HomeMy WebLinkAbout19-19 REDEVELOPMENT AUTHORITY OF THE CITY OF OSHKOSH, WISCONSIN
JULY 17, 2019 19-19 RESOLUTION
(CARRIED LOST LAID OVER WITHDRAWN )
PURPOSE: APPROVE OFFER TO PURCHASE VACANT PROPERTY ON SOUTH
MAIN STREET BETWEEN 7TH AVENUE AND 8TH AVENUE; OSHKOSH
BIER &BREWING, LLC
BE IT RESOLVED by the Redevelopment Authority of the City of Oshkosh that
the offer to purchase submitted by Oshkosh Bier & Brewing, LLC or its Assigns, for the
vacant property on the west side of South Main Street between 71h Avenue and 81hAvenue
is hereby accepted and the proper officials are hereby authorized and directed to execute
any and all documents necessary for purposes of same.
BE IT FURTHER RESOLVED that the terms of said option to purchase agreement
shall include, but not be limited to:
1) Formal submittal of a proposal by July 16th, 2020.
2) Approval of the final development plan by the Redevelopment Authority and
Common Council.
3) Provide lending financing commitment.
4) Obtain project approval under Planned Development Overlay provisions.
5) Submittal of a scaled site plan detailing building elevations.
6) The option fee shall be One Dollar and NO/100 ($1.00).
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REQUEST FOR OPTION TOPURCHASE
TO: Allen Davis/Community Development Board
315 Church Avenue
Osbbmsh,VVY 54901
Please be advised that this is a formal request for an option to develop the 1.3 acre vacant
parcel ofreal property owned bythe City ofOshkosh located nnMain Street'
lying betvveen7mStreet
and 8"`StreeLThe parcel ishighOghtedomthe attached survey map. Ktisnurrequest that the option
price be$1,00,which we understand to be the going price for properties in that area. Specifically,-ca||Specifically,Oshkosh Bier O' Brewing LLC seeks a12-nnnmtboption from the Oshkosh Community Development Board
for that site. |tisacknowledged that the exercise ofthe option shall beconditioned onthe
commencement ofconstruction ofimprovements omthe s�ite consistent with the proposal that has
previously been submitted tothe City, |tisthe intention nfOshkosh Bier and Brewing to construct
facility of approximately 15,000 square feet, which facility will be for the purpose of brewing and
packaging fermented malt beverages (beer). Said facility will also offer onpremise retail beer served in
a2800square foot "Tap Room". /maddition, anenclosed extensively landscaped "Bier Garden" will be
constructed, extending west from Lhebuilding. |twill offer arelaxing, outdoor venue for the public tm
enjoy hand-made craft beer produced at this facility. The proposed layout ofthe development is set
forth Vnthe attached exhibit.
Please consider our request. VVebelieve our project will beamasset tothe City and shall server
to spur on other development in the area.
Thank you for your consideration,
Dated this day ofJune, 2O19.
OSHKOSH BIER & BREWING, LLC
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OSHKOSH BIER & BREWING
7TH & MAIN SITE
• 1 .3 ACRE (59,400 SQ. FT.)
• BREWERY BUILDING 14,700 SQ. FT.
o TAP ROOM 2700 SQ. FT.
• BREW HAUS 12,000 SQ. FT.
o BIER GARTEN 113 ACRE (12,350 SQ. FT.)
• PARKING & PATIO 15,600 SQ. FT.
• LAWN 4,800 SQ. FT.
o TRASH, TRUCK ENTRY, MISC. 1,550 SQ. FT.
• SIDEWALK, EASEMENT 10,200 SQ. FT.
• TOTAL USAGE : 59,000 SQ. FT.
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SECONDARY LOCKUP - L
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Company Mission Statement
"Produce World Class Bier From a Place We Call ,dome"
Company Motto
"Bier As Art"
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I. EXECUTIVE SUMMARY
We would like to introduce you to the Oshkosh Bier & Brewing Company, the reason for its
formation and its intended goals.
The Oshkosh Bier & Brewing Company is a Wisconsin limited liability.company with
offices currently located at 210 N. Main Street, _Suite...:100�,Oshkosh, Wisconsin 54901. This
company was formed for the purpose of raising capital to establish a full production, state-of-the-
art "craft brewery" in the City of Oshkosh. To help accomplish that goal Oshkosh Bier has
undertaken to assemble a select team of seasoned professionals, each with their own particular
expertise, whose talents are complimentary to the execution and operation of a successful
production brewery. Taking advantage of the strong annual year over growth of the craft beer
industry nationally, it is the company's long term goal to produce 15,000 barrels of Ales and
Lager beers annually, with revenues in excess of$5.0 million within 5 to 6 years. Emphasis will
be placed on local sales of both draught and packaged beer.
