For small brewers itching to move beyond their current footprint or capacity limitations, consider the private stock route taken by a number of new brewers, including Fireman’s Brew, a Los Angeles-based craft beer company founded by two firefighters.
In 2013, Fireman’s Brew plans to double their numbers. The brewery announced a private stock offering to help raise the necessary capital they need to continue their booming expansion and to build Fireman’s Brew into a national brand. Some quick details on that offering, which was announced in October 2012: The company offered 6,250,000 shares of common stock at $0.80 per share for an aggregate offering price of $5 million. The minimum purchase is 6,250 shares for $5,000. Prospective investors must be residents of the State of California.
We followed-up with Founder Rob Nowaczyk and Chief Operating Officer David Johnson for some details on this stock offering strategy. They couldn’t comment much in way of specifics on this current offering for legal reasons, but they closed a similar offering on May 31, 2012. Since that time, the company expanded inventory and its distribution footprint beyond California to five other states including: Arizona, Colorado, Illinois, Nebraska and Nevada.
“As a result of our last stock offering, we have been able to expand and achieve a sales growth of over 300 percent in 2012,” Nowaczyk said.
Brewers across the country are seeking expansion a variety of ways – so what made that earlier stock offering so appealing as a strategy?
“To begin, in 2011, we were able to secure distribution at a major Southern California retailer and as a result needed to expand to service the influx of new business. As a small company, we made the decision to bring in outside investors with our previous stock offering to help facilitate our growth,” Nowaczyk said.
This strategy is obviously not without its obstacles and red tape. Nowaczyk said some of those finding and paying for appropriate legal representation, internal and external due diligence and aligning with the right investment banker for your particular type of offering. It is a very time consuming process.
“Every business is different and every business owner has different goals. I can only recommend that each business owner uses the strategy that he or she thinks is best for them,” he said.
Despite not being able to share many key details at this time in the process, Nowaczyk is definitely excited about his brand and the opportunities that lay ahead thanks to these stock offering opportunities.
“Number one, we have an authentic brand story that nobody can replicate,” he said. “Two firefighters set out to brew fantastic beer with a goal of giving a portion of the profits back to the families of their fallen brothers. Number two, we produce a line of high quality, award winning beers. All three of our beers are critically acclaimed and our flavor profiles appeal to a broad spectrum of beer drinkers. And number three, we have an accomplished management team with over 100 years of industry experience. Fireman’s Brew is incredibly fortunate to have a dedicated group of professionals working for us. There is no better way to describe us than as a team.”