Invest in an award-winning and profitable brewery
Regardless of which beer you drink from us you will find that our focus is on maximum flavor.
The story about Train Station Brewery started in an old empty train station in Knivsta outside of Stockholm, Sweden. The founders are Colin Nordstrom and Simon Vikström who both met working together in the wine industry in Sweden. Colin, an educated biochemist, is originally from Sonoma County in California and knows all the microscopic details in beer and winemaking. Simon has a bachelors degree in marketing and PR and runs a number of companies including a marketing agency producing advertisement and design for different beverage producers all over the world.
Please see at the bottom of the pitch regarding a Swedish tax deduction incentive.
When working together in the wine industry we realized there was a gap to fill in the low alcohol segment in Sweden. We weren't impressed with the so called folköl in the Swedish grocery stores. So we made the decision to focus on a high quality, micro brewed, unfiltered, low alcohol beer. We only had a small equipment at that time, and after a long process of creating recipes and importing rare ingredients from countries such as New Zealand and the US, the first product became a reality. The Hoppy One, a full flavoured India Pale Folk Ale (3,5%), was launched in the fall of 2012 in Swedish grocery stores. At that time, we were almost the only craft beer in low alc format. We set a target to start a folköl revolution, and we think we have succeeded in that. In the beginning, our plan was to scale up the brewery inside the train station, but we soon realized that the size was just too small for the large demand we had from the first group of stores to take in our product. Therefore, in order to be able to scale and focus on recipe design as well as logistics and business, we started to contract brew our commercial volumes. One year later and beyond expectations, The Hoppy One got wonderful reviews from beer connoisseur groups, leading food magazines and national TV.
In terms of recipe design Colin’s background as a biochemist is extremely rare. He knows brewing at a microscopic level. That in combination with Simon who is a first degree sommelier, has been running various businesses for a long time and has a bachelors degree in marketing and PR, we really stand out from other beer producers. We never cut down on quality. For our first beer, we had to import eight different strains of hops from three different countries. And when the product became successful, we had to spend a lot of energy and effort to source the hops for commercial volumes. But, we never cut down on quality. We think that is our recipe for success.
Where we are today
Soon after the success with the low alc beer the demand for strong beer started. The stronger beers saw the shelves at the Swedish monopoly Systembolaget shortly thereafter. Flash forward to 2015 and we now have 5 beers with a 6th soon to hit the shelves and things are really starting to kick off with orders coming in from all over the world. We have just started exporting to Norway and Finland and there is strong interest from the UK and Ireland. See for example this video from Beer Judge Simon Martin who tries our IPA for the first time. You can skip to around 2:35 to see the tasting.
Today we are known as the company who recently won Gold for “Best Swedish Bottled Beer Regardless of Category” in possibly the largest competition amongst swedish beers there is (Stockholm Beer & Whisky Festival 2014). As well as the brewery whose unfiltered lager was named “Best Swedish Lager” two years in a row in possibly the most complete blind tests of Swedish lager beers (Umeåguiden 2014 and 2015).
On all our bottles you can read the phrase “If you don’t really like beer, buy something else.” And that is exactly how we feel.
With the increase in volume and countries during 2015 we now see a demand to expand our brewery and build a quite large one to handle the growth coming up. Up until now we have been scalable because we contract brew our commercial volumes. But we have reached the volumes that can motivate a larger brewing setup to become a large scale micro brewery and be able to supply many countries with our beer. This brewery we have a location for only 50 km outside of Stockholm and very close to Arlanda. But we want you to help us build it and expand the brand to the whole world.
To be able to do this, we are looking for you. You who want to be a shareholder and a part of our team of heroes to help us spread our idea that high quality Swedish beer deserves more attention and a place in beer loving countries all over the world. We want to become friends with you. To share our new products with you. To arrange tastings in our newly opened pub (inside the train station) and get feedback on things we do. You are our heroes. As a small token of our appreciation we also want to give you our unique Train Station Brewery Hero-shirt when you become a part of us.
So why a horse driving the train in the logo?
Well. It all started with systembolaget banning our first strong beer because there was a tiny train driver on the side of our bottles. (In case some one is thinking about driving a 19th century train under the influence). Seriously, because of this, we had to relabel about 10 000 beers by hand. After that, we thought, well "Horses can’t drive trains". So we changed it to a horse and that later became our logo. You can read more about it here since newspapers picked up on the story as well.
