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2013

2013 Business Plan March 2013 Twin Pints Cooperative 325 E. Grand River Ste. #345 East Lansing,
2013 Business Plan March 2013 Twin Pints Cooperative 325 E. Grand River Ste. #345 East Lansing,

Business Plan

March 2013

Twin Pints Cooperative 325 E. Grand River Ste. #345 East Lansing, Mich. 48823

2013 Business Plan March 2013 Twin Pints Cooperative 325 E. Grand River Ste. #345 East Lansing,

Table of Contents

Table of Contents

Table of Contents

ii

Executive Summary

1

Recognitions

2

Background

2

Community-supported Brewing

3

The Cooperative Model

5

Mission

6

Objectives & Milestones

6

Management Team

7

President

7

Legal & Regulatory Officer

7

Financial Management Officer

7

Production Operations Officers

7

Marketing & Brand Management Officers

8

Advisors & References

8

Industry & Market Analysis

8

Craft Beer Trends in the United States

9

Products, Services & Pricing Plan

10

Artisan Participatory Brewing & Artisan Tap Room Sales

10

CSB Growler Club

11

Commemorative Growler Containers

11

Homebrew Tool Library

12

Productive Capacity

12

Location Requirements

12

Staff

13

Financial Plan

13

Risks Assessment

14

Insufficient Start-up Capital

14

Slow Customer Uptake

15

Licensing

15

Operational Risk

15

Transient Management (Turn-over)

16

Strategic Timeline

16

Twin Pints Cooperative | Table of Contents

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Business Plan

Executive Summary

Twin Pints Cooperative will develop and operate a brewpub in Old Town, Lansing, which will engage craft beer drinkers, homebrewers, and artisan brewers through a variety of services and experiences. Our tap room will cater to young professionals from Cooley Law, LCC, and MSU; our homebrewing tool library will offer our members the opportunity to pick up the hobby of homebrewing; and, finally, our collective ownership structure will allow at least 25 artisan brewers in the area experiment with making a craft beer of their own to sell in the tap room.

Craft beer is a growing market in the United States, enjoying over 10% growth in both 2011 and 2010 even as the overall beer industry fell by 1% both years. However, the Lansing area is currently under-served by breweries and brewpubs compared to the adjacent Kalamazoo–Grand Rapids or Ann Arbor–Detroit corridors. We seek to create a vibrant brewpub destination in Old Town that will anchor more bright young professionals in the tri- county area.

Our cooperative will also operate as a “beer incubator” to develop new brewers and brews. For the novice homebrewer, there is an approximate $200 investment to purchase a homebrewing kit and get started with the hobby; the members of our cooperative will be able to utilize collectively-owned equipment for as little as $30 a year in membership dues. Aspiring artisan brewers often need to hatch their own business plan with financing of ~$50,000 before they can even brew their first batch; we will provide at least 25 artisan brewers in the local area the opportunity to use our facilities for a much more modest $500 investment in co-ownership. Brewing will become much more accessible to individuals in the greater Lansing area, and all of this participation in the cooperative will drive additional tap room sales as they, along with their friends and colleagues, visit to test their latest beer recipe.

This is also an entirely new innovation, and it is cooperative ownership that makes it possible for brewing equipment to be so accessible and affordable for the individual. Investors in a more conventional venture would typically only hire one brewmaster to run their facility rather than make it available for participatory brewing as in a cooperative where hobbyists could get a piece of the action and the profits. This is our dream.

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Recognitions

Twin Pints Cooperative was a finalist in the 2012 MSU FCU startUP Challenge (November 2012) and was also awarded the 2 nd place ($2,500) and People’s Choice ($500) awards in the MSU Broad College Pitch Contest (December 2012).

Background

Twin Pints Cooperative was conceived over the past summer by a group of friends that wanted to collaborate over something that brings everyone together: craft beer. We are each hobbyist homebrewers and the original ambition to create a brewing cooperative arose from a shared need for better brewing equipment. Homebrewing is a laborious task that, for many, begins with kitchen stove tops for cooking and ice baths or snow banks for cooling. It takes a lot of work, and vast quality (and labor-saving) improvements can be realized with more sophisticated brewing equipment like gas kettles or immersion cooling systems. However, this equipment has a cost that would be prohibitively expensive for any one student-brewer to invest in. A number of members of our group are current or former officers of the MSU Student Housing Cooperative, so we already knew the solution to this cost dilemma was collective ownership.

Cooperatives, including credit unions, are expert “self-help” organizations where individuals can contribute their individual resources to a common pool for everyone to utilize. The credit union aggregates deposits from the community to provide affordable lending back to the community, and the insurance mutual does its best to charge its policyholders affordable premiums and any surpluses are refunded back to the member-owners. We understood that a homebrewer should only need a gas kettle or a cooling system for one day out of each month to brew, and then that this equipment would later sit idle in a storage room. That is twenty-nine days that others could be utilizing the tools through collective ownership, as in a cooperative. And so, we first set out to organize a homebrewing tool library where users could check out and use this sort of equipment.

However, when we started polling our friends and colleagues for support and interest we received an overwhelmingly positive response that exceeded the narrow scope of a tool library. Many were excited about participating in the tool library and still others shared their dreams of starting a cooperatively-owned nanobrewery where artisan brewers could

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collaborate with minimal investment to test out new and exotic beer styles. Still more, who were not brewers themselves, were enthusiastic about being able to taste all the great locally brewed beers we would be producing.

Out of our first meeting in August, we discovered that a cooperative was uniquely suited to deliver an entirely new model of brewing and consumption: the beer incubator. A tap room could introduce newbies to the craft beer market, which is a tiny, hidden 6% market share as opposed to the Anheuser-Busch InBev and Coors empires that most beer drinkers are inundated with. Newbie craft beer patrons would eventually develop their beer palate and could grow interested in homebrewing for themselves. For those of us that got into the hobby alone years ago, that meant an initial investment of at least $200 in equipment and ingredients only to spoil our first batch of beer because we had been un-skilled. But for our target market, they will be able to use free equipment from the homebrew tool library and attend staff-led educational workshops to learn the trade. Their only cost will be their $30 in membership dues.

Before our proposed Twin Pints Cooperative, the hobby of homebrewing doesn’t advance much farther than $200 homebrewing kits. Homebrewers are pretty limited in equipment choices and it is arduous, time-consuming work without larger, industrial equipment. Further, it is not lawful to distribute homebrewed beer, meaning you cannot financially support your burgeoning hobby. Our business plan will provide a leg-up to aspiring artisan brewers by offering affordable limited-equity shares to buy into the nanobrewery at $500. They will be able to hone their craft by brewing 2-keg batches of beer once each quarter and will be able to support their hobby with tap room revenues from selling their own beers.

