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4 Brothers Brewing
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Minimum target: AU $160,000
Days left: 10
Funded: AU $22,834
AU $22,834 pledged
35 people pledged
9 days left
AU $160,000 minimum target
Pledges will only be confirmed if the target is reached by: 01/12/2019 at 5:00 PM (AEST)Make a Pledge
4 Brothers Brewing
4 Brothers Brewing Pty Ltd is offering fully paid ordinary shares at $0.80 per share to raise a maximum of $200,000
This Offer is made under the CSF regime in Part 6D.3A of the Corporations Act 2001 (Corporations Act). The general public in Australia can buy up to $10,000 worth of shares in this company, as part of the new equity crowdfunding legislation (Note: there is no cap on how much Sophisticated Investors can invest). Please make sure to read the risk warning statement, offer document, and understand the Cooling-Off rights. Instructions on how to register to invest and pledge are here.
Letter from the founder
Dear potential Brothers (and Sisters),
Thank you for taking the time to explore the opportunity of investing in our company, 4 Brothers Brewing. We are excited at the prospect of you joining us on our mission to continue making delicious, innovative beer locally. Only a few short years ago the idea of owning a craft brewery seemed like nothing more than a dream, thankfully, due to hard work, passion and careful planning, we have been able to establish our brewery and brand over the last couple of years. We have essentially been learning as we go and we have seen our revenue grow rapidly each year since inception, because of you, our loyal fans.
I liken our current operations to dipping our toes in the water of the beer industry, a proof of concept. It was also a good way to explore which kind of business model would suit our company best. I’ve taken pride in being able to run such a small brewing operation at a profit for the last two financial years. However our small size also creates several issues: we can’t make enough beer to meet our demand, and our small batches mean our labour costs are high. I estimate that we will hit our brewing capacity and revenue ceiling sometime in 2020.
So it’s now time for us to jump fully in. We want to expand 4 Brothers Brewing in a way that stays true to its founding values, while creating a product that can be accessed by anyone who wants to enjoy it. This requires a new base from which 4 Brothers can lay its roots. We have decided to focus largely on establishing the kind of retail venue (brewpub) that fits with our brand, our story, and the Toowoomba community in which we thrive. We’re inviting investors to join us as we pursue plans to build our new brewpub in Toowoomba.
Adrian, 4 Brothers Brewing
Who are we?
We are a small, independent brewery based in Toowoomba, Australia.
Our core business is the manufacture and sale of small batch craft beer. Our brewery has been operating over the last two years and we have brewed a large variety of different beers in this time. Due to our small size, all of our beers brewed on-site are available in keg only, meaning that we have had to brew beer under contract at larger Queensland breweries in order to be able to offer beer packaged in cans. We are currently undertaking a project for expansion and are looking to move into the next phase of our company by relocating into a new facility.
Products and Services
We differentiate ourselves by focusing on variety in style and quality of product. In 2018 we produced 28 unique beers. While we continue to foster our local market with new and innovative products, we also have a range of 10 regularly brewed beers. More than two years of brewing and selling commercially has taught us a lot about what our customers and market wants. Our current range is:
We also have various beers that we bring out in one one-off batches. These beers include:
- Limited release beers only available at the brewery.
- Collaboration beers with other breweries.
- Custom beers brewed for particular venues.
- Beers brewed for events and awards.
Some of them include a different floral beer each year during the Toowoomba Carnival of Flowers, Blueberry Lager, Cunnamulla range of custom beers, King Of The North and many more.
We have created our own mug club “The Brotherhood”. The Brotherhood is a yearly subscription member loyalty program. Members receive their own mug to use when drinking at the brewery as well as various discounts. The Brotherhood is a way to reward our most loyal customers as well as a way to increase brand loyalty, which can be scarce in the craft beer industry as a whole. We want to be brewed locally, drunk locally, and owned locally.
What is our business strategy?
We plan to expand the business through the development and manufacture of our products over the next five years. We are also expanding into a larger premises and increasing the size of our equipment.
Over the next year, we intend to purchase new equipment, fit out a new venue, and change our venue model by having a full commercial kitchen. We expect to continue to run at a profit in the short to medium term.
We believe that we will have the new brewpub venue fully operational within six months after the successful completion of the CSF round (if it is successful).