- Best Swedish bottled beer regardless of category. Stockholm Beer and Whisky Festival. Gold medal for Shipfaced IPA
- Best Swedish Lager (Umeåguiden – one of the biggest blind tests of Swedish lager beer), Gold medal for Groundbreaker Unfiltered Lager 2014
- Best Swedish Lager (Umeåguiden – one of the biggest blind tests of Swedish lager beer), Gold medal for Groundbreaker Unfiltered Lager 2015
- Gambrinus beer association Swedish championship 2013, Gold medal for Groundbreaker Unfiltered Lager
- Gambrinus beer association Swedish championship 2014, Gold medal for Groundbreaker Unfiltered Lager
- 5 Getingar - Expressen 2015, For Groundbreaker
- 5 Fyrar - Sydsvenska Dagbladet 2014, For The Hoppy Bunny (Easter Beer)
- 10 / 10 - Real Craft Ale - Youtube Beer Judge, For Shipfaced IPA
This and so much more. Swedish National television show "SVT Gomorron" recommended The Hoppy One to their tasty stews as well as The Hoppy Bunny as an Easter Ale. The connoisseur magazines Gourmet and Allt Om Mat has given us great reviews for many different beers. So many bloggers etc that also like our beer.
That being said, we know we do great beer. We just want more people to find us and drink up!
Financial calculations and understanding brewery costs (also attached as document in the documents section)
First we want to explain how brewing works in a very simplified way. And why the cost of this brewery setup does not increase dramatically when our volumes does.
First of all boiling and brewing 5000 liter takes the exact same amount of time as brewing 1000 liters. This takes roughly 6 hours. But if you have a brewing kettle of 1000 liter you obviously have to brew five times to do 5 000 liters. This is why a small kettle isn’t cost effective. And that is why we invest in a large kettle.
After the 6 hour brewing day the beer will be transferred to fermentation tanks. The beer then stays in the fermentation tanks for about 4 weeks. These tanks are very cheap and easy to install.
Since we are investing in a large kettle (5000 L) the only thing we will have to add in order to increase volumes dramatically is more fermentation tanks. One very large fermentation tank is about 150 000 sek. Very cheap in comparasion of scaling up the kettle. Because scaling up a brewing kettle is very expensive for many reasons.
Our brewery offer for the 5000 liter kettle with fermentation tanks to cover for 500 000 liters annual production is roughly 5 000 000 kr.
When we later increase in volume in 2019 the investment will be 4 more tanks. That means about 600 000 kr. That is why, as you can see on the next pages and in the calcs in the pitch, the cost increase 896 952 that particular year. Same thing happens 2021, but then extra staff will also be needed so the cost increases more that year.
We can not predict the future exactly - the outcome will of course not be the exact as this, but based on our knowledge of our own company and study of other craft breweries development we believe our estimates are pretty accurate barring that anything unexpected happens.
2016 RUNNING COSTS WriteOff: 244 950 sek per year Labour : 1 188 000 sek per year Rent: 325 000 sek per year Electricity: 130 000 sek per year Water: 0 (Included in rent) Heating: 180 000 sek per year Extras: 50 000 sek per year Total 2 117 950
RUNNING COSTS 2016-2022 + INVESTMENT (10% increase annually) 2016 - 2 117 950 2017 - 2 329 745 2018 - 2 562 720New fermentation tanks for about 600 000 sek 2019 - 3 459 671 2020 - 3 805 638 New fermentation tanks for about 800 000 sek + extra staff 2021 - 5 137 612 2022 - 6 935 776
MARGINS AND PROFIT Our margin per liter minus product cost such as ingredients, bottles, caps, cases etcis on average around 21 sek.
LITERS PRODUCED AND SOLD 2016 - 2022 (Image below) We have had a steady growth of ≈35% over the years. The trend is that our growth is speeding up - but we can’t rely on that so we calc on 35% but we have also set up a best case scenario in the below graph.
LITERS AND PROFIT AND COSTS (Image below) With the basis of our production forecast and the margins we have per liter as described we can easily calc the profit before the running costs. Looking at this graph it is only a projection of profits before running costs. So the next graph is much more relevant to the case. But this can be interesting to see.
As mentioned, the above graph is not very relevant. But this one below is. In this graph we have subtracted the running costs to the previous graph in order to show the company profite before tax.
As you can see we will be very profitable even with a standard growth rate of 35%.
Please see the Financial Forecast document in the documents section for more detailed images and numbers.
Valuation and dividends
One good thing to mention here before going in deeper is that the money raised will not be spent on consumables or purely on marketing. This will be spent on actual brewing equipment that will last and keep value for a very long time.
When it comes to valuation. This is not our profession - so we have taken in recommendations from different people that are better then us about this. Because there are so many different ways to valuate a company. After this we can just present you all relevant numbers, and make sure you have all the information needed to make your own decision about if you think the investment is for you or not. If you lack some information in order to make a decision or calculate the investment, please email us at [email protected]ewery.com or ask the question in the question segment.
We truly know the swedish craft beer market is on its move - read more about this below.
When it comes to dividends. Our goal is definitely to pay dividends as much as the financials will allow it.