At its heart, however, our cooperative will be a worker-owned nanobrewery providing affordable, tasty beer. We anticipate that many of the artisan brewers from the preceding paragraph will be contented with their existing careers or academic studies, and for them, theirs will be the part of the silent business partner. However, for those other brewers with the drive and the dream of life as a brewer, they will be able to prove themselves to our patrons in the tap room and be hired as full-time brewers with wages.

Community-supported Brewing A recent innovation in microbrewing is Community-supported Brewing. The term is borrowed from farming where it stands for Community-supported Agriculture (CSA) which

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describes a local network of consumers that have pledged to support one or more local farmers.

The CSA model tackles the challenge of promoting a locally-based supply of produce which provides environmental benefits for the community when produce does not have to be imported from thousands of miles away. Corporate supply chains stretching from Walmart to offshore countries have long since displaced much of the original agricultural production in Michigan and the United States, and many lament that this may be causing environmental degradation from the pollution associated with shipping transportation. For those that hold this viewpoint, CSAs offer an opportunity for them to consume locally and to avoid the ill-gotten superstore produce, while also supporting local jobs in farming. We make no assertion one way or the other as to the validity of the environmental concerns with supermarket shopping, but CSAs do exist and demonstrate the emerging appeal of this model of consumption.

Under a common CSA scheme, subscribers purchase a share of the anticipated harvest at the beginning of the season. Then, through the course of the growing season they receive periodic shares of the vegetables and fruits harvested. A significant innovation in the CSA model is shared risk: the loss of a crop from drought or flooding or locusts will be felt financially by both the farmers and the subscribers. Should the farmer have a great enough CSA subscriber base, it will not be wholly devastating enough to bankrupt his operation. And consumers benefit when they can realize slightly cheaper prices when the farmer does not need to purchase crop insurance or otherwise structure his prices lower knowing he does not need to put away savings in each of nine years to plan for the tenth year when his crops could fail.

While a microbrewery is not likely to suffer a locust swarm or one of the other crippling hazards facing farms, the CSA model does provide other advantages for a microbrewery. A large base of subscribers who pay dues ahead of the launch can provide a large amount of start-up capital and the regularity of income will enable our business to approach creditors for expansion in the future with the assurance that we have a committed community behind us. Further, Community-supported Brewing will enable our artisans and brewers to take more risks with exotic and edgy ingredients in their beers. If a batch designated for the CSB subscribers turns out poorly because the Macaroni Stout tastes too much like macaroni, or the Pop-tart Porter is not quite the winner it was expected to be, the risk is borne wholly by the CSB

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subscribers; we will have already booked our revenue for that batch from their subscription fees. We, the founders, do not feel a failed batch in this manner to be an unfortunate event, rather, this adventurous brewing that is made possible by the CSB model will inevitably produce a few amazing beers that will carry our brand and grow our market share vis-à-vis other microbrewers that stick with yesterday’s styles. We will not be shackled to the same risk aversion which is necessary at other microbreweries because we will have a community backing our risks up financially. The CSB model greatly resonates with our aspirations for being a beer incubator.

The Cooperative Model The cooperative model and Community-supported Brewing are mutually reinforcing. Whereas conventional corporations are governed by a remote group of people that are far- removed from either the worker or the consumer, our Board of Directors will only be comprised of the brewers and the consumers. The profit interests of external stakeholders and investors often result in efforts to minimize product costs, resulting in diminished product quality that is disadvantageous for consumers. These same profit interests also typically drive down the wages of employees whom are not usually equity owners of the company.

A cooperative, once successfully developed by its founders with the contributions of time and money by its backers, is not burdened with the same motivation for cheapening products and under-paying workers. Our success will be a virtuous cycle of better beers, resulting in increased demand for our better beers, and increased production capacity and new salaries to meet the increased demand. The net profits of our enterprise will accrue to the worker-owners of the cooperative, all of whom will live in Michigan and buy in Michigan. The dollars earned by our workers will be paid back into the Lansing economy whenever our workers go shopping. (This is not the case when you choose to purchase an inferior beer from Anheuser-Busch InBev in St. Louis, Missouri.)

Further, cooperative ownership will give consumers a direct voice to express feedback as a minority block of directors on our Board. They will be able to provide input and guidance in selecting beer recipes for the CSB production scheme. Marketing consultants for conventional corporations extol the value of “brand buy-in” and how the belief that you can impact a product via social media (whether true or not) can make you more likely to routinely buy a product; as a cooperative, we offer genuine ownership of the brand and we anticipate

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this characteristic of cooperative ownership will be a great selling point in our own marketing strategy to attract CSB subscribers.

With at least a few of us hailing from a background including real estate development, we also see the value of our cooperative in potentially re-developing blighted areas of East Lansing or Lansing. Cooperatives by their very nature remain in one geographic area, anchored by the workers and consumers that use them; they are not apt to re-locate to another city once founded. A long-term goal for our nanobrewery is to continually reinvest and grow each year to eventually build-out a larger package brewery in East Lansing. (We rather like the prospect of renovating the ugly Citizens Bank Building into a brewpub at street-level with co- operative housing apartments or other ventures above.)

Indeed, cooperatives have been widely acknowledged as a potential solution to the economic woes facing our society in the wake of the Great Recession, with the United Nations declaring this year, 2012, as the International Year of Cooperatives. We intend to do our small part to develop an economy built to last, starting with our very modest nanobrewery.

Mission Our primary mission, then, is to develop a full suite of engagement with craft beer for everyone in the Greater Lansing area. Our tap room and CSB will cater to novice drinkers as well as those drinkers with more sophisticated palates; our homebrewing tool library will introduce individuals to the hobby inexpensively; and our cooperative structure will provide the opportunity for motivated individuals to take their hobby one step further as artisan brewers and co-owners at a fraction of the investment costs otherwise required.

A secondary mission of the cooperative is to incubate new and appealing beer styles.

A tertiary interest is to effect economic redevelopment in the Greater Lansing area by reinvesting our net income toward a new package brewery and to other future co-operative businesses.

Objectives & Milestones

1. Spring 2013: Operate a homebrewing tool library to begin networking and generating interest in our cooperative brewery.

2. Spring 2013: Raise start-up capital of ~$25,000 for the “soft launch”. This includes recruiting 100 earnest members in the pre-development period.

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3.

Summer 2013: Build-out our brewhouse in a small location to initiate licensure/registration and thereafter to begin earning revenue on take-out growler sales.

