Newcastle distillery plans crowdfunded brewery
The Newcastle Distilling Co. is undertaking an equity crowdfund to, in part, help fund a brewery which it will be launching in New South Wales.
The Newcastle Distilling Co. and its portfolio of businesses under the Brew Still Pty parent company, are aiming to raise a maximum of $1.32 million on crowdfunding platform Birchal. With two days left the business has raised $726,633.60, from 525 investors.
“Given the tracking, we would hope to reach our maximum target before the end of the campaign and are confident we will. There has been significant interest so far and we will continue to push hard,” explained director Lucas Cattell who runs the company alongside director Sam Cable.
Like other breweries and beverage companies which have taken on an equity crowdfund, Newcastle Distilling was attracted to the communities created by the crowdfunding process.
“We want people to become involved, feel like they are part of something special, grow with us and enjoy profits from our hard work, rather than giving money hand over foot to the banks, we would rather our local community benefits,” Cattell said.
As a result of the distillery’s crowdfund it will be using a portion of the funds it receives to invest in a brewery, dubbed Newcastle Brewing Co.
Once the campaign is complete, the distillery, trading as Brew Still Pty, will purchase, install and commission a 10hL, six-vessel brewing and canning system with plans to product just over half a million litres a year.
With an already stacked portfolio and an increasingly competitive beer market, it is an ambitious move.
“We love beer. We enjoy making beer. We have a team with solid beer industry experience, so we feel we are primed to bring high quality beers to the local market,” explained Cattell.
“Plus the Hunter region is a significantly expanding growth market for craft beer, with a strong supportive culture in the area.
“Much like south-west Sydney, we see additional breweries in the region to be draw cards for the craft beer lovers – who doesn’t love a tour to a few breweries in a day?”
“Given our growth plan and arrangements already in place, I definitely consider the valuation to be fair and reasonable,” Cattell said.
“With our current stock levels, that fact we currently operate at 5 per cent of our capacity and are already profitable, so based on the figures at hand, we consider our position in 2 years time to be higher than a $4.62 million valuation,” he said.
In addition, the company is planning on opening a bar and restaurant in the NSW Hunter Valley wine region in late 2021, which it says will allow for “rapid brand expansion”.
Part of a company’s valuation when doing an equity crowdfund or raising any capital is deciding on the nebulous figure of how much its future potential is worth.
But Newcastle Distilling like many other businesses during COVID has faced challenges with its wholesale plans and venues.
“Retail has always been the planned focus, but many delays have prevented that until now,” Cattell explained.
“These delays are namely government agencies and red tape, councils and state government.
‘’With the opening of three cellar doors in Pokolbin, Warners Bay and Shortland, plus a bar and restaurant, this will see substantial growth in the company. In turn this will assist in driving our online and wholesale sales. We also plan on expanding our marketing significantly.”
The Shortland site will consist of a small tasting room for beers spirits and small events, as will Pokolbin which will also feature a full commercial kitchen, whilst Warners Bay will be the major production site, acting as a bottleshop with a range of other independent craft breweries and distilleries.
Along with the crowdfund, the company is in the final assessment stages for a $500,000 grant from the New South Wales Job Creation Fund, which a number of existing breweries including Beerfarm have recently benefited from.