Wayfarer's Ale - Thread not started by GRock (See OP)

[GuingesRock]

I didn't start this thread, I was the second to post and the original post was deleted when the person requested their account and all posts be deleted. The original title was " New Brewery Shares Offered" and was started by one of the Wayfarers.

[GasMD30]

I personally would have gone through Kickstarter to get something like this going. The right target audience for sure.

Here is an example of a keg/growler hybrid:
https://www.kickstarter.com/projects/gr ... me_popular" onclick="window.open(this.href);return false;

PS I want one of those!

Here is a group of guys who successfully kickstarted a brewery:
https://www.kickstarter.com/projects/20 ... y_location" onclick="window.open(this.href);return false;

[mumblecrunch]

I think Chris posted three times in error (easily done). I'm sure the other two identical threads could be simply deleted, if any of the mods had the time.

To three different forums (fora?) within a minute? Seems more likely he didn't know which forum to put it in and wanted to get it as much exposure as possible, which is understandable given the nature of the posting. The mods have taken care of it by locking the other two (which will sink into the depths of obscurity because no new posts will be added) and leaving this one around; seems reasonable to me.

I personally would have gone through Kickstarter to get something like this going. The right target audience for sure.

I disagree that a Kickstarter would be more appropriate in this case. The purpose of a CEDIF is to raise capital in Nova Scotia largely from Nova Scotian contributors. "Keep your money in the province," and "Don't just buy local, invest local" would be the rallying cries. A Kickstarter immediately puts a portion of the proceeds outside the province (5% to Kickstarter on successful funding, or $50,000 in this case). Kickstarter allows people all over the world to contribute relatively small sums to investments that in turn will provide a product or incentive that can ship to all the places from which investments have come in. I don't believe Kickstarter can do "shares" in return for investment in the classic sense simply due to the sheer number of securities jurisdictions that would be involved. So nobody outside the realistic geographic product range for the Wayfarer's Brewery would have much cause to invest.

The big advantage of CEDIFs to the investor is that they'll give you a bunch of tax breaks, benefits that are dependent on (a) you keeping your money in and (b) the company surviving. They can also qualify as RRSP investments, which can have additional benefits. There have been some CEDIF success stories (I believe JustUs Coffee Roasters have worked multiple CEDIF investment rounds) and not so successful ones (although there's way more to that story than the CEDIF).

I'd personally like to see something more like a business plan than the CEDIF document. There's some stuff in there about the overall growth of the craft beer industry, and Wayfarer's being, ideally, the largest local brewery (20 bbl would top Garrison and Propeller, I believe, at least for now), and the craft beer industry being a community with a spirit of friendly collaboration and competition, but you have to figure at some point there's likely to be some degree of market saturation. What is going to differentiate Wayfarer's? Product? Location? Marketing? What makes them believe they can drop into the market as the biggest producer in the region with no proven products and survive or even thrive? Who on their staff has experience in the craft beer industry beyond "a keen interest in brewing"? What makes Wayfarer's different enough to warrant such a big bang approach when all the other breweries have started on a much more limited basis and solely on private funding?

Please note that I'm not against this idea at all and I think it's a novel tack to take, possibly at a crucial juncture in the local industry. I just have questions that I would personally like to have answered before I would consider parting with $1,000 (or some multiple thereof) of my hard-earned cash.

[mr x]

Some good comments there. First thing I looked at, as always, is the people behind this via their Offering Document. I can't help but ask myself why they can't raise their own cash to fund this.

[GuingesRock]

...........

[mr x]

I didn't see in the Offering Document what their investment would be.

Also, files for Annex E and F are missing.

[Celiacbrew]

I didn't see in the Offering Document what their investment would be.

Also, files for Annex E and F are missing.

No word on their $$ contributions, but they control 44% of the company. page 32 explains the structure. In order for them to get the giant tax breaks from their investments they need 25 people to join in which is why they are structuring it this way. The principles can't put up everything because then it wouldn't qualify for as a CEDIF.

The thing I would say is the biggest issue with this venture is that no one involved has any experience in the brewing, beverage, food service, manufacturing, wholesale, distribution or marketing or any industries that are even loosely related to the brewing industry. Their background is running the 5 pharmacies that the principal investor owns. They aren't even pharmacies in a highly competitive arena like a saturated big city, which is what the beer market is. They can try to say they don't compete with other craft brewers and that their segment is different from the big breweries, but bars and restaurants only have so many taps. Liquor stores only have so much shelf space. Last time I looked those shelves and taps were full, so their growth will come at the expense of others. It has to. So they need to survive long enough to build up a following and push out the other players. Until they do that, their big giant brewery operates way below capacity, which means no savings from operating at the larger scale. Since those machines cost money they will likely be operating at a higher average cost than even the small guys. There are models that work for ventures like this but this one is too small to be trying to be a contract brewer for other craft breweries and it is too far from the large markets that contract brewers would service. So they need a survival plan because that $450K-$1M will go very quickly.

Without a lot more information people should stay away from this venture. With ventures like this it is the people seeking your $$$ who need to provide you with the information. You shouldn't be dragging information out of them. Playing hard to get is a ploy you use when your plan and business model aren't solid enough to do the work on their own. The hard to get ploy is tailored for inexperienced investors and is akin to the stockbroker with the hot tip on a penny stock that he is only going to tell you about.

[Celiacbrew]

PS if they provide all the information in a timely manner so that it can be evaluated well ahead of the Feb 2015 closing, and it is a sound business/capital/marketing plan this would be a very attractive investment, since the tax breaks from CEDIFs are quite lucrative. I really like the program.

