Ian Schuster, the founder of Bay Area-based Schubros Brewery, is attempting to raise more than $1 million via equity crowdfunding to build a brewery in Tianjin, China.
To do so, Schuster has formed the San Francisco East Bay Brewing Inc. (SFEBB) holding company and he’s selling 23 percent of the company to non-accredited investors through WeFunder, a Securities and Exchange Commission-approved third-party crowdfunding portal, at $250 a share.
“The idea is that Schubros is going to be U.S., and San Francisco East Bay Brewing will be shepherding and holding the Schubros brand outside the U.S., which means Asia right now but could be global,” Schuster told Brewbound.
Thus far, San Francisco East Bay Brewing has raised $138,198 from 140 investors.
“We’re still aggressively seeking more capital there,” Schuster added.
The initial plan, he said, is to establish multiple joint ventures with new or existing brewery partners throughout Asia.
SFEBB has tapped Oriental Pearl Entertainment, a Chinese company that operates a chain of karaoke bars and health clubs, as its first partner. SFEBB will hold a 49.9 percent stake in that venture, Schuster said.
As part of that deal, Schuster said Oriental Pearl has agreed to pay for the buildout and equipment costs while SFEBB will cover operational and startup costs as well as labor, marketing and distribution. The brewery, which will also produce Schubros-branded offerings as part of a licensing arrangement, is slated to open later this year with an initial capacity of up to 5,000 barrels annually.
Schuster — who spent 5.5 years working for Philip Morris Japan and helped expand the company’s category management team into China, Korea and Hong Kong, according to his LinkedIn — said he was attracted to China due to the potential for beer market there to “skyrocket” as the country’s growing middle class discovers craft beer.
“You’re looking at almost a million new middle class families being minted every four or five weeks there, and those are craft beer drinkers,” he said. “They’ve got their disposable incomes, and they’re looking for good fun and a modern western cosmopolitan ways to spend it.”
He added that Anheuser-Busch’s promotion of its Goose Island craft brand in the country is “the greatest thing in the world” for SFEBB because it’s helping build awareness of craft beer among those drinkers.
Schuster said he initially planned to build a much bigger Schubros brewery in the Bay Area and export beer to Asia, but those plans fell apart after President Donald Trump pulled the United States out of the Trans-Pacific Partnership trade agreement and many of his Asian business partners halted negotiations.
“It’s too dangerous in this environment to make beer and export it because who the hell knows what’s going to happen with currency?” he said. “Who knows what’s going to happen with tariffs? It’s ironic because this is something that’s supposed to protect American jobs but it’s actually forced me as a business person to send production overseas.”
Nevertheless, Schubros is still planning a to open a new U.S.-based brewpub in Hayward later this year, Schuster said.
Schuster added that the lease for the company’s current facility in San Ramon expires at the end of May and the property owner has already said it will not be renewed. The move to Hayward will cost about $300,000, funded by a small business loan, cash flow and additional capital from current Schubros investors, he said.
Schuster has signed an agreement to buy a commercial property, but he is anticipating some downtime between the closure of the company’s San Ramon location and the opening of the brewpub in Hayward
“We’ll be brewing like crazy right before we leave,” he said. “We might have to do a little bit of contract brewing in the gap.”
Schuster said Schubros had maxed out its production at the facility at about 900 barrels of beer last year, half of which was exported to countries such as China, Japan, Taiwan and Vietnam.
Press releases with more information are included below.
Oriental Pearl Entertainment Joins Schubros To Launch New Brewery In Tianjin China
SAN RAMON, Calif. — Schubros Brewery, a craft beer company focused on creating a bold epicurean experience influenced by all the flavors of the world, announced plans to launch a new brewery in Tianjin, China.
The new Tianjin brewery is a result of a joint venture between Schubros and Oriental Pearl Entertainment, a company that operates a chain of karaoke bars and health clubs. Construction of the upcoming brewery will begin in Q2 2018. The location of the 1000 square meter facility will be in Tianjin, a city southeast of Beijing. It is expected to open later this year. To start, the brewery will be built out to accommodate a capacity of 4000 to 5000 barrels. Schubros will produce a variety of beers from this location including new exotic fruit-flavored beers along with its core four and seasonal craft beers.
Carl Yu, Director of SFEBB and Schubros Tianjin said, “We’re excited to work with Schubros to bring unique American craft beers to Tianjin. “In seeking a partner to make this venture a reality, we were looking for one that understood the local Chinese market and had a track record of success. Schubros was the perfect fit due to its history of leadership and traction in Asia.”
