David G. Jonesdavidjones@md.metrocast.net

OverviewGoals:

Revitalize historic Dick Brothers Brewery with microbrewery

Create a cooperative brewing environment for homebrewers to test recipes

Partner with an upcoming restaurant to pair craft beer with menu items

Partner with a larger contract brewer to proliferate the Dick Brother brand into the retail market

Introduce German / International Public Market to promote Farm to Table and Farm to Restaurant programs

Market “Throwback Beer” service, recreating historic labels and recipes

Become a “test bed” for new brewing technologies, innovations, and alternate brewing processes

Problem Description Small brewers are unique in the more personal nature of the

business and the unique history behind their brews. It is a sense of community that compels small brewers to higher standards, as even small changes in the clientele can have massive impacts on their ability to survive collectively as an industry, and individually as businesses.

The microbrewer is faced with the problem of distributing the final product, unlike the brewpub operator who has a captive market.

Illinois allows self distribution. Regulations vary from state to state. Some states allow you to sell your brews directly to retailers, while others require you to go through a distributor. Obviously, if you need to use a distributor, you'd better establish that relationship early on

The three-tiered system favors larger established breweries. The three-tier system of alcohol distribution is the system for distributing alcoholic beverages set up in the United States after the repeal of Prohibition. The three tiers are producers, distributors, and retailers. The basic structure of the system is that producers can sell their products only to wholesale distributors who then sell to retailers, and only retailers may sell to consumers. Producers include brewers, wine makers, distillers and importers. Entrance and success for small brewers is hard for the small brewer.

No single American company is focused on exporting / expanding the market for craft beer in foreign markets.

Venture History 1995 - First homebrew batch conducted in Quincy, IL basement using a sock filter 1996 - Entered first homebrew competition at Germanfest in South Park 1998 – Attended homebrew classes at the Copper Dragon in Carbondale, IL and

equipment procurement at Southern Illinois University 1998 - First all grain batch 1999 - “Beertron” term first coined with vision of automated RIMS 2002 - Design and assembly starts on “Beertron”, an automated 3 keg home

brewery January 2, 2005 “Beertron” comes to life and produces first autonomous batch of

homebrew 2007 - Genesis of the “Brewtronix System” and business plan at venture capital

classes at Kansas University and the University of Maryland’s Technology Enterprise Institute and Entrepreneurial office, SCORE and Southern Maryland Small Business Development Center

2010 - Joined the Hollywood Hop Heads 2012 – Started reinvigoration of Dick Brothers Brewing 2012/2013 - Craft Beer Cuisine Adventure Charters conducts research in Lesser

Antilles 2013 - Filed LLC paperwork with state of Illinois

Recent Illinois Legislation

Illinois Craft Brewers Guild recently won a hard-fought battle to restore the right of small craft brewers to self-distribute their beer under Illinois law

A proposed change to the Craft Brewer’s License would allow small breweries to produce up to 200,000 barrels, increased from 15,000. A compromise was made to increase the production cap to 30,000 barrels.

Governor Quinn signed HB630 into law July 5, 2013

Illinois can LEGALLY have Homebrew at private Club meetings

LEGALLY take our homebrew to private picnics

Homebrew is BACK in the Festivals!

Dick Brothers Brewing Business PlanCompany Seeded Ready for Startup

Business Planning complete Logo / Label design complete Initial marketing started Initial merchandizing started Investors being secured 12 recipes brewed, evaluated, and revised over 5 year period “Dick Brothers Brewing” LLC documentation in place

Procurement 1 to 5 BBL Brewing System Brewing Supplies Licenses, permits, and insurance

Facility Construction / Retrofitting Drainage trench installation Installation of Brewing Vessels Ventilation of Mash Tun and Boiler Connect to Fridge or Glycol Cooling system

Dick Brothers Brewing Management TeamDavid Jones - Director, Brewmaster, Manager – 11 years program Analyst/Manager and

technical lead. B.S. Mechanical Engineering, Southern Illinois University, Masters in Engineering, Energy and the Environment, University of Maryland. 17 years experience in homebrewing and 7 years experience in Entrepreneurship and company development.

