What follows is our fund raiser letter which describes the goals for our Founder in Cognito pre-sale, then a summarized vision of Cognito Brewing's place in the existing market. Please read through, and feel free to contact us if you would like more information.
Dear Friends,
Our approach to brewing began the same way as most - by what we liked in other breweries, and what we wished was available. Most breweries are great at explaining each of their beers from the basics of what style they are, to the subtle differences that make them unique. We wanted to take this one step further, and when we found our pilot system, the model emerged. Our pilot system is a dual, meaning side by side system where two batches can be made at one time. Ours is 1 barrel on each side which is about 1000 pints of beer total.
Often when brewers are creating recipes and particularly when they are trying new ingredients or techniques, they make a single change to a batch in order to evaluate just what that change contributes. You see this on beer lists as a “SMaSH” or “single malt single hop” when the flavor of each is left alone to evaluate, or sometimes just to shine on its own as a success. Our dual system allows us to either try two different new things side by side, or to follow a more empirical model and use one side as a control with no change for comparison. We, as craft beer customers and brewers were excited about this, and thought that our customers who brew or just want to understand brewing better would likely appreciate it as well. Our vision is to have paired taps for tasting and to elicit feedback from our customers to help us decide which direction to go with the recipe - kind of a “choose your own adventure” beer. Eventually, after a series of changes, a beer that a lot of people enjoy will be the end result. When the recipe is perfected, the dual system can be easily switched to cross circulate and make a single 2 barrel batch of the beer we know we want a lot of.
As luck would have it, Colorado Brewing Systems started making a micro brew sized model of this same system, and it is getting stellar reviews. We would like to order the 10 barrel version this system to be built and shipped about this time next year, after we prepare the annex portion of the elevator to hold its weight in the fall. Because of the demand for brewhouses, we need to submit that order with sizeable chunk down very soon in order to get it when we want it, and because the timing coincides with the purchase of the building, that’s a slightly challenging task. That, friends, is why we decided to offer lifetime memberships now, before and only before we are open, to our early supporters, at special rates. We won’t sell lifetime memberships once we are open, so this is a limited opportunity to save big for years to come. You get an awesome deal, we get to avoid brewing 24 hours a day, and we all get beer. Good idea, no?
Cheers!
Mike, Shanna, Amber, Rich, and Erik
As we built our business plan we reviewed hundreds of brewery models and their business structures. Several things became clear.
1. It is a rare brewery that with good beer and solid management can’t succeed. Brewery start-ups are still launching successfully in places with a dense concentration of breweries like Portland, OR and Grand Rapids, MI, and tiny towns in the middle of nowhere that wouldn't inspire even the most prolific big box store, are the surprising hosts of breweries with busy taphouses.
2. With high population comes high overhead so the idea that breweries are best off in high population density areas like Grand Rapids or summertime South Haven is not necessarily true. By taking advantage of the very low overhead of a place like Bangor, MI yet benefitting from the populations of neighboring cities and the considerable traffic between them, we have found a relatively low risk model compared to that of breweries paying big city or tourist destination real estate prices.
3. Because the traffic going through Bangor in the summers includes a proportionately high number of tourists going to or from vacations and day trips in South Haven, they are uniquely prepared to be excellent customers. Here's why:
A. They have flexibility with their time.
B. They are generally prepared to spend money
C. Vacationing customers’ money is mentally allotted from the more liberal “leisure budget” vs. the more conservatively managed “grocery budget”.
D. People on vacation tend to be more open to trying something new.
E. They are aware that South Haven food merchants are or will be very busy
4. By creating impetus (beyond the speed limit and the train) for these customers to stop, the door is opened for increasing other revenue in Bangor such as gas station, grocery, and leisure shopping sales. Because Cognito will follow the model of all the great breweries by being involved in and supportive of its community, customers will learn about trail town and train tourism and all of the wonderful reasons there are to make Bangor more than a short stop.
3. The existing event rental business of the Bangor Elevator further mitigates the risk of this as a start up with its history of bookings that cover the building expenses with very little marketing. There is clear room for increasing this revenue with added services, and simply by having the goal of being fully booked. (Bob didn’t push the bookings because his goal was understandably to cover expenses without it being too much extra work.) Saturdays in 2017 are currently at 50% booked with signed contracts and deposits, which puts us very close to the break even point for the building expenses, even though we have just begun increased marketing and added services.
4. There is strong local support for this endeavor, in evidence most recently at our Founder in Cognito party. We are both humbled and impressed by the enthusiasm and wholehearted commitment to our success that the community has shown us. We saw this at this incredible party, through our social media following, and we see it in the willingness of city officials to work with us. The decision to call Bangor, MI Cognito Brewery's home has been our foundation in so many respects. It is the choice we have the most confident in, and that we draw the most positive energy from. Each day that we spend working within this community, we feel more sure that we are on the right path together. We promise to follow the lead of great Michigan breweries before us and to be stewards of the community, a force for meaningful change, and the very best neighbors.
