2. Overview
Goals:
Become the first microbrewery in St. Mary’s County
Create a cooperative brewing environment for
homebrewers to test recipes
Partner with an upcoming restaurant to pair craft
beer with menu items
Partner with a larger contract brewer to proliferate
the SOMD brand into the retail market
Introduce Create Craft Beer Cuisine Adventure
Charters offering a charter sailboat service pairing
craft beer and food
Become a “test bed” for new brewing technologies,
innovations, and alternate brewing processes
3. Problem Description
Small brewers are unique in the more personal nature of the business and the
unique history behind their brews. It is a sense of community that compels small
brewers to higher standards, as even small changes in the clientele can have
massive impacts on their ability to survive collectively as an industry, and
individually as businesses.
The microbrewer is faced with the problem of distributing the final product,
unlike the brewpub operator who has a captive market.
Maryland doesn’t allow self distribution. Regulations vary from state to state.
Some states allow you to sell your brews directly to retailers, while others require
you to go through a distributor. Obviously, if you need to use a distributor, you'd
better establish that relationship early on
The three-tiered system favors larger established breweries. The three-tier
system of alcohol distribution is the system for distributing alcoholic beverages
set up in the United States after the repeal of Prohibition. The three tiers are
producers, distributors, and retailers. The basic structure of the system is that
producers can sell their products only to wholesale distributors who then sell to
retailers, and only retailers may sell to consumers. Producers include brewers,
wine makers, distillers and importers. Entrance and success for small brewers is
hard for the small brewer.
No single American company is focused on exporting / expanding the market for
craft beer in foreign markets.
4. Venture History
1995 - First homebrew batch conducted in Quincy, IL basement using a sock filter
1996 - Entered first homebrew competition at Germanfest in South Park
1998 – Attended homebrew classes at the Copper Dragon in Carbondale, IL and
equipment procurement at Southern Illinois University
1998 - First all grain batch
1999 - “Beertron” term first coined with vision of automated RIMS
2002 - Design and assembly starts on “Beertron”, an automated 3 keg home
brewery
January 2, 2005 “Beertron” comes to life and produces first autonomous batch of
homebrew
2007 - Genesis of the “Brewtronix System” and business plan at venture capital
classes at Kansas University and the University of Maryland’s Technology
Enterprise Institute and Entrepreneurial office, SCORE and Southern Maryland
Small Business Development Center
2010 - Joined the Hollywood Hop Heads
2012 – Created SOMD Brewing brand and logo
2012/2013 – Craft Beer Cuisine Adventure Charters conducts research in Lesser
Antilles
2013 - Filed LLC paperwork with state of Maryland
5. St. Mary’s County Brewery Legislation went into effect July 1 st 2013
New Legislation allows for
Breweries
Brewpubs
Microbreweries
Distilleries
Farmhouse Breweries
ARTICLE 2B., TITLE 2, SUBTITLE 2. MANUFACTURER'S LICENSES.
§ 2-208. Micro-brewery license
St. Mary’s Zoning Regulations through Land Use and Growth Management
Need to wait for the legislation to start - probably in October.
Will do a text amendment and after that breweries are allowed
Working with LUGM to push zoning legislation
Looking at 5 potential locations in the mixed commercial zones. Farmhouse
breweries probably only located in Rural Preservation Districts
House Bill 231/Senate Bill 223: Allows for a Class 7 to apply for a Limited Beer
Wholesaler license to self-distribute their own beer up to 3,000 bbls annually
6. SOMD Brewing Business Plan
Company Seeded Ready for Startup
Business Planning complete
Logo / Label design complete
Initial marketing started
Initial merchandizing started
Investors secured
12 recipes brewed, evaluated, and revised
LLC documentation in place
Green Brewery Automation Technology Proof of concept
Procurement
1 to 5 BBL Brewing System
Brewing Supplies
Licenses, permits, and insurance
Facility Construction / Retrofitting
Installation of Brewing Vessels
Ventilation of Mash Tun and Boiler
Connect to Fridge or Glycol Cooling system
7. SOMD Brewing Management Team
David Jones - Director, Brewmaster, Manager – 11 years program Analyst/Manager and
technical lead. B.S. Mechanical Engineering, Southern Illinois University, Masters in
Engineering, Energy and the Environment, University of Maryland. 17 years experience in
homebrewing and 7 years experience in Entrepreneurship and company development.
Dave Mahoney. Financial Manager – NAVAIR Calibration Program, VFW Commander,
Quartermaster. 15 years experience in Naval Acquisition Logistics, personnel, and
technical management. 10 years experience in non-profit organization leadership and
management roles. Associates degree in Aviation Electronics Technician, B.S. in
Technical Management.