2019 2020 2021
Total Sales ($/yr) 1,069,156 1,449,339 1,981,256
Net Income ($/yr) (30,021) 160,034 451,675
Net Income (% sales) -2.8 11.0 22.8
Cash Flow ($/yr) 1 54,315 272,707 562,039
Cash Flow (% sales) 5.1 18.8 28.4
It is well known that Oshkosh has a rich history of successful, independent breweries
dating back to the time of the Civil War. At their peak production in the 1950s and 1960s, with a
population of a little over 41,000 residents, Oshkosh breweries produced more than 1.00,000
barrels on an annual basis. However, by the early 1970s, the last two remaining breweries
(Oshkosh Brewing and Peoples Brewing) ceased production. It was the first time in more than
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100 years that Oshkosh was without a production brewery. It is believed that the reasons for
those business failures were the breweries' decision to focus on markets outside of Oshkosh
where local popularity and support did not exist to the same degree, the massive resources and
the influence of the national "mega breweries" in addition to questionable business decisions.
The local breweries had looked outside their market despite the fact that the taste for local beer
had not really diminished though, as Oshkosh had a century and a half history of supporting local
beers.
The beer industry and market place have changed dramatically in the last 40 years,
allowing for creative, new windows of opportunity within an industry that had been dominated
by national breweries for over 50 years. Today's consumers have become more aware of the
quality and differences between craft beers and beer produced by much larger, national breweries
which offer less variety and richness of style and flavor. Moreover, craft beer production offers
an "economy of scope" that can decrease production costs by increasing the variety of goods
produced. Smaller craft brewers practice economies of scope in that they, by definition, produce
a wide variety of beer styles in smaller quantities of Lagers, Ales, Seasonal and Specialty beers
rather than putting the bulk of the breweries resources behind mass production of one or two
styles of beer.
Before brewpubs and micro-breweries (craft brewers) were legalized in 1978, the
majority of consumers were exposed primarily to light Lagers and Pilsners. However, these
generalized, limited offerings created peripheral product opportunities for craft brewers to evolve
and flourish. Current Brewers Association statics indicate that between 1990 and 2019, over
6000 micro-breweries were established(nationally) with a year over growth rate of 15.3%. More
recent B.A. reports indicated that 2016 was the most active year ever, with 18.5% year over
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growth with over 5,000 breweries in operation. We believe that this is an impressive success
ratio demonstrating not only the popularity of craft beer but the very real potential for the
development of more craft breweries, which now only capture nearly 22% of the entire 100+
billion dollar beer industry. Additional Brewers Association statistics show an annual economic
impact of nearly $22.3 billion nationally, with an associated 500,000+ jobs created within the
craft beer segment. Statistics for Wisconsin show an economic impact of$2.1 billion, which is
14th nationally and over 1,000,000 barrels produced. Wisconsin currently has 190 craft breweries
(both production and brewpub facilities), ranking 14th nationally. This figures out to be
approximately 4.3 breweries by capita of 100,000 adults.
Given the impressive industry facts and double digit growth on a national and regional
Ievel the Oshkosh Bier & Brewing Company is committed to returning a great brewing tradition
back to Oshkosh by opening the first large production brewery in this city since 1972. We have
selected a site for our facility in the new Sawdust Entertainment District located on South Main
Street, extending from the Main Street Bridge, south and past the Menominee Arena. Oshkosh
Bier & Brewing Company will be strategically located on a1.5 acre parcel between 7th Avenue
and gth Avenue on Main Street. The Oshkosh Bier & Brewing Company facility will be an
attractive, modern 15,000 square foot, state-of-the-art craft brewery producing world class beer
for the local market. In addition, the brewery will feature an attractive, 2,000 sq. ft., multi-tap
public "sampling room" featuring core Oshkosh Bier & Brewing styles such as: Munich Gold
Lager, Ambier, Porter and an India Pale Ale as well as Seasonal (Bocks, Oktoberfest, Weiss,
etc.) and specialty styles on rotation, Plans also include utilizing a portion of the acreage for a
very large, extensively landscaped Bier Garten for the comfort and enjoyment of all who visit the
brewery, whether for brewery tours or visiting the sampling room. Given the size and scope of
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this fall production brewery, we feel that not only is this district development a unique
opportunity for Oshkosh Bier & Brewing Company, but conversely an opportunity for this
district to have a large venue to help anchor and attract further development in this ambitious
district plan. In addition to providing fresh, local draught beer, attractively packaged, Oshkosh
Bier& Brewing Company products will be distributed throughout the area's retail grocery stores,
restaurants, clubs and taverns. When operational, the brewery will.employ eight full time and
two to four pant time employees.
The Oshkosh Bier & Brewing Company will be headed by Jeffrey Fulbright who has
extensive beer production experience as a graduate of the Siebel Brewing Institute and as
founder of Mid Coast Brewing, which produced Chief Oshkosh Red Lager Beer, the nation's
first Red Lager. The company will also feature a well-trained and experienced brewery staff. In
addition, support and counsel will be provided by an exceptional advisory board consisting of
individuals and limited partners with experience in every aspect of business planning, start-up,
construction, finance and sales/marketing.
