Microfinance & Microbrew – 2 Local Breweries Get Creative

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Over the past decade, an ever-increasing thirst for craft beer spawned an unprecedented proliferation of breweries across the country. The Brewers Association reports that the number of breweries in the country has roughly doubled in the past ten years. Today there are more than 2,000 breweries in the United States, with about 180 active breweries right here in Washington. Many of us are beginning to wonder when this unbridled industry growth will stop. Some people expect the bubble to burst. Some of us predict something more akin to a thinning of the herd. But while we all sit around scratching our heads in amazement, trying to calculate the exact tipping point, new breweries are popping up around us like mushrooms in a damp Cascade forest.

Alas, mushrooms spawn and grow without financing. Breweries do not.

Have you ever wondered where all the money is coming from? Opening a brewery is not a cheap proposition. I have talked to many new brewers over the past ten years. I always try to be tactful, but like many of you I cannot help wondering about the money. I’ve heard it all: banks loans, grandparents, groups of friends, legal settlements, software-fueled fortunes, you name it. At its core, brewing is a creative science. So too is funding a new brewery. Currently, there is a new trend in brewery finance: Kickstarter.

Microfinance is a relatively new phenomenon. So too is social media. Kickstarter is the marriage of the two. The basic idea is to fund a new business by finding 100 people to give you $100 instead of finding one bank to loan you $10,000.  Many of you are probably familiar with Kickstarter already, so I will not go into details. I simply want to point out that a number of wannabe breweries are looking at Kickstarter as a solution for their financing needs. A search of the Kickstarter website for projects containing the word “brewery” returned more than 100 results, though I must admit that a few of the results appear to be something other than a proper brewery.

At the top of the list, a local company: Stereotypical Brewing. The man behind this Seattle-based project is Chris Smith. “We have already sourced two-thirds of the start-up capital needed, however we are taking a unique approach to the final bit,” says Smith. “We are leveraging Kickstarter to raise the remaining capital. Basically, Kickstarter leverages the power of social networks to help people like us raise capital for creative projects. The theory is that a large amount of small donations from multiple sources can amass quite a bit of capital quickly. Project backers, as they are known, are then rewarded for their donations in unique and fun ways.”

According to the company’s Kickstarter page, Stereotypical Brewing intends to start “impressively small” and use its popularity to fuel expansion. Similar to how Kevin Klein got things started at NW Peaks Brewery in Ballard, Chris Smith plans to start out by offering growler fills exclusively. Stereotypical Brewing will offer no pints, no kegs, and no distribution to local pubs. Just beer, straight from the brewery to the people.

“We are aiming to slowly and purposefully build a brand through quality products and a deep connection with our customers,” says Smith.

There are few different options for Stereotypical Brewing’s project backers. You can pledge as little as $25 or as much at $1,000. Each different level of support comes with a different set of rewards. Visit the Stereotypical Brewing Kickstarter page.

Stereotypical Brewing is not the only Washington brewery on Kickstarter. In Pasco, Robby Burns and Kevin Fort are working to fund the Fort Burns Brewing Company. Beyond using Kickstarter for funding, they have a different plan than Stereotypical Brewing. They hope to open a brewery and pub in the Tri-Cities, with a kitchen and several beers on tap. You can find out more on Fort Burns Brewing’s Kickstarter page.

Beer is a social beverage best enjoyed in the company of others. It brings people together and creates a sense of community. Kickstarter offers would-be breweries a socially based microfinance option. Sounds like a winning combination to me.

 

One Response to Microfinance & Microbrew – 2 Local Breweries Get Creative
  1. Bill S.
    December 6, 2012 | 10:56 am

    Another method of raising funds is creating a Founders club and/or Mug club. Populuxe Brewing, for example, which is busily working towards getting the brewery up and running in Ballard created a Founders Club to consist of 100 members @ a one-time charge of $100. A Founders/Mug club has the secondary benefit of driving customers to come back, to utilize their mug, helping future cash flow. Populuxe is using this angle to obtain additional start-up funds, while other breweries might use it to help fund expansion or packaging (cans/bottles) initiatives.
    Help support your local brewery!!