Matt Peluso – Graphic Artist and Marketing. 5 years experience as creative director with
www.StimuliDesigns.com
Todd Willis – Product Rep and Marketing – 10 years experience technical management
Mark Abromitis – Marketing – 10 years experience reporter, technical writer, and social
media director
Jason Babcock – Historian – 12 years experience research analyst, reporter, and news writer
Hollywood Hop Heads, Brewing and Recipe Consultants – 5 plus years of monthly group
brewing discussions and the combined brewing experience of 30 plus active members
8. Advantages and Benefits
Reduced time to market with structured business in
place
Increase food sales and total sales from appeal of
craft beer
Potential for more outward catering opportunities
and sales at craft beer festivals with a food / beer
truck
More merchandizing opportunities and synergy
Unique Restaurant specific craft beer brand creation
with transferable rights to restaurant owners
Food and Craft Beer pairing events and beer paired
menu items
9. Other Production Lines and Profit Centers
Contracted “throwback brews” recipe
research, design, and development for
pre-prohibition historic breweries
Food and Beer Truck party catering
service
Merchandizing: T-shirts, can cozies,
wooden nickels, glassware, barware, etc.
Craft beer and food pairing charter sail
Hybrid Brewery Energy
Craft Beer Canning Line
Brewing Equipment Test and Evaluation
10. Why Our Beer is Better
Autonomous temperature controls and triple decoction mash method allow us to
precisely and repeatably brew all types and styles of beer
We can recreate any style of beer... with consistency.
Our mash temperature control technology allows us to make precision mash
conversions... i.e. a dry German Pilsner vs. a sweet Munich Helles
We operate a self sufficient green brew house and are actually able to pump
electricity back into the grid
By utilizing solar water heaters we are able to reduce electrical/gas water heating
demands and increase the efficiency of our Hybrid Brewing Energy System
By burning a portion of our spent grain biofuel we are able to power our entire brewing
operations thus decreasing green house gases and our electrical needs
When steam demands are idle we are able to divert energy to powering a microturbine
and pump energy back into the grid
By utilizing solar photovoltaic arrays and battery technology we are able to pump energy
back into the grid while the brewing operation is offline
By filtering aqueous brewery waste with our organic pressed spent grain filters we
can reduce pollution into the Chesapeake Bay and compost the organic waste for an
on-site hop farm
We use the freshest of local ingredients
In essence, we are powered by people drinking beer
11. Beer-Powered Brewery Saves $450,000 A Year, Feb 4th 2013 press release
• Alaska Brewing Company purchased a $1.8 million furnace that burns the company's spent
grain — the waste accumulated from the brewing process — into steam which powers the
majority of the brewery's operations. Designers estimates that the spent grain steam boiler
will offset the company's yearly energy costs by 70 percent. Awarded nearly $500,000 in a
grant from the federal Rural Energy for America Program. Alaskan Brewing Co. makes
about 150,000 barrels of beer a year
• SOMD Brewing plans to build a smaller, less expensive, high tech version marketable
to the 2,386 smaller brewpub and microbreweries
US Breweries Operating as of June 2013
Brewpubs = 1,165
Microbreweries = 1,221
Regional Craft Breweries = 97
Total US Craft Breweries = 2,483
12. Patentable and Licensable Technology: Hybrid Brewing Energy
Advantages:
•Green Energy and Energy Efficient
•Energy Management and Thermal Management
•Scalable to brewing system
•Utilizes existing hybrid technology in new applications
•Cost efficient for high load brewing days
•Less development time with existing technologies
•Venture capitalist have expressed interest
•Prototype design by area businesses
•Spent grain into energy
Prius
Drive train
$1.4M raised to start this contract brewing company in DC area
Control System used on 100
BBL system. Proven
Technology. Same technology
as original “Brewtronix”
Prius Energy
management
system
Micro
Steam
Turbine
PLC
Logic
Control
HP
Steam
To
Boiler
Double
55 gal
wood
stove
w/
copper
tubing
jackets
LP
Steam
Radiant
Heat
To
Mash
Tun
Hot
Water
Tank
Cold
Spring
Water
Original
“Brewtronix”
System
Prototype
Design
13. Patentable and Licensable Technology: Mash Filter Press
Alaska Brewing Company was the first craft brewery in the United States to employ this
Belgian-based brewing technology, which allows them to reduce the amount of water, malt
and hops needed to make beer, while maintaining high quality and consistency. In one year,
the mash filter pressed nearly 2 million fewer gallons of water and 6 percent less malt to
make the same amount of beer as our traditional brewing process. The unique design of the
mash filter press also reduces the moisture content in the spent grains, which further
reduces the energy required to dry the grain before it is transported to farms.