The Oshkosh Bier&Brewing Company seeks to raise $2,525,000.00 to secure the site on
Main Street; to lease a 15,000 square-foot facility (with purchase at the end of 60 months),
purchase a custom, multi-vessel 30-barrel brew system and packaging line; and all equipment
necessary to bring this "showcase brewery" to Oshkosh. We are confident that our brewery will
have a strong, positive impact upon Oshkosh as another part of "Event City" local venues. In
addition to being the largest city in Wisconsin without a large production brewery, the timing
and popularity of craft beers are at a point that to miss this window of opportunity would be a
disservice to the City of Oshkosh and its long and proud history of local breweries.
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Intended Sources of finance are as follows:
0 $75,000 in personal equity contributions from Jeff Fulbright
• $50,000 in revolving loan from Oshkosh Area Economic Development Corporation
• $100,000 in revolving loan from Greater Oshkosh Area Economic Development
Corporation
$1,500,000 in equity contributions from private investors
• $900,000 in bank loan financing
Equity interest in OB&B will be offered to investors in the form of a "Subscription
Agreement" stating the amount & terms there in. Equity will be offered in 4% ($95,000.00)
shares with a minimum ownership of 4%per investor required. The Agreement states that the
investor provide the agree amount (cash) when the conditions of the Agreement are met
including the procurement of additional Agreements providing for capital contributions in the
aggregate of not less than$750,000.00.
Agreement funds will be held in the Dempsey Law Firm "IOLTA" trust account until
necessary for initial Oshkosh Bier & Brewing financial requirements, i.e. equipment
deposits, local, state& federal fees &licenses etc.
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USE OF FUNDS
BREWHOUSE/FERMENTATION CELLAR $ 669,000
INSTALLATION 180,000
CAN AND FILL LINE 265,000
CARTONER SYSTEM 120,000
"RING" CARRIER SYSTEM 16,500
LABELER 18,900
CARTONS/CARRIER (40K) 11,200
LABELS: 250K AT 3-5 SIU 13,657
POLY "RING" CARRIERS 3,500
KEG WASHER/FILLER 30,000
CANS AND LIDS ("BALL") 194,5001351,624 31,542
200 KEGS 17,500
COOLER: 1000 SQ FT 18,000
TAPROOM DECORIEQUIPMENT 80,000
COMPUTER/PHONE SYSTEM 3,500
GRAPHICS 15,000
MALT (10K LBS) 7,500
HOPS (1K LBS) 2,000
YEAST 300
FEE'SILICENSES 2,049
LANDSCAPING (BIER GARTEN) 25,000
TOTAL 1,530,1481
It should be noted that the above-referenced amounts do not include shipping of equipment nor
reserve and working capital.
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II. COMPANY DESCRIPTION
The Oshkosh Bier & Brewing Company will be what is known in the industry as a "fall
production" brewery. Unlike a brewpub, which is a restaurant with beer, Oshkosh Bier &
Brewing will not serve meals. The focus is on production of beers in draught (kegs), cans or
bottles for the retail market. The brewery building will be an attractive, modem, 1.5,000 square-
foot facility. 12,000 square feet will be dedicated to production, storage, cooler, laboratory and
warehousing with a custom stainless steel 13 vessel brewing and fermentation system capable of
brewing 30,000— 3 5,00 0 barrels annually. The remaining 3,000 square feet will be dedicated to a
2,000 square-foot public "taproom" in which company product will be offered and sold to retail
consumers. Large windows will offer a view of the brewery production area. The remaining
space will be dedicated to an office/conference area, restroorns and possible souvenir shop. Set
on a 1.S®acre site, a large, enclosed, landscaped "Bier Garters" will be for the enjoyment of our
guests in the spring through fall seasons.
Included with this proposal, for your consideration, are projections for the brewery
business. We have spent a significant amount of time and have devoted resources to produce a
reliable picture of how our brewery operations will be conducted once it is operational. In
preparing the projections, we have identified key vendors, cost of equipment, inventory,
construction, finance and labor. The projections are conservative and were prepared by qualified
professionals. Production costs have been calculated. Based on industry standards, product
pricing has been established and margins calculated. An agreement with the City of Oshkosh for
a site location has been reached and approved by the Redevelopment Authority with a one year
option.
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Oshkosh Bier & Brewing is a Wisconsin limited liability company. An Alcohol and
Tobacco Tax and Trade Bureau application for Federal Brewers Notice is in process, to be
followed by an application to the Department of Revenue for a Brewery Permit after a State
Liquor Contract Committee investigation.
