Three Sisters Brewery

By Joseph Emans

PledgeMe.Investment

Food,



NZ $520,000 pledged


174 people pledged


Closed


NZ $350,000 minimum target


Min

NZ$350,000

Max

NZ$1,200,000

100 100% Complete

This campaign was successful and closed on 24/04/2022 at 3:00 PM.

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About

Three Sisters Brewery

Letter from the Founders

Hi. Joe here - my wife Sarah is busy crunching numbers. Officially, I have to say a few words so you know we’re good people to have a pint with.

Where to “begin” this? I grew up next door to my Grandad Ernie’s pub, The Hand & Flowers, in a brewery town in the UK. Well, except for when my folks ran the Ferryboat Inn further up the Thames, and I lived upstairs.

Sarah comes from Koblenz, Germany, where beer is part of the furniture… Oktoberfest or not! Beer is in our DNA.

We came to NZ because I landed an engineering job. But after a whiff of the homebrew culture here, I got a starter kit with my mates Ben and Charlie. Maybe it was a dare, but the first original recipe we crafted was entered into the Taranaki Society of Beer Advocates Home Brew competition. Cheers, we won!

I decided to go all in on this “hobby”, so in 2017 Sarah and I started Three Sisters, a toast to our three daughters and our love of the Tongapōrutu region of Taranaki. A 50L pot in our basement quickly became a squeeze, and as the first awards started rolling in, we bumped capacity up to 300L.

In December 2020 we officially embraced the family tradition, turning the historic TSB bank in New Plymouth into a bar and brewery. Capacity tripled, thanks to the PledgeMe crowd whose polaroids now adorn our walls.

We won the Brewers Guild of New Zealand Champion Micro Brewery award in October, but even without it, we’d already exceeded our new brewing capacity! With so much unfulfilled demand, the time has come to raise the bar again and max out our new home.

So why you? Our brewing philosophy is all about real people and stories… those happenstance connections during a round of beer are mirrored in the way we formulate. We love the serendipity of strangers becoming friends, and I reckon a great craft beer is equal parts engineering and art. We start with an interesting story, and pair ingredients and artwork to it.

We invite you to be part of the next story, and to make us part of yours.

Joe and Sarah

 

 

Drinking Buddies

Joe Emans

Joe has been running Three Sisters since it started up in 2017 and has grown the business to where it is today. He is a self-taught brewer, part-time artist, and glass half full kinda guy. While he’s slightly mad about craft beer now, his background isn’t so grassroots. He has a first-class Master of Mechanical Engineering degree from the University of Aberdeen and spent over 20 years in the energy industries before packing it up for the world of entrebrewneurship. The last 14 years of his engineering career included management of projects and engineering departments in the UK, the Middle East and New Zealand, managing teams up to 100 people. Joe project managed the brewery expansions and performed part of the installation.

Sarah Markert-Emans

Sarah supports the business by keeping the numbers tight and the books juggled (audited by Tandem Group in New Zealand), but is learning to analyse people, too… studying for a Master’s Degree in Psychology at Massey University. She also helps with some of the brewing recipes.

Ameya Vajpai

Ameya is our Sales and Marketing Manager, and possibly about to become a good mate of yours if you don’t already know him. People like him, and so do we. Ameya joined us from Woodstock Brewing in Hokitika. He has several qualifications in the hospitality industry and is a former ‘Employee of the Year’ at the Copthorne Hotel in Queenstown.

Marian Angeles

Marian is the Marie Kondo of our venue and runs our bar. She sparks joy everywhere, keeps things shipshape and timely, in fact, we’re not sure if there is anything she can’t do? She has extensive hospitality experience and has managed venues in Auckland and Wellington, and also coaches hospitality in our local area.

 

Market Opportunity

The craft beer industry in New Zealand has grown rapidly over the last ten years and shows no signs of slowing down. This has been driven be a general trend towards crafted batch-produced beverages and away from mass production of limited beverage styles. Comparing data from the New Zealand Institute of Economic Research’s publications for the New Zealand Brewers Association over the last three years indicates an acceleration of craft beer consumption as it moves from a niche product into the mainstream.

Three Sisters believes that consumers are increasingly seeking the variety that craft beer provides. Three Sisters has so far produced over 60 different beers and continues to produce new beers at a rate of 2-3 per month. In fact, Three Sisters thrives on crafting new and exciting beer for our followers.

 

 

Growth Plan

Three Sisters has a long-term growth plan, with a phased approach.

We currently have significant unfulfilled demand, which we intend to meet through maximising our current iconic location in New Plymouth. We have room in our current venue, as well as sufficient staff and most of the infrastructure to increase production capacity by 3.5 times. Our minimum share offer will allow us to replace our 600L brewhouse with a 1200L one, and grow our total fermentation capacity from 1800L to over 6000L. It will also allow us to supplement our bottling system (which we’ll retain for specialty beers) with a state of the art canning line, which will satisfy a latent demand we have for this packaging format.

Beyond the minimum share offer, additional improvements to our current venue will also include converting the old bank vault into a beer chiller, which will increase our chilled storage capacity, adding an additional ten taps to the bar and booth seating for improved customer experience. We also have planned an array of brewing gadgets to help maintain our great beer quality. There is also the current option to expand to and fully fit out the neighbouring building to establish Three Sisters Brewery’s flagship location as a truly destination experience.

We do not intend to stop there of course, the second phase of our plan which is being actively developed, is to add an additional brewing location in Taranaki, currently planned for the financial year 2024. This location will provide the ability to seamlessly continue our expansion should we hit capacity again at the old bank location, and provide room to expand well into the future and to allow us to exploit export markets.