“Schubros already has distribution in China, so the next natural step was to build out a brewery in Tianjin, said Ian Schuster, CEO of Schubros Brewery. “We’re very excited to join Oriental Pearl Entertainment to bring the people of Tianjin a unique American craft beer experience that embraces the unique flavors and tastes of the region.”
In launching this and other initiatives as part of its Asian expansion, Schubros is creating a new subsidiary, San Francisco East Bay Brewing Company, (SFEBB). To fund this new subsidiary, a crowdfunding campaign is currently underway through Wefunder (https://wefunder.com/sfebb) with a goal of raising a total of $1.07 million. The campaign runs through Mid-March 2018 and offers a unique opportunity to invest in the rapidly growing, yet still relatively untapped Asia Pacific craft beer market.
More About Schubros’ Asian Expansion
Schubros is expanding its production, import and distribution of its craft beer in China, Japan, Vietnam, and India. In addition to this initiative, the company has plans to build out several breweries in specific cities across these countries that will cater to local markets.
About Schubros Brewery
Schubros Brewery was founded in 2011 and strives to elevate beer enjoyment to the highest level, Schubros believes in creating the ultimate epicurean experience through its purposefully crafted beers.Guided by three core values – community, responsibility and quality, Schubros is committed to preserving the purity of its brands, investing in green technology and using all-natural and organic ingredients. Schubros Brewery participates in community events and hires locally whenever possible. Schubros supports a variety of local and national causes including local area schools, and military veterans. Schuster is himself an ex-Naval Officer. For more information about Schubros, please visit www.schubrosbrewery.com or call (925) 786-2232.
Schubros Signs Agreement To Purchase Commercial Building In Hayward
SAN RAMON, Calif. — Schubros Brewery, a craft beer company focused on creating a bold epicurean experience influenced by all the flavors of the world, today announced that it has signed an agreement to purchase a retail location just south of Downtown Hayward.
The brewery will be completing its relocation to Hayward in Q2 2018, shifting to its much larger facility and adding a new brewpub that offers cuisine from area restaurants in addition to an in-house menu. Offering and eclectic mixture of diverse cuisines – predominantly from Asia. Other fare like BBQ and Mexican dishes will be available. Guests will experience a concept that is similar to Uber Eats. They can place their order from surrounding restaurants while at the Hayward brewpub and Schubros will take care of delivery to table. Sports aficionados who visit the new brewpub will also enjoy watching some of the harder to find sports in the U.S. such as Cricket, Field Hockey, and Kabaddi on large LED screens in the new Hayward location.
Schubros will feature its full range of beers, from its Core 4 led by 680 IPA to its line of South East Asian fruit-inspired IPAs. These include Kiwi, Mango, and a Dragonfruit/Passionfruit fusion.
“We’re excited to join the Hayward community with the purchase of our new building,” said Ian Schuster, CEO of Schubros Brewery. “The new space will perfectly accommodate our growth and allow us to bring our beers to a much broader and diverse market both locally and internationally. We’re looking forward to carrying out our vision to bring our beers to Asia and bring some of the unique product we are making out there back to home here. It will all start in Hayward, right at the crossroads of the Bay Area.”
In addition to launching its new Hayward brewpub, Schubros is expanding production, and distribution in China, India, Japan and Vietnam, and in the process of opening second and third breweries near Beijing and Shanghai respectively. To fund this, the company is selling equity in its Asian-focused spinoff, San Francisco East Bay Brewing Inc. (SFEBB), leveraging the JOBS Act of 2012’s new internet equity crowdfunding IPO law. Open to all investors of legal age, the offer is currently underway through online broker Wefunder (https://wefunder.com/sfebb), and seeks $1.07 million. The campaign runs through March 17th, 2018, and offers a unique opportunity to invest in the rapidly growing, yet still relatively untapped, Asia Pacific craft beer market.
About Schubros Brewery
Schubros Brewery was founded in 2011 and strives to elevate beer enjoyment to the highest level, Schubros believes in creating the ultimate epicurean experience through its purposefully reciped beers.Guided by three core values – community, responsibility and quality, Schubros is committed to preserving the purity of its brands, investing in green technology and using all-natural and organic ingredients. Schubros Brewery participates in community events and hires locally whenever possible. Schubros supports a variety of local and national causes including local area schools, and military veterans. Schuster is himself an ex-Naval Officer. For more information about Schubros, please visit www.schubrosbrewery.com or call (925) 786-2232.