PROJECT TIMELINE
TASK START END
ESTABLISH BUSINESS PLAN 10/10/2017 2/10/2018
BREWERY CONCEPT&DESIGN 11/1/2017 12/20/2017
RESEARCH& SELECT EQUIPMENT 11/30/2017 1/30/2018
DETERMINE COMPANY PROCEDURES 12/10/2017 1/20/2018
DETERMINE STAFF STRUCTURE 12/10/2017 1/20/2018
DETERMINE PACKAGING TYPE ART& COST 1/30/2018 2/28/2018
SECURE BREWERY SITE 1/10/2018 1/31/2018
RAISE START UP CAPITAL 8/1/2018 2/28/2019
ORDER EQUIPMENT 2/10/2019 3/20/2019
BLUE PRINTS 1/20/2019 1/30/2019
LICENSE/PERMITS/FILINGS 12/1/2018 1/20/2019
BREAK GROUND 1/25/2019 4/25/2019
DEVELOP BEER TYPES &FORMULAS 1/30/2019 3/30/2019
HIRE BREW HOUSE STAFF 3/25/2019 4/10/2019
ORDER INVENTORIES 4/1/2019 4/10/2019
TEST BREWINGS 5/1/2019 6/10/2019
HIRE &TRAIN HOURLY STAFF . 6/10/2019 6/20/2019
SOFT OPENING 6/25/2019 6/30/2019
GRAND OPENING 7/1/2019
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111. MANAGEMENT AND PERSONNEL
The founder and managing member of Oshkosh Bier & Brewing Company, LLC, Jeff
Fulbright, is a life-long business owner, restaurateur and entrepreneur who will serve in the
principal administrative position for the brewery. In this capacity, he will oversee the day-to-day
management of the brewery including the brew house, fermentation cellar, packaging,plant floor
staff, etc. In addition, an executive assistant will aid in processing weekly staff reports after
submittal by department heads or OB&B CPA, Charles Nigl.
Mr. Fulbright is uniquely qualified to execute this form of administrative structure given
his years of business management and ownership. Fulbright was involved in a restaurant
business in the Tampa Bay, Florida area. Over time he progressed from chef to manager to
supervisor over a large sea food restaurant group with in excess of 150 mangers, cooks and
wait/bar staff. Each site ranged from $2.7 - $3.5 million annually. He has .also pioneered and
developed two unique food products for the growing health and wellness industry. In addition,he
received his certification from the prestigious United States Brewers Academy to the Siebel
Institute of Technology in Chicago, Illinois in 1990. In 1991, he founded Mid Coast Brewing,
one of the first craft beer companies in Wisconsin and re received national recognition for
developing the first"Red Lager beer"produced in the United States. His marketing model for the
first craft beer package in cans has become the industry standard 25 years later (see appendix).
As a result of that early experience, Fulbright gained background and experience in all levels of
brewing management,production, sales/marketing/art graphics and distribution.
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Brew house procedures, formulations and brewing will be directed by master brewer
Grant C. Johnston. Below is Mr. Johnston's resume:
Grant C Johnston -
BrewmasterlConsultant
Madison, WI USA
Personal Objectives
• To continue producing high quality, distinctive and flavorfal beers
within the craft brewing industry - while in a creative
environment.
Available on special assignment for brewer training, recipe
formulation, pilot brewing, brewery design, expansions and
startup projects.
Professional Involvement
Full time Brewmaster, Marin Brewing Company, Larkspur, CA USA
from April 1989 through.December 1995. Initiated full brewing
operations. Trained and supervised all assistant brewers'.
Full time Brewmaster, Third St. Aleworks, Santa Rosa, CA USA
from January 1996 to March 1998. Designed the brewery layout,
supervised all facets of brewery construction. Initiated full
brewing operations. Produced and served traditional British cask
conditioned ale on beer engine as well as American style beers on
draught.
Full time Brewmaster, Golden Gate Park Brewery, San Francisco,
CA USA,March to August, 1998. Brewery ceased operations
while attempting a business reorganization. After brewing
operations ceased, freelanced as brewing consultant,which
included training and recipe formulation.
Full time Brewmaster, Zero Degrees Brewing, Blackheath SE13,
London, England from May 2000 to June 2001. Initiated full
brewing operations, formulated and produced all beer styles.
Packaged all products for retail sale. Formulated the winner of the
Champion Beer Of London competition held in London, July
2001. First place category winners were Pilsner and Pale Ale.
Pale Ale won as the overall Champion Beer of London 200 I.
Full time Brewmaster, Black Diamond Brewing in Walnut Creek and
Concord, CA USA frorn September 2001 to November 2007.
Reformulated all beer styles in place in 2001 and was responsible
for full brewing operations.
Formulated silver medal winning beer in Belgian Pale Ale category at the World
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Beer Cup 2008 in San Diego CA USA.
Full time Brewmaster,Argus Brewery in Chicago, IL USA from
March 2010 to September 2014. Initiated full brewery
operations first providing startup services and then fall
training for all staff. Oversaw complete brewery operations as
well as creating new recipe formulations and pilot brewing.
Full Time Brewmaster,Lucky's 1313 Brewpub in Madison WI
USA from July 2015 to January 2018. Dealt with all aspects
of brewery planning, layout, equipment selection, startup and
performed all brewery operations.
Brewer Mentor instructor for American Brewers Guild 1994-
1995.Taught four student brewers as part of two intensive twelve
week programs led by Dr. Michael Lewis of UC Davis.
Professional member- Master Brewers Association of the Americas -
District Northern California. Member since 1991.
Brewing Edueation
University of California at Davis, USA. Attended all Extension
Brewing classes given from 1989-1992.
