Dick brothers brewing business plan


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Dick Brothers Business Plan

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  • Mike Crammer, Mac’s Homebrew, Brewing and Recipe Consultants – 5 plus years of monthly group home brewing discussions and the combined brewing experience of 30 plus active members.
  • Prototyping and design can be done by CTSI
    Manufacturing can be done by multiple Quincy, IL companies
  • Dick brothers brewing business plan

    1. 1. David G. Jones davidjones@md.metrocast.net
    2. 2. Overview Goals: Revitalize historic Dick Brothers Brewery with microbrewery 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 Dick Brother brand into the retail market Introduce German / International Public Market to promote Farm to Table and Farm to Restaurant programs Market “Throwback Beer” service, recreating historic labels and recipes Become a “test bed” for new brewing technologies, innovations, and alternate brewing processes
    3. 3. 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.  Illinois allows 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.
    4. 4. 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 – Started reinvigoration of Dick Brothers Brewing  2012/2013 - Craft Beer Cuisine Adventure Charters conducts research in Lesser Antilles  2013 - Filed LLC paperwork with state of Illinois
    5. 5. Recent Illinois Legislation  Illinois Craft Brewers Guild recently won a hard-fought battle to restore the right of small craft brewers to self-distribute their beer under Illinois law  A proposed change to the Craft Brewer’s License would allow small breweries to produce up to 200,000 barrels, increased from 15,000. A compromise was made to increase the production cap to 30,000 barrels.  Governor Quinn signed HB630 into law July 5, 2013  Illinois can LEGALLY have Homebrew at private Club meetings  LEGALLY take our homebrew to private picnics  Homebrew is BACK in the Festivals!
    6. 6. Dick Brothers Brewing Business Plan  Company Seeded Ready for Startup  Business Planning complete  Logo / Label design complete  Initial marketing started  Initial merchandizing started  Investors being secured  12 recipes brewed, evaluated, and revised over 5 year period  “Dick Brothers Brewing” LLC documentation in place  Procurement  1 to 5 BBL Brewing System  Brewing Supplies  Licenses, permits, and insurance  Facility Construction / Retrofitting  Drainage trench installation  Installation of Brewing Vessels  Ventilation of Mash Tun and Boiler  Connect to Fridge or Glycol Cooling system
    7. 7. Dick Brothers 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.  Mike Shull – Historian. 10 years experience history teaching and community relations  Josh Klitz – Marketing and distribution. Hot Sauce king of Tri-state area. 5 years experience with marketing and proliferating Crawdad’s Classic Hot Sauce and 314 Hot Sauce in St. Louis  Vacant: Financial Manager and fund raising –  Todd Buckley: Executive Chef. 10 years culinary experience  Paul Nelson – Graphic Artist and Marketing. 5 years experience as creative director with http://studiouprising.com/  Beth Jones and Jason Snell – Training Program, 5 years experience Municipal Training Systems  Jim Aubuchon – Product Representative, Product Specialist
    8. 8. Size of 1 BBL Brewing System
    9. 9. Size of 10 BBL Brewing System
    10. 10. Layout 1 BBL Brewing System 12’ 3’ FV1 FV2 FV3 FV = Fermentation Vessel MT = Mash Tun Blue = Cooled or Refrigerated Red = Heated and Hooded or Ventilated Grain milling done in kitchen during off hours Storage for brewing supplies and equipment within existing spaces Affixed and close to Fridge FV4 Boiler 9’ MT 4’ Potentially Removable
    11. 11. Dick Brothers Building German/International “Public Market”: •Delicatessen and bakeries •Specialty meats and cheeses •Fresh fruit and vegetables •Multiple food vendors and retail food distributors Layout cohesive for: •3 business units •Enter at tasting room/bar, walk through art gallery to dinner •Food truck bays •Art gallery and art studio space •Brewery tours and tourism •Overflow and large event seating •Utilization of existing spring water •Expansion once capital is flowing