Mike Shull – Historian. 10 years experience history teaching and community relations Josh Klitz – Marketing and distribution. Hot Sauce king of Tri-state area. 5 years experience

with marketing and proliferating Crawdad’s Classic Hot Sauce and 314 Hot Sauce in St. Louis Vacant: Financial Manager and fund raising – Todd Buckley: Executive Chef. 10 years culinary experience Paul Nelson – Graphic Artist and Marketing. 5 years experience as creative director with

http://studiouprising.com/ Beth Jones and Jason Snell – Training Program, 5 years experience Municipal Training

Systems Jim Aubuchon – Product Representative, Product Specialist

Size of 1 BBL Brewing System

Size of 10 BBL Brewing System

Layout 1 BBL Brewing System

FV1 FV2 FV3 FV4

Boiler

MT

FV = Fermentation VesselMT = Mash TunBlue = Cooled or RefrigeratedRed = Heated and Hooded or Ventilated

Grain milling done in kitchen during off hoursStorage for brewing supplies and equipment within existing spaces

3’

12’

4’

9’

Potentially Removable

Affixed and close to Fridge

Dick Brothers Building

Layout cohesive for:•3 business units•Enter at tasting room/bar, walk through art gallery to dinner•Food truck bays•Art gallery and art studio space•Brewery tours and tourism•Overflow and large event seating•Utilization of existing spring water•Expansion once capital is flowing

German/International “Public Market”:•Delicatessen and bakeries•Specialty meats and cheeses•Fresh fruit and vegetables•Multiple food vendors and retail food distributors

German/International Public Market Promotes the growing enclaves of ethnic communities and their cultures:

Asian, Latin American, Thai, Vietnamese, Pilipino, etc.

Hy-Vee, County Market, Butcher Block, Kohl Foods delicatessen: specialty sausages and meats...sauerbraten, schnitzel, schwarzwurst, specialty cheeses

Underbrink’s , Krazy Cakes, bakeries: Biertreberbrot (spent grain bread), soft pretzels, German deserts

Consolidate/relocate farmers market from Washington Square and Quincy Mall

Multiple vendors under a shared leased space… equates to multiple investors

Promotes Illinois Stewardship Alliance’s Farm To Table and Farm to Restaurant programs

Check out what Engrained Brewing, in Springfield is doing with Farm to Table: http://www.engrainedbrewing.com/engrained-brewpub-blog/the-farm-to-table-challenge

Advantages and BenefitsReduced time to market with structured

business in placeIncrease food sales and total sales from

appeal of craft beerPotential for more outward catering

opportunities and sales at craft beer festivals with a food / beer truck

More merchandizing opportunities and synergy between Dick Brothers Brewing and local restaurants

Unique restaurant specific craft beer brand creation with transferable rights to restaurant owners

Food and Craft Beer pairing events and beer paired menu items

Beer festivals and tourism

Why Our Beer is Better Recreation of German brewing styles and techniques now extinct Autonomous temperature controls and triple decoction mash method

allow us to precisely and repeatably brew all types and styles of beer We can recreate any style of beer... with consistency. Our mash temperature control technology allows us to make precision

mash conversions... i.e. a dry German Pilsner vs. a sweet Munich Helles We operate a self sufficient green brew house and are actually able to

pump electricity back into the grid By utilizing solar water heaters we are able to reduce electrical/gas water

heating demands and increase the efficiency of our Hybrid Brewing Energy System

By burning a portion of our spent grain biofuel we are able to power our entire brewing operations thus decreasing green house gases and our electrical needs

When steam demands are idle we are able to divert energy to powering a microturbine and pump energy back into the grid

By utilizing solar photovoltaic arrays and battery technology we are able to pump energy back into the grid while the brewing operation is offline

By filtering aqueous brewery waste with our organic pressed spent grain filters we can reduce pollution into the water table