Sicbel Institute of Technology, Chicago, IL USA. Attended
Microbiology and Microscopy class, 1993. Granted full
scholarship for this class from The Association of Brewers,
Boulder CO USA.
American Brewers Guild, Woodland, CA. USA. Attended quality
control class 1994 in Woodland. Attended many other lectures
during the brewer mentor programs.
Trained in traditional British cellaring techniques of cask
conditioned ales with Mark Dorber at The White Horse Pub
on Parson's Green, Fulham, London, England.
University of Sunderland England. Attended sensory evaluation
training class given at The White Horse Pub in London by Dr.
Keith Thomas of BrewLab 1996.
Professional Beer Judging Experienee
Participated as a judge- Great American Beer Festival, 1990, 1991, 1992, 1993,
1994, 1995, 1996, 1997, 1998, 1999, 2000, 2002, 2005, 2006, 2009, 2012 and
2013.
Participated as judge - Great British Beer Festival, 1992, 1
1994, 1998, 1999 and 2000 in London, England.
Participated as a judge - World Beer Cup in USA, 1996, 1998, 2002, 2006, 2008.
AHA celtifiedjudge. CeltifzedApril, 1988.
Brewing Honors - Great American Beer Festival
Yeai: Medals Cate oriel
1989 Gold Stout
Silver Barleywine
Bronze Pale Ale
Bronze Wheat (American)
1990 Gold. Fruit
Gold Herb W Spice
Silver Barleywine
1991 Gold Wheat (American)
Gold Fruit
Gold Herb - Spice
Silver Pinter
1992 Gold Wheat (American)
1993 Gold Fruit
Silver Porter
Bronze Wheat (American)
1995 Bronzy Porter
2005 Gold Specialty (Wild Rice Ale)
2012 Gold Fruit (Contract beer produced at Argus
Brewing)
Activities,Travel.,.Interests
Extensive foreign travel in The United Kingdom, Ireland,
Belgium, Germany, Czech Republic, Slovenia,China and
Japan on beer treks over the last twenty years, visiting 75+
breweries.
Participated as a speaker, University of California- Davis
Extension USA. Lectured on beer style and sensory
evaluation 1997.
Continue to produce experimental pilot brews on my home
brewery, in a broad range of styles.
Award winning home brewer - 1988 through , 1992.
Approximately 50 ribbons at local, state (California), and
national levels - including two first places at the AHA
National Competition in 1989 in the Wheat & Poiter
categories.
Passionate interests include baking, cooking, photography, music and travel.
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Company accountant and financial advisor functions will be performed by Certified
Public Accountant Charles Nigl. He currently represents OB&B partner and general counsel,
Charles Hertel's law firm "Dempsey Law Offices". Nigl has 30+ years experience representing
some of the area's major companies and is considered one of the most respected in his field.
Benjamin Ganther III will be an advisory board member. He is a third generation general
contractor and Ganther Construction president. Ben will act as the brewery's general contractor
in building the new 15,000 sq. ft. facility. Ganther has extensive construction and business
experience and has been involved in developing large and varied projects locally, nationally and
overseas.
Another advisory board member will be Lee Reiherser. He will perform as OB&B's
social media consultant/author. Lee is the author of the very informative and respected"Oshkosh
Beer Blog" for over 7 years. The blog offers highly detailed historic and current information
regarding national, state & Oshkosh breweries/beer. Lee has done writing for numerous
periodicals and is co-author of "Breweries of Oshkosh" considered the most complete
documentation of Oshkosh's brewing history. A long time and avid home brewer, he will assist
in formula development in addition to speaking on behalf of OB&B.
As a second generation owner of"Lee Beverage Distributing" Jeff Lindemann will serve
as an advisory board member. His company is one of the largest beer distributors in Wisconsin.
Jeff has served as past president of the Wisconsin Beer Distributors Association and was and still
is an influential presence in all aspects of the practical and political sides of this industry. His
many years of experience has given him invaluable insight into trending, marketing, beer styles
and packaging within the industry which he will bring to OB&B in his advisory capacity.
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The final advisory board member is a successful developer with an architect background,
Jim Larson. He created the original conceptual design drawings for the OB&B building. His
years as a developer has given him broad insight regarding the details involved in large and
varied projects he has been involved in.
General counsel regarding brewery business, financial and legal decisions will be guided
by partner and company attorney, Charles Hertel. Hertel, a graduate of Northwestern University
School of Law, is a long-time Oshkosh business attorney and considered one of the brightest
legal counsels in Northeast Wisconsin. Charles is a partner in the Dempsey Law Firm, LLP and
has been in practice for 3 6 years. He has appeared in courts throughout the country, including the
United States Supreme Court and the Wisconsin Supreme Court. His practice is focused upon
representing commercial concerns in a broad range of matters. Importantly, he has assisted
innumerable clients in organizing and structuring business startups. Further, Chuck has provided
wise counsel to businesses large and small and has successfully represented their interests on
matters that are diverse in nature. Over the years, Charles has developed relationships within the
business community as well as the City of Oshkosh, which will serve to assist Oshkosh Bier in
forgoing key relationships necessary to get the brewing business off the ground. Charles is more
than qualified to represent Oshkosh Bier in the challenging matters that shall arise as it
organizes, develops and conducts the brewery business.
