Jump to content

Founders Brewing Company Expansions


GRDadof3

Recommended Posts


  • Replies 127
  • Created
  • Last Reply

 

Definitely interesting. Most of the European beermakers like InBev are trying to buy up U.S. market share. This company wants to do the opposite, increase European market share.

Link to comment
Share on other sites

Im curious to what 30% of Founders equals. $100M?

I was wondering the same thing.  My tends to always "go there" when I hear an announcement like this.  Not sure I am 100% correct with my numbers, but here is a rough guess:

  • In an MLive article this past summer ownership said they expect to produce 193,000 barrels of beer.  There are about 53 gallons in a barrel, so that is 10,335,000 gallons in 2014.
  • However, with the current expansion they expect to produce 600,000 barrels of beer, or 31,800,000 gallons!  This would put them right behind New Belgium Brewery.
  • Every industry has a specific multiplication factor used for valuation of the company.  The multiplication factor stands for years,  It is annual revenue X's [    ] years.
  • The large multinational breweries like Anhueser-Bush have a multiplication factor of 3.4 years.  However, established craft breweries have a multiplication factor of 2.4
  • So, let's use 2014 to come up with a ball park figure: 10,335,000 gallons or 82,680,000 16 oz servings, whether that be on tap, or a bottle of beer.  This number is low because bottled beer is predominately 12 oz.  But let's stay at 82,680,000.  
  • Now you have to determine what there actual gross revenue is for a 16 oz serving.  This is a total moving target.  The big question is how do you split up retail bottles, kegs, and beer sold on site in GR?  None of us will ever know these numbers.  Of course keg beer, and beer sold on tap on site is the most profitable.  Based on some quick research I think an fair average is $1.95 per 16 oz serving.  I could be all wet on this, but let's use this number.
  • 82,680,000x$1.95=$161,226,000.  I would add 5% to this to account for "other" forms of revenue like merchandise, licensing, etc. for a total of $169,287,000.
  • Now using the multiplication factor of 2.4 means at the very least Founders is worth $406,288,800, just based on gross revenue from 2014.
  • I would imagine that when it comes to valuation the growth of Founders based on the approved financing etc to bring their production to 600,000 barrels would have to be added.  They are more than doubling their production in the next several years so I can easily see 15% added to the valuation to account for this growth.  
  • This would bring a valuation of $467,232,120.  So a 30% share would cost about $140,160,636.

Not bad for 7:30 on a Wednesday night... :shades:

Link to comment
Share on other sites

I was wondering the same thing.  My tends to always "go there" when I hear an announcement like this.  Not sure I am 100% correct with my numbers, but here is a rough guess:

  • In an MLive article this past summer ownership said they expect to produce 193,000 barrels of beer.  There are about 53 gallons in a barrel, so that is 10,335,000 gallons in 2014.
  • However, with the current expansion they expect to produce 600,000 barrels of beer, or 31,800,000 gallons!  This would put them right behind New Belgium Brewery.
  • Every industry has a specific multiplication factor used for valuation of the company.  The multiplication factor stands for years,  It is annual revenue X's [    ] years.
  • The large multinational breweries like Anhueser-Bush have a multiplication factor of 3.4 years.  However, established craft breweries have a multiplication factor of 2.4
  • So, let's use 2014 to come up with a ball park figure: 10,335,000 gallons or 82,680,000 16 oz servings, whether that be on tap, or a bottle of beer.  This number is low because bottled beer is predominately 12 oz.  But let's stay at 82,680,000.  
  • Now you have to determine what there actual gross revenue is for a 16 oz serving.  This is a total moving target.  The big question is how do you split up retail bottles, kegs, and beer sold on site in GR?  None of us will ever know these numbers.  Of course keg beer, and beer sold on tap on site is the most profitable.  Based on some quick research I think an fair average is $1.95 per 16 oz serving.  I could be all wet on this, but let's use this number.
  • 82,680,000x$1.95=$161,226,000.  I would add 5% to this to account for "other" forms of revenue like merchandise, licensing, etc. for a total of $169,287,000.
  • Now using the multiplication factor of 2.4 means at the very least Founders is worth $406,288,800, just based on gross revenue from 2014.
  • I would imagine that when it comes to valuation the growth of Founders based on the approved financing etc to bring their production to 600,000 barrels would have to be added.  They are more than doubling their production in the next several years so I can easily see 15% added to the valuation to account for this growth.  
  • This would bring a valuation of $467,232,120.  So a 30% share would cost about $140,160,636.

