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Mon 7th Dec 2015 - Redchurch Brewery launches crowdfunding to meet demand
Redchurch Brewery launches crowdfunding to meet demand: Redchurch Brewery, based in a double railway arch in Bethnal Green, has started a £200,000 fund-raise on crowdfunding platform Crowdcube. The company, founded by lawyer turned brewer Gary Ward and television producer Tracey Cleland, is offering 9.09% equity and has so far seen 30 investors pledge £20,810 with 24 days remaining. The largest investment to date is £11,000. The pitch states: “The Redchurch Brewery was established in August 2011 in a single railway arch in Bethnal Green, London. The idea for the brewery business was conceived by Gary Ward who was, at the time, practicing as a commercial property solicitor whilst brewing beer at home as a hobby. Quickly becoming fascinated and captivated by the flavour profiles and variety of styles available to buy from the new wave of craft breweries both from the United States and a number of craft/micro -breweries in the UK, Ward identified the nascent trend of the consumer expectation towards craft beer and the business possibilities that this sea-change presented and formulated a plan to open a craft brewery. The brewery was founded in August 2011 in conjunction with seed capital provided by initial investors. For the first six months Ward worked alone carrying out all of the brewing, bottling, packaging and deliveries himself.  Since this humble beginning, the business has grown and expanded and is now housed in a double arch at Poyser Street, Bethnal Green, London. We have upgraded the brewery to increase the annual production capacity to just over 250,000 litres per year and we are now in a position where we simply cannot make enough beer to satisfy the current demand. The business currently employs eight full-time and two part-time staff and is managed by Ward. The business produces a core range of six bottled and kegged beers: Bethnal Pale Ale, Paradise Pale Ale, Shoreditch Blonde, Great Eastern IPA, Hoxton Stout, and Old Ford Export Stout. In addition to the six core beers, the business also produces seasonal specials including: Brick Lane Lager, Viccy Park Porter, East End Saison, Broadway Black Pale, Double IPA Chinook. As a new addition to the product range we have created the ‘Wild Series’; under this heading we will be producing a range of experimental beers using mixed fermentation techniques, souring, use of wild yeasts and bacterial fermentation. We have a tap-room bar on site which currently opens to the public three days per week and is turning over around £10,000 per month with plans to increase the opening hours and turnover to £15,000 per month. The tap-room is rapidly becoming appreciated as one of the best London brewery bars with press coverage such as this from Time Out London. To assist us with the purchase of the additional equipment we have secured an asset finance facility from HSBC Bank plc. The facility available to us is for £248,914.00 and will be repayable over a period of 36 months from the point of drawdown. Back in 2011 when the brewery was established, the craft brewing renaissance in the UK was in its relative infancy with only a handful of equivalent breweries in London and the UK as whole. Leading the charge were BrewDog in Scotland, Magic Rock in Huddersfield and Meantime and The Kernel and Camden Town Brewery in London. Since we began brewing, there has been a proliferation in the number of new entrants to the market, driven by a growth in consumer interest in the sector, and current estimates put the number of active small-scale craft breweries in the UK at over 1,000 and growing. We believe this in itself presents a major challenge and a benign market all in one. We see the challenge that clearly there is more competition, however the market for the product has grown exponentially and most bars and restaurants are now seeking to include some craft beer offering. Our advantage is that we are now viewed as a recognised producer of quality craft beer and we are regularly mentioned in press as one of the best craft brewers in the UK. In our opinion, by virtue of our concentration on the development of a solid core range and our simple, understated, yet stylish branding, we have managed to differentiate ourselves from the vast pool of breweries embroiled in the race to produce the most adventurous and outlandish combinations of unorthodox ingredients – our ethos was and remains simple; ‘quality, consistency and modern yet traditional values’. We aim to place our brand as a durable, globally recognised, premium alcohol product set apart from what we see as faddish and fashionable youth brands available in the market. Market analysis indicates that the craft beer phenomenon is moving firmly into the mainstream consciousness of the British beer drinker with reports such as this from Mintel stating that “there has been a boom in the number of UK breweries, and many are now moving the craft movement firmly up the consumer agenda. Proving this, a new report from Mintel reveals the continued health of the craft beer movement in the UK, with a quarter (25%) of British adults – equating to some 13 million – stating that they have consumed a craft beer over the past six months. As the segment develops and its popularity increases, it is moving towards the overground and mainstream consumption. Craft beers have forged associations with high quality, so much so that over a third (35%) of beer drinkers think that they are worth paying more for”. Reports on the state of the craft beer market share in the USA, which is a more mature market than the developing one in the UK, estimates that craft beer will represent in the region of 15% of the overall beer industry by 2020 at the current rate of growth. There is every reason to believe that the same trend will apply to the UK beer production industry, estimated to worth over £9.5bn per year in 2020. In order to continue and accelerate growth, to capitalise upon the position we maintain in the growing craft beer market place, and to achieve our brand vision, a significant expansion in capacity and improvement in efficiency of packaging is required together with an intelligent and co-ordinated sales and marketing campaign. Clearly there are uncertainties around how investors will cash out, but we see two possibilities – a trade sale in four-five years as the business attracts the interest of large businesses in the sector or a second funding round to scale the business even further – this may give initial investors the opportunity to invest further or sell their holding on.”

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