 

 

Financials

Revenue growth has been organic since we started up in 2017.

The quality of our beer, and consistent awards we have won, have led to significant consumer pull through. We have brewed flat out at full capacity since startup, and each expansion has led to a short-term stock build before we’ve hit supply constraints again. We strongly expect this to continue with the next expansion as we have a lot of unfulfilled and latent demand for our beer.

Our gross profit margin has been strong, since we have brewed every single beer in-house, and will continue to do so for the foreseeable future. Gross margin has increased recently as we commenced our hospitality operations.

Going forward, we expect gross margin to reduce slightly, as we focus more on wholesale markets. We see considerable economies of scale going forward as we do initially intend to maximise our current lease, and utilise our existing staff. Our philosophy to date has been to employ versatile staff and train them in multiple roles; this has given us the ability to scale operations without any additional staff appointments.

The additional gross margin we aim to make from increased wholesale revenue should add to the bottom line. We are anticipating that the increased production from this investment comes online in August 2022. In order to maintain growth we have included a further investment and expansion during FYE2024, with commissioning of an additional brewing location in Oct 2023. This is reflected in the increased assets in that year and growth thereafter.

Cash will be available for reinvestment in the business from FYE2023 onwards. It is anticipated that as of FYE2022 there will be related party loans to the shareholders of approximately $362k. The board reserves the right to refinance this debt into bank term debt at a future date.

 

 

Share Offer

Offer price per share - $500

Shares on offer - 2,400 shares which constitute 20% of the company in a mixture of Class A and Class B shares.

Class A – Can vote on special authorisations as defined in the shareholder’s agreement

Class B – No voting rights

Each share has the same rights to share in the dividends of the company, but there are different voting rights, conditions, and limitations between the classes and shareholder rewards levels (all of which are at the discretion of the Three Sisters board of directors).

Capitalisation Table

Investor Class Pre-offer shares % Ownership pre-offer Post-offer shares % Ownership post-offer*
Joseph Emans and Sarah Markert-Emans Class A 9,600 100% 9,600 80%
2022 new investors Mix of Class A and B 0 0 2,400 20%
           
  TOTALS 9,600 100% 12,000 100%

* Assumes offer is fully subscribed

Please note that the capital raised in this investment round will not go toward repayment of directors' loans.

 

Valuation

Prefunding valuation of $4.8m;  Post funding valuation of $6m (fully subscribed)

The valuation of Three Sisters Brewery was undertaken by the current shareholders. The valuation has been calculated using the ‘multiple of revenue’ method. This method has been a common valuation ratio used previously by growing craft breweries when raising capital from the market.

The current shareholders are comfortable that a multiple of 7.7 times the 2022 financial year estimated revenue is a fair market value, based on the growth potential of the business in today’s market. The shareholders feel that there is added justification for this valuation based on its diversification into the hospitality industry and Champion Micro Brewery status. This is further justified by the below Comparative Analysis of recent market transactions in the same industry.

 

 

Risks and Mitigations

BEER QUALITY – the risk of a decline in beer quality from moving to new equipment

Joe has brewed on a variety of equipment as Three Sisters has grown without any drop in quality. If the beer is not up to scratch, it will not be released to market. Quality is of the utmost importance.

CASHFLOW – the risk of not having enough cashflow or working capital

to meet obligations, due to either poor sales or late paying customers

We have good systems to manage and mitigate the risk from late paying customers and we also have a credit policy that limits our exposure to individual customers.

INCREASED COMPETITION

– the risk of the market significantly heating up with increased competition

Three Sisters has only experienced increasing demand for their products, we focus on what we do best, making great beers with authenticity and exceptional quality.

KEY PERSONNEL – the

risk of losing key personnel

A key strategy at Three Sisters is to upskill and multi-skill our staff so that everyone is capable of swiftly filling gaps left by other personnel. This includes front-of-house, back-of-house and brewery roles, as well as packaging and distribution.

PROFITABILITY – the risk of not operating profitably

Our strategy is to grow production and gross margins whilst minimising additional overheads, such as leases and additional staff. All increases in sales will add to the bottom line.

PROJECT DELAYS – the risk of the new brewery build being delayed by unforeseen circumstances

We are looking at multiple options, including local fabrication of brewery equipment. Joe is a skilled and experienced project manager.

DOWNTURN IN CRAFT BEER

CONSUMPTION - The risk that demand for craft beer will decline

We see the risk of a downturn in craft beer consumption being a very low risk based on the way more developed craft beer markets around the world have continued to grow, and also based on the ongoing growth in New Zealand’s craft beer industry which actually appears to be accelerating.

LOSS OF SUPPLY - risk

of not having beer to sell

All of our brewery expansions have hit capacity shortly after commissioning, but we have a growth plan which allows for continued growth for at least 5 years.

 

 

 

Warning Statement about Crowdfunding

PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by Three Sisters Brewery Ltd. will only be made available for acceptance through the PledgeMe website. Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks. You may lose your entire investment, and must be in a position to bear this risk without undue hardship. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. Please ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

A Note from PledgeMe

We have completed Equifax checks on Three Sisters Brewery and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

Updates 4

We did it!

26/04/2022 at 12:24 PM

Hi Everyone!!!

Well we've finally finished celebrating and can take some time to thank everyone who has pledged on this campaign and who are now shareholders in Three Sisters Brewery!

It's great to have you on board and we feel truly privileged that you have put your faith in us.