4. Autumn 2013: Conduct an offering to raise ~$50K+ to acquire and renovate a location in an entertainment district.

5. Winter 2013-14: Open the new location with finished tap room and robust street traffic.

Management Team

President Patrick Paul is our President and is responsible for project management, meeting facilitation, networking, and strategic planning. Patrick is a Michigan State University graduate with a degree in International Relations (Class of 2011). He has two years of experience in financial management and has demonstrable success managing projects. Patrick currently works as a research programmer in the MSU Department of Forestry developing applications for monitoring and modeling forest carbon emissions and reductions.

Legal & Regulatory Officer Isaiah Wunsch is our Legal & Regulatory Officer and is responsible for our incorporating documents and for our microbrewery licensure in the pre-development period. Isaiah holds a B.A. Public Policy from the University of Michigan (Class of 2009) and a M.S. Agriculture, Food, and Resource Economics from Michigan State University (Class of 2012). He has already proven himself very knowledgeable of federal and Michigan brewing regulations in the strategic planning to-date. Isaiah currently works as an agribusiness specialist at Michigan Economic Development Corporation.

Financial Management Officer Aaron Hoffer is our Financial Management Officer and is responsible for financial planning, capital financing, and bookkeeping. Aaron holds a B.S. Finance from Caltech, an M.S. Astronomy from Michigan State University, and is a current PhD candidate in Astronomy at MSU. Apart from his PhD research, Aaron currently serves as corporate treasurer at MSU Student Housing Cooperative, which has an on-going banking relationship with MSUFCU.

Production Operations Officers Ted Linabury and Jonathan Huck are our Production Operations Officers and are responsible for brewhouse purchasing and build-out in the pre-development period and brew

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operations thereafter. Ted is a junior at MSU majoring in Mechanical Engineering and has work experience as a Product Development Co-op at BorgWarner Turbo Systems in Asheville, NC. Jonathan is a junior studying neuroscience at Lyman Briggs College, MSU.

Marketing & Brand Management Officers Michael Spreng, Megan Spaans, and Brendan LaCroix are our Marketing & Brand Management Officers. Michael Spreng is a senior studying Applied Engineering Sciences at MSU who also has internship experience as a market analyst at Ducker Worldwide in Troy, Michigan. Mike will primarily be responsible for our marketing efforts and the recruitment of CSB subscribers. He also participates in on-going market analysis associated with the founding’s feasibility studies. Megan Spaans is a graduate of MSU with a degree in Media Arts & Technology and Brendan LaCroix is a graduate of MSU with a degree in Professional Writing. Megan and Brendan will be responsible for communications, web development, videography, and brand management.

Advisors & References Finally, we have already begun bringing together a “brain trust” that will guide our efforts to a successful launch. These individuals have contributed their vast knowledge and experience to our business planning efforts and we are very grateful for their assistance.

1. Kris Berglund, PhD

2. Richard Spreng, PhD

MSU University Distinguished Professor Director, Artisan Distilling Program

MSU Associate Professor of Marketing; Director, Masters in Marketing Research Program

Industry & Market Analysis The Brewers Association ranks Michigan as #14 in terms of Capita
Industry & Market Analysis
The Brewers Association ranks Michigan as #14
in terms of Capita per Brewery in 2011 with 102
breweries and a Capita/Brewery of 96,898. This is a
comparatively great standing for Michigan beer lovers,
however, there is one glaring need that has not yet been
filled. The Greater Lansing area is unquestionably
lacking in the availability of locally-brewed beer. Just by
Microbrewing “Donut Hole”
Twin Pints Cooperative | Industry & Market Analysis
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looking at a map of the locations of Michigan breweries and brewpubs one can see that the area has only one pin on the map, that location being Harper’s Restaurant and Brewpub. While it is great that we have a brewpub in the heart of downtown East Lansing, Harper’s clearly caters to a college student demographic—one that doesn’t necessarily frequent Harper’s specifically for its craft brews. There is a definite demand for a true local craft beer establishment. There is a virtual donut around the greater Lansing area. We seek to remedy this with a constant and utterly unique supply of participant brewed beer that the entire community can enjoy and get their fix for some true local beer.

can enjoy and get their fix for some true local beer. Craft Beer Trends in the

Craft Beer Trends in the United States The entire success of Twin Pints Cooperative is centralized on the idea that consumers want to drink more craft beer. Market analysis has consistently supported the fact that consumers are increasingly moving away from buying mass produced beer and starting to purchase more and more beer from craft beer makers and micro breweries. An interesting point to note is that in 2011 and 2010 while the overall US beer market was down 1.3% and 1.2% respectively, the craft brewing industry enjoyed 13% and 12% growth by volume respectively, and 15% growth by retail dollars both years (Brewers Association).

According to the IBISWorld Industry Report from October 2011, “the craft brewing segment of this industry has grown consistently since the 1990s.” This report attributes the 4.5% annualized increase in industry establishments (individual breweries) over the past five years to the craft brewing industry. It goes on to explain that “younger beer drinkers (aged 21- 24) will increasingly experiment with and seek out unusual flavors as part of their drinking experience, which will provide opportunities for craft and microbreweries to expand their market reach.”

Mintel Group’s report Beer: The Consumer from November 2011 agrees, saying that “despite recession, job losses, and other negatives, craft beers have enjoyed eight years of positive - and sometimes dramatic - growth.” This rapid growth and market opportunity can be evidenced by the national companies’ moves towards the craft beer market, for example, Anheuser-Busch InBev purchased Goose Island in 2011 and the launch of the Blue Moon brand by Coors in 1995. By looking at some of the most successful craft beers we can see obvious consumer trends: Blue Moon grew by 30.4% in 2010 and 68% of craft beer drinkers ages 21-24 drink Blue Moon. Yuengling, a Pennsylvania regional brand, sold 29.7 million

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cases in 2010. Sierra Nevada Brewing Company shipped a total of 779,065 barrels, and its Torpedo Extra Dry IPA is growing at 40% annually. Many bars and restaurants have cashed in on the growing craft beer movement as well with many competing for the best selections to attract customers.

As of July 1, 2012, there are 2,075 craft breweries in the US and 2,126 US breweries total. In 2011 there were 1,938 craft breweries and 1,749 in 2010.

In 2011 there were 1,938 craft breweries and 1,749 in 2010. Products, Services & Pricing Plan

Products, Services & Pricing Plan We have developed a product mix that offers something for everybody: tap room pint sales, growler club subscriptions, homebrew tool rentals, and artisan participatory brewing. Our first year operating budget calls for competitive prices that will attract high sales volume.

Artisan Participatory Brewing & Artisan Tap Room Sales As co-owners, 25 artisan brewers will share in the labor of manufacturing our beer. Artisan co-owners will invest $500 in limited equity shares. For this, they will be able to manufacture one batch of beer each quarter to sell in our tap room. One batch of beer produces 2 kegs of beer or 248 pints, and artisan brewers will earn a royalty on their beer recipes.