Today about 25% of the world’s beer volume is produced with a Mash Filter Press. More than 20 years ago
when the industrial introduction of the Mash Filter Press took place, only one filter size, was available, mainly
sized for large lager brewers. In 2012 at the Craft Brewing Convention in San Diego, supported by an
increasing demand from the U.S. Craft Brewing market, Meura decided to introduce a smaller Mash Filter
Press suitable for microbreweries.
As a matter of interest, nearly 90% of the beer volume produced in Belgium is produced with the Mash Filter
Press technology.
Utilize Engineering Change Proposal (ECP) process and engineering knowledge base to give Original
Equipment Manufacturers (OEMs) product improvement suggestions based on test and evaluations and
plant/energy efficiency improvements. Improve design by allowing pressed mash to also filter aqueous
sediment from boilers and fermenting vessels to create zero organic aqueous discharge for brew house.
SOMD’s brewing processes have been hand pressing mashes and utilizing a mash filter method for over 4
years.
No American company manufactures a comparable product and the craft brewing industry is just now
catching on… 1 brewery out of 2,483 utilize a Mash Filter Press.
14. Patentable and Licensable Technology: Beer Canning Line
Oskar Blues started the Canned Beer Apocalypse
In 2002 Oskar Blues became the first brewery to can beers in the craft brewing industry.
They started canning their beer with a manual canning system. Both craft brewers and craft
beer drinkers are coming around to the idea of cans. More affordable supplies and canning
equipment also are helping the boom. In 2002, just one craft brewery was using cans. Now
around 300 different breweries offer close to 1,000 beers in cans.
Utilize Engineering Change Proposal (ECP) process and engineering knowledge base to
give Original Equipment Manufacturers (OEMs) product improvement suggestions based on
test and evaluations and plant/energy efficiency improvements.
Advantages:
Low capital cost to enter the packaging market for cans
One of the most productive uses of capital for small packagers
Easy to operate
Small footprint
Compact design
Only 12% of US Craft Breweries
utilize a canning line. In 2002, just 1
brewery used a canning line.
15. Funding Programs
• We are approaching venture capitalists, angels, and MD state grant programs:
• Craftfund.com, CrowdBrewed.com, Kickstarter.com, Startups.co, Angels List, Angel Soft, National
Venture Capital Association, Funding Post, Et al…
• TEDCO – RBI2, Rural Business Improvement Program
• Funds to assists start up and small technology-based businesses in the rural areas of Maryland
• Maryland Clean Energy Center ($100,000 to $500,000)
• Maryland Commercial Clean Energy Grant Program (DISRE) (SWH $5,000)
• Two programs that have not been announced yet but will be coming out in the next 6 months. One is
for the commercial and industrial sector and the other is for the agricultural sector
• Maryland Agricultural & Resource-Based Industry Development Corporation (MARBIDCO) ($1,000)
• Low-interest (4%) "micro" loans for energy efficiency projects. Maximum loan amount is $30,000 with
10% grant incentive
• Southern Maryland Agricultural Development Commission
• Grants for hops
• Community Development Corporation
• Business Loan Guarantee Program - Designed to support start-up or early stage companies
• Lexington Park Property Landscaping Program - Matching grants for landscaping commercial
properties located in the Lexington Park Revitalization District
• Microloan Program
• Provides very small loans to start-up, newly established, or growing small business concerns. Direct
Loans and Guarantees
• Maryland Venture Fund
• The Fund makes direct investments in technology and life science companies and indirect
investments in venture capital funds
• Maryland Economic Development Assistance Authority and Fund (MEDAAF)
• Offers five different loan programs available to businesses and political jurisdictions and creates loans
to help industry create jobs and economic opportunities within the state
• Bootstrapping…
16. Potential SOMD Prototyping and R&D Partnerships
CTSI = Prototyping and Fabrication
Amelex = Hardware and Software Engineering
Integrated Program Solutions = Program Management and cost analysis
AR Systems, Inc. = Electronics Manufacturing, circuit boards, and wiring diagrams
ARINC Engineering Services = Systems engineering, system design, prototyping, modeling
and simulation
Heron Systems Inc. = Software development and electrical engineering, programming
Triton Metals, Inc. = Precision machine, sheet metal, and job shop
AMEWAS = Systems Engineering, modeling and simulation
Specialty Systems, Inc. = Hardware/Software Engineering, system prototype development
