INNIS & Gunn’s fundraising push to build a new brewery in Scotland is expected to hit the £2 million mark this weekend, fuelling confidence that the company will achieve its £3m target by the deadline later this month.
With nine days left before the Edinburgh craft beer firm’s crowdfunded mini-bond offer closes, the firm said it had seen significant interest from fans of its products and other private investors.
It is looking to raise the money to build a brewery capable of producing around 24 million bottles of beer a year and has been in negotiations to purchase an unidentified site in south-east Scotland.
Founder Dougal Sharp said the firm’s first foray into crowdfunding had proved an “absolutely fascinating” process. “We’ve never done this kind of thing before and have tried many different approaches to reach potential investors so we’ve learned a lot about the process and what works well or not so well,” said Sharp, a former head brewer at Edinburgh’s Caledonian Brewery.
The £2m mark has been reached in five weeks since the offer was launched and Sharp said experience from other mini-bond issues suggested that the pace of investment tended to increase as the deadline nears.
“As with a lot of things I think people think about doing it but only act when the deadline approaches and those are the people we’ll be looking to target in the final days before the deadline. I’ve no crystal ball but I’m certainly optimistic we’ll reach our target. Even if we don’t, we’ve learned a lot from the process for the future.”
The Innis & Gunn BeerBond is an initial four-year investment offering an interest rate of 7.25 per cent gross a year with a minimum stake of £500.
Investors can also opt for a “Beerbucks” bond which offers an equivalent of 9 per cent gross interest rate per annum but which will be paid in vouchers which can be redeemed against beer at the Innis & Gunn online shop. To date, one in five investors has opted for the BeerBucks bond.
The company said the low minimum investment level had made investing accessible to a wide range of individuals with about 15 per cent of investors committing between £500 to £1,000.
More than half of investors so far are based in Scotland, and half of that again in Edinburgh. The average investment has been £2,000 with the largest so far £100,000. Innis & Gunn drinker Simon Laidlaw, a Glasgow-based former TV producer who now runs a corporate video production company, has invested a total of £5,000 together with his wife. “It’s a great way to be part of the company and its business plans,” he said.
Sharp said the surge in interest in craft beer around the world also meant it was an ideal time to raise money to build the facility, which will include a bottling line and barrel store, and which would enable the firm to brew small-run limited edition and seasonal batches.
Since being set up in 2003, Innis & Gunn has become a £11.8m turnover business, up from £10.5m in 2013. Last year it sold more than 20 million bottles of beer and is the second-biggest supplier of craft beer to the UK off-trade.
Applications for the BeerBond, which is not protected from loss by the Financial Services Compensation scheme, are due to close on 16 June.
The firm has the capacity to issue up to a maximum of £6m under the offer with any funds over and above the £3m required for the brewery used to accelerate international expansion.