Indeed Brewing Now Selling Growlers

Indeed GrowlerAs a result of the progress made during the last legislative session, Indeed Brewing is selling growlers. Indeed never intended to sell growlers because they planned on meeting the 3,500 bbl limited very early early on in their production plans.

Thanks to the Save the Growler movement effort organized by the Minnesota Brewer’s Association, the 3,500 bbls limit has been upped to 20,000 bbls. Matt Schwandt covered the issue here in Minnesota Growlers Saved For Some, For Now.

Now, If we could fix the universal branding issue, we can leave the growler rules alone for a while.

The SEC’s New General Solicitation Rule: Will it Really Help Breweries Raise Funds Faster?

Infographic-New-SEC-Rules-on-General-Solicitation
Infographic via Angel Investment Network

By Jeffrey C. O’Brien

Of all the legal issues involved with starting a brewery, none is more complicated, cumbersome, time consuming and costly than obtaining equity capital.  That’s due to the requirements – or should I say, restrictions – imposed by federal and state securities laws.

On September 23, 2013, the new Securities and Exchange Commission (“SEC”) rule which lifts its long-standing prohibition on general solicitation and general advertising for certain private securities offerings under Rule 506 of Regulation D goes into effect.  Some have written that finding investors will get easier and pre-launch breweries are looking at updates to their websites to include a pitch for funds. Is the new rule that much of a benefit to issuers, or is the devil in the details? 

Background on Securities Laws

In the aftermath of the 1929 stock market crash and in the midst of the Great Depression, Congress enacted the Securities Act of 1933.  This Act created the SEC as the federal regulatory agency having jurisdiction and oversight over the raising of investment capital.  Under the Act, an issuer must either register its offering with the SEC (this is said to be a “public offering”) or make the offering under one of several exemptions set forth in the Act.  Most small private company offerings are made under exemptions set forth in Regulation D.  Rule 506 is one of the Regulation D offerings and allows an unlimited amount of funds to be raised, provided that the issuer does not engage in general solicitation or general advertising of investors. 

The importance of the prohibition on general solicitation is this:  unless the issuing company or someone with close ties to it knows of any “accredited investors” interested in investing, the issuing company faces a steep uphill climb to realizing its fundraising goal(s).  In the brewery context, experience shows that those most interested in owning part of a brewery are typically “non-accredited”, meaning that they lack the net worth and/or annual income sufficient to qualify as “accredited.”  The process for soliciting these “non-accredited” investors – who the law deems to be unsophisticated and entitled to greater disclosures and protection – is complicated and expensive…unless the SEC ever creates regulations giving effect to the crowdfunding provisions of last year’s JOBS Act.

The New Rule 506(c)

The new rule creates another means of raising funds from accredited investors under Rule 506.  The “old” rule – whereby no general solicitation is made – is now found as Rule 506(b).  New Rule 506(c) allows issuers to engage in general solicitation and general advertising to market their offerings, so long as: (1) all purchasers of the securities are accredited investors; (2) the issuer takes “reasonable steps to verify” that the purchasers of the securities are accredited investors; and (3) all terms and conditions of Rules 501, 502(a) and 502(d) are satisfied.

“Reasonable steps to verify” is the key verbiage of this new so-called “easier” way to raise funds.   Under current Rule 506 offerings, typically the issuer verifies accredited investor status via a check-off box in its subscription agreement.  That, however, is not enough under Rule 506(c).  An issuer looking to engage in general solicitation to find investors under Rule 506(c) is going to have to review tax returns, bank statements, personal financial statements, or receive a written opinion from an attorney, CPA or financial advisor.  This is a cumbersome task that goes well beyond finding the right location, determining what to name your brewery and beers and where to source your raw materials from.

In short, the wisest course of action, in my opinion, when it comes to the new Rule 506(c) is to proceed as if it does not exist.  The 506(b) offering, while restricting an issuing brewery’s ability to cast a wide net for equity investors, remains far simpler to comply with and less fraught with potential liability for the brewery and its professional advisors.

Reprinted with Permission

Fulton to Build Another Brewery in Minneapolis

Fulton recently announced that they are expanding their brewing capacity with an additional brewery in NE Minneapolis. The new brewing facility will allow the North Loop neighborhood brewers to finally have their beer produced out of their own facilities. The new brewery will not have a taproom, as it is illegal under current Minnesota laws. Production is scheduled to begin the new brewery in late 2014, and it will give the Minnesota brewers the ability to push their distribution beyond its current Twin Cities metro limitations.