Spiral Technology, Inc. = Modeling and Simulation
DRW Technologies = Automation, electronics, and system design
Pioneering Decisive Solutions, Inc. = Automation, system design, software
DCS Corporation = systems engineering, modeling and simulation
J.F. Taylor = electronic engineering, software systems design, system fabrication
Platform Systems = mechanical design and engineering
Vulcan Engineering and Manufacturing = Precision metal prototypes, fabrication
Westwind Technologies = engineering, prototyping, and fabrication
Compliance Corporation = prototype design and development
17. Midwest Manufacturing Partnerships
Knapheide’s = Food and Beer Truck design
Manchester Tank = CO2 Tanks and Beer Kegs
US Cooler = Beer coolers for tasting room and beer/food truck
Gully / McNay Transportation = Transport and Export services
Quincy Metal Fabricators = Bottling and canning line machines
Midwest Pattern = Bottle cap jigs
Awerkamp/Quincy Machine & Welding = Brewery Equipment
Maintenance
Tristate Food Equipment / Kohl’s = Food service equipment
Fierge Auto parts = Hybrid Brewing Energy
Gardner Denver = Hybrid Brewing Energy, Bottling lines
Quincy Compressor = Pressure control systems
18. St. Mary’s Craft Beer Market Potential
St. Mary's
Total Population (2009)
Users % Index
Total Market Potential
103,100
13.19%
13,599
13.19%
5,849
Population age 21 to 50
44,341
St. Mary's County Full Market Potential
$60 per person per year x 5,849 people = $351,000
Growth of the craft brewing industry in 2012 was 15% by volume and 17% by
dollars compared to growth in 2011 of 13% by volume and 15% by dollars
19. Financials
The business requires $500,000 for the company to start operations, $300,000
from a business loan and $200,000 in investor equity. Following this there is no
further capital investments needed. Our pre-money valuation is $60,000 and our
post-money valuation is $560,000.
20. Financials
SOMD Brewing will become profitable in year one and will achieve a break-even event in
year 2. Available cash in the year 2015, our third year of operations, will be $326,000.
21. Marketing Pillars
1. Green Brewing Technology
Renewable Energy
2. Autonomous Controls
3. CHP + PV Integrated within brewery applications
4. Partner with “Save the Bay” environmental organizations
1.
2. Historic Preservation
Nautical: Sailboats, lighthouses, landmarks, etc
2. Dove and the Ark 1634
3. Blakistone Island (St. Clements) / St. Mary’s City
4. Narrative “history bits” on each bottle
1.
3. Fresh and Local Beer
We buy fresh local hops, specialty grains, and adjuncts from Maryland growers
2. Our beer is made fresh and served to the customer with limited shelf time
1.
4. Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors
from around the world
22. Facade, Motif, and Theme
Dirty Blonde Lighthouse Ale
Blakistone 1634
Chesapeake Bay Amber Ale
Watermen’s Wine
Historical and Nautical
•Beer Labels
•Wall Art
•Beer Names
Organizations willing to help
•St. Mary’s Historical Society
•Calvert Marine Museum
•Point Lookout State Park
•Lighthouse Friends
•St. Mary’s Co. Museums Division
•Maryland State Archives
•Maryland Historical Society
•Annapolis Maritime Museum
•Historic St. Mary’s City
Skipjack IPA
Dinghy Blonde Ale
Cecil’s Mill Spiced Pumpkin Pie Ale
Sotterly Plantation Chocolate Stout
Screwpile IPA
Oyster Fleet Imperial Stout
Solomon’s Dirty Sailor Porter
Piscataway Indian Wheat Ale
23. Brewhouse
• Garage door entrance for
bulk shipping and receiving
and delivery truck storage
• Easily installed net
metering electrical meters
(other meters have been
removed)
• ~ 3,000 sq feet, easily
expandable to incorporate
10 to 20 BBL operation
and tasting room
• Flat roof for solar water
heater and photovoltaic
installation
• 2nd story grain storage /
milling into 1st floor
brewery operations
• 2nd story office space
• Security: barb wire fence
with two gates
24. Brewhouse
• Car ports easily modified
to hop growing trusses
• Brewing herbs: lemon
grass, coriander, mint,
rosemary
• Compost spent grain for
topsoil additions
• Ample space for onsite
parking and walking
brewery tours
26. Brewhouse (First Floor)
Sewer
Connection
Water
Meter
Grease
Trap
Net Electrical Meter
Canning
Rail Hoist
Keg Storage
Foyer
Grain
Hoist
Walk-in Fridge
Keg Cellarage
Kegging
Existing Circuit
Breaker
Drain
MicroTurb
Battery
Furnace
WH
Boiler
Oil Tank
Vent
Control Box
HX
BK
FV
FV
MT
FV
BT
FV
FV
Tasting Room
and Merchandizing
Beer Garden
27. Brewhouse (Second Floor)
Grain
Hoist
Solar Water
Heater and Solar
Arrays
Roof
Access
Existing Circuit
Breaker
in
Gra ge
ra
Sto illing
M
and
n
Ve
t
Women's
Block Hoist
Grain
Chute
28. Community Impact
Increased jobs: distribution, drivers, marketing, advertising, building
maintenance and preservation, food prep, tourism, brewery tours, etc.