    12. 12. German/International Public Market  Promotes the growing enclaves of ethnic communities and their cultures: Asian, Latin American, Thai, Vietnamese, Pilipino, etc.  Hy-Vee, County Market, Butcher Block, Kohl Foods delicatessen: specialty sausages and meats...sauerbraten, schnitzel, schwarzwurst, specialty cheeses  Underbrink’s , Krazy Cakes, bakeries: Biertreberbrot (spent grain bread), soft pretzels, German deserts  Consolidate/relocate farmers market from Washington Square and Quincy Mall  Multiple vendors under a shared leased space… equates to multiple investors  Promotes Illinois Stewardship Alliance’s Farm To Table and Farm to Restaurant programs  Check out what Engrained Brewing, in Springfield is doing with Farm to Table: http://www.engrainedbrewing.com/engrained-brewpub-blog/the-farm-to-table-challenge
    13. 13. 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 between Dick Brothers Brewing and local restaurants Unique restaurant specific craft beer brand creation with transferable rights to restaurant owners Food and Craft Beer pairing events and beer paired menu items Beer festivals and tourism
    14. 14. Why Our Beer is Better  Recreation of German brewing styles and techniques now extinct  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 water table  We use the freshest of local ingredients
    15. 15. Other Production Lines and Profit Centers  Contracted “throwback brews” recipe research, design, and development for pre-prohibition historic breweries  Photomosaic bottle cap art (marketed to World of Beer franchises)  Stressed bottle cap prints  Craft Beer Cuisine tailgators and brewery tours from RV or food/beer party truck  Food and Beer Truck party catering service  Merchandizing: T-shirts, can cozies, wooden nickels, glassware, barware, etc.  Green roof hop farm  Brewery hostel accommodations and tour excursions  Small Hybrid Brewery Energy System  Brewing Equipment Test and Evaluation service
    16. 16. 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 • Dick Brothers 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
    17. 17. 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 express interest Prius •Quincy Manufacturable Drive train •Spent grain into energy $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
    18. 18. 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. Dick Brother’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.
    19. 19. Funding Programs • We are approaching venture capitalists, angels, and IL state grant programs: • Startups.co, Angels List, Angel Soft, National Venture Capital Association, Funding Post, Et al… • Illinois Clean Energy Community Foundation • Solar and Wind Grant Program (minimum $100,000, max $250,000) • Biogas and Biomass to Energy Grant Program (Up to 50% of project cost, max $500,000) • Renewable Energy Business Development Program ($250,000 to $500,000) • Invest Illinois Venture Fund (IIVF) • Venture capital program seeking to support young, innovative companies, and start-ups that show a high potential for future growth resulting in the creation of high-paying professional Illinois jobs • Microloan Program • Provides very small loans to start-up, newly established, or growing small business concerns. • Small Business Innovation Research (SBIR) Program • SBIR programs encourage small firms to undertake scientific research that helps meet Federal R&D objectives, and have high potential for commercialization if successful • CAPLines • CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical workingcapital needs • Small Business Participation Loan Program • Funds must be used primarily for the purchase of land or buildings, construction or renovation of buildings, and acquisition of machinery and equipment • Capital Access Program • Loan program for for-profit, Illinois businesses that employ 500 employees or less. • Revolving Line of Credit Program • This loan permits a company to borrow, repay and re-borrow in accordance with business needs, without applying for a new loan. • Participation Loan Program • The PLP program is designed to work through banks and other conventional lending institutions, to provide subordinate financial assistance to Illinois small businesses • Enterprise Zone Participation Loan Program • Loans for small businesses with fewer than 500 full-time employees, and located within an Illinois designated enterprise zone. • Employ Illinois Loan • Loans of up to $1 million may be used to acquire land, purchase equipment, provide working capital, buy inventory or make capital improvements • Bootstrapping…
    20. 20. Potential Tristate Area Partnerships  Knapheide’s = Food and Beer Truck design  McClean’s = Quincy food  Manchester Tank = CO2 Tanks and Beer Kegs  Midwest Controlled Storage = Beer storage and lagering  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  The Shirt Shack = Merchandizing  Tristate Food Equipment / Kohl’s = Food service equipment  Shortridge Construction = heavy equipment loans and general contracting  Fierge Auto parts = Hybrid Brewing Energy  Gardner Denver = Hybrid Brewing Energy, Bottling lines  Quincy Compressor = Pressure control systems  Local donors = brewery memorabilia
