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OverviewGoals:
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 1st 2013New 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 PlanCompany 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 TeamDavid 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 BenefitsReduced time to market with structured
business in placeIncrease food sales and total sales from appeal
of craft beerPotential for more outward catering
opportunities and sales at craft beer festivals with a food / beer truck
More merchandizing opportunities and synergyUnique 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 CentersContracted “throwback brews” recipe
research, design, and development for pre-prohibition historic breweries
Food and Beer Truck party catering serviceMerchandizing: T-shirts, can cozies,
wooden nickels, glassware, barware, etc.Craft beer and food pairing charter sailHybrid Brewery EnergyCraft Beer Canning LineBrewing 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 2013Brewpubs = 1,165Microbreweries = 1,221Regional Craft Breweries = 97Total US Craft Breweries = 2,483
Patentable and Licensable Technology: Hybrid Brewing Energy
HP Steam
LP Steam
Cold Spring Water
Radiant Heat
Double 55 gal wood stove
w/ copper tubingjackets
Micro Steam Turbine
Hot Water Tank
Prius Drive train
Prius Energy management
system
Control System used on 100 BBL system. Proven
Technology. Same technology as original “Brewtronix”
Original “Brewtronix”
SystemPrototype
Design
PLC Logic
Control
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
To Mash Tun
To Boiler
$1.4M raised to start this contract brewing company in DC area
Patentable and Licensable Technology: Mash Filter PressAlaska 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 LineOskar 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 packagersEasy 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 PotentialSt. Mary's
Total Population (2009) Users % Index Total Market Potential
103,100 13.19% 13,599
Population age 21 to 50
44,341 13.19% 5,849
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 Pillars1. Green Brewing Technology
1. Renewable Energy2. Autonomous Controls3. CHP + PV Integrated within brewery applications4. Partner with “Save the Bay” environmental organizations
2. Historic Preservation 1. Nautical: Sailboats, lighthouses, landmarks, etc2. Dove and the Ark 16343. Blakistone Island (St. Clements) / St. Mary’s City 4. Narrative “history bits” on each bottle
3. Fresh and Local Beer1. We buy fresh local hops, specialty grains, and adjuncts from
Maryland growers2. Our beer is made fresh and served to the customer with limited
shelf time4. Craft Beer Cuisine: Experimenting with ingredients, styles, and
flavors from around the world
Facade, Motif, and Theme
Cecil’s Mill Spiced Pumpkin Pie Ale
Chesapeake Bay Amber Ale
Dirty Blonde Lighthouse Ale
Skipjack IPA
Solomon’s Dirty Sailor Porter
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
Screwpile IPA
Watermen’s Wine
Dinghy Blonde Ale
Sotterly Plantation Chocolate Stout
Piscataway Indian Wheat Ale
Blakistone 1634
Oyster Fleet Imperial Stout
Brewhouse• 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
• 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
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
Hop Garden
Hop Garden
Compost Ops
Sewer Connection Grease
Trap
Water Meter
Outdoor Kitchen
Brewhouse (First Floor)
BK
MTCon
trol B
ox
Net Electrical Meter
WH
HX
Walk-in Fridge Keg Cellarage
Furnace
Boiler
VentOil Tank
Drain
FV
FV
FVFV
FV
BT
Battery
MicroTurb
Sewer Connection
Keg
ging
Can
ning
Foyer
Tasting Roomand Merchandizing
Beer Garden
Keg Storage
Existing Circuit Breaker
Rail HoistGrainHoist
Grease Trap
Water Meter
Brewhouse (Second Floor)
Grain
Storage
and Milling
Roo
f A
cces
s
Vent
Solar Water Heater and Solar
Arrays
Block Hoist
Grain Chute
Wom
en's
Existing Circuit Breaker
GrainHoist
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 the Dove
RisksAbility of restaurants to incorporate SOMD Brewing LLCConstruction constraintsDelay from permitting and legislationProfit sharing negotiations
Exit Strategy 5 to 10 yearsBuyout investorsDiversify into more high end privately owned restaurants Build larger capacity 10 bbl brewery offsite, transfer
license from brewpub to microbrewerySell brewing business to restaurant or larger contract
brewery
SummaryPoised to become the first microbrewery in St. Mary’s CountySmall batch brewing to generate extra restaurant sales and a
cooperative brewing environment for local homebrewersPoised for partner opportunities Growth relationship in place to partner with a larger contract
brewer to proliferate the SOMD brand into the retail marketPoised to expand food and beer market into sailing by introducing
Create Craft Beer Cuisine Adventure ChartersPoised to conduct T&E on brewery equipment and process
development
https://www.facebook.com/#!/pages/SOMD-Brewing/425387377554078https://www.facebook.com/#!/pages/Craft-Beer-Cuisine-Adventure-Charters/445187795550951
Facebook Us:
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.
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