Pint prices will vary from $4 to $7 depending on the variety and quality of the craft beer. We will assign higher prices to our beers with the greatest demand. New beer recipes will initially be licensed at the “Yellow Ribbon” tier of a $1 per-pint royalty. Beers that sell-out quickly will be promoted to the higher “Red Ribbon” tier ($2 per pint) and finally the “Blue

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Ribbon” tier ($3 per pint) on subsequent batches, based on quality. This competitive process will yield excellent craft beers. (The pricing and royalties are subject to market demand in order to remain profitable.)

In this way, our artisan brewers are also entrepreneurs who can take risks on new beer recipes in hopes of striking it rich with a new beer style that commands a higher sales price in the tap room. Artisan brewers will typically support their livelihood with their own jobs and careers, but for those that want to do it for a living and whose beers are also popular in the tap room, the cooperative can hire them as workers to brew every week for a living. The cooperative is able to offer this amazing opportunity to hobby brewers because it’s our mission. Something for everybody.

CSB Growler Club Our operations are also supported by a 12-month subscription known as the Growler Club. To keep our equipment running around the clock, we will hire workers to brew batches for those holes in the calendar week that are not allocated to artisan brewers. The symbolic contribution from workers’ batches is to provide the base-line break-even revenue necessary to keep the organization afloat financially. We intend for these batches to be exclusively marketed to Growler Club subscribers whom will receive one growler pour each month at no additional charge beyond the original subscription fee of $100 per year (excluding $30 in CSB membership dues).

The fee of $100 is competitive pricing. The volume of a growler (64 oz.) for one year equates to approximately 10 six-packs of craft beer, which are typically sold in retail for $10 (e.g. Meijer). Therefore, the equivalent market price for our subscription is $106.67. We are charging prices slightly below market and we also provide exclusive beers that will only be available to Growler Club subscribers; they will not be available in the tap room. This exclusivity makes our product superior to an alternative that would always be available in the grocery aisle.

Commemorative Growler Containers Each year we will produce a limited edition growler emblazoned with a different design that is unique for the year. These commemorative growlers will be issued at no additional charge to Growler Club members whom have paid their $30 dues and any supplies that remain

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after September 1 of each year will be sold separately for $10 each. This exclusive growler is another draw of the Growler Club membership.

Homebrew Tool Library The last service we offer is the homebrew tool library. We will endow our library with an initial investment in homebrew equipment, and CSB members will be able to utilize this equipment at no additional charge. This freebie should be understood as a “loss leader” which promotes the hobby of homebrewing in the community and ultimately leads to greater demand for our tap room and artisan-owner shares.

Production

Productive Capacity Twin Pints will produce beer in one barrel batches (a 1 BBL capacity), the smallest size typically used in commercial brewing (sometimes also used to make “pilot” batches at larger breweries). Each barrel is equivalent to two kegs or 248 pints. There are numerous advantages to this size. Namely, the equipment is readily available, is compact enough to be set up in almost any commercial space and easily handled by employees, and many different types of beer may be brewed at once.

Most importantly, the system is very scalable; adding additional fermenters (along with additional refrigeration capacity as required) could increase the production by two-fold or more. This is because the mashing and wort boiling equipment is only used in four hour blocks, allowing two batches to be brewed per day (more with an additional shift).

Location Requirements The location requirements for Twin Pints are similar to those of any restaurant, bar, or brewpub. A visible storefront with sidewalk access is not only convenient, but draws interest, providing free advertisement. Therefore, a building with a previous history as a bar or restaurant and a basement or additional storage space beyond the seating area/bar (to house the brewing equipment) would be highly desirable. The additional advantage of a location of this nature would be the high likelihood of being able to or having once contained a walk-in refrigerator.

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We have found a suitable location in Old Town and hope to identify two additional spots to compare and contrast in order to inform our negotiating of the lease. This location is a former bar and would require minimal improvements to host our business there.

We will pursue any and all relevant economic development grants available.

Staff Our staff positions include a general manager, a brewer, and a bartender. The general manager will be responsible for purchasing, marketing, bookkeeping, and information technology. One or more brewers will manufacture our CSB-allocated beer. And a bartender and/or other available staff will keep the tap room open from 4pm to 12am each day of the week. The Board of Directors will evaluate staff periodically and will also ensure that adequate cash controls are in place to mitigate the risk of fraud.

Financial Plan The Twin Pints strategic timeline envisions the lease of an affordable location to begin July 2013, a soft launch around September 2013, with an autumn ramp-up period before truly opening our microbrewery and taproom in January 2014 in a vibrant entertainment district.

Generally speaking, the pre-launch period will consist of installing our brewhouse equipment in July at an affordable location to allow two months’ time for microbrewery license registration. As we will not be earning any revenue until our license is granted, it is prudent to operate as cheaply as possible in this period; we have allocated July and August to this waiting period.

After successfully registering with the state and federal regulatory bodies, around September, we will begin earning revenue with take-out growler sales on a couple batches each week while simultaneously renovating our eventual vibrant, brewpub location to open in January 2014. This is the soft launch period.

During the summer and autumn ramp-up period, we will begin recruiting further artisan brewers to join our ranks (with thirty more $500 investment shares to match our initial twenty) and generally promote the January launch of our brewpub within the community (garnering one-hundred “early bird” Growler Club memberships at $100 each). We have amortized these cash flows equally over the four autumn months in our cash flow budget.

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The pre-launch and soft launch periods are identified in cash flow budget for 2013 (Appendix C). During this entire period, we maintain a healthy checking account balance of at least $20,000. The full capital budget for our Old Town/REO Town brewpub projects a capital cost of approximately ~$60,000 before opening on January 1, 2014 (Appendix A, “January 2014 Capital Budget”). The capital required to begin microbrewery registration activities in July before ramping up is smaller at ~$20,000 (Appendix F, “July 2013 Capital Budget”); all the capital included in the July budget is a piece of the full capital budget for January 1. With $41,000 in financing in-hand by July, we will need to raise a further $19,000 from additional artisan brewers and Growler Club subscriptions in the autumn ramp-up period.

Moving on to our January launch at the entertainment district brewpub, we have projected a first year operating budget (Appendix C) and two 5-year proforma income statements (Appendix D & E). Our FY2014 operating budget projects ~$179,000 in revenue on ~$162,000 in expenses, yielding an EBITDA of ~$17,000. Accounting for the ~$13,000 in FY2013 cap-ex attributable to FY2014 “early bird” growler club sales in the soft launch period, actual positive cash flow for the first year is ~$4,000. This is based on a production capacity of 20 kegs a week.