We have some great plans and the ideas just don't stop coming, we are so excited right now, it is just too awesome.

We will soon be adding everyone to our share register via the 'Orchestra' platform, where you'll be able to go in and see the status of your shareholding.  Expect some emails from Orchestra in the next couple of weeks.  

We're now working through all the pledges and processing payments etc., we will get on to organising the perks straightaway and you'll also get some communication about that once we've got it sorted.

Thanks again, and we look forward to seeing you in the bar, or further afield, in the near future!

Cheers,

Joe and Sarah.

We made it!

11/04/2022 at 8:56 AM

🥳🎉❤️ Wow! We've hit our minimum target. We'd like to take the opportunity to thank all the new shareholders that are coming on board for the journey!

There's still more time to pledge so please keep spreading the word. 

Better get organising them perks for you....

So close...

10/04/2022 at 2:08 PM

Another massive thank you to our Pledgers / Supporters!!

Two weeks to go and we’re at 96% of our target, who'll be the one to get us over the line??

If you are you’ll be the first to learn the Three Sisters secret shareholder handshake!

We’ve got some great ideas to expand into the neighbouring property (and reunite the two sides of the old TSB Bank building), with a ‘brewing tutorial’ / experimental area where we’ll get really creative and let the public come and brew with us, and a courtyard at the rear to make the most of sunny days like today!

What's in the fermenters right now? Well there's fresh batches of Oakura Blonde and Paper Tiger IPA on the way, our fresh hop red ale ‘Is it Reddy Yet?’ and a new Medusa and El Dorado IPA.

70% There!

07/04/2022 at 7:11 PM

Hey Team!

We'd like to take the opportunity to thank you all for your support!

We've raised over 70% towards our minimum target and really appreciate it.

We've still got a little way to go, so please keep spreading the word!

We really need more production... our next three beers have almost completely sold out before we can get them out of the fermenters!  Really looking forward to our fresh hop beer and Hopstock Festival in Wellington at end of April.

All the best!

Joe & Sarah.

 

 

    Details

    Offer Details

    Current Valuation 4,800,000
    Raise Minimum 350,000
    Raise Maximum 1,200,000
    Share Price 500.00
    Minimum Pledge 500.00
    Maximum Shares Offered 2,400
    Explanation of valuation:

    The valuation has been calculated using the ‘multiple of revenue’ method. This method has been a common valuation ratio used previously by growing craft breweries when raising capital from the market.

    Financial Summary

    Prev Year Current Year Est. FY 2024 Est. FY 2025
    Revenue NZ $283,000 NZ $623,000 NZ $1,321,000 NZ $1,936,000
    Operating Expenses NZ $208,000 NZ $542,000 NZ $512,000 NZ $619,000
    EBITDA -NZ $28,000 -NZ $67,000 NZ $375,000 NZ $519,000
    Net Profit -NZ $96,000 -NZ $100,000 NZ $234,000 NZ $296,000

    Company Details

    Company Name: Three Sisters Brewery Ltd

    Company Number: 6267851

    Company Documents

    Documents no longer available to download, as this campaign has closed

    Director Details

    Name Role Profile URL Invested?
    Joseph Emans Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6267851/directors
    Sarah Markert-Emans Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6267851/directors

    Questions 10

    Ask a Question (You must login to ask a question)


    Craft beer is normally expensive if the economy has a downturn can and will you make a lower price beer.

    Posted on 10-04-2022 by Cameron Brown

    Hi,
    It is difficult to say, because there are so many possibilities of what can occur in the market place. We are looking at the option of a range of non-alcoholic root beers and other craft beverages to diversify our offering. This should help us adapt to changing market conditions.

    Answered on 10-04-2022 by Joseph Emans


    I don't live locally, so how would I get my engraved beer glass?

    Posted on 06-04-2022 by Hannele

    Hi, we can certainly ship this to you if you want (free postage). However, it is nice to drink from the bigger glass in the bar. You could of course bring it with you when you come!

    Answered on 06-04-2022 by Joseph Emans


    Hi, Are your FYE based on the tax year 31st March and so your sales for FYE 2022 will be close to 623K as projected? Also why is the excise higher in 2020 compared to 2021 even though the sales much higher.

    Posted on 30-03-2022 by StephenRogers

    Hi, we haven't finalised accounts for FY2022 but yes we should be +/- 5% of that figure. In FY2020 we were purely selling wholesale, and a larger portion of higher alcohol beers. We opened our brewpub towards the end of FY2021 at higher gross margins and a larger proportion of lower alcohol beers for the bar.

    Answered on 30-03-2022 by Joseph Emans


    I know its right - the question was what was the thinking ;-)

    Posted on 29-03-2022 by Dave Smith

    Hi, well we had to set a cut off at a level where we thought investors would want to be involved in decision making without significantly over complicating the decision making process and we considered that that was an appropriate level.

    Answered on 29-03-2022 by Joseph Emans


    What is the thinking behind the Class A and B shares - essentially if someone invested 20,000 they end up with no control over the rights or future of that investment

    Posted on 29-03-2022 by Dave Smith

    Hi, yes that's correct. Voting rights are available at $50,000 and above.

    Answered on 29-03-2022 by Joseph Emans


    I would be interested to hear sales and profit figures? I see you value the business at 6m currently (1.2m for 20% of it), where does that come from. Thanks

    Posted on 27-03-2022 by Joel Mate

    Hi, please download the information memorandum, as all this information is contained there. But essentially the valuation is ascertained by comparison with other similar industry transactions. Hope that helps. Cheers, Joe.

