Mixed results at crowdfunded beer businesses
Retailer Beer Cartel and gluten-free brand O’Brien have revealed financial statements to investors following successful crowdfunds last year.
Both have highlighted the challenges and opportunities posed by COVID, as well as the impact of wider issues, such as Apple declaring it would no longer share tracking information with Facebook and the global increase in the price goods which is impacting cost of sales.
They have also been transparent about their financial results, with Beer Cartel reporting its financials for 2021 despite its crowdfund occurring after the period.
This is in contrast to other crowdfunded businesses in the beer space such as Endeavour Brewing Co., which has notably not filed its results and has faced major difficulties since its crowdfunding campaign in 2019.
Online retailer Beer Cartel released its annual report this week to shareholders following its successful crowdfund last year, which saw it raise $1.5 million from a total of 1063 investors.
In its annual report for the year ended 31st June 2021, Beer Cartel founder Richard Kelsey called 2021 a “watershed year” for the company.
According to the results, it saw revenue growth of 34 per cent to $5 million during the year, which included subsidiary Brewquets results. Profit after income tax reached $242,290.
Overall, the online retailer experienced good growth over most parts of the business. Sales are already up 31 per cent for the period to July 2021 and January 2022, the retailer said.
Beer Cartel, said that in that time, it had continued to build out new products including a range of mixed packs, and “refined” its supplier partnerships with core suppliers to get better pricing and supply of new products.
Beer Cartel also highlighted successes this year, including its Beer Cartel Advent Calendar which it said sold out in five days.
However, the retailer also highlighted challenges for selling during key periods such as Christmas and Valentine’s, due to Apple not sharing tracking information with Facebook. It said it is looking at alternative marketing solutions to mitigate the issue.
Kelsey said the company was “well-positioned for future growth”, and the company is confident about the remainder of the financial year.
Rebellion Brewing, which trades as gluten-free brand O’Brien, has been transparent about a tough year but is optimistic about its future.
During the second half of 2021 it raised $689,056 in its crowdfunding campaign on the Birchal platform, which took a cut of $49,323 for its fees.
The beer company reported to investors that in 2021, total income rose to $2.2 million, slightly under projected forecasts listed in its CSF round which suggested it would make $2.3 million.
Following the release of Hahn Ultra Crisp into the gluten free beer market in February 2019, O’Brien said it had seen a “significant drop in revenue” in 2020, but it had managed to recover some of this lost revenue in 2021.
Gross profit reached $854,542, under the $1 million it forecast last year.
The beer company reported net losses after tax of $640,494. It had initially predicted that losses would reach $402,962.
O’Brien acknowledged that wholesale packaged revenue was $70,000 less that forecast, and it also suggested that cost of goods sold saw an increase of 14 per cent on 2020, well below its 18 per cent income growth, but $118,000 more than forecast in its initial offer document, which resulted in higher-than-predicted losses.
During the period, O’Brien took advantage of the Federal Government’s Small and Medium Enterprise Government Guarantee loan scheme, acquiring a $250,000 loan through its bank.
Investment in marketing and promotional activity grew 21 per cent to $400,000 in the year as it positioned itself for growth with a new website and content updates.
O’Brien highlighted its wins at last year’s AIBA event, with six gold and two silver medals awarded. It also won two gold Indies medals, and was awarded best Gluten Free Beer at the World Beer Awards in London for its O’Brien Belgian Ale.
In addition, the brand has made changes to its beer range, consolidating its mid and low alcohol offerings into one, O’Brien Lager 3.0. It also launched its 3.8% abv O’Brien XPA, and engaged sales representatives nationally and brought in a brand consultant.
Despite the outbreaks of COVID-19 and lockdowns of many of the on-premise venues that stock O’Brien beers, the company said that it expects this recovery in revenue to continue as it implements the plans detailed in its CSF offer.
O’Brien said it has been assisting a related entity with the development of a range of “new and unique beer based beverages that will herald a new beer sub-category”, and expects revenues to increase as a result when the beer is released in 2022, although impacts will not be made clear until its 2023 results are released.
O’Brien also highlighted the Federal Government’s alcohol excise rebate announced last year, saying that it will add to its available cash flow.
No dividends were paid during the reporting period, and the company said it had no plans to pay any dividends in the foreseeable future. All retained earnings will be reinvested into the company.