Checkout the Fulton website for full details.

Kramarczuk’s Kielbasa Fest has a special new Surly beer: Dampfbier

This Friday, September 6 and Saturday, September 7 is the 4th Annual Kramarczuk’s Sausage Co Kielbasa Fest (http://kramarczuk.com/entertainment/events/). This year, Kramarczuk’s will receive a proclamation from the City of Minneapolis proclaiming the day, “Kielbasa Day,” in Minneapolis.

Dampfbier 8_28b on white
Artist: Michael Berglund

In addition, Surly Brewing Co has created a special new beer to be served at Kielbasa Fest Friday and Saturday—Dampfbier, a German style steam beer that’s traditional to the region that the Kramarczuk’s food and family hails from. This is the first time the beer will be tapped! It will pour both days at Kielbasa Fest:

Surly Dampfbier
A lesser known style of German ale once popular and brewed on the Germany/Czech border.
Brewed with 100% malted barley and fermented (warm) with a traditional Bavarian (wheat) Hefe-Weizen yeast, this is the German equivalent of a “Steam” beer.
Hazy yellow in color and medium bodied with flavors of toasted bread, cloves and banana’s.
ABV 5.3%
SRM 4.5
IBU 12

Location

Parking lot at Kramarczuk Sausage Company
215 East Hennepin Ave.
Minneapolis, MN 55414

General Information

4th Annual Kramarczuk’s Kielbasa Festival 2013
Presented by Kramarczuk Sausage Co.
“Meat Us In Nordeast”

Live Music & Family Entertainment

Kramarczuk’s Street Food
Local & European Beers on Tap

Friday, September 6 5 – 10 p.m.
Saturday, September 7 11 a.m. – 10 p.m.

3rd Annual Nordeast Big River Brew Fest

The 3rd Annual Nordeast Big River Brew Fest will be on Saturday October 19th, 1:00-4:00pm at the Grain Belt Bottling House on 79 13th Avenue NE, MPLS.  The festival will be indoors this year, so rain will not be an issue.  General information and online tickets can be found here.  If the internet isn’t your thing, you can also buy tickets at North Loop Liquor downtown MPLS.  Tickets are a steal at $25 in advance, and $30 at the door.  The brewery list currently in the works, and an in-progress list can be found online.  All proceeds from the Fest benefit the East Side Neighborhood Services (ESNS).

The Nordeast Brewers Alliance is holding it’s 2nd annual BJCP competition in conjunction with the beer fest.  The Nordeast Big River HBC registration opened up on August 24 and runs till September 28, or until 400 entries are logged.  It’s a beer only competition, but has two additional categories: American Wild Ale and 100% Brett.  We want the funky stuff!  Registration and more info can be found at nordeasthbc.brewcompetition.com.  We still need judges and stewards to help out on October 12 and 13.  Winners will be announced on October 19th at the Brew Fest.  Chop & Brew also filmed a promo video for the competition.

Meet Lake Monster Brewing

Lake Monster BrewingThe brainchild of Matt Zanetti, Matt Lange, and Jeremy Maynor, Lake Monster Brewing is a new brewing company based in Minneapolis.

The guys all met about a year and a half ago when Lange was introduced by a mutual friend. Zanetti and Maynor had been working on brewery plans for about 6 months when a friend mentioned that he knew a guy that brews beer. Lange he was introduced to the pair, and they turned out to be a good match and fast friends. The men love beer, of course, but they also had the same values and similar goals. Lange had just put his plans to open a distillery on hold, and he was looking for a new adventure. The guys went to work developing a business plan.

After months of planning, inspections, licensing, and just plain old hard work the Lake Monster Brewing is ready for launch. The have built a brand that feels very Minnesotan. The logos are done in pen and ink with watercolor by local artist, Jeff Nelson. So far, each label has a nautical theme that ties into the brand quite well. With 10,000 lakes in Minnesota a beer brand named after a mythical lake monster makes sense and is just fun.

