Renaissance Brewing

[vorno]

So, I came across this website which is opening soon to the public. Think of it as crowd-funding companies! Anyway, I came across Renaissance and personally I really like their beer!

https://www.snowballeffect.co.nz/renaissance-brewing (https://www.snowballeffect.co.nz/renaissance-brewing)

An interesting concept this website. Not 100% sure if this should be listed here as I am not sure if this will go onto the NZX as opposed to the alternative market.

[Harvey Specter]

So, I came across this website which is opening soon to the public. Think of it as crowd-funding companies! Anyway, I came across Renaissance and personally I really like their beer!

https://www.snowballeffect.co.nz/renaissance-brewing (https://www.snowballeffect.co.nz/renaissance-brewing)

An interesting concept this website. Not 100% sure if this should be listed here as I am not sure if this will go onto the NZX as opposed to the alternative market.Initially it wont be on any market so liquidity will be a major issue. Having said that, I assume they will look to list on the new NZAX if they are successful with their expansion.

[vorno]

Initially it wont be on any market so liquidity will be a major issue. Having said that, I assume they will look to list on the new NZAX if they are successful with their expansion.

Indeed - quoting them:
"No recognised market exists for the shares at present, which means that the shares are likely to be illiquid and unable to be traded easily. Given the recent law changes that enable wider investing from the public in small companies, platforms to provide liquidity to shareholders may emerge in New Zealand. The Renaissance board is committed to looking at these options for shareholder liquidity."

[GTM 3442]

I think there are some parallells with Burger Fuel Worldwide, in that the consumers are likely to be targetted as shareholders. I reckon there are still a few busloads of burger-buyers with the minimum parcel of BFW in a bottom drawer somewhere.

[PJK]

They're brewing good beer - and having a good time.

The offer doc makes for interesting reading - recommended download.

CLIFF NOTES
----------------
1/ They're small - really small - going since 2005 and just $1.5m income.
2/ This pricing of $2 per share means $0.7m issued in this raising - and existing holders valued at $5.0m
3/ They've only just moved into positive assets of 80K (mainly thanks to writing of 137K of shareholder divvies that were reinvested)
4/ Growth is not huge - been about 25% pa and roughly expected to remain same rate.
5/ projecting $3m income / $0.75m EBIT for FY17.

Most interesting part was a comparison table with other beverage producers Renaissance present their gross margin as 43% comparing it to MOA at 17% - it also highlights the extremely high 8 x sales price that 42 Below was flogged to Bacardi for ... ;-)

Most future growth targeted at export (UK, Europe, Asia), but at the same time they note that they can't cut in in Auckland where the preference is for "commercial craft" (craft beer at a cheaper price) which "is not where Renaissance sits".

Honestly, this one feels like a donation rather than an investment. There is not going to be dividends(*) anytime soon, there is no after-market, there is not going to be explosive growth, and a valuation of 3.3 x current sales or 29 x EBITDA for a manufacturing business seems extremely high.

If you want a feel good factor of owning part of a brewery that REALLY is AWARD winning, and getting involved in a tiny company then you might want to take part. I'm vacillating between purchasing 1,000 shares ... or just buying the beer more often as a show of support.

-----

(*) If you buy a minimum 1000 shares at $2,000 then Renaissance will send you a dozen beers each year "FREE" - RRP est $100. That's a 5% ROI I guess, and I do like their beer (when I can find it).

[vorno]

(*) If you buy a minimum 1000 shares at $2,000 then Renaissance will send you a dozen beers each year "FREE" - RRP est $100. That's a 5% ROI I guess, and I do like their beer (when I can find it).

Indeed, really like their beer. Can usually find it at New World (although recently they say they're having trouble getting in more stock) - Could hint towards the real need to expand!

Other stores that have it tend to be Regional Wines and Spirits and Wellington being Wellington basically anywhere decent you go you can find it! (Love the bars there).

If you're into the stronger tastes try get your hands on Renaissance Tribute, imo the best beer/barley wine I have had to date.

DISC: Despite the liquidity issue I have decided to "donate" some money for shares.

[Harvey Specter]

If you want a feel good factor of owning part of a brewery that REALLY is AWARD winning, and getting involved in a tiny company then you might want to take part. I'm vacillating between purchasing 1,000 shares ... or just buying the beer more often as a show of support.


DISC: Despite the liquidity issue I have decided to "donate" some money for shares.That is the way to think about it. I've had a quick look and I think it is overpriced a bit. However, all the money is going into growth, not their back pockets, and there is the potential for future take over based on the reputation of their brand.

[J R Ewing]

Vorno - can you amend the thread title to "brewing" with just the one "e" please :)

[vorno]

Vorno - can you amend the thread title to "brewing" with just the one "e" please :)

What an annoying typo! Cheers!



I think you will get a greater return for your money by drinking their beer than buying shares.

Its too small to cut it commercially - the stock market is littered with tiny niche beer and wine companies that gladly took shareholder money and then went belly up after they realised they were never likely to make a profit. Even GRB on the ASX, (Gage Rd Brewing) which makes money (courtesy of it being the commercial craft beer brewer for Woolworths and other clients) isnt really going anywhere stock price wise as the froth has worn off (haha pun intended). If they were reliant on just brewing their own label they would already have gone under. The return on capital and equity is pitiful.

Craft beer is just the latest fad. Like flavoured cider, premium vodka, and RTDs. Next year it will probably be something else. Most likely tequila - its been popping up a lot lately.

I disagree mate, having tried the beer that is around. Commercial beer such as Tui, Lion Red, Boundary Road...etc cannot touch or come close to some craft beers I've had the pleasure to enjoy! Those who have never tried a craft beer usually do not understand that there are beers which exist for your taste-buds instead of "cheap piss". This doesn't automatically mean that every craft beer is great, there are a couple of awful brewers out there!

