Melbourne's 3 Ravens launches crowdfund
The 3 Ravens equity crowdfunding campaign closed on 18th August, raising $544,653 from 320 investors.
Melbourne’s 3 Ravens Brewery launched its crowdfund offer yesterday, looking for a maximum investment of $2 million.
The launch follows an expressions of interest phase, and values the business at a maximum of $12 million.
3 Ravens general manager Nathan Liascos and head brewer Brendan O’Sullivan explained that now was the time for a crowdfund to support 3 Raven’s next phase of growth.
“We’ve achieved steady organic growth for the last 18 years, but we really wanted to take 3 Ravens to the next level,” said Liascos.
“It allows us to achieve our vision, plus build a community of co-owners that are passionate about the industry and the planet the way we are.”
Currently brewing 200,000 litres a year, the expansions will allow 3 Ravens to grow to around 600,000 litres a year within its current site, and this could expand further if new brewpubs are added to the 3 Ravens portfolio.
3 Ravens crowdfunds brewery upgrade
3 Ravens has already received some funding through the Sustainable Australia Fund and the Victorian Government’s Small Scale and Craft Program in recent years as it looked to grow its technical capabilities.
The funding enabled 3 Ravens to invest in a CO2 Heat Recovery Chiller, used to remove waste heat from the chilling operation, raising the temperature of water stored in a thermal vessel which is then re-used in the brewing process.
“Alongside that, we’re upgrading a lot of the infrastructure in the brewery to make it more ergonomic and more hygienic,” explained O’Sullivan.
“[So it’s] easier to make more beer and larger volumes to increase scalability, [and] also improving the floor space so we can continue to increase our capacity.”
Three new 45hL fermenters, a replacement coolroom and revamp for its Thornbury brewpub are also in the work. In the medium term, 3 Ravens is looking at launching brewpubs in other states and capitals, notably Perth, Brisbane and Sydney.
“It’s all still in the planning phase…[but] we’ve got a site and opportunity in Western Australia we’re looking at that we’re just working through some options with that site due to licensing,” explained Liascos.
“We’re also actively looking for sites in Victoria, somewhere closer to the action than we currently are in an industrial zone in Thornbury, and looking to start looking at some additional sites in Queensland and New South Wales.”
3 Ravens will be launching satellite brewpubs where possible, rather than venue-only sites, said O’Sullivan.
“Our preference is always to have bulk tanks in brewpubs to minimise packaging, minimise kegs, minimise cleaning, minimise loss, all that sort of stuff. So if we can have a brewery or brite tanks and fermenters on-site, that’s definitely going to be our preference.”
“[We’re planning] satellite destination spots in all the states around Australia to strengthen relationships with current and future customers to try and gain a larger portion of taps in certain venues around Australia.
“Definitely having a bricks-and-mortar presence in other areas expands or spikes interest in brands from consumers. So that’s going to translate to other venues and outlets wanting to pull your pour your beer as well.”
In a crowded market, gaining traction for your brand has never been more crucial or more challenging, and 3 Ravens hopes that its strategy will enable it to gain some cut-through.
“[It’s] an opportunity for us to showcase our beer and have conversations with people. The most challenging aspect is reaching the consumer. So for us, that retail presence means we can control the communication, we can give them the full 3 Ravens experience and really show people what we’re about, rather than hoping that someone else can do that for us,” O’Sullivan explained.
“So it’s about getting in front of people, which historically was not our strength. You know, in the early days, we were very, very much an introverted and introspective brewery that didn’t really get out in front of people, so we’ve been really conscious about that in the last five years trying to become a bit more customer-facing and getting on the front foot with marketing and engagement.”
The 3 Ravens crowdfund
A number of other breweries have crowdfunded in previous years to varying degrees of success during the offer as well as afterwards.
Currently, Future Magic Brewing Co. in Brisbane is crowdfunding, as is Dainton Beer, all on the Birchal platform. But this isn’t an issue for 3 Ravens.
“I think we’re a unique business and we differ in our offer, and our plans differ from the other breweries that are out there crowdfunding,” explained Liascos. “It’s probably not ideal timing but I don’t think it’s going to really impact our race at the end of the day.”
O’Sullivan agreed, saying that greater excitement and awareness of breweries can only benefit others.
“The craft industry and movement, we’re all in it together. So we really hope that all the other breweries raising are successful. We don’t see them as hindrances – the rising tide floats all boats.”
Of course one of the issues raised by previous crowdfunds is the challenges posed by extending an investor pool. If it reaches its maximum subscription, the 3 Ravens crowdfund will see nearly 17 per cent of the business in the hands of retail investors.
Equity crowdfunding requires businesses to be much more transparent than they may have been before, with reporting promises that some breweries have not managed to fulfil. 3 Ravens is dealing with this challenge by hiring for a designated ‘investor relations’ role.
“We’re picking someone to manage it,” explained Liascos. “We see the need to ensure that all investors can be communicated to well and frequently so with the raise, we’re looking to put someone in that place to make sure that that’s done as well as we can.”
And it’s a two-way street, explained O’Sullivan.
“What I’m looking forward to is not just us communicating with them, but getting their feedback and their engagement as well.”
But Liascos said that while they were pleased with the raise so far, organising the raise had proven to be a challenge and necessitated them moving the offer launch date.
“There was a bit of back and forth, a whole bunch of the backend stuff – it’s a bit of a process to pull it all together.
“But it’s been good to get all of that information together for the business and to build that structure.”
“The end result will be something that we’ve been working towards for the last five years anyway, having a board of directors and a bit more formality and structure around the business is something we’ve really needed to progress. So this just encouraged us to make it happen,” explained O’Sullivan.
Room for growth
One of the aims of 3 Ravens’ business strategy is to “drastically increase” the number of permanent and long-term contracted taps in Victoria.
Tap contracts remain a challenge, one which is currently being taken up by the Independent Brewers Association according to its 10-year roadmap – but where breweries stand on it is difficult and dependent on their own practices and market position.
“I find it really interesting, the feedback that the ACCC got, and in a lot of ways I agree that it’s down to the publicans to choose what they want to do. So it’s a really interesting and complex topic,” said O’Sullivan.
“I don’t really sit on either side in terms of agreeing with them or disagreeing with [tap contracts], I think the publicans enter into them of their own volition, and they’re responding to market demands.
“So realistically, we need consumers to demand different beer or better beer or independent beer or beer with more flavour, before those tap contracts become limiting or become a factor that is negatively influencing options.”
Another aspect that 3 Ravens is looking at improving following its raise is its online presence, especially given that others, such as Big Drop Brewing, have elected to close their online stories in favour of bigger platforms such as Boozebud, SansDrinks and Craft Zero – the latter two of which have recently merged.
“COVID really twisted our arm into getting that online shop up and running,” said O’Sullivan.
“And we’ve had really good results and are really satisfied with the way the relationship works, so we can talk to consumers and really build that relationship. So we’ve seen a lot of value, and had a lot of enjoyment in having that connection with our consumers, rather than leaving it to someone else.”