We use the freshest of local ingredients

Other Production Lines and Profit CentersContracted “throwback brews” recipe research, design,

and development for pre-prohibition historic breweries Photomosaic bottle cap art (marketed to World of Beer

franchises)Stressed bottle cap prints Craft Beer Cuisine tailgators and brewery tours from RV

or food/beer party truckFood and Beer Truck party catering serviceMerchandizing: T-shirts, can cozies, wooden nickels,

glassware, barware, etc.Green roof hop farmBrewery hostel accommodations and tour excursions Small Hybrid Brewery Energy SystemBrewing Equipment Test and Evaluation service

Beer-Powered Brewery Saves $450,000 A Year, Feb 4th 2013 press release

• Alaska Brewing Company purchased a $1.8 million furnace that burns the company's spent grain — the waste accumulated from the brewing process — into steam which powers the majority of the brewery's operations. Designers estimates that the spent grain steam boiler will offset the company's yearly energy costs by 70 percent. Awarded nearly $500,000 in a grant from the federal Rural Energy for America Program. Alaskan Brewing Co. makes about 150,000 barrels of beer a year

• Dick Brothers Brewing plans to build a smaller, less expensive, high tech version marketable to the 2,386 smaller brewpub and microbreweries

US Breweries Operating as of June 2013Brewpubs = 1,165Microbreweries = 1,221Regional Craft Breweries = 97Total US Craft Breweries = 2,483

Patentable and Licensable Technology: Hybrid Brewing Energy

HP Steam

LP Steam

Cold Spring Water

Radiant Heat

Double 55 gal wood stove

w/ copper tubingjackets

Micro Steam Turbine

Hot Water Tank

Prius Drive train

Prius Energy management

system

Control System used on 100 BBL system. Proven

Technology. Same technology as original “Brewtronix”

Original “Brewtronix”

SystemPrototype

Design

PLC Logic

Control

Advantages:•Green Energy and Energy Efficient•Energy Management and Thermal Management•Scalable to brewing system•Utilizes existing hybrid technology in new applications•Cost efficient for high load brewing days •Less development time with existing technologies•Venture capitalist express interest•Quincy Manufacturable •Spent grain into energy

To Mash Tun

To Boiler

$1.4M raised to start this contract brewing company in DC area

Patentable and Licensable Technology: Mash Filter PressAlaska Brewing Company was the first craft brewery in the United States to employ this Belgian-based brewing technology, which allows them to reduce the amount of water, malt and hops needed to make beer, while maintaining high quality and consistency. In one year, the mash filter pressed nearly 2 million fewer gallons of water and 6 percent less malt to make the same amount of beer as our traditional brewing process. The unique design of the mash filter press also reduces the moisture content in the spent grains, which further reduces the energy required to dry the grain before it is transported to farms.

Today about 25% of the world’s beer volume is produced with a Mash Filter Press. More than 20 years ago when the industrial introduction of the Mash Filter Press took place, only one filter size, was available, mainly sized for large lager brewers. In 2012 at the Craft Brewing Convention in San Diego, supported by an increasing demand from the U.S. Craft Brewing market, Meura decided to introduce a smaller Mash Filter Press suitable for microbreweries.

As a matter of interest, nearly 90% of the beer volume produced in Belgium is produced with the Mash Filter Press technology.

Utilize Engineering Change Proposal (ECP) process and engineering knowledge base to give Original Equipment Manufacturers (OEMs) product improvement suggestions based on test and evaluations and plant/energy efficiency improvements. Improve design by allowing pressed mash to also filter aqueous sediment from boilers and fermenting vessels to create zero organic aqueous discharge for brew house.

Dick Brother’s brewing processes have been hand pressing mashes and utilizing a mash filter method for over 4 years.

No American company manufactures a comparable product and the craft brewing industry is just now catching on… 1 brewery out of 2,483 utilize a Mash Filter Press.