Core Business Model
Two-thirds of our revenue is generated from direct retail sales from our taproom. With the other third being made up of wholesale sales as well as sales from festivals and events. With our expansion, we anticipate that our main source of revenue will continue to be the retail sale of our beers at the brewery location. There is also the opportunity to grow our revenue by focussing more on wholesale beer sales. So far we have our beers stocked in four bottleshops, and semi-regularly at nine venues around Toowoomba. This was achieved without having any dedicated sales staff.
We will specifically target pubs, bars, cafes and licenced restaurants in the immediate Toowoomba vicinity as well as the Southern part of Queensland as a whole. We believe, part of the success and profitability of the Company will depend on our ability to create a retail location (brewpub) that provides an environment and experience that customers expect and enjoy. Our vision is to reconnect people with good friends, good taste, and good times.
To date, our growth has mainly come from selling locally. We sell most of our beer in the immediate vicinity of Toowoomba, Queensland. We sell a small amount in Brisbane and Ipswich and haven’t distributed outside of those areas.
Still, with limits on supply we have managed to grow at a rapid pace. The new brewhouse will enable us to supply our own venue, and begin an effort to market and distribute beer wider than our local area. We will be working with new distribution partners and hiring our own local reps in key markets to make this happen.
Our biggest challenge in the past has been not having enough beer. For that reason, we have held off launching in the larger beer markets. Once the brewpub is operational our production capacity will go up from around 30,000L per year to 100,000L per year. We have designed the brewery so the current 4 fermenters can be replaced giving us a capacity of over 200,000L.
Our Taproom at the Brewery
Our current taproom serves as our home for exhibiting our wide array of ever-evolving and changing beers. You can enjoy six different beers on tap and the beers that are being poured change regularly. Our Taproom is really where our customers are engaged with our story and receive the level of customer service that keeps them coming back. For a lot of our consumers, the first time they try our beers is at our Taproom and the positive effect of the experience they receive goes well beyond our Taproom walls.
With a rating of 4.9 on Facebook with 146 votes and 5,000 followers (at the time of publication of this offer document) we are confident we’re doing the right thing by our happy customers.
Our venue represents something unique in Toowoomba, a place that is family and dog-friendly, where you can drink up to 6 unique local beers. Our patrons are spoilt for choice with our ability to brew small-batch, experimental beers - in 2018 we created 28 different beers in the year, many of which were exclusive to the taproom.
We serve mixed meat/cheese platters alongside a rotating food truck line-up and special foodie events. The vibe of the place is friendly and inclusive – a wonderful place to immerse yourself in beer or just relax with friends and family. The taphouse is located on the Northside of Toowoomba, just 5kms from the center of the CBD.
Our taproom offers good margins and immediate cash flow, this is why our focus will be on creating a new brewpub. Our taproom enables us to provide that experience and education to new audiences and convert more and more people over to drinking craft beer. However, once we have our new brewpub live, we plan to run further CSF rounds over the next five years to build more retail venues.
As of the date of this publication, we don’t have an online store. However, we are currently working on one and aim to have it operational in the near term. Once it is up and running it should increase our revenue as well as make our beers more easily available, especially for people from interstate who can’t find our beers stocked near them. We plan to sell beers and merchandise via our online store.
Marketing and Distribution
We believe 4 Brothers Brewing stands out because we have a real story that resonates with our customers. Ours is a story of a man, with three other brothers, that through years of trial and tribulation finally made a go out of brewing beer. Things weren’t always easy and at the start Adrian had a steep learning curve in stepping up to the level of brewing on commercial equipment.
So, where does that put us in the market? Sincerity, creativity and authenticity are our core values. We have a real story and one we believe that real Australians can relate to – the man filled with passion who somehow managed to make a go of his dreams. Through tireless improvement and experimentation, we have proven ourselves as an integral part in the craft beer industry in our local area.
We pride ourselves on being exceptionally creative and innovative when it comes to new products. We brewed 28 different beers last year. Creating new and exciting products is a core part of our strategy because this is what the market craves and what continues to drive our sales.
Every business needs to get attention for what they are doing. We tell our story wherever possible to help spread the word about 4 Brothers Brewing and craft beer.
We have been featured by many major local press outlets such as The Courier Mail, The Chronicle, 9 News, 7 News, WIN News etc as well as the major beer publications like Beer and Brewer Magazine, Australian Brews News and The Crafty Pint.
We have great relationships with local journalists and make sure we are there to help them out any time they need information for beer-related stories. In return we always let them know when we have any newsworthy content.