    Answered on 27-03-2022 by Joseph Emans


    Assuming profits are reinvested into the company for future growth , At what point would you expect dividend returns to share holders

    Posted on 26-03-2022 by Glenn Butters

    Hi, while there are opportunities for growth it certainly makes sense to reinvest profits, and certainly for the next three years we feel the opportunities for growth are very strong. Thereafter a mix of reinvestment and dividend returns might be suitable.

    Answered on 26-03-2022 by Joseph Emans


    Question: if you bought in , how do you sell your shares later on should you decide to ?

    Any plans to sell beer to supermarkets or bottle shops in near future ?

    Posted on 26-03-2022 by Glenn Butters

    Hi, we are investigating secondary market options for this, and we understand that PledgeMe is developing a platform that will allow this. We will also be keen to consider buying back the shares from you in future.
    We are already in bottleshops throughout the country, but the increased production will allow us to expand our stockists, including supermarkets (especially in can format)

    Answered on 26-03-2022 by Joseph Emans


    Hi there, can you break down the total annual volume expectation for the brewery after the capital raise? Also, are you intending to use funds from your planned capital raise to repay any loans provided to the company by the founders?
    Cheers!

    Posted on 25-03-2022 by Callum Stewart

    Hi, yes sure. Our annual volume expectation after capital raise, installation and commissioning will be approx. 120,000 litres/annum, around 60% in cans and the rest in kegs. We are not intending to use any of the funds to repay loans provided by the founders. However, we may at some point in the future convert the founder's loans into bank debt.

    Answered on 25-03-2022 by Joseph Emans


    Hi
    I note the equity increase between FY23 and FY24 from $350k (min cap raise) to circa $1.5m - is there a second cap raise planned?
    Thanks

    Posted on 24-03-2022 by David Heald

    Hi, yes that is correct. We are planning a second capital raise in that financial year.

    Answered on 25-03-2022 by Joseph Emans

    Pledgers 174

    Varghese Chakko Nettikaden
    2022-04-08 22:43:53 +1200
    Gonzalo Millan
    2022-04-08 21:30:59 +1200
    Veronika Schmidt
    2022-04-08 21:11:27 +1200

    "Would love to be at the bar more often! Open one in Auckland? I hope I can get my Birthday Beer delivered, bit far to come by for one."

    Karina Huang
    2022-04-08 20:35:27 +1200
    Charlie Nicholson
    2022-04-08 19:36:50 +1200
    Stephen Maynard
    2022-04-08 12:45:32 +1200

    "Looks like a great company and look forward to visiting next time I am in New Plymouth, Good luck team"

    Robert Veitch
    2022-04-08 12:27:51 +1200

    "Great work team, Cant wait to come and have a beer at the bar"

    Karl Laird
    2022-04-08 10:13:31 +1200
    Darryn Soper
    2022-04-08 09:16:51 +1200
    Bruce Lawrence
    2022-04-07 21:27:25 +1200

    "Good luck guys. Will give me an excuse to get down that way to visit :)"

    Richard Mudge
    2022-04-07 19:53:38 +1200
    Craig Williamson
    2022-04-07 16:12:47 +1200
    Liam ronald
    2022-04-07 08:41:29 +1200
    Hannele
    2022-04-06 14:44:23 +1200
    Richard Sumner
    2022-04-06 13:04:00 +1200
    Michael
    2022-04-05 10:45:49 +1200

    "Go get it guys !"

    Justin Wilson
    2022-04-04 15:44:41 +1200
    Louise Quinn
    2022-04-04 08:55:35 +1200
    Danielle Taylor
    2022-04-03 20:47:22 +1200
    Ashly Kumar
    2022-04-01 14:12:02 +1300

    "Thank you and good luck 😊"

    Andrew
    2022-04-01 08:43:50 +1300
    Dope Honey Limited
    2022-03-30 12:26:16 +1300
    Thi Ngoc Diem Ho
    2022-03-29 23:07:10 +1300
    Simon Ellingham
    2022-03-29 14:58:41 +1300

    "Congrats on this pledge and heres hoping you achieve the min amount. Bottoms up.."

    Karen Johnson
    2022-03-28 21:48:00 +1300

    "Awesome - good luck "

    Soraya
    2022-03-28 10:37:34 +1300
    Rhys Humphries
    2022-03-28 09:16:38 +1300

    "Good luck!"

    Brad Davison
    2022-03-28 07:01:30 +1300

    "Let's go!"

    Sajith Chittezhath
    2022-03-27 20:28:37 +1300

    "Please confirm through SMS or call too."

    Julie
    2022-03-27 19:01:43 +1300

    Three Sisters Brewery

    Letter from the Founders

    Hi. Joe here - my wife Sarah is busy crunching numbers. Officially, I have to say a few words so you know we’re good people to have a pint with.

    Where to “begin” this? I grew up next door to my Grandad Ernie’s pub, The Hand & Flowers, in a brewery town in the UK. Well, except for when my folks ran the Ferryboat Inn further up the Thames, and I lived upstairs.

    Sarah comes from Koblenz, Germany, where beer is part of the furniture… Oktoberfest or not! Beer is in our DNA.

    We came to NZ because I landed an engineering job. But after a whiff of the homebrew culture here, I got a starter kit with my mates Ben and Charlie. Maybe it was a dare, but the first original recipe we crafted was entered into the Taranaki Society of Beer Advocates Home Brew competition. Cheers, we won!