Additional counsel, input and support will be provided through an advisory board
consisting of additional partners and non-partners with skill sets that lend themselves to the
success of a business project such as this. With backgrounds ranging from social media, finance,
marketing, hospitality, construction and distribution, their input and opinions will be valued and
applied to brewery decisions that would impact marketing, growth, goals and brewery success.
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IV. THE MARKET
Recent Brewers Association statistics show that the craft beer market has grown to over
$22 billion in annual sales and captured approximately 23%+ of the entire multi-billion
dollar beer industry with strong annual growth predicted to continue. Wisconsin ranks 14th
nationally with 190 craft breweries and brew pubs, with over$2 billion in state revenue.
It is remarkable to see how the beer industry has evolved over the past 25 — 30 years.
Year after year one can see tremendous growth in the craft beer segment. It is now apparent
that craft beer has moved into the mainstream. Consumers are making a conscious choice to
try and buy the vast array of beers produced by small and independent brewers. As a result,
craft brewers are the growth point in the overall beer industry with craft brewers, often
enjoying double digit annual growth, while large, mainstream breweries grew by 1% or less.
The "classic target market" (males, 21- 35) has been expanded by craft beers. Part of the
reason is that craft beer consumers are becoming as diverse as craft beer itself. Statistics
show that 38% of households bought craft beer in the past year, as compared to 29% in 2010.
Additionally, women now consume almost 32% of craft beer volume. Of that group of
women, approximately one-half are between the ages of 21 and 34.
Surprisingly, craft beer's volume is largely internal with the majority of the growth
occurring when consumers bring craft beer into more "occasions". The most recent studies
indicate that the volume increase was not stolen from the rest of the other beer category, but
rather from the expansion of craft consumption, which includes new consumers from other
beverage categories (wine and liquor) and increased volume from existing craft consumers.
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The difference between economies of scale and scope will continue to partition the
resources available to large and small scale brewers. Mass producers are unable to efficiently
distribute a large variety of beers, which allows microbreweries to target consumers looking
for new malt beverages, and unique tastes. The growing number of microbreweries dwarfs
the number of mass producers,which resembles a true change in consumer preferences and a
shift in demand from premium craft beer. The volatile growth of the microbrewery industry
has been compared to the dot-cam boom in the 90s.
Another major change is in the usual ebb and flow of the beer industry over the course of
yearly sales. Trends have been altered by the increasing consumer demand for two to four
month seasonal/specialty offerings by craft beer breweries (i.e. Summer "Weis", Spring
"Books", Winter "Spice Beer", etc.). Moreover, craft beer is in the forefront of turning "cross
drinkers" (wine and liquor) into beer consumers as craft beer becomes more mainstream. For
example, it is now acceptable for craft beer to be an accompaniment with entrees in fine
restaurants. Craft beer is now the key to United States beer industry growth. Simply put,
starting a craft brewery may be a very worthy endeavor for the right type of entrepreneur.
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V. MARKETING AND SALES
25 years ago, the craft beer market was less than 1% of the overall beer industry (.08%)
and even less in the upper Midwest. As a result, when Jeff Fulbright's Mid Cost
Brewing/Chief Oshkosh Red Lager was distributed more than 20 years ago, it was forced to
venture outside of the county and state borders to maintain an acceptable cash flow.
However, this resulted in a drain on limited marketing and advertising resources. More
importantly, there were no company representatives to support the products for out of state
distributors. However, sales of 2,000 —2,700 were achieved (see appendix). Today, the craft
beer market has gone through tremendous growth and changes. It is now over 20 times larger
and growing with consistently year-over strong growth. Posting 21%+ of the total multi-
billion dollar beer industry, craft beer provides multi-billions of dollars in revenue and
hundreds of thousands of related jobs. It is this type of growth that more than justifies our
sales/revenues for Oshkosh Bier & Brewing. Fortune Magazine reported in 2016 that there
were now over 5,000 breweries in the U.S. Only back in the 1870's was brewery to
population greater. However, given today's greater population the industry is nowhere near
saturation.
Today, Oshkosh Bier & Brewing Company's marketing plan will advocate a strong
emphasis on local and state consumers by providing maximum service via company
representatives who will be armed with extensive point of sale marketing, which will include
posters, table tens, coasters, tap handles, t-shirts, and signage. That marketing will be
directed to clubs, restaurants and retail locations, as needed. In addition, our underlying
philosophy shall be to promote an attitude of"support local" and "local pride" in Oshkosh
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Bier & Brewing craft products, brewed locally in hand-made batches utilizing the finest
yeast, malts and hops.
Additional marketing strategy will include;
• Press releases to regional media outlets.
• An informative, easy to navigate website with up-to-date information regarding new
style brewings offered, charity events, entertainment,etc.