We have always been active and hands-on with social media, particularly Instagram and Facebook. We’ve built a following of 2,500+ on Instagram, growing rapidly and with great engagement.
On Facebook, our natural traction is also something we are proud of. While some businesses struggle for organic traction and need to focus on paid channels, we are the opposite. As a venue we have 150+ organic reviews averaging 4.9 out of 5. We have over 5,200 likes and 1,100 check-ins. We have a 91% response rate and an 18-minute average response time. Our posts regularly reach thousands of people organically (tens of thousands for some). We then have the opportunity to use boosted posts to capitalise on the natural traction, instead of paying to try to get traction in the first place.
Market and Competitors
In Australia, during the period from 2008 to 2016 the number of breweries increased from 81 to 387, which is nearly a five-fold increase. This is a significant increase. However, if you consider the number of breweries and market penetration of craft beer in the USA, we believe Australian craft beer to still be in the early stages of growth. In the USA, there are currently more than 7000 breweries and craft beer makes up 23% of all beer sold in the country. Currently, craft beer sales make up only 5% of beer sales in Australia, which suggests that we could expect to see significant growth in craft beer sales over the coming years. In fact, research agencies have projected craft beer sales are to grow at an annualised rate of 7.9% over the next 10 years. (IBIS WORLD Craft Beer Production in Australia Sept 2018)
Brewers have successfully been using equity crowdfunding for years:
Note: Units in local currency millions. *pending successful completion of offer.
Improved Regulatory Environment
Until recently, craft breweries were not getting the same attention and support from the State and Federal governments as other similar industries. For example, wineries had access to a producer rebate of up to $500,000. This made the excise rebate available to craft breweries of $30,000 seem like an unfair disadvantage.
Fortunately, we believe things are changing for the better. At the federal level, the excise rebate has just increased from a maximum of $30,000 to $100,000 per year starting on the 1st of July 2019. The Queensland government are taking steps to get behind craft beer in the state with the implementation of their Queensland Craft Beer Strategy (QCBS). They’ve set out three key priorities, addressing improvements in infrastructure and education, wider supply networks, and regulation changes including the way excise is managed. We believe that the government has finally begun to recognise the importance of our industry and that both the state and national governments will continue to offer greater support for craft brewers.
We opened our brewery in April 2017. At the time there were no other breweries in Toowoomba, with the nearest brewery being in Ipswich, over an hour’s drive away. Since we have opened, we have seen the doors to Volcanic Brewing open 5 minutes south of us and Monty Brewing are building a brewery and restaurant in the suburb of Highfields, 15 minutes to the North.
While we think that Toowoomba is still in its infancy in regards to craft beer, we also believe there is an allowance in the market for more breweries to open and still remain a competitive space.
To us, the more breweries and brewpubs that open means there is a higher demand for craft beer and more people drinking craft beer, and that is a great thing.
Founder and Managing Director: Adrian Cubit
Adrian founded 4 Brothers Brewing in 2017. He brews the beer for the company and has a real passion for his craft. Adrian creates the never-ending list of new beers and oversees all branding components of the company. He also oversees the growth and strategy of the company.
Adrian comes from a vastly varied background. From an early working life in hospitality, to sales, and then spending over a decade in the transport and logistics industry.
At 4 Brothers Brewing, Adrian is the Managing Director and works on business strategy, fundraising and finance, marketing, PR and content and manages the sales and brewing operations.
- Responsible for ensuring all areas of the business run efficiently.
- Directly responsible for finance, keeping the business well funded and operating in a financially sustainable manner.
- Manage and take ownership of capital and expansion projects.
- Oversee the sales and establish targets, strategy and direction.
- Create new beer recipes, marketing material and label artwork.
- Manage marketing strategies and budgets. Manage public relations
Director: Byron Cubit
Byron is an initial investor of 4 Brothers Brewing, but he has been a part of 4 Brothers his whole life. He quite literally is the 4th brother. He has almost 10 years of experience in the rail industry, starting with customer service and quickly found himself driving trains all over Queensland. Byron has studied law and workplace health and safety. He is also a young workers rights advocate and believes in quality pay and good working conditions for young people.
- Responsible for reviewing the financials of the company.
- Approval of all recommended compensation changes
- Assist the Managing Director in the short and long-range planning activities including growth strategies.