Our 5-year proforma with zero growth (Appendix D) shows net income sliding from $13,000 in year one to $7,500 in year five. Our 5-year proforma with 20% growth shows income increase from $13,000 in year one to $143,000 in year five. With 20% growth we would produce 518 barrels in year five, safely beneath our theoretical maximum capacity of 700 barrels.

Risks Assessment

Insufficient Start-up Capital Substantial capital barriers exist for developing brewpubs, which must be covered before any income can be generated. We anticipate we will be able to raise sufficient capital from equity and grant sources and are not pursuing debt financing at this time. In the event we are unable to raise enough start-up capital through equity and grant sources, including “early bird” revenues in the pre-development period, we can consider a line of credit to get us started.

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Slow Customer Uptake Twin Pints Cooperative will pursue two models in its brewing operations: CSB brewing and Artisan brewing. The number or ratio of CSB members or Artisan brewers may initially be lower than estimated. In future years the distribution of CSB brewed beer and Artisan brewed

beer may change drastically from the initial distribution. In our feasibility analysis, we projected

a balance of 60% CSB batches and 40% Artisan batches. In our first year, the figure of 60%

CSB batches roughly correlates to the amount of business we need to support our fixed overhead costs. As a significant part of our mission is to “incubate” beer and to provide a ladder for individuals to grow as brewers, we will incentivize individuals to take up Artisan shares of ownership. Under this scenario, the share of brewing production would trend toward more Artisan batches and away from CSB batches.

We acknowledge that consumer demand for beer remains a risk, but we do feel it is a

strength that we can market to two different pieces of the community – to CSB participants and

to Artisan brewers – and we feel this balancing act will allow flexibility in our production goals.

Licensing We do not have any licensing as a microbrewery or brewpub. We still need to receive that licensing from the state of Michigan and from the federal government. Several members of our team have experience with compliance, government affairs, and public policy and we anticipate that we will able to obtain licensing.

Liquor Liability

There is a risk that an intoxicated patron of Twin Pints Cooperative could cause an accident or perpetrate some other damages while drunk, and Twin Pints Cooperative could be sued and found liable. We will carry liquor liability insurance (as is also required by law) to mitigate this risk. We will also provide alcohol consumption awareness training to our bartenders and servers to reduce the likelihood of these events.

Operational Risk Because Twin Pints Cooperative seeks to help prospective brewers move from home brewing to their own commercial microbrewery operations, our management team will need to carefully screen prospective brewers to ensure that their technical skills are sufficient, and to ensure that we are providing the level of administrative support needed to keep their activities organized. We feel that we have put into place sufficient internal policies to manage this risk.

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From time to time, batches of beer will not turn out well. This is a risk inherent in the vagaries of fermentation. In order to manage this risk, we will provide training to our brewers in proper sanitation and food chemistry. Additionally, we will plan on occasional failures in our budgeting process.

Transient Management (Turn-over) Our existing management team is comprised primarily of students and we have heard the concern expressed by our advisors that the venture could underperform if our management and customers were primarily college-aged students that are prone to move away for career opportunities. We will address this risk of transience by deliberating recruiting tenured professors (of which there are a fair number of homebrewers) to serve on our Board of Directors as at-large, appointed directors that will contribute to the governance of the organization and to our institutional memory. We will also market our CSB broadly to both young and old demographics to encourage multigenerational participation in our business that will better shape our business to persist as a community asset for longevity.

Strategic Timeline

While the brewpub articulated in this business plan is and remains the ultimate goal of the founding team, there are a few immediate and intermediate activities that we are undertaking to drive us forward.

Phase 1 of the start-up is to begin operating the homebrewing tool library. This can be achieved at minimal cost through de-centralized peer-to-peer lending and through centralized branch lending located at some of the founders’ properties. We anticipate that many entry-level homebrewing tools can be sourced from the founding team and charter members and that we will be able to make our first investments in higher-tier brewing equipment which will entice existing homebrewers to participate in the tool library. This activity will garner interest in the cooperative from outside of the founding team, and would demonstrate the demand for the further homebrewing and probrewing opportunities that we want to market. This phase is an opportunity to prove our market in order to attract further private investment.

Phase 2 of the start-up is to open a licensed microbrewery in a very cheap (and likely very remote or blighted) location. This will enable us to begin manufacturing beer and earning enough sales to self-sustain via the patronage of founders/charter members and their friends.

Twin Pints Cooperative | Strategic Timeline

16

We will also continue to network and recruit further brewers to join our co-op from the greater Lansing area, in order to (again) prove our market and attract further private investment. We will pursue generous month-to-month leases at long-vacant properties in exchange for paying property taxes as well as approaching existing restaurants which have been unable to obtain a Class C liquor license for a partnership where we could manufacture beer to serve on-site. This phase could be limited to exclusively take-out growler sales with no on-site consumption.

Phase 3 of the start-up is the launch of our commercial/downtown brewpub, as articulated in this business plan.

Phase 4 comprises the post-launch activities we hope we will be able to pursue and monetize. These activities include recipe licensing and brewer acceleration. Recipe licensing is a revenue stream whereby we license the most successful brews from our tap room to existing package breweries for a cut of any profits. Brewer acceleration is where we help graduate our best brewers whom have proven out in our tap room into the real world to start microbreweries of their own; as with recipe licensing, we would retain a financial interest in the new business. Phase 4 activities provide compelling value for our capital investors.

Twin Pints Cooperative | Strategic Timeline

17

Twin Pints Cooperative CSB Nanobrewery JANUARY 2014 Capital Budget (Sources / Uses Statement)

Appendix A

Brewhouse Capacity CSB # Batches / week Artisan # Batches / week BBL / month Oz. / month

bbl / batch

Brewing Weeks in Year Fermentation Period, weeks

allocation varies based on artisan demand, up to 14 batches per week

calculated as: # batches/mth * 1 BBL per batch * 3968 oz per BBL

USE OF FUNDS

General Pre-development Costs

Unit Cost

Cost

$

155

$

520

$

3,000

$

6,000

Sub-total

Brewhouse Equipment

Batches per Ferm. Vessel, year

Brite Period, weeks

Batches per Brite Vessel, year

This table is used to determine the quantity of fermenting vessels that we need.