• Announcements via voluntary e-mail list and social networking sites
• Community involvement such as tastings at local events, participating in home
brewing organizations, mentoring home brewers & customers in the finer technical
aspects of Craft beer and brewing.
• Sport sponsorships
• Charitable fund raising events
• Hosting a home brewing competition with winning brew served in the taproom for
the public
These and other aspects will be in the effort to maintain Oshkosh Bier&Brewing's perception as
Oshkosh's finest, large, production brewery in the minds of Oshkosh and central Wisconsin
residents.
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VI. PRODUCTS AND PACKAGING
Oshkosh Bier & Brewing Company will produce "Oshkosh Classic", which will be an
American lager style beer often referred to as a "session beer". Even though the craft beer
industry has been growing at double digit rates for nearly the last decade, American lagers
still dominate, by a wide margin, in the $110+billion U.S. market, Oshkosh Bier & Brewing
believes that sales of session beers are too large of a segment and opportunity to ignore. As a
result, Oshkosh Bier & Brewing plans to produce a lighter American lager with the same
handcrafted care for our friends who have not (yet) embraced the variety that craft beer
provides.
In addition to Oshkosh Classic, Oshkosh Bier & Brewing will enthusiastically explore
and produce hand-made craft and Euro-style beers to meet the growing demand for these
styles of beer. This product line will be called "Oshkosh Reserve". The initial Oshkosh
Reserve line will include a core of four to five year-round craft beers. Oshkosh Reserve will
be offered with "seasonal" styles brewed for the appropriate months of the year. In addition,
more adventurous "one off' styles will be provided in limited (draught) rotation to test the
feasibility of offering them on a regular or packaged basis.
Both Oshkosh Classic and Oshkosh Reserve lines will be available in draught and 12 oz.
six packs of cans. The six packs will be sold in fully enclosed cartons, which will allow for
maximum, highly visible graphics (see appendix). The "Oshkosh Classic" design will have a
"vintage", warm, country/outdoors theme and will also be available in a convenient 12 x 12
oz. "fridge pack". The "Oshkosh Reserve" line will be in a 6 x 12 oz. carton. This line will
feature unique and eye-catching abstract and modern art graphics from local artists to set it
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apart in a retail setting. Pricing for these lines will compare very favorably with current,
similar market offerings.
1. "Oshkosh Reserve"
Year-Round Craft Beers: $7.99 to $8.99 retail for 6 X12 oz. cares
International
Alcohol by Bitterness Unit
AB B
Name/Style Description Volume (ABY)-
r
Munrch GoldMunche:' Style 4 6 5 6% 20
deep golden
color
Porter American 5 - 6 % 40 - 50
bottom ferment,
style; medium
bodied; Ruby
color
India Pale Ale StxOng ale, 5 7 7 l°10 45 SS
intense hop taste
and bouquet
Vienna Malty; copper 4.8 - 5.8% 17 -26
color
1/2 BBL Kegs: $83.00
Seasonals: Limited to 2 -4 months availability; $7.99 to $8.99 retail for 6 X 12 oz. cans;
• Bock
• Oktoberfest
• Holiday(Spiced)
• Weiss
%Z BBL Kegs: $90.00,
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Rotation One Off. draught only; $80 - $100 per 1/2 BBL keg to distributor
11. "Oshkosh Classic"
Year-Round Lager: $5.49 - $6.49 retail for 6 X 12 oz. cans
International
Alcohol by Bitterness Unit
Name/Style Description Volume AB
Pilsen'Style Mild biftr vith
}
lougttet and
flavor,
12.56050
gr Vzty
V2 BBL Keg: $64 to distributer
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V11. DISTRIBUTION
Current law requires that a small brewer sell no less than 75% of its production through
either a three-tier system (brewer to wholesaler to retailer to consumer) or a two-tier system
(brewer, as wholesaler, to retailer to consumer) and direct sales to consumer via carry outs
and on-premises taproom sales of 25%maximum, by law.
Oshkosh Bier & Brewing Company is committed to having its "Oshkosh Classic" and
"Oshkosh Reserve" lines distributed by Oshkosh based "Lee Beverage". This distributorship
is one of Wisconsin's largest, with 4,625 accounts and" 110 employees. A 53-year old
company, Lee Beverage is a second generation-owned distributor with satellite offices in Eau
Claire and Stevens Point serving accounts in Northcentral and Northwest Wisconsin from
Dodge County north to Baron Counties. Lee Beverage is a founding member (in 2012) of the
Wisconsin Beverage Network, which is an 11 distributor coop that serves all 72 Wisconsin
counties, with 16,500 accounts. Initially, Oshkosh Bier & Brewing will focus sales and
marketing in Winnebago County and 4 to 5 surrounding counties in order to establish a solid,
local customer base before utilizing the extent of Lee Beverage's state-wide influence. Lee
Beverage owner, Jeff Lindmann, is on the Oshkosh Bier &Brewing advisory board.