- Act as the principle sounding board and advisor for the Managing Director including helping to review strategies, define issues, maintain accountability and build relationships
We have been operating profitably in the last year and our full financial statements are available for download here, on the Details tab of this offer page and extracted in our offer document.
USE OF FUNDS
As can be seen below, the lions share of the funds raised will be used to fit out a new brewpub venue. We plan to move our operations into a new 120- 150 seat venue. With a full kitchen, larger brewing equipment, and a bigger location within the Toowoomba CBD, we believe we have the plan and budget to succeed.
Table 5 below sets out the intended use of funds raised under this Offer based on the minimum and maximum subscription amounts.
In Table 5, ‘working capital’ includes overhead expenses and employee wages. The costs of the Offer include the Intermediary’s fees under the hosting agreement between the Company and the Intermediary. These fees are 6% of all funds raised.
Other than as specified above, no other payments from the funds raised will be paid (directly or indirectly) to related parties, controlling shareholders, or any other persons involved in promoting or marketing the Offer.
We expect that the Maximum Subscription amount will be sufficient to meet the Company’s short-term objectives over the next 18–24 months. If only the Minimum Subscription amount is raised, the Company will require further funding to be able to carry out our intended activities over the next 12–18 months. In such circumstances, the Company may consider undertaking a further CSF offer under the CSF regime. Until additional funding is obtained, we will scale back our Venue Fit Out plan, and continue to focus our cash resources on production, sales and working capital costs.
In addition to being a shareholder of 4 Brothers Brewing Pty Ltd, a range of incentives and rewards are being offered for investors. The table below sets out the ‘investor gifts’ based on the amount invested.
An investment in the Company should be seen as high-risk and speculative. A description of the main risks that may impact our business is included in our offer document. Investors should read this section carefully before deciding to apply for shares under the Offer. There are also other, more general risks associated with the Company (e.g. risks relating to general economic conditions or the inability to sell our shares).
NOTE FROM PLEDGEME
PledgeMe have completed background checks on the Company (4 Brothers Pty Ltd) and its Directors (Adrian Cubit and Byron Cuit). We found no adverse findings in our checks. Please read the warning statement, offer document and ask questions before investing. PledgeMe will receive 6% (GST exclusive) of the funds raised if the goal is met by the deadline.
08/11/2019 at 3:22 PM
Firstly I would like to that all those who have chosen to invest in 4 Brothers Brewing so far. At the moment we are over 10% to our minimum target. Remember that if we don't hit the minimum target of $160,000, no shares will be issued, so please share the campaign with anyone you think may be interested.
For those that are yet to invest, we understand that there is a fair bit of information to read and digest from our Offer Document. We are happy to add to that, as last week we completed our Business Activity Statement for the first quarter of the financial year. We are pleased to let you know that our quarterly revenue is up 58% from the corresponding period last year.
For this financial year we have a revenue target of $250,000, with a stretch goal of $270,000. So far, we are on track to hit our stretch goal. As many of you have seen, our current venue is quite small. And I believe we will struggle to extract much more than $300,000 per year from this site. That's one of the reasons why we are running our campaign for expansion, and offering you the chance to come on board and help us keep growing at such a great pace. I wholeheartedly believe that we can provide investors that join us at this level with really good value, and great capital growth prospects in the next few years.
Don't forget, as well as becoming a Shareholder in a fast growing company, there are also perks for investors that join our equity crowdfunding program. These include discounts at the brewpub and online store, birthday beers, merchandise, invitation to brew days and an invitation to a yearly Annual General Meeting.
Also, if anyone is attending the Brews & Barbie Bash here in Toowoomba this Saturday, we will be there pouring some beers, so feel free to pop in and have a chat face to face if you want to.
|Maximum Shares Offered||250,000|
(application/pdf, 2.08 MB, uploaded 31 October 2019)
(application/pdf, 476 KB, uploaded 31 October 2019)
(application/pdf, 859 KB, uploaded 31 October 2019)
|Adrian Cubit||Managing Director||https://www.linkedin.com/in/adrian-cubit-1245a964/||✔|
Followers of 4 Brothers Brewing
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"Proud to be part of local business "
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"Good luck guys! Can’t wait to be a part of this awesome business and have a cold beer or 10 with us all! "
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"Good Luck Adrian, At Startup Toowoomba and Canvas Coworking we wish you all the success!"
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I want to embed this investment somewhere
Minimum target: AU $160,000
Days left: 10
Funded: AU $22,834