Not bad for 7:30 on a Wednesday night... :shades:

 

 

That's pretty good Dave. $163 Million coming out of that one plant is huge. No wonder so many people are getting into this game. If you do traditional manufacturing, the old standard used to be a goal of $200,000 per employee in revenue. At 250 employees, Founders (if your $163 Million revenue is correct, which I bet you're close) is $676,000 per employee.

 

In addition, pumping out $163 Million in product from 65,000 square feet of manufacturing space is mad money.

Link to comment
Share on other sites

Love the calculation methodology.  My only thought is that the $1.95 a pint is a bit too high for what Founder's nets back. For a $10 6-pack I would guess that most is taxes and retail/distributor profit. Thus they probably pull back less than a buck a bottle/pint. I would imagine that a keg nets back even less per "pint equivalent". Their bar is probably the only high margin return back to Founders. 

 

The best point of comparison is the sale of Goose Island to In-Bev for $40 million.  Not sure where they were on the barrels per year scale compared to Founders today, but that might be a better way to approximate the value.   Goose Island 2011: 140,000 barrels in 2011 (est) = $40 million.   Founders 2014: 200,000 barrels = $57 million. 

 

However, the annual growth rate of any brewery would be the more important factor. My guess is that Founders ridiculous annual growth rate of 67% since 2008 would value Founders significantly higher than Goose Island by a Valuation-to-Current Output basis.

Link to comment
Share on other sites

Love the calculation methodology.  My only thought is that the $1.95 a pint is a bit too high for what Founder's nets back. For a $10 6-pack I would guess that most is taxes and retail/distributor profit. Thus they probably pull back less than a buck a bottle/pint. I would imagine that a keg nets back even less per "pint equivalent". Their bar is probably the only high margin return back to Founders. 

 

The best point of comparison is the sale of Goose Island to In-Bev for $40 million.  Not sure where they were on the barrels per year scale compared to Founders today, but that might be a better way to approximate the value.   Goose Island 2011: 140,000 barrels in 2011 (est) = $40 million.   Founders 2014: 200,000 barrels = $57 million. 

 

However, the annual growth rate of any brewery would be the more important factor. My guess is that Founders ridiculous annual growth rate of 67% since 2008 would value Founders significantly higher than Goose Island by a Valuation-to-Current Output basis.

Jijppy, you are most likely correct about net profits.  However, most industry valuation calculators use gross sales not net profit.  To be honest we will never know.  What I wonder is how the culture of Founders when it comes to their 250 employees has changes with 67% growth rate since 2008?  But that is a discussion for another forum.  :thumbsup:

Link to comment
Share on other sites

Jijppy, you are most likely correct about net profits.  However, most industry valuation calculators use gross sales not net profit.  To be honest we will never know.  What I wonder is how the culture of Founders when it comes to their 250 employees has changes with 67% growth rate since 2008?  But that is a discussion for another forum.  :thumbsup:

 

Either way, here's what 67% sales growth will get ya. :)

 

15864579728_0a69896a72_c.jpg

Link to comment
Share on other sites

  • 2 weeks later...
  • 2 weeks later...

It's interesting to think that Grand Rapids will have one of the largest craft brewers in the country and their downtown presence will be VERY noticeable.

 

It's not a skyscraper but all that steel in the sky makes me feel proud. :)

 

16274189992_ef4ebe1683_b.jpg

 

 

 

16087643190_2b5c31d249_b.jpg

 

 

16273225551_130d581025_b.jpg

Link to comment
Share on other sites

I was surprised when I saw how much this impacts my view south across 131 from work. This is alot bigger than i expected.

 

I would guess it's 45 to 50 feet tall? Plus it sits on a hill amidst a bunch of warehouse type buildings. I noticed the other day while driving on I-196 that you can see it at the Southern end of the river.

 

Here's the finished look again. I like that it has all the windows in it. I assume you'll be able to see all the fermenting tanks through the windows?

 

15437321578_6e66931971_o.jpg

 

 

They make some monster tank towers.

 

DSC_3196_tankmove01v01multlayadjcropbord

 

 

Sell_500T_beer_fermenter-Unitank-FV.jpg

Link to comment
Share on other sites

I would guess it's 45 to 50 feet tall? Plus it sits on a hill amidst a bunch of warehouse type buildings. I noticed the other day while driving on I-196 that you can see it at the Southern end of the river.

