Technologies = engineering, prototyping, and fabrication Compliance Corporation = prototype design and development
  • Midwest Manufacturing Partnerships  Knapheide’s = Food and Beer Truck design  Manchester Tank = CO2 Tanks and Beer Kegs  US Cooler = Beer coolers for tasting room and beer/food truck  Gully / McNay Transportation = Transport and Export services  Quincy Metal Fabricators = Bottling and canning line machines  Midwest Pattern = Bottle cap jigs  Awerkamp/Quincy Machine & Welding = Brewery Equipment Maintenance  Tristate Food Equipment / Kohl’s = Food service equipment  Fierge Auto parts = Hybrid Brewing Energy  Gardner Denver = Hybrid Brewing Energy, Bottling lines  Quincy Compressor = Pressure control systems
  • St. Mary’s Craft Beer Market Potential St. Mary's Total Population (2009) Users % Index Total Market Potential 103,100 13.19% 13,599 13.19% 5,849 Population age 21 to 50 44,341 St. Mary's County Full Market Potential $60 per person per year x 5,849 people = $351,000 Growth of the craft brewing industry in 2012 was 15% by volume and 17% by dollars compared to growth in 2011 of 13% by volume and 15% by dollars
  • Financials The business requires $500,000 for the company to start operations, $300,000 from a business loan and $200,000 in investor equity. Following this there is no further capital investments needed. Our pre-money valuation is $60,000 and our post-money valuation is $560,000.
  • Financials SOMD Brewing will become profitable in year one and will achieve a break-even event in year 2. Available cash in the year 2015, our third year of operations, will be $326,000.
  • Marketing Pillars 1. Green Brewing Technology Renewable Energy 2. Autonomous Controls 3. CHP + PV Integrated within brewery applications 4. Partner with “Save the Bay” environmental organizations 1. 2. Historic Preservation Nautical: Sailboats, lighthouses, landmarks, etc 2. Dove and the Ark 1634 3. Blakistone Island (St. Clements) / St. Mary’s City 4. Narrative “history bits” on each bottle 1. 3. Fresh and Local Beer We buy fresh local hops, specialty grains, and adjuncts from Maryland growers 2. Our beer is made fresh and served to the customer with limited shelf time 1. 4. Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors from around the world
  • Facade, Motif, and Theme Dirty Blonde Lighthouse Ale Blakistone 1634 Chesapeake Bay Amber Ale Watermen’s Wine Historical and Nautical •Beer Labels •Wall Art •Beer Names Organizations willing to help •St. Mary’s Historical Society •Calvert Marine Museum •Point Lookout State Park •Lighthouse Friends •St. Mary’s Co. Museums Division •Maryland State Archives •Maryland Historical Society •Annapolis Maritime Museum •Historic St. Mary’s City Skipjack IPA Dinghy Blonde Ale Cecil’s Mill Spiced Pumpkin Pie Ale Sotterly Plantation Chocolate Stout Screwpile IPA Oyster Fleet Imperial Stout Solomon’s Dirty Sailor Porter Piscataway Indian Wheat Ale
  • Brewhouse • Garage door entrance for bulk shipping and receiving and delivery truck storage • Easily installed net metering electrical meters (other meters have been removed) • ~ 3,000 sq feet, easily expandable to incorporate 10 to 20 BBL operation and tasting room • Flat roof for solar water heater and photovoltaic installation • 2nd story grain storage / milling into 1st floor brewery operations • 2nd story office space • Security: barb wire fence with two gates
  • Brewhouse • Car ports easily modified to hop growing trusses • Brewing herbs: lemon grass, coriander, mint, rosemary • Compost spent grain for topsoil additions • Ample space for onsite parking and walking brewery tours
  • Brewhouse Compost Ops Outdoor Kitchen Water Meter Sewer Connection Grease Trap Hop Garden Hop Garden
  • Brewhouse (First Floor) Sewer Connection Water Meter Grease Trap Net Electrical Meter Canning Rail Hoist Keg Storage Foyer Grain Hoist Walk-in Fridge Keg Cellarage Kegging Existing Circuit Breaker Drain MicroTurb Battery Furnace WH Boiler Oil Tank Vent Control Box HX BK FV FV MT FV BT FV FV Tasting Room and Merchandizing Beer Garden
  • Brewhouse (Second Floor) Grain Hoist Solar Water Heater and Solar Arrays Roof Access Existing Circuit Breaker in Gra ge ra Sto illing M and n Ve t Women's Block Hoist Grain Chute
  • Community Impact  Increased jobs: distribution, drivers, marketing, advertising, building maintenance and preservation, food prep, tourism, brewery tours, etc.  Positive impact on neighborhood improvements. Hiring within the neighborhood and making improvements on the property could trickle out, thereby improving a section of town that is currently degrading with increasing crime.  Increased tourism: Microbreweries attract tourists, and SOMD Brewing would bring in people from the base and regional community who enjoy craft beer.  Increased relationships with the sailing community in the form of Craft Beer Cuisine Charters, sponsorships at regattas and cruising community, and sailing clubs, reinvigoration of Ark and Dove voyages  Seeking letters of support from the St. Mary’s County Tourism Department, Chamber of Commerce, St. Mary’s Historical Society, Calvert Marine Museum, Chesapeake Bay Foundation, Maryland Historical Society, Chesapeake Bay Program, Chesapeake Bay Commission, Chesapeake Bay Trust, Historic St. Mary’s City, St. Clements Island Museum, Maryland State Archives and The Society of the Ark and
  • Risks Ability of restaurants to incorporate SOMD Brewing LLC Construction constraints Delay from permitting and legislation Profit sharing negotiations Exit Strategy 5 to 10 years Buyout investors Diversify into more high end privately owned restaurants Build larger capacity 10 bbl brewery offsite, transfer license from brewpub to microbrewery Sell brewing business to restaurant or larger contract brewery
  • Summary Poised to become the first microbrewery in St. Mary’s County Small batch brewing to generate extra restaurant sales and a cooperative brewing environment for local homebrewers Poised for partner opportunities Growth relationship in place to partner with a larger contract brewer to proliferate the SOMD brand into the retail market Poised to expand food and beer market into sailing by introducing Create Craft Beer Cuisine Adventure Charters Poised to conduct T&E on brewery equipment and process development Facebook Us: https://www.facebook.com/#!/pages/SOMD-Brewing/425387377554078 https://www.facebook.com/#!/pages/Craft-Beer-Cuisine-Adventure-Charters/445187795550951
  • Spinoff Technology  Brewery ships: In 1944, the George Adlam & Sons Company designed a brewing ship for the Royal Navy to serve soldiers with beer in the Pacific Theatre in World War II capable of making 250 barrels of beer a week. Only Menestheus saw service, completed on 31 December 1945 and completing a six month deployment to Pacific ports including Yokohama, Shanghai and Hong Kong to dispense English Mild Ale to sailors. Her brew house, known as "Davy Jones Brewery" was dismantled in 1946 and the ship was returned to her owners in 1948.  2010 - SABMiller’s floating brewery concept unveiled: Would allow for rapid entry to new markets, especially where no infrastructure is in place, it would provide flexibility in positioning and length of stay and allow SABMiller to move with water sources, with people, with crops, or even away from severe weather, natural disasters or political instability.”  Shipping container nano brewery – small turnkey operation marketable to less developed countries and foreign countries without craft brewery infrastructure. I.e. St. Maarten. Increases trade and economic dependence on U.S. based brewing skills and supply commodities.