Grain Mill, Hopper, Base + $30 Corded Drill (Motor) 40G Hot Liquor Tank, 40G Mash Tun, 45G Brew Kettle March Pump 7GPM, x3 5500W Heating Elements, weldless kits, and elec. controls DIY Immersion Wort Chiller and 300G Tank

$

212

 

$

2,157

$

480

$

1,570

$

300

40G Conical Fermenter, Food-grade Plasti 37G Brite Beer Tanks 20.5 cu. ft. Upright Freezer Kegs, 15.5G half-barrel Water Filter (Reverse Osmosis system)

15

$

400

$

6,000

3

$

1,389

$

3,473

18

$

649

$

11,358

45

$

129

$

5,805

 

$

200

Sub-total

$

31,554

Tap Room & Homebrew Library

Tap Room Renovation & Supplies Homebrew Supplies Shopping Spree Printed Glass Growlers

 

$

5,000

 

$

2,000

1,000

$

3

$

3,000

Sub-total

$

10,000

Other

Contingency & Shipping/Handling Operating Reserve

10%

of costs

$

5,023

 

$

3,000

$

3,000

Sub-total

$

8,023

Total Project Uses

$

58,252

SOURCE OF FUNDS

Debt Sources

Amount

 

Bank Loan

$

10,000

$

-

Total Debt Sources

$

10,000

Internal Sources (Equity & Revenue)

Artisan Brewer Shares Early Bird CSB Membership Dues Early Bird Growler Club Sales (1-year)

50

$

500

$

25,000

 

25%

of sales

$

2,023

25%

of sales

$

6,743

Total Equity

$

33,765

External Sources (Grant & Equity)

Amount

Offering

$

25,000

$

-

MSU Broad Contest 2nd Place + People's Choice

$

3,000

Total Grant Sources

$

28,000

Total Sources

$

71,765

Twin Pints Cooperative First Year Operating Budget

Appendix B

Anticipated Production PER MONTH and portions allocated to Growler Club or Tap Room

 

Total Oz. / month

% Portion Growlers % Tap Room Sales

# Growlers

# Tap Room Pints

 
 

Beer Production CSB

17,261

100.00%

0.00%

 

269.70

 

0.00

Beer Production Artisan Total

69,043

0.00%

100.00%

 

0.00

 

4,315.20

86,304

269.70

4,315.20

Income Old Town Brewpub Income CSB Membership / "Mug Club" Dues CSB Growler Club subscriptions (12-months)

Price

Qty

Rate

Monthly

Annual

30.00

269.70 annually

 

674.25

8,091.00

125.00

269.70 annually

2,809.38

33,712.50

 

annually

0.00

0.00

monthly

0.00

0.00

 

Pint Sales ($3 per pint before royalties)

3.00

4,315.20 monthly

 

12,945.60

155,347.20

 

annually

0.00

0.00

 

Glass Growler Sales

 

10.00

1,000.00 annually

 

833.33

10,000.00

 

CSB Membership / "Mug Club" Perks (reductions to income) Growler Club growler container 20% Discount on Tap Room Sales (varies) 20% Discount on Growler Club Sub. ($25 off) Free Homebrew Tool Library use

 

17,262.56

207,150.70

(10.00)

269.70 annually

 

(224.75)

(2,697.00)

-20.00%

4,315.20

monthly

(863.04)

(10,356.48)

(25.00)

269.70 annually

 

(561.88)

(6,742.50)

0.00

269.70 annually

0.00

0.00

 

(1,649.67)

(19,795.98)

 

Total Income

15,612.89

187,354.72

Expenses General & Administrative Advertising External Audit Bank Interest Property Insurance Liquor Liability Insurance

 

Price

Qty

Rate

Monthly

Annual

1,000.00

1.00 annually

 

83.33

1,000.00

500.00

1.00 annually

41.67

500.00

50.00

1.00 annually

4.17

50.00

1,000.00

1.00 annually

83.33

1,000.00

500.00

1.00 annually

41.67

500.00

 

Brewpub Overhead Rent (~$12 per sq. ft.) Replacement Pint Glasses Pub Water (gal) Pub Electrical (kWh) Pub Gas, mcf Trash Internet

 

254.17

3,050.00

 

3,000.00

1.00 monthly

 

3,000.00

36,000.00

1.00

100.00 monthly

100.00

1,200.00

0.0029

1,348.50 monthly

3.91

46.93

0.10

9,500.00 annually

79.17

950.00

8.00

0.00 annually

0.00

0.00

100.00

1.00 monthly

100.00

1,200.00

100.00

1.00 monthly

100.00

1,200.00

Workers

(As hours per labor pool) Brewing (# Batches * 4 hrs per batch) Bartending (7 days @ 8 hours: 4p-12p) Bookkeeper / Purchaser (10 hrs/wk) Other Administrative (10 hrs/wk)

 

3,383.08

40,596.93

 

10.00

20.00 weekly

 

866.67

10,400.00

10.00

56.00 weekly

2,426.67

29,120.00

10.00

10.00 weekly

433.33

5,200.00

10.00

10.00 weekly

433.33

5,200.00

 

weekly

0.00

0.00

 

Employee Benefits (Healthcare, etc.) Payroll Taxes (SS, Medicare, FUTA, SUTA)

 

25.00%

of above wages of compensation

1,040.00

12,480.00

16.35%

850.20

10,202.40

 

Variable Costs / Cost of Goods Sold Batches of beer (utilities + ingredients)

 

6,050.20

72,602.40

182.54

250.00 annually

 

3,802.84

45,634.02

 

annually

0.00

0.00

annually

0.00

0.00

weekly

0.00

0.00

weekly

0.00

0.00

weekly

0.00

0.00

weekly

0.00

0.00

 

3,802.84

45,634.02

 

Variable Costs per 1BBL Batch (for use in COGS calculation)

   

Total Expenses

13,490.28

161,883.35

Input

Qty

Unit Cost

$ in Batch

EBITDA

2,122.61

25,471.37

Electricity*, kWh Water, gal Gas, mcf ** Hops, oz Grain, lbs Yeast, grams S/H & Misc.

157

$0.10

$15.70

   

90

$0.0029

$0.26

Less "Early Bird" CapEx from Capital Budget

(8,765.25)

2.8

$8.00

$22.40

 

25

$1.00

$25.00

 

Anticipated Cash Flow for First Year

16,706.12

75

$1.35

$101.25

 

70

$0.02

$1.33

10%

of above costs

$16.59

 

$182.54

* 110 kWh required; assuming 70% efficiency we will draw 157kWh from the wall. ** At this time, we are looking at electrical heating elements but gas is an alternative.