    I decided to go all in on this “hobby”, so in 2017 Sarah and I started Three Sisters, a toast to our three daughters and our love of the Tongapōrutu region of Taranaki. A 50L pot in our basement quickly became a squeeze, and as the first awards started rolling in, we bumped capacity up to 300L.

    In December 2020 we officially embraced the family tradition, turning the historic TSB bank in New Plymouth into a bar and brewery. Capacity tripled, thanks to the PledgeMe crowd whose polaroids now adorn our walls.

    We won the Brewers Guild of New Zealand Champion Micro Brewery award in October, but even without it, we’d already exceeded our new brewing capacity! With so much unfulfilled demand, the time has come to raise the bar again and max out our new home.

    So why you? Our brewing philosophy is all about real people and stories… those happenstance connections during a round of beer are mirrored in the way we formulate. We love the serendipity of strangers becoming friends, and I reckon a great craft beer is equal parts engineering and art. We start with an interesting story, and pair ingredients and artwork to it.

    We invite you to be part of the next story, and to make us part of yours.

    Joe and Sarah

     

     

    Drinking Buddies

    Joe Emans

    Joe has been running Three Sisters since it started up in 2017 and has grown the business to where it is today. He is a self-taught brewer, part-time artist, and glass half full kinda guy. While he’s slightly mad about craft beer now, his background isn’t so grassroots. He has a first-class Master of Mechanical Engineering degree from the University of Aberdeen and spent over 20 years in the energy industries before packing it up for the world of entrebrewneurship. The last 14 years of his engineering career included management of projects and engineering departments in the UK, the Middle East and New Zealand, managing teams up to 100 people. Joe project managed the brewery expansions and performed part of the installation.

    Sarah Markert-Emans

    Sarah supports the business by keeping the numbers tight and the books juggled (audited by Tandem Group in New Zealand), but is learning to analyse people, too… studying for a Master’s Degree in Psychology at Massey University. She also helps with some of the brewing recipes.

    Ameya Vajpai

    Ameya is our Sales and Marketing Manager, and possibly about to become a good mate of yours if you don’t already know him. People like him, and so do we. Ameya joined us from Woodstock Brewing in Hokitika. He has several qualifications in the hospitality industry and is a former ‘Employee of the Year’ at the Copthorne Hotel in Queenstown.

    Marian Angeles

    Marian is the Marie Kondo of our venue and runs our bar. She sparks joy everywhere, keeps things shipshape and timely, in fact, we’re not sure if there is anything she can’t do? She has extensive hospitality experience and has managed venues in Auckland and Wellington, and also coaches hospitality in our local area.

     

    Market Opportunity

    The craft beer industry in New Zealand has grown rapidly over the last ten years and shows no signs of slowing down. This has been driven be a general trend towards crafted batch-produced beverages and away from mass production of limited beverage styles. Comparing data from the New Zealand Institute of Economic Research’s publications for the New Zealand Brewers Association over the last three years indicates an acceleration of craft beer consumption as it moves from a niche product into the mainstream.

    Three Sisters believes that consumers are increasingly seeking the variety that craft beer provides. Three Sisters has so far produced over 60 different beers and continues to produce new beers at a rate of 2-3 per month. In fact, Three Sisters thrives on crafting new and exciting beer for our followers.

     

     

    Growth Plan

    Three Sisters has a long-term growth plan, with a phased approach.

    We currently have significant unfulfilled demand, which we intend to meet through maximising our current iconic location in New Plymouth. We have room in our current venue, as well as sufficient staff and most of the infrastructure to increase production capacity by 3.5 times. Our minimum share offer will allow us to replace our 600L brewhouse with a 1200L one, and grow our total fermentation capacity from 1800L to over 6000L. It will also allow us to supplement our bottling system (which we’ll retain for specialty beers) with a state of the art canning line, which will satisfy a latent demand we have for this packaging format.

    Beyond the minimum share offer, additional improvements to our current venue will also include converting the old bank vault into a beer chiller, which will increase our chilled storage capacity, adding an additional ten taps to the bar and booth seating for improved customer experience. We also have planned an array of brewing gadgets to help maintain our great beer quality. There is also the current option to expand to and fully fit out the neighbouring building to establish Three Sisters Brewery’s flagship location as a truly destination experience.

    We do not intend to stop there of course, the second phase of our plan which is being actively developed, is to add an additional brewing location in Taranaki, currently planned for the financial year 2024. This location will provide the ability to seamlessly continue our expansion should we hit capacity again at the old bank location, and provide room to expand well into the future and to allow us to exploit export markets.

     

     

    Financials

    Revenue growth has been organic since we started up in 2017.

    The quality of our beer, and consistent awards we have won, have led to significant consumer pull through. We have brewed flat out at full capacity since startup, and each expansion has led to a short-term stock build before we’ve hit supply constraints again. We strongly expect this to continue with the next expansion as we have a lot of unfulfilled and latent demand for our beer.

    Our gross profit margin has been strong, since we have brewed every single beer in-house, and will continue to do so for the foreseeable future. Gross margin has increased recently as we commenced our hospitality operations.

    Going forward, we expect gross margin to reduce slightly, as we focus more on wholesale markets. We see considerable economies of scale going forward as we do initially intend to maximise our current lease, and utilise our existing staff. Our philosophy to date has been to employ versatile staff and train them in multiple roles; this has given us the ability to scale operations without any additional staff appointments.

    The additional gross margin we aim to make from increased wholesale revenue should add to the bottom line. We are anticipating that the increased production from this investment comes online in August 2022. In order to maintain growth we have included a further investment and expansion during FYE2024, with commissioning of an additional brewing location in Oct 2023. This is reflected in the increased assets in that year and growth thereafter.

