Some time last week Stone Brewing launched an indiegogo page aimed at raising money for their expansion plans. Those who throw money at them get a range of rewards, dependent on how much cash they cough up – anything from t-shirts to a night in owner Greg Koch’s place.
There seem to be plenty of people keen to throw their money at Stone – the tally has already passed $35,000. But there are a lot of things about this that don’t sit well with me.
1) The “little guy” garbage: I don’t like that Stone seems to be trying to paint itself as the little guy who is deserving of your financial assistance. If you’re a business that brings in more than a million bucks a year, you don’t get to be the little guy. If you’re expanding by building, not one but TWO breweries – one of which is overseas – you don’t get to be the little guy. If you’re going to be raking in even more money from those two breweries, you don’t get to be the little guy. This is similar to the sort of rubbish BrewDog go on with – trying to hide the reality that they’re a rather large business and wanting people to believe they’re some really small, indie undertaking.
2) So just what are they going to be doing with the money?: Well, they’re not building any breweries with it. A close reading of the indiegogo page – and a blog post on the Stone website – shows that both the brewery in the US and the one in Europe are already fully funded. What they want your money for is to build a restaurant and beer garden. And yet all they seem to talk about on the plea for cash page is making great beer – which can lead people to think they’re funding a brewery. But in reality, your cash is funding tables, chairs, knives, forks, plates and landscaping for the beer garden. Funny how Stone didn’t tell anyone that upfront, isn’t it? Well, not really, I think they realise they’ll get more cash if they let people think they’re helping to make beer – because that’s way sexier than buying cutlery.
3) Stone Brewing is hungry to expand: Sounds like something you’d say about those nasty mainstream breweries Stone boss Greg Koch rails against, doesn’t it? But on their own indiegogo page it says they could wait until they got more money and then build the restaurant and beer garden, but they don’t want to do that. They want it all now. They want to grow bigger, faster.
4) Cross-Planetary Brewing Revolutionaries: That what Stone is calling themselves and anyone who gives them money. Oh, just give it up right now, will you? You’re not storming barricades or overthrowing governments, you’re a million-dollar company that brews beer. Making beer is NOT a revolutionary act. Neither is making good beer – heaps of people are doing that too. So enough with the “revolutionary” rubbish.
5) It’s an interest-free loan: The plea for cash talks about how Stone couldn’t get any more money from the bank and didn’t want to raise money by selling shares to “some rich suits” (more of the “little guy” revolutionary spin). Why? So they could retain control. And surely, the fact that this indiegogo option is essentially an interest-free loan would have nothing to do with it. Hell, these breweries won’t be built for a few years so it’s likely the money they raise from this will go into some bank account somewhere – earning Stone interest. So they get your money, plus interest on your money. Seems a sweet deal for Stone.
6) Who gets the better deal?: Well, Stone does. By a long, long, long way. You put in $50 and you get a bottle of beer. Once. But Stone get to build their restaurant and beer garden, and make money out of it year after year after year. Get to own a money-making asset after just essentially one repayment? What a great deal for Stone.
7) How much money are they asking for, again?: Well, the tally at the top of their indiegogo page says the target is $1 million. But if you read all the way down to the bottom of the story (yeah, they put this right at the end), they’d actually like $2.5 million. No wait, what they’d really like is $5 million. So why not make the target $5 million instead of just $1 million? Who knows, maybe that would look too greedy and corporate for the Stone Brewing “revolutionaries”.
Sure, none of this will likely dissuade some people from giving Stone money. If you see this as a way of rewarding Stone for their work, then fine (though I’d suggest you already do that every time you buy one of their beers). You might even see it as a totally mercenary transaction – I’m buying a bottle of that rare beer and that’s all I’m thinking of.
But I see it differently. There’s no point in me donating cash because I’m too far away from any of the pick-up points anyway. Even if I was, I wouldn’t be giving Stone my money – not because I’m against them getting bigger (I think any brewer expanding is a good thing) – but because I feel they’re not being entirely upfront about what’s happening. Which is interesting from a company that likes to talk about integrity.
Categories: beer business, economics, United States
Great post, Glen. The fact that the breweries are both already funded essentially means Stone are asking fans to pay for a tourist attraction in Berlin. The indiegogo page and Facebook responses to questions seem to be intentionally vague in regards to this.
There’s been a significant number of US Stone fans concerned about their money going to jobs off-shore rather than locally, with Stone’s response being “nope! East Coast brewery!” This makes it appear as though funds are going towards the development of the new US brewery.
Well, hang on a sec, seeing as that brewery is already funded, then yes, crowd-funding from fans is ultimately going towards the beer garden/bistro, and hospitality jobs in Berlin as a result.
Yeah, it does seem like they’re being a bit vague when it comes to the nuts and bolts of this exercise.
I should point out I’m not against Stone expanding at all – in fact it proves that there’s a growing market for good beer.
I just would prefer the information to be much clearer. At present it reads like they’re trying to divert attention from those areas where they would appear “corporate”.