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VIII. COMPETITION
Competition in the craft brewing segment seems not to be classic competition as defined in
the dictionary. Craft brewing tends to be more of a counterintuitive communal experience
wherein craft breweries work in conjunction through festivals, tastings, beer dinners, etc.,
often sharing ideas, techniques, problem solving and sometimes even equipment and/or co-
purchasing of raw materials. This synergy aids in the health and proliferation of the craft
brewing industry. That attitude began at a grass roots level approximately 40 years ago as a
rebellion to the dominance of bland beers produced by the nation's mega breweries (the
"Original Competition"). This same attitude has today resulted in an amazing array of classic
and new styles of beer. In turn, driven by popularity, craft beer created new consumers (cross
drinkers) from other alcoholic beverage categories, wine and liquor, without cannibalizing
the beer industry.
Major breweries have fully recognized this grass roots business model and have tried to
infiltrate the craft market with their versions of"craft beers", spending hundreds of millions
of dollars in marketing budgets. Major breweries are the real competition to the healthy
competitive synergy between smaller craft brewers.
Direct local competition for Oshkosh Bier & Brewing Company would come from the
approximately 190 craft breweries and pubs in Wisconsin. Breweries such as Sprecher,
Lakefront, Capitol and New Glarus are well established, popular brands throughout the state,
with newer breweries such as Wisconsin Brewing, Titletown, Hinterland, Badger Brewing
and others all making their brands known.
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Not to dismiss these other fine craft brands, Oshkosh Bier & Brewing will be one of the
largest craft breweries in Northcentral Wisconsin, with 30,000 to 35,000 barrels in annual
capacity. Recent studies indicate that importance of local pride and loyalty by the substantial
role played in the success of hometown craft breweries. The Oshkosh Bier & Brewing beers
will also be hand crafted, using the finest domestic and imported yeast, malts and hops for
our own distinctive flavor profiles...LOCALLY.
The proliferation of craft breweries and pubs has been extremely positive for all involved.
It has driven the popularity of craftbeer as consumers seek out new flavors and styles,
adding to craft growth and market share. This paradigm shift in competition has created a
"beneficial competitive synergy" among craft brewers. In other terms, "my Craft competitor
is my partner". That is good for all in the craft beer business.
We are confident that Oshkosh Bier & Brewing can meet our sales goal for years one
through three at 3,000 bbl, 4,500 bbl, and 5,500 bbl annually, given the strength and
popularity of craft beer. This is in tandem with the trend toward supporting local breweries.
In the early 90s, Fulbright and Mid Coast Brewing attained sales of between 2,000 and 2,700
barrels annually with only two style offerings. Craft beer captured only .08% of the market.
Today's Craft market share is 21%+ with $22.3 billion in sales. Oshkosh Bier & Brewing
will offer four to five year round core styles, seasonal offerings and "one off' styles in
regular draft rotation. Moreover, our statewide distributor agrees that these predictions are
valid and attainable.
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Here are the top selling craft brands in the Fox Valley:
• New Glarus (Wisconsin)
• Jacob Leinenkugels (Wisconsin)
• Lakefront Brewery(Wisconsin)
• Boston Beer (National)
• Point Brewing Co. (Wisconsin)
• Capital brewery (Wisconsin)
• Bells Brewing Co. (National)
• New Belgium(National)
• Laganitus (National)
• Ale Asylum (Wisconsin)
Other that would be in play—Wisconsin locals like: Stone Arch,Titletown and Central Waters.
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IX. LOCATION AND DEMOGRAPHICS
Since the inception of the Oshkosh Bier & Brewing Company concept, it has been our
plan to build not only a modem, efficient craft brewery, but one that is as visually attractive
as to be considered a "showcase" brewery for the City of Oshkosh. We believe that the
Oshkosh Bier & Brewing design meets that goal. Set on a 1.5 acre site in the new and
developing "Sawdust District", this site is just one block south of the heart of the Main Street
shopping district on the 7th Avenue and Main Street parcel. This location anchors the north
end with the new Menominee Arena, anchoring the current south end of this planned
entertainment district. The synergy of these two large and important venues will serve to
drive and support additional future developments for this district, the City of Oshkosh and
the visitors to "Event City"
The site is large enough to accommodate the planned 15,000 square foot brewery and a
beautifully landscaped one-quarter to one-third acre "Bier Garten" with customer parking
completing the "showcase" site. This attractive and convenient location (on the bus route) in
"Event City" will have easy access for locals and city's guests, including 100's of thousands
attending E.A.A., Water Fest, Sawdust Days, Country USA and Rock USA.
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X. APPENDIX
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VIII. CRAFT BREWERY STATISTICS
NUMBER OF CRAFT BREWERIES
2011 - 73
2012 - 84
2013 - 90
2014 - 97
2015 - 116
2016 - 131
2017 - 160
2018 - 190
BBL PRODUCTION
2011 - 388,025
2012 - 398,811
2013 - 4581.706
2014 - 850,874
2015 - 1,0201567
2016 - 974,530
2017 - 1,029,916
2018 - 11007,123