Funding Programs

• We are approaching venture capitalists, angels, and IL state grant programs:• Startups.co, Angels List, Angel Soft, National Venture Capital Association, Funding Post, Et al…

• Illinois Clean Energy Community Foundation• Solar and Wind Grant Program (minimum $100,000, max $250,000)• Biogas and Biomass to Energy Grant Program (Up to 50% of project cost, max $500,000)• Renewable Energy Business Development Program ($250,000 to $500,000)

• Invest Illinois Venture Fund (IIVF) • Venture capital program seeking to support young, innovative companies, and start-ups that show a high potential for future

growth resulting in the creation of high-paying professional Illinois jobs• Microloan Program

• Provides very small loans to start-up, newly established, or growing small business concerns. • Small Business Innovation Research (SBIR) Program

• SBIR programs encourage small firms to undertake scientific research that helps meet Federal R&D objectives, and have high potential for commercialization if successful

• CAPLines • CAPLines is the umbrella program under which the SBA helps small businesses meet their short-term and cyclical working-

capital needs• Small Business Participation Loan Program

• Funds must be used primarily for the purchase of land or buildings, construction or renovation of buildings, and acquisition of machinery and equipment

• Capital Access Program • Loan program for for-profit, Illinois businesses that employ 500 employees or less.

• Revolving Line of Credit Program • This loan permits a company to borrow, repay and re-borrow in accordance with business needs, without applying for a new

loan. • Participation Loan Program

• The PLP program is designed to work through banks and other conventional lending institutions, to provide subordinate financial assistance to Illinois small businesses

• Enterprise Zone Participation Loan Program • Loans for small businesses with fewer than 500 full-time employees, and located within an Illinois designated enterprise zone.

• Employ Illinois Loan • Loans of up to $1 million may be used to acquire land, purchase equipment, provide working capital, buy inventory or make

capital improvements

• Bootstrapping…

Potential Tristate Area Partnerships Knapheide’s = Food and Beer Truck design McClean’s = Quincy food Manchester Tank = CO2 Tanks and Beer Kegs Midwest Controlled Storage = Beer storage and lagering US Cooler = Beer coolers for tasting room and beer/food truck Gully / McNay Transportation = Transport and Export services Quincy Metal Fabricators = Bottling and canning line machines Midwest Pattern = Bottle cap jigs Awerkamp/Quincy Machine & Welding = Brewery Equipment

Maintenance The Shirt Shack = Merchandizing Tristate Food Equipment / Kohl’s = Food service equipment Shortridge Construction = heavy equipment loans and general

contracting Fierge Auto parts = Hybrid Brewing Energy Gardner Denver = Hybrid Brewing Energy, Bottling lines Quincy Compressor = Pressure control systems Local donors = brewery memorabilia

Potential SOMD Prototyping and R&D Partnerships CTSI = Prototyping and Fabrication Amelex = Hardware and Software Engineering Integrated Program Solutions = Program Management and cost analysis AR Systems, Inc. = Electronics Manufacturing, circuit boards, and wiring diagrams ARINC Engineering Services = Systems engineering, system design, prototyping, modeling

and simulation Heron Systems Inc. = Software development and electrical engineering, programming Triton Metals, Inc. = Precision machine, sheet metal, and job shop AMEWAS = Systems Engineering, modeling and simulation Specialty Systems, Inc. = Hardware/Software Engineering, system prototype development Spiral Technology, Inc. = Modeling and Simulation DRW Technologies = Automation, electronics, and system design Pioneering Decisive Solutions, Inc. = Automation, system design, software DCS Corporation = systems engineering, modeling and simulation J.F. Taylor = electronic engineering, software systems design, system fabrication Platform Systems = mechanical design and engineering Vulcan Engineering and Manufacturing = Precision metal prototypes, fabrication Westwind Technologies = engineering, prototyping, and fabrication Compliance Corporation = prototype design and development

Dick Brothers BuildingDinning Room and Micro Brewery

Brewing Space

Dining Room with seating

Dick Brothers BuildingBar and Tasting Room

Dick Brothers BuildingBar and Tasting Room

Dick Brothers BuildingPublic Market

Dick Brothers Building Malt Room

Dick Brothers Building Historic Memorabilia for the Walls and Walking Tour

Adam’s County Craft Beer Market Potential

Adams County

Total Population (2012) Users % Index Total Market Potential

67,197 13.19% 8,863

Population age 21 to 50

34,286 13.19% 4,457

Adams County Full Market Potential

$60 per person per year x 5,849 people = $267,420

Growth of the craft brewing industry in 2012 was 15% by volume and 17% by dollars compared to growth in 2011 of 13% by volume and 15% by dollars