    Cash will be available for reinvestment in the business from FYE2023 onwards. It is anticipated that as of FYE2022 there will be related party loans to the shareholders of approximately $362k. The board reserves the right to refinance this debt into bank term debt at a future date.

     

     

    Share Offer

    Offer price per share - $500

    Shares on offer - 2,400 shares which constitute 20% of the company in a mixture of Class A and Class B shares.

    Class A – Can vote on special authorisations as defined in the shareholder’s agreement

    Class B – No voting rights

    Each share has the same rights to share in the dividends of the company, but there are different voting rights, conditions, and limitations between the classes and shareholder rewards levels (all of which are at the discretion of the Three Sisters board of directors).

    Capitalisation Table

    Investor Class Pre-offer shares % Ownership pre-offer Post-offer shares % Ownership post-offer*
    Joseph Emans and Sarah Markert-Emans Class A 9,600 100% 9,600 80%
    2022 new investors Mix of Class A and B 0 0 2,400 20%
               
      TOTALS 9,600 100% 12,000 100%

    * Assumes offer is fully subscribed

    Please note that the capital raised in this investment round will not go toward repayment of directors' loans.

     

    Valuation

    Prefunding valuation of $4.8m;  Post funding valuation of $6m (fully subscribed)

    The valuation of Three Sisters Brewery was undertaken by the current shareholders. The valuation has been calculated using the ‘multiple of revenue’ method. This method has been a common valuation ratio used previously by growing craft breweries when raising capital from the market.

    The current shareholders are comfortable that a multiple of 7.7 times the 2022 financial year estimated revenue is a fair market value, based on the growth potential of the business in today’s market. The shareholders feel that there is added justification for this valuation based on its diversification into the hospitality industry and Champion Micro Brewery status. This is further justified by the below Comparative Analysis of recent market transactions in the same industry.

     

     

    Risks and Mitigations

    BEER QUALITY – the risk of a decline in beer quality from moving to new equipment

    Joe has brewed on a variety of equipment as Three Sisters has grown without any drop in quality. If the beer is not up to scratch, it will not be released to market. Quality is of the utmost importance.

    CASHFLOW – the risk of not having enough cashflow or working capital

    to meet obligations, due to either poor sales or late paying customers

    We have good systems to manage and mitigate the risk from late paying customers and we also have a credit policy that limits our exposure to individual customers.

    INCREASED COMPETITION

    – the risk of the market significantly heating up with increased competition

    Three Sisters has only experienced increasing demand for their products, we focus on what we do best, making great beers with authenticity and exceptional quality.

    KEY PERSONNEL – the

    risk of losing key personnel

    A key strategy at Three Sisters is to upskill and multi-skill our staff so that everyone is capable of swiftly filling gaps left by other personnel. This includes front-of-house, back-of-house and brewery roles, as well as packaging and distribution.

    PROFITABILITY – the risk of not operating profitably

    Our strategy is to grow production and gross margins whilst minimising additional overheads, such as leases and additional staff. All increases in sales will add to the bottom line.

    PROJECT DELAYS – the risk of the new brewery build being delayed by unforeseen circumstances

    We are looking at multiple options, including local fabrication of brewery equipment. Joe is a skilled and experienced project manager.

    DOWNTURN IN CRAFT BEER

    CONSUMPTION - The risk that demand for craft beer will decline

    We see the risk of a downturn in craft beer consumption being a very low risk based on the way more developed craft beer markets around the world have continued to grow, and also based on the ongoing growth in New Zealand’s craft beer industry which actually appears to be accelerating.

    LOSS OF SUPPLY - risk

    of not having beer to sell

    All of our brewery expansions have hit capacity shortly after commissioning, but we have a growth plan which allows for continued growth for at least 5 years.

     

     

     

    Warning Statement about Crowdfunding

    PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by Three Sisters Brewery Ltd. will only be made available for acceptance through the PledgeMe website. Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks. You may lose your entire investment, and must be in a position to bear this risk without undue hardship. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment. Please ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

    A Note from PledgeMe

    We have completed Equifax checks on Three Sisters Brewery and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

    We did it!

    26/04/2022 at 12:24 PM

    Hi Everyone!!!

    Well we've finally finished celebrating and can take some time to thank everyone who has pledged on this campaign and who are now shareholders in Three Sisters Brewery!

    It's great to have you on board and we feel truly privileged that you have put your faith in us.

    We have some great plans and the ideas just don't stop coming, we are so excited right now, it is just too awesome.

    We will soon be adding everyone to our share register via the 'Orchestra' platform, where you'll be able to go in and see the status of your shareholding.  Expect some emails from Orchestra in the next couple of weeks.  

    We're now working through all the pledges and processing payments etc., we will get on to organising the perks straightaway and you'll also get some communication about that once we've got it sorted.

    Thanks again, and we look forward to seeing you in the bar, or further afield, in the near future!

    Cheers,

    Joe and Sarah.

    We made it!

    11/04/2022 at 8:56 AM

    🥳🎉❤️ Wow! We've hit our minimum target. We'd like to take the opportunity to thank all the new shareholders that are coming on board for the journey!

    There's still more time to pledge so please keep spreading the word. 

    Better get organising them perks for you....

    So close...

    10/04/2022 at 2:08 PM

    Another massive thank you to our Pledgers / Supporters!!

    Two weeks to go and we’re at 96% of our target, who'll be the one to get us over the line??