Twin Pints Cooperative

Appendix C

Cash Flow Budget - Project Development Period and Soft Launch

 
   

Project Development Period

   

Soft Launch Period

 

Equity & Grant & Loan & Income

Budgeted

May

June

July

Aug

 

Sep

Oct

Nov

Dec

Offering Artisan Brewer Shares Early Bird CSB Membership Dues Early Bird Growler Club Sales (1-year) MSU Broad Contest Bank Loan Operating Revenue, 2 bbl / week *

$ 50,000

 

$

12,500

$

12,500

$

12,500

$

12,500

$ 25,000

$

10,000

$

2,500

$

2,500

$

2,500

$

2,500

$

2,500

$

2,500

$ 2,023

 

$

506

$

759

$

759

$

759

$ 6,743

$

1,686

$

2,528

$

2,528

$

2,528

$ 3,000

$

3,000

 

$ 10,000

$

10,000

$ 21,576

 

$

5,394

$

5,394

$

5,394

$

5,394

Total

$ 118,341

$

23,000

$

-

$

2,500

$

2,500

$

22,585

$

23,681

$

23,681

$

23,681

* Operating revenue calculated as follows: 2 bbl * 3968 oz/bbl * 4.35 weeks/month / 64 oz/growler * $10 per growler =

$

5,394

Expense

Expense

 

Legal & Incorporation Fees Microbrewery License Attorney fees July Brewhouse Order (2 bbl /wk) Dec. Brewhouse Order (5 bbl /wk) Homebrew Supplies Order Tap Room Location, 1st Months Rent Tap Room Renovation & Supplies Bank Loan (Principal, Interest, Payoff) Growler Purchase Order Labor, 10 hrs/wk @ $10 + $2.50 fringe Rent, monthly Utilities, monthly Soft launch COGS, monthly

$

155

$

155

 

$

520

$

520

$

2,000

$

2,000

$

12,993

$

12,993

Delivered

 

$

18,561

   

$

18,561

Delivered

$

2,000

 

$

2,000

$

3,000

$

3,000

$

5,000

$

20,000

$

10,851

$

193

$

193

$

193

$

193

$

193

$

193

$

193

$

9,500

$

3,000

 

$

900

 

$

2,100

$

4,350

$

544

$

544

$

544

$

544

$

544

$

544

$

544

$

544

$

6,000

 

$

1,000

$

1,000

$

1,000

$

1,000

$

1,000

$

1,000

$

2,298

$

383

$

383

$

383

$

383

$

383

$

383

$

1,460

 

$

365

$

365

$

365

$

365

Total

$

72,189

$

16,405

$

737

$

2,120

$

3,020

$

2,485

$

21,046

$

2,485

$

38,892

Checking Account Balance

$

6,595

$

5,859

$

6,239

$

5,719

$

25,819

$

28,454

$

49,650

$

34,439

Twin Pints Cooperative 5-Year Proforma Income Statement

 

Appendix D

 

0

1

2

3

4

Year-over-year change based on Expansion Trend %

 

Production Expansion

Actual %

Year 1

Year 2

Year 3

Year 4

Year 5

Brewhouse Limit

Worker Batches per Year Artisan Batches per Year

20%

50

50

50

50

50

140

80%

200

200

200

200

200

560

Total Batches per Year

100%

250

250

250

250

250

700

 

# Additional Required Fermenting Vessels # Additional Required Brite Beer Tanks # Additional Required Freezers # Additional Required Kegs

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Cost of New Capital, 2012 prices Cost of New Capital, 201X prices

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

 

YoY change based on Production Qty & Income Trend %

 

Income

Budgeted %

$ per Batch

Year 1

Year 2

Year 3

Year 4

Year 5

Trends

Worker contribution to Income Artisan contribution to Income

17%

$640

32,008

32,968

33,957

34,975

36,025

Income 3% Expense 4% Expansion 0%
Income
3%
Expense
4%
Expansion
0%

83%

$777

155,347

160,008

164,808

169,752

174,845

Annual Income

100%

187,355

192,975

198,765

204,728

210,869

Expenses

2014 Variable Costs

YoY change based on Production Qty & Expense Trend %

General & Administrative Brewpub Overhead Brewers (per batch, base+fringe) Batch variable costs (per batch) Non-brewer workers

n/a

3,050

3,172

3,299

3,431

3,568

n/a

40,597

42,221

43,910

45,666

47,493

61

15,126

15,731

16,360

17,014

17,695

183

45,634

47,459

49,358

51,332

53,385

57,477

59,776

62,167

64,654

67,240

 

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Operating Expenses

161,883

168,359

175,093

182,097

189,381

Capital Improvement Reserve

2%

 

3,747

3,860

3,975

4,095

4,217

Net Operating Income

21,724

20,757

19,696

18,536

17,271

Debt Service

n/a

0

0

0

0

0

0

0

0

0

0

Total Debt Service

0

0

0

0

0

Total Expenses + Reserves + Debt

 

165,630

172,218

179,068

186,191

193,598

NET INCOME

21,724

20,757

19,696

18,536

17,271

 

Cumulative

Planned Capital Investment

Five Years

Net Income Planned CapEx for Expansion for Following Year

$21,724

$20,757

$19,696

$18,536

$17,271

$97,985

$0

$0

$0

$0

$0

$0

 

Remainder after CapEx

$21,724

$20,757

$19,696

$18,536

$17,271

$97,985

Allocation of Net Income to Cooperative and to Stakeholders

 

Cumulative

 

Recipient

Portion %

Year 1

Year 2

Year 3

Year 4

Year 5

Five Years

Twin Pints Reinvestment Reserve Financing Partner / Co-op Development Reserve CSB Members' Dividend Artisan Brewers' Dividend Workers' Dividend

20%

$4,345

$4,151

$3,939

$3,707

$3,454

$19,597

20%

$4,345

$4,151

$3,939

$3,707

$3,454

$19,597

10%

$2,172

$2,076

$1,970

$1,854

$1,727

$9,799

20%

$4,345

$4,151

$3,939

$3,707

$3,454

$19,597

30%

$6,517

$6,227

$5,909

$5,561

$5,181

$29,396

 

100%

$21,724

$20,757

$19,696

$18,536

$17,271

$97,985

# CSB Members # Artisans Annual Dividend per 1x CSB Member Annual Dividend per 1x Artisan Annual Dividend per 1x Worker (40-hourly)

270

270

270

270

270

n/a

50

50

50

50

50

n/a

$8

$8

$7

$7

$6

$36

$22

$21

$20

$19

$17

$98

$2,716

$2,595

$2,462

$2,317

$2,159

$12,248

The above individualized figures assume a constant # members/artisans/workers per 1x batch using Year 1 as the base-line.