 

Here's the finished look again. I like that it has all the windows in it. I assume you'll be able to see all the fermenting tanks through the windows?

 

15437321578_6e66931971_o.jpg

 

 

They make some monster tank towers.

 

DSC_3196_tankmove01v01multlayadjcropbord

 

 

Sell_500T_beer_fermenter-Unitank-FV.jpg

 

I don't think the rendering does it justice though. The scale impressed me, adding height to a very flat area.

Link to comment
Share on other sites

In this tidbit I found on their website that I hadn't seen in any of the articles yet: says they are adding a 300bbl "brewhouse" with fermenting tanks. They must be stacking them in that vertical space. Great use of a cramped urban footprint without taking it out to Cascade Township or some other Walker industrial park.

 

http://foundersbrewing.com/latest-news/2014/thanks-beer-enthusiasts-growing/

 

These are apparently 300bbl tanks. I think that's what they have now, just more of them.

 

BB_Tanks_3_041112-570x425.jpg

Link to comment
Share on other sites

In this tidbit I found on their website that I hadn't seen in any of the articles yet: says they are adding a 300bbl "brewhouse" with fermenting tanks. They must be stacking them in that vertical space. Great use of a cramped urban footprint without taking it out to Cascade Township or some other Walker industrial park.

 

Word.  :thumbsup:

Link to comment
Share on other sites

It's hard to believe that just a few years ago that this property consisted of a derelict truck depot with squatters, and trash ridden- weed invested lot.  Now the entire block is home to one of the fastest growing and most celebrated breweries in the country!  

 

As a side note, I had not been to Founder's since they were on Monroe, but not for a lack of trying!  Each time I tried there was a long  line or no seats.  I finally got in Christmas Eve, arriving just after their 11 am opening.  To my surprise, there were only a couple of open seats!  I confirmed with our waiter that they had just opened, but he said there was already a long line at the door when they unlocked the doors.  A couple of the "Founder's" where there too, celebrating Christmas Eve with family. 

Link to comment
Share on other sites

It's hard to believe that just a few years ago that this property consisted of a derelict truck depot with squatters, and trash ridden- weed invested lot.  Now the entire block is home to one of the fastest growing and most celebrated breweries in the country!  

 

As a side note, I had not been to Founder's since they were on Monroe, but not for a lack of trying!  Each time I tried there was a long  line or no seats.  I finally got in Christmas Eve, arriving just after their 11 am opening.  To my surprise, there were only a couple of open seats!  I confirmed with our waiter that they had just opened, but he said there was already a long line at the door when they unlocked the doors.  A couple of the "Founder's" where there too, celebrating Christmas Eve with family. 

 

Also could have been the fact that they had Canadian Breakfast Stout on tap (last available in 2011). 

Link to comment
Share on other sites

It's hard to believe that just a few years ago that this property consisted of a derelict truck depot with squatters, and trash ridden- weed invested lot.  Now the entire block is home to one of the fastest growing and most celebrated breweries in the country!  

 

As a side note, I had not been to Founder's since they were on Monroe, but not for a lack of trying!  Each time I tried there was a long  line or no seats.  I finally got in Christmas Eve, arriving just after their 11 am opening.  To my surprise, there were only a couple of open seats!  I confirmed with our waiter that they had just opened, but he said there was already a long line at the door when they unlocked the doors.  A couple of the "Founder's" where there too, celebrating Christmas Eve with family. 

 

 

Like this?

 

5804909656_18a70cab6b_o.jpg

 

5804354125_e7b6eb1f44_o.jpg

 

 

And they stripped it down to its skeleton:

 

1030108947_0010a5ad88_z.jpg

 

1277634406_a8acba6e2d_z.jpg

 

 

I was in it at the time but I think I may have lost the pictures in a previous laptop crash. Bummer.

 

I'll drop in there and meet with people at 2 or 3:00 and usually the inside tables to the left are pretty much filled up already. I don't like the other newer half, doesn't feel like Founders to me (even though they have the old original Brass Works building bar). :)

 

 

Here's a cool pic I found on flickr:

 

10434706333_e65c7b829b_z.jpg

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...

Important Information

By using this site you agree to our Terms of Use and Privacy Policy. We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.