The problem tends to be when craft brewers get bought out or go commercial & someone decides to lower the quality and/or speed up the brewing process artificially. So, as long as these guys stick to their game they'll succeed.

As for the likes of flavoured ciders & RTDs - Well lets be honest, they tend to exist for the ladies who do not like the taste of alcohol and prefer a soft-drink!

...I recommend you tour the Wellington bars - they are a shining example craft beer success; They also tend to have very nice décor.

[J R Ewing]

Having a good product is a good place to start though, and Renaissance make some very good beers - the best IMHO.

[winner69]

Its still a fad. Just like a few years back drinking imported beers was all the rage. Every one drank Heineken, Stella, Corona, Millers ... perhaps you are too young to realise that liquor fads and phases come and then go (as the hipsters move on to something trendier).

I dont need to tour the Wellington bars as I've drunk plenty in Melbourne bars - and I hate to tell you this, but the craft beer market is totally saturated over there as every man and his dog now makes one, plus the zillions of imported craft beers that are coming in (perhaps imported craft beers have not yet hit Wellington hence you are still drinking Renaissance?) One bar I went to had a beer fridge with over 100 different local and imported craft beers - perhaps you might fancy a Canadian Alpine beer with a dash of maple, or a El Paso desert beer with a touch of chilli? The market for craft beer is extremely fragmented now and there is a lot of competition - the only way a brewery will be successful is if it goes mainstream and produces enough quantities to be commercially viable. Otherwise its just a hobby for a bunch of guys who like to brew beer (and there are 60 microbreweries in NZ, god knows how many in Australia) - and in this case, a couple of guys who will gladly take your money to continue funding their little hobby. Fast forward a few years from now and you will be lucky to find 2 or 3 craft beer brands left that are still being stocked in the supermarkets and in pub beer fridges. Most of those will be the ones made by the big breweries who have low production costs and good international distribution.

I think the fact that Moa is struggling now is a clear sign the market is flooded and the hipsters have moved on.

Have you ever come across Doss Blockos .....brillantly marketed and the bottle comes in a paper bag. Beer not too bad

I was going to approach East 9th Brewing after collecting my Little World Breweries money to see if thy wanted a partner. Something else came up and I never got around to it

Best meal in Melbourne in recent years was Gingerboys drinking Doss Blockos

But as you say Melbourne awash with all these craft stuff

[Harvey Specter]

but the craft beer market is totally saturated over there as every man and his dog now makes one, plus the zillions of imported craft beers that are coming in (perhaps imported craft beers have not yet hit Wellington hence you are still drinking Renaissance?)mmm - I've heard a rumour Pledgeme, the other platform approved for equity crowdfunding, will also have a craft brewer.

[vorno]

Its still a fad. Just like a few years back drinking imported beers was all the rage. Every one drank Heineken, Stella, Corona, Millers ... perhaps you are too young to realise that liquor fads and phases come and then go (as the hipsters move on to something trendier). ....

....I think the fact that Moa is struggling now is a clear sign the market is flooded and the hipsters have moved on.

Do you drink/enjoy beer?
Moa is not the greatest of beer, personally I even find Macs & Speights to be better. Moa is simply over-rated for what it is and the company has not been handled well from what I have read/interpreted.



...Fast forward a few years from now and you will be lucky to find 2 or 3 craft beer brands left that are still being stocked in the supermarkets and in pub beer fridges. Most of those will be the ones made by the big breweries who have low production costs and good international distribution.

2017 you reckon? I'll take you on a bet ;)

...and I am well versed in the different types of beer on offer, personally my favourite has come from Norway - a company called De Molen Brewery from memory; point is, I believe craft beers are here to stay.

[vorno]

"Big call for small beers. Export demand for New Zealand craft beer is expected to triple over the next decade as Asian consumers develop a taste for boutique brews"

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11311331

[GBHcorp]

mmm - I've heard a rumour Pledgeme, the other platform approved for equity crowdfunding, will also have a craft brewer.

Can you speculate on which brewery this could be?

[Harvey Specter]

The speculation is based on a twitter thread I saw, not inside info.

I note a brewery made them special Green beer for their equity launch so a look at their blog May round out the speculation.

[vorno]

The speculation is based on a twitter thread I saw, not inside info.

I note a brewery made them special Green beer for their equity launch so a look at their blog May round out the speculation.

.. I believe I saw a small 10-20L fermenter called "green something" at Black Dog brewery (from memory) about 5months back. If it is them then I would not recommend proceeding. The only decent beer they do imo is their APA - which is actually quite nice. The others however, not great.

[Harvey Specter]

The speculation is based on a twitter thread I saw, not inside info.

I note a brewery made them special Green beer for their equity launch so a look at their blog May round out the speculation.


.. I believe I saw a small 10-20L fermenter called "green something" at Black Dog brewery (from memory) about 5months back. If it is them then I would not recommend proceeding. The only decent beer they do imo is their APA - which is actually quite nice. The others however, not great.Back on the desktop now. THe blog I was refering to was this : http://blog.pledgeme.co.nz/aint-no-party/#more-2185

It was Yeastie Boys taht made the beer. As I said this is all pure speculation, not inside info.

[Harvey Specter]

On a more related note, Renaissance is over 90% so looks like it will be fully funded by the end of the week. It needs just over $50k to hit its target and after that, it can only accept an extra $100k of overfunding.

So if you want in, start your research quickly as you want the alcohol to wear off before you push invest. ;)

[Harvey Specter]

They've hit their target - only $90k of over funding to go.

[vorno]

Yeasty boys aye! They have some....very unique beers! Like peaty taste? Try their X-rex!