Positive impact on neighborhood improvements. Hiring within the
neighborhood and making improvements on the property could trickle
out, thereby improving a section of town that is currently degrading with
increasing crime.
Increased tourism: Microbreweries attract tourists, and SOMD Brewing
would bring in people from the base and regional community who enjoy
craft beer.
Increased relationships with the sailing community in the form of Craft
Beer Cuisine Charters, sponsorships at regattas and cruising community,
and sailing clubs, reinvigoration of Ark and Dove voyages
Seeking letters of support from the St. Mary’s County Tourism
Department, Chamber of Commerce, St. Mary’s Historical Society,
Calvert Marine Museum, Chesapeake Bay Foundation, Maryland
Historical Society, Chesapeake Bay Program, Chesapeake Bay
Commission, Chesapeake Bay Trust, Historic St. Mary’s City, St. Clements
Island Museum, Maryland State Archives and The Society of the Ark and
29. Risks
Ability of restaurants to incorporate SOMD Brewing LLC
Construction constraints
Delay from permitting and legislation
Profit sharing negotiations
Exit Strategy 5 to 10 years
Buyout investors
Diversify into more high end privately owned restaurants
Build larger capacity 10 bbl brewery offsite, transfer license from
brewpub to microbrewery
Sell brewing business to restaurant or larger contract brewery
30. Summary
Poised to become the first microbrewery in St. Mary’s County
Small batch brewing to generate extra restaurant sales and a
cooperative brewing environment for local homebrewers
Poised for partner opportunities
Growth relationship in place to partner with a larger contract
brewer to proliferate the SOMD brand into the retail market
Poised to expand food and beer market into sailing by
introducing Create Craft Beer Cuisine Adventure Charters
Poised to conduct T&E on brewery equipment and process
development
Facebook Us:
https://www.facebook.com/#!/pages/SOMD-Brewing/425387377554078
https://www.facebook.com/#!/pages/Craft-Beer-Cuisine-Adventure-Charters/445187795550951
31. Spinoff Technology
Brewery ships: In 1944, the George Adlam & Sons Company designed a brewing ship
for the Royal Navy to serve soldiers with beer in the Pacific Theatre in World War II
capable of making 250 barrels of beer a week. Only Menestheus saw service,
completed on 31 December 1945 and completing a six month deployment to Pacific
ports including Yokohama, Shanghai and Hong Kong to dispense English Mild Ale to
sailors. Her brew house, known as "Davy Jones Brewery" was dismantled in 1946
and the ship was returned to her owners in 1948.
2010 - SABMiller’s floating brewery concept unveiled: Would allow for
rapid entry to new markets, especially where no infrastructure is in place, it would
provide flexibility in positioning and length of stay and allow SABMiller to move with
water sources, with people, with crops, or even away from severe weather, natural
disasters or political instability.”
Shipping container nano brewery – small turnkey operation marketable to less
developed countries and foreign countries without craft brewery infrastructure. I.e.
St. Maarten. Increases trade and economic dependence on U.S. based brewing skills
and supply commodities.
Notas do Editor
less pollution and industrial run off into the Bay. using rain barrels at our facility would help the bay, reducing impervious surfaces (i.e. replacing an old blacktop parking lot with a hop garden) helps the bay. ... instead of dumping kettle trub and excess aqueous yeast down the drain we create a natural spent grain filter and dry out it out for compost and use in our biomass fueled boiler. Kettle trub we’re saving from the bay = insoluble precipitate that results from protein coagulation and simpler nitrogenous constituents + proteins and protein-tannin complexes.
Prototyping and design can be done by CTSI
Manufacturing can be done by multiple Quincy, IL companies
6930 square feet of hop growing space. Plant 3.5 feet apart = 12 x 22 plants per canopy = 264 or a total of 528. @ $10 per rhizome is $5,300. ~172 cubic yards of topsoil @$8 per cubic yard = $1,376. Leasable garden space. Outdoor Kitchen is a food truck. Need to add handicap accessible portable toilet and parking spaces.