McMenamins Seeks $15 Million in Second Investment Round
Pacific Northwest-based hospitality and brewpub chain McMenamins has launched the second phase of its investment drive as it seeks to raise as much as $15 million from accredited investors.
McMenamins kicked off the first phase in May and has raised $5.9 million from 43 investors. Its goal is $20 million across both phases.
“We’re excited to welcome our first company investors into the fold,” co-founder Mike McMenamin said in a press release. “Their contribution will help us bring the company back to pre-COVID levels, and open the door to our next great investment phase.”
The second phase will remain open until December 31, 2020. To qualify, investors must have $1 million or more in net worth, excluding the value of an individual’s primary residence, or more than $200,000 in solo annual income, or $300,000 in annual income combined with a spouse.
Investors can expect to earn a 3% cumulative dividend annually and up to a 6.5% overall return over five, eight or 10 years. Only non-voting stock is available through investment.
Money raised through investments will be used to repay short-term loans taken out earlier in the COVID-19 pandemic and provide working capital for the company to take on long-term construction projects.
Projects named in the press release include transforming the company’s Cornelius Pass Roadhouse brewpub in Hillsboro, Oregon, into a multi-functional property with lodging, meeting space and a bottle shop; and building more hotel rooms at the company’s Edgefield resort in Troutdale, Oregon. Both projects have been discussed for a decade or more, Brian McMenamin told Brewbound in May.
The McMenamins empire includes 56 brewpubs, hotels and event venues in Oregon and Washington, many of which are converted historic buildings and require complicated renovations.
“For those interested in history, music, art, architecture, restoration, great food, wine, spirits, beer and therything community, we hope you’ll join us in our pursuit,” Mike McMenamin said in the press release.
In 2019, national not-for-profit the Brewers Association (BA) listed McMenamins as the largest brewpub group by volume. McMenamins’ 29 brewing locations produced a total 19,960 barrels of beer last year, a 9% decline from 2018.
Green Bay, Wisconsin-Based Titletown Brewing Up for Sale
Green Bay, Wisconsin-based Titletown Brewing is seeking a new owner or investors due to the COVID-19 pandemic hampering sales, according to the Milwaukee Journal Sentinel.
Without a steady stream of visitors to nearby Lambeau Field, home of the NFL’s Green Bay Packers, Titletown’s on-site sales suffered.
Titletown’s distribution sales have remained steady, the company told the Milwaukee Journal Sentinel, but on-premise sales have slumped due to capacity restrictions. The taproom can hold up to 20 patrons and the roofdeck can hold 75.
Titletown was founded in 1996, opened its taproom in 2014 and added a rooftop bar in 2015. The brewery’s production declined 7%, to 4,430 barrels of beer, in 2019, according to data from the BA. However, opening the taproom in 2014 appeared to have boosted production significantly; Titletown’s volume increased 97% in 2014, and 40% in 2015.
The brewery’s annual production capacity is 20,000 barrels and its brewhouse includes four 30-barrel vessels, eight fermenters, four brite tanks and bottling and canning lines, according to an email Titletown sent to prospective investors.
Greensboro, North Carolina-Based Natty Greene’s Files for Chapter 7 Bankruptcy
Greensboro, North Carolina-based Natty Greene’s Brewing Company filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court’s Middle District of North Carolina on October 18.
Owners Chris and Ashleah Lester will keep the restaurant portion of their business open, but the fate of the company’s brewing portion is in the hands of the court, according to the Greensboro News & Record.
“We would like to take a moment to make it clear that Downtown is still open,” the company wrote on Facebook last week. “Thank you so much for your support at this time.”
In March, the company opened a second taproom near the Greensboro Coliseum, hoping to draw foot traffic from event attendees, which never materialized due to the COVID-19 pandemic.
Natty Greene’s Brewing Company’s liabilities to 100-199 secured and unsecured creditors total $6.49 million. Its assets total $130,636. The sole secured creditor is Charlotte, North Carolina-based Trusit Bank, which has a $652,000 claim.