    If you are you’ll be the first to learn the Three Sisters secret shareholder handshake!

    We’ve got some great ideas to expand into the neighbouring property (and reunite the two sides of the old TSB Bank building), with a ‘brewing tutorial’ / experimental area where we’ll get really creative and let the public come and brew with us, and a courtyard at the rear to make the most of sunny days like today!

    What's in the fermenters right now? Well there's fresh batches of Oakura Blonde and Paper Tiger IPA on the way, our fresh hop red ale ‘Is it Reddy Yet?’ and a new Medusa and El Dorado IPA.

    70% There!

    07/04/2022 at 7:11 PM

    Hey Team!

    We'd like to take the opportunity to thank you all for your support!

    We've raised over 70% towards our minimum target and really appreciate it.

    We've still got a little way to go, so please keep spreading the word!

    We really need more production... our next three beers have almost completely sold out before we can get them out of the fermenters!  Really looking forward to our fresh hop beer and Hopstock Festival in Wellington at end of April.

    All the best!

    Joe & Sarah.

     

     

      Offer Details

      Current Valuation 4,800,000
      Raise Minimum 350,000
      Raise Maximum 1,200,000
      Share Price 500.00
      Minimum Pledge 500.00
      Maximum Shares Offered 2,400
      Explanation of valuation:

      The valuation has been calculated using the ‘multiple of revenue’ method. This method has been a common valuation ratio used previously by growing craft breweries when raising capital from the market.

      Financial Summary

      Prev Year Current Year Est. FY 2024 Est. FY 2025
      Revenue NZ $283,000 NZ $623,000 NZ $1,321,000 NZ $1,936,000
      Operating Expenses NZ $208,000 NZ $542,000 NZ $512,000 NZ $619,000
      EBITDA -NZ $28,000 -NZ $67,000 NZ $375,000 NZ $519,000
      Net Profit -NZ $96,000 -NZ $100,000 NZ $234,000 NZ $296,000

      Company Details

      Company Name: Three Sisters Brewery Ltd

      Company Number: 6267851

      Company Documents

      Documents no longer available to download, as this campaign has closed

      Director Details

      Name Role Profile URL Invested?
      Joseph Emans Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6267851/directors
      Sarah Markert-Emans Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/6267851/directors

      Ask a Question (You must login to ask a question)


      Craft beer is normally expensive if the economy has a downturn can and will you make a lower price beer.

      Posted on 10-04-2022 by Cameron Brown

      Hi,
      It is difficult to say, because there are so many possibilities of what can occur in the market place. We are looking at the option of a range of non-alcoholic root beers and other craft beverages to diversify our offering. This should help us adapt to changing market conditions.

      Answered on 10-04-2022 by Joseph Emans


      I don't live locally, so how would I get my engraved beer glass?

      Posted on 06-04-2022 by Hannele

      Hi, we can certainly ship this to you if you want (free postage). However, it is nice to drink from the bigger glass in the bar. You could of course bring it with you when you come!

      Answered on 06-04-2022 by Joseph Emans


      Hi, Are your FYE based on the tax year 31st March and so your sales for FYE 2022 will be close to 623K as projected? Also why is the excise higher in 2020 compared to 2021 even though the sales much higher.

      Posted on 30-03-2022 by StephenRogers

      Hi, we haven't finalised accounts for FY2022 but yes we should be +/- 5% of that figure. In FY2020 we were purely selling wholesale, and a larger portion of higher alcohol beers. We opened our brewpub towards the end of FY2021 at higher gross margins and a larger proportion of lower alcohol beers for the bar.

      Answered on 30-03-2022 by Joseph Emans


      I know its right - the question was what was the thinking ;-)

      Posted on 29-03-2022 by Dave Smith

      Hi, well we had to set a cut off at a level where we thought investors would want to be involved in decision making without significantly over complicating the decision making process and we considered that that was an appropriate level.

      Answered on 29-03-2022 by Joseph Emans


      What is the thinking behind the Class A and B shares - essentially if someone invested 20,000 they end up with no control over the rights or future of that investment

      Posted on 29-03-2022 by Dave Smith

      Hi, yes that's correct. Voting rights are available at $50,000 and above.

      Answered on 29-03-2022 by Joseph Emans


      I would be interested to hear sales and profit figures? I see you value the business at 6m currently (1.2m for 20% of it), where does that come from. Thanks

      Posted on 27-03-2022 by Joel Mate

      Hi, please download the information memorandum, as all this information is contained there. But essentially the valuation is ascertained by comparison with other similar industry transactions. Hope that helps. Cheers, Joe.

      Answered on 27-03-2022 by Joseph Emans


      Assuming profits are reinvested into the company for future growth , At what point would you expect dividend returns to share holders

      Posted on 26-03-2022 by Glenn Butters

      Hi, while there are opportunities for growth it certainly makes sense to reinvest profits, and certainly for the next three years we feel the opportunities for growth are very strong. Thereafter a mix of reinvestment and dividend returns might be suitable.

      Answered on 26-03-2022 by Joseph Emans


      Question: if you bought in , how do you sell your shares later on should you decide to ?

      Any plans to sell beer to supermarkets or bottle shops in near future ?

      Posted on 26-03-2022 by Glenn Butters

      Hi, we are investigating secondary market options for this, and we understand that PledgeMe is developing a platform that will allow this. We will also be keen to consider buying back the shares from you in future.
      We are already in bottleshops throughout the country, but the increased production will allow us to expand our stockists, including supermarkets (especially in can format)

      Answered on 26-03-2022 by Joseph Emans


      Hi there, can you break down the total annual volume expectation for the brewery after the capital raise? Also, are you intending to use funds from your planned capital raise to repay any loans provided to the company by the founders?
      Cheers!