Lake Monster BrewingMarketing and clever branding alone can’t sell beer though. Well, maybe it can, but it shouldn’t. Regardless, the guys at Lake Monster are sure the beer will stand on its own as a quality product. For the time being the beer is being brewing in Black River Falls, WI under Lange’s supervision. Lange earned his brewing stripes working as an assistant brewer at Ale Asylum, in Madison Wisconsin. He will be using his knowledge to make sure his creations come out exacting standards. He is in the brewhouse frequently, doing everything from checking the quality of ingredients to tossing in hops.Lake Monster Brewing

Lake Monster will start out self distributing their first beers, a Czech Pils, and an IPA across the metro. They already have a few draft locations secured, and they are hoping to get their beer into customers glasses by the middle of September. Bottles will likely make their way into stores in a few months. If their wildest dreams come true, they are hoping to sell 1,500 bbls during the next year while they build out their new brewery.

Lake Monster Brewing

CORRECTION: Lange was introduced to Maynor and Zanetti by a mutual friend. Lange was not introduced to the company by Maynor, as was previously stated.

Beer of the past – Yoerg’s Brewery

yoergH02In the last couple years Minnesota has had a beer brewing explosion and in some ways a rebirth. Most Minnesota natives only know of the bigger breweries of the past Hamm’s, Schmidt and Schell’s. Of those three only one still is brewed in Minnesota and the others have been bought up and moved out of state. There were also many other smaller breweries throughout the Twin Cities and the state of the early 1800’s and 1900’s that have also closed their doors for good and faded away into history. I’d like to give light to the ones that came before us and paved the way for the modern beer age which is upon us now.

In this edition I’ll start with Minnesota’s first commercial brewer; and that man was Anthony Yoerg. Born in 1816, Yoerg was born in real beer country, Bavaria Germany. He was trained as a brewer in Bavaria and moved to the United States when he was 29. He jumped around the country a little before landing in St Paul in 1848.

By the following year, Yoerg was already up and brewing in the area behind the Eagle Street Grille where he could use the bluffs to store his beer in which it was famously referred to as “Cave-Aged”. By the time 1871 came around his beer was in such demand that the brewery was getting too cramped and he needed to relocate. Finding a new location was a simple as looking across the river.

yoergH01The new brewery was built on the corner of St. Paul’s Ohio and Ethel streets. Here Yoerg had the perfect 47 degree climate for the storage and aging of the beer and more than enough room if needed for any future expansion of the brewery. Soon his new brewery was producing up to 50 barrels of beer a day and things were looking up for Yoerg and his crew.

By 1880 the brewery had entered “the modern age” and installed steam power. The work crew consisted of around 20 workers including the brewmaster Joseph Slappi… I could make a joke here but I won’t. In the next decade the styles were expanded by offering Pilsner (of course), Lager and Culmbacher, (not exactly sure what style that is but Kulmbacher is currently a beer in Germany which is made in…Kulmbach). On a side note Yoerg had a slogan for their Royal Export beer and that was “The Queen of beers”…yeah I’m not sure what was going on in those caves but those guys spent wayyy too much time together haha. Also, is this where Budweiser got the inspiration for their slogan?

yoergbeerSadly, in July of 1896 Anthony Yoerg died. After which Yoerg’s five sons took over the business and continued on. Brewery operations continued until what we all know as the biggest and worst idea ever, in 1922 Prohibition changed everything. The brewery was now forced to change what they had down pat and start in a different direction if they expected to survive. Other breweries decided to go the soda route but Yoerg decided to go the dairy route.

The Yoerg Milk Company was born, and yes it was as bad as it sounds. According to records the Yoerg’s were unable to have any competition against the already established dairy companies in the metro area. Amazingly enough they struggled through prohibition and in 1933 the Yoerg beer company was back.

After prohibition ended it seemed like the Yoerg brewery missed the starting gun and soon Hamm’s and Schmidt were leaving them in the dust. They continued their brewing style and also continued to use the caves in place of the refrigeration style of what others were using in which also inhibited them from any long distance shipping, too.

The times were changing, but the Yoerg’s weren’t. They finally came to admit defeat after financial loses continued and there were no options for expanding to what was the modern day advances in the industry and in 1952 the Yoerg brewery closed it’s doors for the last time. To this day the Yoerg name is still forever associated with St Paul’s beer roots.

Beer Consumers in Minnesota

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