Community Impact Increased jobs (distribution, drivers, marketing, advertising, building

maintenance and preservation, food prep, tourism, brewery tours, etc. Positive impact on neighborhood improvements.  Hiring within the

neighborhood and making improvements on your property could trickle out, thereby improving a section of town that is currently degrading with increasing crime. Liz Solaro and Brewery Arts District started the positive push

Increased tourism: Microbreweries attract tourists, and Dick Brothers Brewing would bring in people who would eat and stay at Quincy

Seeking letters of support from the Quincy Area Convention and Visitors Bureau, Great River Economic Development Foundation, Chamber of Commerce, Quincy Historical Society, Historic Quincy Business District, Illinois State Historical Society, Gardner Museum of Architecture and Design, Quincy Museum, Historical Society of Quincy and Adams County (their organizations can also help with branding and providing historic photos)

Historical themed beer brands: Lincoln Douglas Debate Pale Ale, Mississippi Steamboat Amber Ale, Quincy Select German Pilsner, Germantown Hefeweizen , Munich Oktoberfest, South Side Vienna Lager

Increased communication and travel to Herford Germany (Quincy’s sister city) to research historic brewing traditions and Ruppertsberg, Thein-Pfalz, Bavaria where the three Dick brothers originally hailed

Marketing Pillars1. Green Brewing Technology

1. Renewable Energy2. Autonomous Controls3. CHP + PV Integrated within brewery applications4. Partner with environmental and green energy organizations

2. Historic Preservation 1. Dick Brothers Quincy Brewery Memorabilia2. Historic events and places in tri-state region3. Mississippi River and transportation heartland4. Narrative “history bits” on each bottle

3. Fresh and Local Beer1. We buy fresh local hops, specialty grains, and adjuncts from

Illinois growers2. Our beer is made fresh and served to the customer with limited

shelf time3. Partner with agricultural sector

4. Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors from around the world

Craft Beer Cuisine: Experimenting with ingredients, styles, and flavors from around the world

Never dull and stagnant: Dick Brothers Brewing is constantly researching new ingredients, worldly brewing styles, old world and new, and flavors from around the globe to insert into our beers and generate food pairing ideas for you…

Increased tourism: Microbreweries attract tourists, and Dick Brothers Brewing would bring in people from the region who enjoy craft beer

Increased relationships with the sailing community in the form of Craft Beer Cuisine Charters, sponsorships at regattas and the cruising community, sailing clubs, reinvigoration of historic Mississippi tugs, barges, and paddlewheel boats and how they brought different cultures thru the area, etc.

Financials

The business requires $300,000 for the company to start operations, $150,000 from a business loan and $150,000 in investor equity. Following this there is no further capital investments needed. Our pre-money valuation is $60,000 and our post-

money valuation is $360,000.

Financials

Dick Brothers Brewing will become profitable in year one and will achieve a break-even event in year 2. Available cash in the year 2015, our third year of operations, will be

$474,000.

RisksAbility of restaurants to incorporate Dick Brothers

Brewing LLCConstruction constraintsDelay from permitting and legislation

Exit Strategy 5 to 10 yearsBuyout investorsDiversify into more high end privately owned restaurants Build larger capacity 10 bbl brewery offsite, transfer

license from brewpub to microbrewerySell brewing business to restaurant or larger contract

brewery

SummaryPoised to revitalize the historic Dick Brothers microbrewery in

QuincySmall batch brewing to generate extra restaurant sales and a

cooperative brewing environment for local homebrewersPoised for partner opportunities Growth relationship in place to partner with a larger contract

brewer to proliferate the Dick Brothers brand into the retail market

Poised to expand food and beer market into sailing by introducing Create Craft Beer Cuisine Adventure Charters

Poised to conduct T&E on brewery equipment and process development

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