      Posted on 25-03-2022 by Callum Stewart

      Hi, yes sure. Our annual volume expectation after capital raise, installation and commissioning will be approx. 120,000 litres/annum, around 60% in cans and the rest in kegs. We are not intending to use any of the funds to repay loans provided by the founders. However, we may at some point in the future convert the founder's loans into bank debt.

      Answered on 25-03-2022 by Joseph Emans


      Hi
      I note the equity increase between FY23 and FY24 from $350k (min cap raise) to circa $1.5m - is there a second cap raise planned?
      Thanks

      Posted on 24-03-2022 by David Heald

      Hi, yes that is correct. We are planning a second capital raise in that financial year.

      Answered on 25-03-2022 by Joseph Emans

      Varghese Chakko Nettikaden
      2022-04-08 22:43:53 +1200
      Gonzalo Millan
      2022-04-08 21:30:59 +1200
      Veronika Schmidt
      2022-04-08 21:11:27 +1200

      "Would love to be at the bar more often! Open one in Auckland? I hope I can get my Birthday Beer delivered, bit far to come by for one."

      Karina Huang
      2022-04-08 20:35:27 +1200
      Charlie Nicholson
      2022-04-08 19:36:50 +1200
      Stephen Maynard
      2022-04-08 12:45:32 +1200

      "Looks like a great company and look forward to visiting next time I am in New Plymouth, Good luck team"

      Robert Veitch
      2022-04-08 12:27:51 +1200

      "Great work team, Cant wait to come and have a beer at the bar"

      Karl Laird
      2022-04-08 10:13:31 +1200
      Darryn Soper
      2022-04-08 09:16:51 +1200
      Bruce Lawrence
      2022-04-07 21:27:25 +1200

      "Good luck guys. Will give me an excuse to get down that way to visit :)"

      Richard Mudge
      2022-04-07 19:53:38 +1200
      Craig Williamson
      2022-04-07 16:12:47 +1200
      Liam ronald
      2022-04-07 08:41:29 +1200
      Hannele
      2022-04-06 14:44:23 +1200
      Richard Sumner
      2022-04-06 13:04:00 +1200
      Michael
      2022-04-05 10:45:49 +1200

      "Go get it guys !"

      Justin Wilson
      2022-04-04 15:44:41 +1200
      Louise Quinn
      2022-04-04 08:55:35 +1200
      Danielle Taylor
      2022-04-03 20:47:22 +1200
      Ashly Kumar
      2022-04-01 14:12:02 +1300

      "Thank you and good luck 😊"

      Andrew
      2022-04-01 08:43:50 +1300
      Dope Honey Limited
      2022-03-30 12:26:16 +1300
      Thi Ngoc Diem Ho
      2022-03-29 23:07:10 +1300
      Simon Ellingham
      2022-03-29 14:58:41 +1300

      "Congrats on this pledge and heres hoping you achieve the min amount. Bottoms up.."

      Karen Johnson
      2022-03-28 21:48:00 +1300

      "Awesome - good luck "

      Soraya
      2022-03-28 10:37:34 +1300
      Rhys Humphries
      2022-03-28 09:16:38 +1300

      "Good luck!"

      Brad Davison
      2022-03-28 07:01:30 +1300

      "Let's go!"

      Sajith Chittezhath
      2022-03-27 20:28:37 +1300

      "Please confirm through SMS or call too."

      Julie
      2022-03-27 19:01:43 +1300
      This campaign was successful and got its funding on 24/04/2022 at 3:00 PM.

      This campaign has closed, but this company may choose to do more equity raises on PledgeMe in the future. If you're interested in investing in Three Sisters Brewery, you can sign up to be notified when a new equity campaign from this company is published.

      Notify Me

      Investor Perks

      SIB (Somewhat Imbibed Person)

      NZ $500.00+

      This package includes: 10% discount online and at the bar. Birthday beer at the bar and 50% off a birthday box mixed 6 pack. Membership to our 'Beer Release Club' - we will open the bar just for shareholders to try our newest beers.

      Mashing Good Time

      NZ $2,000.00+

      As per SIB, but you also get a 500ml Supporters Glass at the bar with your name engraved, 20% bigger than our normal glasses for the same price.

      Humble Bragger

      NZ $5,000.00+

      Same as 'Mashing Good Time' but you will also get some unique shareholder's merch (including a t-shirt, hoodie and cap). Also, you'll get membership to 'Big Beer Release Club' and get to drink our imperial stouts and barleywines before anyone else.

      Smorgasbeered

      NZ $10,000.00+

      Same as 'Humblebragger' but you get a 'big beer' six pack on the house. Also, you get a 600ml glass to drink from at the bar with your name engraved on it, for the same price as our 410ml glasses!

      Care Beer

      NZ $50,000.00+

      Same as 'Smorgasbeered', but you get Class A shares with voting rights. Also you get the opportunity to brew and name a beer.

      Tank Topped And Ready To Rock

      NZ $100,000.00+

      Same as 'Care Beer' but you also get to name and brew a core range beer that we'll brew at least every 6 months for 3 years. You'll also get to name a fermenter or our mash tun or kettle.

      Warning statement about equity crowdfunding

      Equity crowdfunding is risky.

      Issuers using this facility include new or rapidly growing ventures. Investment in these types of business is very speculative and carries high risks.

      You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

      New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

      The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

      Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.