A Milwaukee brewery known for its crowdsourced craft beer recipes aims to take its business model across state lines with plans to open as many as 10 locations by 2025.
MobCraft Beer Inc. has targeted three immediate locations for expansion, including Waterford, Denver, and Woodstock, Illinois. The brewer’s growth plans coincide with a $2.25 million Wefunder campaign through which it hopes to attract investors to help finance new locations.
MobCraft is testing the waters to gauge investor interest in an offering under regulation crowdfunding. No money or other consideration is being solicited, the company said. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until Form C is filed with the SEC and only through Wefunder’s platform. Any indication of interest involves no obligation or commitment of any kind, the company said.
Since 2013, MobCraft has generated a loyal following by tapping into the ideas of its fans to brew outrageously flavored beers, like its Fruity Pebble cereal-inspired milkshake IPA or its cranberry-infused farmhouse ale.
Each month, Mobcraft crowdsources beer flavor ideas from its followers and then brews top picks based on votes cast through its website and social media. The Walker’s Point tap room and brewery also produces several flagship and seasonal brews, churning out approximately 3,000 barrels of beer each year, said Henry Schwartz, MobCraft founder and chief executive officer.
With its planned expansion, the brewery hopes to replicate the systems, processes and environment of its existing taproom in other cities while growing its sense of community and emotional connection to the brand through its crowdsourced brewing model.
Known for making the beverage dreams of beer connoisseurs come true, MobCraft is turning to its fans once again to make its own dreams come true by offering 28% ownership in the company.
“We want our fans to be owners of the brewery,” Schwartz said. “We want people who love MobCraft to own a share of it and, as the company continues to grow, reap those benefits of being an owner of the brewery.”
The new taproom and breweries will have a much smaller production capacity, allowing MobCraft to produce experimental brews in smaller volumes. With these smaller batches, MobCraft can partner with nonprofits to produce cause-based beers or collaborate with musicians and graphic artists on new beverages and can designs, Schwartz added.
“My philosophy behind beer is that it’s such a powerful thing to bring people together to debate, to laugh and to cry over, and a lot of ideas happen over a pint of beer,” Schwartz said. “Many of these ideas we can turn into something greater, larger and more impactful through beer, and that’s what we’re hunting to do with a lot of these smaller pilot batches.”
Despite record sales for beer, wine and liquor in Wisconsin during the COVID-19 pandemic, 2020 wasn’t a great year for craft brewers. In fact, a Brewers Association report suggests craft brewers faced their most challenging year in decades.
The craft brewery industry produced 23.1 million barrels of beer in 2020, a 9% decrease from the year prior, according to the BA, a not-for-profit trade association representing small and independent American craft brewers.
The overall American beer market dropped 3% by volume in 2020, although the report did not include flavored malt beverages and hard seltzers.
“2020 was obviously a challenging year for many small brewers, but also one that proved their resilient and entrepreneurial nature,” Brewers Association chief economist Bart Watson said in the report. “In a year where U.S. draught sales were down more than 40%, small brewers found new ways to connect with their customers and keep their businesses running.”
MobCraft also faced cashflow challenges throughout the pandemic and at one point considered furloughing employees before federal Paycheck Protection Program dollars arrived. But it also turned to innovation to keep its business alive.
MobCraft was able to reduce its revenue losses by releasing advent calendars, a 24-pack featuring a combination of its core craft beers in addition to seasonal, limited release and oak/spirt barrel-aged beers.
Following its launch, beer drinkers, bars and liquor stores purchased the advent calendars by the hundreds, with MobCraft selling more than 2,000 last year. Heading into the holiday season, MobCraft has more advent calendars on pre-order than it sold in 2021, Schwartz said.
“We were able to generate $100,000 in revenues in the middle of the pandemic, which was awesome and kind of helped keep us alive,” Schwartz said. “Not only was it a year ago that we launched (the advent calendars), but it was also a year ago that we came up with them.”
After a rocky start to 2020, Schwartz reevaluated the brewery’s business model, prompting MobCraft to set forth new plans for growth by expansion. The company is targeting failed or unique locations for new operations throughout the Midwest where it knows a core following exists, Schwartz said.
In Woodstock, MobCraft will convert an 1880s sheriff’s house located off the city’s town square into a brewery and taproom by 2023. The Waterford location calls for converting an old fire station into a brewery, taproom and event venue, which will open by 2022. The Denver location was a failed restaurant and brewery adjacent to a craft brewery hotspot in the city called River North. Those plans include a restaurant, brewery and taproom slated to open later this year.
The new locations follow a broader growth plan to open two locations per year for the next five years, Schwartz said, adding that MobCraft is looking at Madison, the Fox Valley and Chicagoland suburbs for its next expansion.