    21. 21. 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
    22. 22. Dick Brothers Building Dinning Room and Micro Brewery Brewing Space Dining Room with seating
    23. 23. Dick Brothers Building Bar and Tasting Room
    24. 24. Dick Brothers Building Bar and Tasting Room
    25. 25. Dick Brothers Building Public Market
    26. 26. Dick Brothers Building Malt Room
    27. 27. Dick Brothers Building Historic Memorabilia for the Walls and Walking Tour
    28. 28. Adam’s County Craft Beer Market Potential Adams County Total Population (2012) Users % Index Total Market Potential 67,197 13.19% 8,863 13.19% 4,457 Population age 21 to 50 34,286 Adams County Full Market Potential $60 per person per year x 5,849 people = $267,420 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
    29. 29. 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 your property could trickle out, thereby improving a section of town that is currently degrading with increasing crime. Liz Solaro and Brewery Arts District started the positive push  Increased tourism: Microbreweries attract tourists, and Dick Brothers Brewing would bring in people who would eat and stay at Quincy  Seeking letters of support from the Quincy Area Convention and Visitors Bureau, Great River Economic Development Foundation, Chamber of Commerce, Quincy Historical Society, Historic Quincy Business District, Illinois State Historical Society, Gardner Museum of Architecture and Design, Quincy Museum, Historical Society of Quincy and Adams County (their organizations can also help with branding and providing historic photos)  Historical themed beer brands: Lincoln Douglas Debate Pale Ale, Mississippi Steamboat Amber Ale, Quincy Select German Pilsner, Germantown Hefeweizen , Munich Oktoberfest, South Side Vienna Lager  Increased communication and travel to Herford Germany (Quincy’s sister city) to research historic brewing traditions and Ruppertsberg, Thein-Pfalz, Bavaria where the three Dick brothers originally hailed
    30. 30. Marketing Pillars 1. Green Brewing Technology Renewable Energy 2. Autonomous Controls 3. CHP + PV Integrated within brewery applications 4. Partner with environmental and green energy organizations 1. 2. Historic Preservation Dick Brothers Quincy Brewery Memorabilia 2. Historic events and places in tri-state region 3. Mississippi River and transportation heartland 4. Narrative “history bits” on each bottle 1. 3. Fresh and Local Beer We buy fresh local hops, specialty grains, and adjuncts from Illinois growers 2. Our beer is made fresh and served to the customer with limited shelf time 3. Partner with agricultural sector 1. 4. Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors from around the world
    31. 31. Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors from around the world  Never dull and stagnant: Dick Brothers Brewing is constantly researching new ingredients, worldly brewing styles, old world and new, and flavors from around the globe to insert into our beers and generate food pairing ideas for you…  Increased tourism: Microbreweries attract tourists, and Dick Brothers Brewing would bring in people from the region who enjoy craft beer  Increased relationships with the sailing community in the form of Craft Beer Cuisine Charters, sponsorships at regattas and the cruising community, sailing clubs, reinvigoration of historic Mississippi tugs, barges, and paddlewheel boats and how they brought different cultures thru the area, etc.
    32. 32. Financials The business requires $300,000 for the company to start operations, $150,000 from a business loan and $150,000 in investor equity. Following this there is no further capital investments needed. Our pre-money valuation is $60,000 and our postmoney valuation is $360,000.
    33. 33. Financials Dick Brothers 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 $474,000.
    34. 34. Risks Ability of restaurants to incorporate Dick Brothers Brewing LLC Construction constraints Delay from permitting and legislation 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
    35. 35. Summary  Poised to revitalize the historic Dick Brothers microbrewery in Quincy 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 Dick Brothers 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/DickBrothersBrewingProject?ref=hl#!/DickBrothersBrewingProject