Twin Pints Cooperative 5-Year Proforma Income Statement

 

Appendix E

 

0

1

2

3

4

Year-over-year change based on Expansion Trend %

 

Production Expansion

Actual %

Year 1

Year 2

Year 3

Year 4

Year 5

Brewhouse Limit

Worker Batches per Year Artisan Batches per Year

20%

50

60

72

86

104

140

80%

200

240

288

346

415

560

Total Batches per Year

100%

250

300

360

432

518

700

 

# Additional Required Fermenting Vessels # Additional Required Brite Beer Tanks # Additional Required Freezers # Additional Required Kegs

3

4

4

5

1

1

1

1

4

4

5

6

9

11

13

16

Cost of New Capital, 2012 prices Cost of New Capital, 201X prices

$5,327.00

$6,392.40

$7,670.88

$9,205.06

$5,540.08

$6,914.02

$8,628.70 $10,768.61

 
 

YoY change based on Production Qty & Income Trend %

Income

Budgeted %

$ per Batch

Year 1

Year 2

Year 3

Year 4

Year 5

Trends

Worker contribution to Income Artisan contribution to Income

17%

$640

32,008

39,561

48,898

60,438

74,701

Income 3% Expense 4% Expansion 20%
Income
3%
Expense
4%
Expansion
20%

83%

$777

155,347

192,009

237,323

293,332

362,558

Annual Income

100%

187,355

231,570

286,221

353,769

437,259

Expenses

2014 Variable Costs

YoY change based on Production Qty & Expense Trend %

General & Administrative Brewpub Overhead Brewers (per batch, base+fringe) Batch variable costs (per batch) Non-brewer workers

n/a

3,050

3,172

3,299

3,431

3,568

n/a

40,597

42,221

43,910

45,666

47,493

61

15,126

18,877

23,558

29,400

36,692

183

45,634

56,951

71,075

88,702

110,700

57,477

59,776

62,167

64,654

67,240

 

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Operating Expenses

161,883

180,997

204,009

231,853

265,692

Capital Improvement Reserve

2%

 

3,747

4,631

5,724

7,075

8,745

Net Operating Income

21,724

45,942

76,488

114,841

162,821

Debt Service

n/a

0

0

0

0

0

0

0

0

0

0

Total Debt Service

0

0

0

0

0

Total Expenses + Reserves + Debt

 

165,630

185,628

209,733

238,928

274,437

NET INCOME

21,724

45,942

76,488

114,841

162,821

 

Cumulative

Planned Capital Investment

Five Years

Net Income Planned CapEx for Expansion for Following Year

$21,724

$45,942

$76,488

$114,841

$162,821

$421,817

-$5,540

-$6,914

-$8,629

-$10,769

$0

-$31,851

 

Remainder after CapEx

$16,184

$39,028

$67,859

$104,072

$162,821

$389,966

Allocation of Net Income to Cooperative and to Stakeholders

 

Cumulative

 

Recipient

Portion %

Year 1

Year 2

Year 3

Year 4

Year 5

Five Years

Twin Pints Reinvestment Reserve Financing Partner / Co-op Development Reserve CSB Members' Dividend Artisan Brewers' Dividend Workers' Dividend

20%

$4,345

$9,188

$15,298

$22,968

$32,564

$84,363

20%

$4,345

$9,188

$15,298

$22,968

$32,564

$84,363

10%

$2,172

$4,594

$7,649

$11,484

$16,282

$42,182

20%

$4,345

$9,188

$15,298

$22,968

$32,564

$84,363

30%

$6,517

$13,783

$22,946

$34,452

$48,846

$126,545

 

100%

$21,724

$45,942

$76,488

$114,841

$162,821

$421,817

# CSB Members # Artisans Annual Dividend per 1x CSB Member Annual Dividend per 1x Artisan Annual Dividend per 1x Worker (40-hourly)

270

324

388

466

559

n/a

50

60

72

86

104

n/a

$8

$14

$20

$25

$29

$96

$22

$38

$53

$66

$79

$258

$2,716

$4,786

$6,640

$8,307

$9,815

$32,263

The above individualized figures assume a constant # members/artisans/workers per 1x batch using Year 1 as the base-line.

Twin Pints Cooperative - CSB Nanobrewery JULY 2013 Capital Budget (Sources / Uses Statement)

Appendix F

Brewhouse Capacity CSB # Batches / week Artisan # Batches / week BBL / month Oz. / month

bbl / batch

Brewing Weeks in Year Fermentation Period, weeks

allocation varies based on artisan demand, up to 14 batches per week

calculated as: # batches/mth * 1 BBL per batch * 3968 oz per BBL

USE OF FUNDS

General Pre-development Costs

Unit Cost

Cost

$

155

$

520

$

1,000

$

2,000

Sub-total

Brewhouse Equipment

Batches per Ferm. Vessel, year

Brite Period, weeks

Batches per Brite Vessel, year

This table is used to determine the quantity of fermenting vessels that we need.

Grain Mill, Hopper, Base + $30 Corded Drill (Motor) 40G Hot Liquor Tank w HERMS coil 40G Mash Tun + 90 degree recirc inlet adapter 45G Brew Kettle 3x March Pump, 7GPM, $160 ea. 3x 5500W heating element for Kettle/HLT, $70 ea. Weldless heating element kit x3

 

$

212

 

$

759

$

739

$

659

$

480

$

210

$

60

HLT/Mash Tun Temp/Elec. Element Controller (automagic) Brew Kettle Electronic Controller x2 (manual) DIY Immersion Wort Chiller and 300G Tub

$

800

$

500

$

300

1

BBL Brite Tank, x2

$

2,778

2x Fridge for housing Brite Tank Water filter, reverse osmosis system

 

$

1,298

$

200

lb CO2 tank + Dual gauge pressure regulator w safety valve Batch ingredients for roll-out Plastic fermenters, 30-40G x 8 @ ~$400 Kegs, 1/2 bbl x 12 @ $129 ea.

5

$

50

$

800

$

1,600

$

1,548

Sub-total Tap Room & Homebrew Library

 

$

12,993

Tap Room Renovation & Supplies Printed Glass Growlers

 

$

1,000

 

300

$

3

$

900

 

Sub-total

$

1,900

Other

 

Contingency & Shipping/Handling Operating Reserve

10%

of costs

$

1,689

 
 

$

1,500

 

Sub-total

$

3,189

Total Project Uses

 

$

20,082

SOURCE OF FUNDS

 

Debt Sources

 

Amount

 

Bank Loan

 

$

10,000

 

Total Debt Sources

$

10,000

Internal Sources (Equity & "Early Bird" Revenue)

 

Artisan Brewer Shares Early Bird CSB Membership Dues Early Bird Growler Club Sales (1-year)

20

$

500

$

10,000

 

0%

of sales

$

-

0%

of sales

$

-

 

Total Equity

$

10,000

External Sources

Amount

 

$

-

$

-

MSU Broad Contest 2nd Place + People's Choice

$

3,000

Total Grant Sources

$

3,000

Total Sources

$

23,000