Swedish Craft beer Market
The craft beer market is booming in many countries worldwide but has only relatively recently started to heat up in Sweden. While the number of breweries has increased from 20 in the 1990’s to over 100 today, craft beer is still a comparatively small percentage (approximately 2%) of the overall beer market in Sweden. The good news is that the segment is growing at a high rate with the ale category showing an increase of 20.6% at Systembolaget in 2014. This category has more than double the sales of just 5 years ago. The US in comparison has an 11% craft beer market share and is still maintaining strong 15+% growth rates showing that in Sweden we still have plenty of room to grow. Beer consumption in Sweden is roughly 460 million liters annually, with 120 million of this being folköl, 2.25% - 3.5%. The craft beer portion of this is only about 9 million liters (1.9% market share) and as Sweden is the second largest importer of US Craft beer (12 – 15% of US Craft beer exports in 2014) nearly half of this 9 million liters is from the US. If craft beer sales increase to only 5% of the market that would be a growth of 13.7 million liters of additional craft beer sales. This is an incredible amount of beer, for comparison today some of our larger Swedish craft beer competitors, Oppigårds and Dugges, are producing less than 1 million liters each annually. Our head Brewer, Colin Nordstrom, grew up in California drinking American craft beer and has an extensive background in the alcohol industry. He knows what craft beer drinkers want and isn’t afraid to push the boundaries here in Sweden. Train Station Brewery today is experiencing rapid growth. In 2014 we produced 55,000 liters and are on track today to produce 70,000 liters in 2015, a growth rate of nearly 30%! With recent listings won in Finland we believe we can meet a minimum of a 50% growth rate in 2016 but would not be surprised to see 100%. We are on the verge of huge expansion inside Sweden with the potential to increase our Systembolaget distribution immensely. Today we are in 9 Systembolaget stores but believe we can achieve 20 – 40 by the end of 2016. We are focused on achieving this and with our knowledge of Systembolaget and the market are confident we will.
Why invest in us?
We have already sold around half a million bottles in Sweden, and we are constantly increasing volume. Sure Sweden is today our largest market, but when exclusive hotel chains and importers from other countries want to sell our beer in their country we know there are huge possibility outside of Sweden as well. We are already in Norway and Finland and that is just the start.
Even though our first year was mostly applications to the Swedish government and applications for different certifications we actually made a profit our first year in business. The second year, we made a lot of investments for the future and closing 2014 we also were profitable. This is very rare for a company in growth.
And we are not just two guys with a passion for taste, we are focused business owners. In order to be scalable, we have outsourced almost every part of our daily tasks to be able to focus on what we are good at. This is one of our success factors. Also, spending plenty of time sorting out logistics has been a great advantage in terms of our competition. We have a logistics setup that covers the whole world as well as anyone in Sweden can order as little as 1 or 2 bottles to any Systembolaget store in the country in just a couple of days.
The market potential is huge, and only in Sweden we can see that the craft beer market is way behind the US in terms of market share. We are up for a potential craft beer boom in Sweden. But our market is the world and we know that our potential is huge. As an example, our friend in business Brew Dog reported an annual turnover of 385 million sek in 2014, while its profits were around 64 million.
Of course, we are not there yet. But we know our potential and since we have all we need in terms of logistics and export possibilities in place to scale now, we know it can really take off from here. With the new brewery our margins per sold bottle will also increase making us more profitable per sold product.
We wish to see you on board!
And just to be clear: If you don’t really like beer, buy something else.
Investeraravdraget - Applicable to Swede's only.
(In swedish only, regarding a swedish tax deduction on this investment). Ett nytt så kallat investeraravdrag infördes den 1 december 2013. Det tillämpas på investeringar gjorda efter den 30 november 2013.
Investeraravdraget innebär att fysiska personer som förvärvar andelar i ett företag av mindre storlek i samband med företagets bildande eller vid en nyemission kan få göra avdrag för hälften av betalningen för andelar i inkomstslaget kapital. Avdrag ges med högst 650 000 kronor per person och år, vilket motsvarar förvärv av andelar för 1 300 000 kronor. Investerarnas sammanlagda betalning för andelar i ett och samma företag får uppgå till högst 20 000 000 kronor per år.
Exempel: Företaget Mindre AB erbjuder befintliga aktieägare att teckna nya aktier i företaget för 100 kronor styck. Företaget uppger att alla villkor för investeraravdraget är uppfyllda. Karl tecknar sig för 500 nya aktier, och han betalar 50 000 kronor för dessa.
Investeraravdragets storlek blir 25 000 kronor (hälften av 50 000 kronor), vilket ger en skattereduktion på 7 500 kr (25 000 kr x 30 %).
Denna investering uppfyller alla villkor för att din investering skall vara avdragsgill enligt ovan