Unsecured creditors include hop supplier S.S. Steiner, Inc., which is owed $1.97 million; ingredient broker Brewers Supply Group, which is owed $27,973.79; the Guilford County Tax Department, which is owed $36,000; Ardagh Glass, Inc., which is owed $58,421.38; and MicroStar Keg Management, which is owed $11,083.06.
Unlike Chapter 11 bankruptcies, which debtors can use to reorganize their debt, Chapter 7 typically ends in liquidation.
Natty Greene’s produced 4,500 barrels of beer in 2019, according to data from the BA.
Massachusetts Brewers Seek Crowdfunding
Two Bay State breweries — Somerville, Massachusetts-based Portico Brewing and Medfield, Massachusetts-based Farthest Star Sake — have taken to crowdfunding investment platform Mainvest to raise funds for the construction of brick-and-mortar locations.
Eight-year-old Portico is crowdfunding to build a taproom in Somerville, but will continue contract brewing its beer for distribution at Ipswich Ale Brewery.
“Since our founding in 2012, Portico has taken a phased approach to growing the business,” the company wrote on Mainvest. “Phase One: successfully establish a contract brewing business. Check. Phase Two: secure broader distribution and packaging. Check. Phase Three: open a brick-and-mortar destination. That’s where you come in!”
Portico’s Mainvest round closes Wednesday, and the company has raised $118,000 from 186 investors, topping its targeted minimum of $75,000. The proposed taproom is a 3,400 sq. ft. space in the Boynton Yards development near Somerville’s Union Square neighborhood. Portico signed a lease and got a zoning permit in February, only to be waylaid by the COVID-19 pandemic the following month.
“After carefully considering our options, crunching the numbers and keeping a close eye on breweries’ unique ability to survive over the past several months, we’ve decided to forge ahead – remaining confident and committed to the development of our brewery and taproom,” Portico wrote.
Since its founding in 2012, Portico has released more than 20 beers to more than 500 retail accounts across Massachusetts. According to the U.S. Securities and Exchange Commission Form C linked to its Mainvest page, Portico’s net income for its most recent fiscal year-end was -$31,795 and -$8,914 the year before. The company’s total assets for the most recent fiscal year-end were $51,964 and $40,628 the prior year.
Portico’s intended use of funds from its target raise of $75,000, which it has now exceeded, include:
- $25,400 for buildout;
- $31,000 for brewery equipment;
- $8,100 for taproom furniture and fixtures;
- $4,500 in Mainvest compensation;
- And $6,000 in working capital.
Portico is projecting Year One gross sales of $762,453 and operating profit of $271,942. The company said investors can expect a multiple of 1.5 and the minimum investment amount is $100.
Farthest Star has not opened yet, but would be New England’s only sake brewery and taproom and one of fewer than 20 in North America, according to its Mainvest page. Its fundraising campaign ends on November 4. So far, it has raised $64,500 from 106 investors. The investment minimum is set at $100 and the company projects a multiple of 1.7 for investors.
Farthest Star’s intended use of its funds under its target raise of $100,000 include:
- $37,500 for leasehold improvements;
- $32,000 for equipment;
- $18,500 for inventory;
- $6,000 in Mainvest compensation;
- And $6,000 would be prepaid.
In Year One, Farthest Star is projecting gross sales of $94,850 and operating profit of -$34,557. Its Year Five projection estimates gross sales of $899,065 and an operating profit of $246,999.
Farthest Star will offer traditional filtered and cloudy sake styles in its taproom and in retail accounts, founder Todd Bellomy wrote on Mainvest.
“We are product-centered and focused on delicious, local, fresh, sometimes-innovative sake,” he wrote. “Companies that use marketing to drive brewing decisions falter; they are the opposite of us.”
Farthest Star would be the only sake brewery between Toronto and Brooklyn, which would create education and experiential opportunities for drinkers.
“The craft beer and cider market in Massachusetts is crowded with quality products and brewer product support; while sake is predominantly a Japanese-export with little-to-no direct brewery promotion,” Bellomy wrote. “Our locally-focused sake brewery and taproom model will inherently be different because we will have opportunities for daily market impact and consumer impressions without the limitations of distance and expense suffered by Japanese breweries, whose U.S. visits are mostly limited to New York City and Los Angeles once or twice per year.”