Craft brewers from Maine to North Carolina to California have raised money to install fermentors, buy more kegs, or expand their barrel-aging program.
But when one of the ten biggest craft brewers in the United States announces their $1 million crowdfunding campaign, a few more heads turn.
Saturday (July 19) morning, Stone Brewing Co., the tenth largest craft brewing company in the United States, announced plans to open a production brewery and destination restaurant in Berlin, Germany, in late 2015 or early 2016. The $25 million project includes the renovation of a historic gasworks complex in Marienpark Berlin into a brewery and packaging hall, a Stone Brewing World Bistro & Gardens restaurant, and a Stone Company Store.
With these plans, Stone will be the first American craft brewery to independently own and operate a brewery in Europe. (Brooklyn Brewery’s brewery and restaurant in Stockholm is a partnership among Brooklyn, D. Carnegie & Co., and Carlsberg Sweden.)
Stone Groundbreaking CollabsIn addition, Stone launched an Indiegogo campaign in an attempt to crowdfund $1 million to complete the bistro and beer garden at both the Berlin location and at their second brewery in the Eastern United States, the location of which is still to be announced. Contribution perks included a $50 “Groundbreaking Collaboration” 1.5L bottle, a $45 T-shirt and glass combo, all the way up to the $1,000 “Brewer for a Day” opportunity or a $10,000 “Founder’s Package” that includes your name engraved on a fermentor. The highest-value perk, which included a stay in Stone founder Greg Koch’s loft and a private dinner in return for a $30,000 contribution, was apparently removed from the campaign on Tuesday, July 22.
The campaign has, as of this writing, raised $129,663 in six days. But it’s left many others scratching their heads. A Facebook comment with sixty-one “likes” on Stone’s page summed up what many expressed on social media: “You guys don't have enough money to do this on your own??”
The need to raise the $1 million is a matter of timeliness, Stone’s Indiegogo campaign explained.
"By throwing your financial weight around, specifically in our direction, you enable us to add a crucial component of the Stone Experience—our Stone Brewing World Bistro & Gardens—to each brewery much sooner than we otherwise could.”
Or, as they further simplify in a comment on their Facebook page:
"These breweries will be built regardless. We're just allowing people to purchase special beers in exchange for funds that will significantly expedite the construction process. That's all.”
But given Stone’s access to traditional business funding mechanisms, some are assuming this campaign is driven more by an interest in consumer engagement than true fundraising, making the criticism (such as this critique on Deadspin or this blog post from beer writer Jordan St. John) sting even harder. A few days into the crowdfunding campaign, Stone responded to the social media backlash with a video posted on their Facebook page and reduced donation levels for various perks (the donation level for the collaboration beers was reduced to $30, and the donation level for Brewer for a Day was reduced to $500). While stopping short of a mea culpa, the video is a frank admission that messaging and value around crowdfunding campaigns is crucial to their success.
With more than 3,000 breweries in America, according to the Brewers Association, consumers are bombarded with choices on the shelves, on tap, at festivals, and in tasting rooms. Now they have choices to make online as well: Whose brewery to invest in and how much? The start-up 15-barrel brewery founded by the homebrewers looking to raise $25,000 for fermentors and a cold storage room? Or one of the largest craft brewers in the U.S. who would like to raise $1 million for their two new breweries?
Smaller craft brewers have used reserve societies and special beer releases as critical funding mechanisms in the past, creating cash flow from bottle and event ticket sales well in advance of the release of those special beers. But the U.S. craft beer scene has not seen a crowdfunding attempt of this magnitude before, and certainly not from a top-10-by-volume U.S. craft brewer. In the U.K., Stone collaboration partner Brewdog has funded rapid growth in their brewery and bars by offering actual equity shares in the company to individual investors. U.S. securities regulations prevent companies from offering equity through crowdfunding, although the U.S. Securities and Exchange Commission last year proposed rule changes that would loosen this restriction for companies raising less than $1M per year through crowdfunded equity offers.
Such rule changes have yet to take effect, yet consumers are increasingly drawn to these new initiatives that create more interaction directly with a brewery. The relationship is no longer limited to buying the beer in the store, visiting the tasting room, or even seeking out rare beer by waiting in line outside the brewery on a specific day. Now consumers can join the “revolution” by buying into it in advance, with rare beer or the chance to hang out on a brew day as their reward. As Stone has said, the breweries and restaurants will be built regardless, and if nothing else the campaign is a marketing tool for what Stone wants to be seen as: leaders in the global expansion of craft beer.