[chalmers]

GRock, several of us had tried to contact them via their website, and in response to their posts here. You seem to have an inside line to them, are you able to ask them to respond.

Great points by CB, i think they are reasonable, and hope they respond. I have been burned by the Farmers Market CEDIF, lost $5,000, my folks much more, so I am certainly willing to invest in this sort of enterprise, but it has to pass the sniff test.

[GuingesRock]

.............

[Celiacbrew]

Thanks for this Mr X and other comments.

Because we have been approved after an exhaustive review by the Securities Commission for public share offering and the Minister of Finance to issue Equity Tax Credits there is a legal restriction on what we are able to say in order to gain funds. We do have a comprehensive business plan and are confident that we can compliment the growing craft beer market. We cannot make public everything we would like to.... and have to by law 'warn' investors that all private businesses are highly risky.

I know you are restricted in your promotional efforts for the issuance, but are you really not allowed to provide any information on the investee company? How are we supposed to find information on the investee company?

[Hub Brewer]

There's a group in Truro that will be watching this very closely as they want to open a brewery in a somewhat similar fashion (some form of a co op), though on a smaller (10bbl) scale. There's a public meeting Thursday night, perhaps I'll start a new thread for that. Anyhow, I also don't believe the market has reached saturation yet, but I do believe it's no longer good enough to just make a decent beer and put a label on it. Product quality will be paramount to thrive.

[HoweFox]

I would seriously consider investing some money towards this. As has been pointed out already, the CEDIF is a great investment method. No argument there.

I think the one issue that has already been raised is that there isn't much information about the beer itself. What is your angle that puts you ahead of other craft breweries? Are you planning to hire a great head brewer? Are there specific beer styles you want to focus on? Will you be aiming to produce many unique limited releases? Are you aiming for really unique recipes or beer that is more aimed at converting macro drinkers to craft drinkers?

In short we need more information about the end product and not just something general like "craft beer".

[Keith]

That's great, we need quite a few new breweries. The competition is the 97% of beer drunk in Nova Scotia that comes from Industrial Breweries , many of whom are outside of our home province and from our southern cousins. We are fighting back with better and local beer and will be planning on sending ours to them. I hate to think how much of our beer money leaves Nova Scotia. Keep RRSP's and beer money here for our kids to have schools, hospitals and decent roads as well as to be able to drink a glass of the 'local'.

Let's think through the maths in NS. 15 craft breweries = 3% of beer sold. We need to get to 15% = 75 craft breweries. I wish Truro well and we will help if we can.

The breweries we have are running out and imagine if they could increase production and broaden their market to the entire province. Issue I have with supporting many of our brewers is that we just don't have any easy means of getting the beer. I love many of the beers and I only get to sample them from time to time while I'm at Stillwell or if for some reason I'm driving by the brewery. I can honestly say I hardly get out of Sackville so i'm really missing out on some great beers. With that being said we are fortunate to have the local offerings in the NSLC that we do.

[wortly]

I actually am a big fan of the CEDIF model, it is a great way to keep the cash in the province.
The jump from homebrewing to 20bbl is massive, but I am sure that you guys are working on that.
The only weird thing about this to me is the location. There are so many fantastic spots in the Valley, why put a brewery in a parking lot right next to an established brewery?

[redoubt]

We have a capable braumeister.

Any chance you'd tell us who this person is?

-Keely.

[GuingesRock]

..............

[Jimmy]

We have a capable braumeister.

Any chance you'd tell us who this person is?

-Keely.

I'd also be interested to know this - the brewer is the biggest piece of the puzzle. Everything else can be fantastic, but it can all fall apart with the brewer. I know there are a lot of brewers around that many people would consider "capable", but I think a lot of our opinions of "capable" could be quite different.

[GuingesRock]

............

[Jayme]

Why is the brew master's identity being withheld? I don't have a firm grasp on the legalities around the whole thing, nor will I be investing, but if I were in a position to do so, I would certainly want to know who this mystery brewer is. Kind of like betting on a horse race without knowing which horse you were putting your money on...

[GuingesRock]

...............

[Jimmy]

Detlef Heiss is the guy. He's one of the founders

This guy?

[GuingesRock]

..........

[gm-]

So is Sea level brewing involved in this at all?

[Celiacbrew]

Hello, there is no one brewmaster, there is one very able technician with a German background and a precise mind. And a number of trained chemists, some belong to the American Institute of Brewing Chemists.

This hasn't sat well with me today and I think I know why. I googled american institute of brewing chemists and couldn't find one. I did find an american society of brewing chemists and it is just a journal. Membership only requires a desire to read their journal and payment of $187. I sincerely hope that I am wrong on this and that the American Institute of Brewing Chemists is just hidden from the first 5 pages of a google search for that term. I think that saying that some of the principals in this endeavor are members of the brewing chemists institute makes it sounds like they are receiving an endorsement from a professional society akin to how being a member of the Pharmacy Association of Nova Scotia implies you are an accredited pharmacist. Hearing that someone is a member of the American Institute of Brewing Chemists makes me think they have completed advanced degrees in brewing sciences from programs like UC Davis or Waterloo. Is that the case and you simply misspoke?

If anyone is considering investing in this venture, I strongly urge you to speak with as many people as you can in the know about this business, including any established brewers in the province that you can gain access to. Also take the NS Securities Commission's warning to heart, this is a very high risk investment and you could very easily lose your RRSPs that you transfer over to the company. Make certain that you are comfortable with losing all of your investment before proceeding.