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HopsFromVirginia.com

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Information about HopsFromVirginia.com
Investor Relations

Published on March 9, 2014

Author: noneofubusiness

Source: slideshare.net

Description

Quick outline of the HopsFromVirginia.com business plan.
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HopsFromVirginia.com The resurgence of hop growing on the east coast. ABFarms, LLC and HopsFromVirginia.com

Our Company Mission and Goals Our Mission: To provide fresh, locally grown hops to the micro-brewery and home brewer communities to enable them to create a quality beer with a local flavor for their customers and own personal enjoyment. ABFarms, LLC HopsFromVirginia.com  To become a primary regional provider of quality hops to the microbrewing industry.  To become a trusted provider of hops to hobby brewer stores and the home brewing community.  Become the primary provider of aroma hops in the State of Virginia and to the Mid-Atlantic region in general.

Current Business Conditions        Explosive growth in the craft beer brewing industry with over 2,300 breweries currently in operation, the most since the 1880's and more being opened every day. According to statistics provided by the Brewers Association, there are 2386 micro-breweries and brewpubs currently operating in the United States, an increase of 62.2% since 2009. As of June 2013, the Brewers Association website states that they have tallied 409 brewery openings in 2012(310 microbreweries and 99 brewpubs) Recent efforts by enthusiasts have pursuaded state legislatures to pass homebrew laws and it is now legal to homebrew beer in all 50 states. Multiple industry surveys have shown that these new brewers, craft breweries and brewpubs desire to purchase locally grown products creating an unfulfilled demand in the marketplace. When addressing price, 58.6% of survey respondents said that they would be willing to pay a premium of 1-10% over market price to purchase locally grown hops. Additionally, 27.6% of the respondents stated they would be willing to pay a premium of 10-30% over the market price. Overall, homebrew supply shops grew 29 percent in gross revenue in 2012, which is an increase of 2% of 2011 and reflects a steadily increasing demand for the ingredients and equipment needed to brew at home.

Our Product Line Whole leaf hops by the pound - A small brewery might not need an entire bale for a special or seasonal brew, so we can also supply by the pound. This will be done on a case by case basis using hops we have in cold storage. Whole leaf by the batch – Home brew shops and recreational brewers require hops in 1-2 oz packets for use in individual batches of beer. These are vacuum packed in a special process and are easy to ship and have the highest profit margin. Wet-Fresh Hops – Available for one week after harvest, specialty sales of this product will arrive just in time for breweries to make seasonal holiday brews. Requiring less processing that other products, the price will be less for the customer but a high profit margin for the business. Pelletized by the pound – Some brewers prefer their hops in pelletized form. Pelletized hops can be sold in large or smaller amounts. Pelletized by the batch – Home brew shops and recreational brewers require hops in 1-2 oz packets for use in individual batches of beer. These are vacuum packed in a special process and are easy to ship and have the highest profit margin. Hop Rhizomes – Each root cutting can become a viable plant and instead of discarding the cutting, they can be sold for $3-5 each based on the variety. Customers are home brew shops for resale and direct to the home brewer.

Mid-Atlantic Brewery Production in 2012 According to a BA survey, American brewers use about one pound per barrel, a number that is going up as drinkers buy still more IPAs (now 18% of craft sold and close to three times more than five years ago). So craft brewers needed at least 1.3 million pounds more hops in 2011. The other brewers needed 750,000 pounds less (to brew 4.5 times more beer). Hop sales went up. Stan Heironymus, AppelationBeer.com* State Breweries USA Rank Barrels/ Annually Increase/ Decrease in 2011 VA 48 15 84,059 36.81% MD 30 24 154,650 25.35% WV 5 48 3,752 22.82% PA 102 6 NJ 26 27 37,648 8.58% DEL 9 44 180,794 17.43% NC 70 10 159,033 33.36% Totals 290 1,626,116 5.11% 2,246,052 *Hieronymus, Stan “Hey, Mr. President, heard of American Hops?” appelationbeer.com 4 Sep 2012 <http://appellationbeer.com/blog/hey-mr-president-heard-of-american-hops/>

Our Target Market Growth The Brewers Association has published the following data on brewery and brewpub growth in the Mid-Atlantic region: State Operating Planned Total Potential Increase VA 48 102 135 181% MD 36 25 61 69% WV 7 7 14 50% PA 102 132 212 107% NJ 26 53 69 165% DEL 11 9 20 81% DC 3 3 6 50% NC 78 66 144 84% Totals 311 397 661 112% Brewers Association – Find U.S. Brewery. Retrieved Feb 1, 2014, Brewers Association <http://www.brewersassociation.org/pages/directories/find-usbrewery>

Our Competitive Advantages       Our biggest competitive advantage is our regional operation zone. Upon establishment, HopsFromVirginia.com will be the single largest hops provider on the eastern seaboard and have no regional competitors. Our regional location and proximity allows us to ship or travel to any of our customers in one day and we can invite them to come visit the operation so they have a stronger customer relationship with us. Surveys indicate a majority of brewers would be interested in sourcing 100% of their hop needs locally if the quality matched their expectations and the price point fell within $5‐ 10/lb. We can provide breweries and brewpubs with fresh wet hops for seasonal brews. A service other hop providers are unable to offer. We can service our customers in the future by expanding or carving out a few areas in the yard to cultivate specific varieties under growing contracts. Our internet marketing savvy and agility will allow us to reach our target market in more efficient and personal ways that other hop providers.

The Plan Land Acquisition – 100-110 acres of suitable property with water sources Erect a hopyard capable of producing 150,000-200,000 pounds of dried hops annually. Plant over 100,000 rhizomes in the spring of 2015. Mid year of 2015 begin marketing the product to breweries, brewpubs and homebrew stores in the Mid-Atlantic region. Prior to the harvest, hold initial Virginia Hops Festival. Conduct the first harvest of hops in fall of 2015. Ship product to customers, continue to market our products and brand. Evaluate our performance and make adjustments for the next year.

Financing ABFarms, LLC and HopsFromVirginia.com LLC will require financing of $3 million to establish farming and harvesting operations, establish offices and to operate for the first two years. Desired financing is a 5-7 year balloon loan with an annual interest rate of 7% annually. While the company will likely operate at a loss for the first two years, it is anticipated that sufficient revenue will be generated to allow interest payments beginning in year two through the completion of the term of the loan. – – – – – Contact: Robert B. Andrews 165 Savannah Drive Strasburg, VA 22657 randrews@hopsfromvirginia.com

Financing ABFarms, LLC and HopsFromVirginia.com LLC will require financing of $3 million to establish farming and harvesting operations, establish offices and to operate for the first two years. Desired financing is a 5-7 year balloon loan with an annual interest rate of 7% annually. While the company will likely operate at a loss for the first two years, it is anticipated that sufficient revenue will be generated to allow interest payments beginning in year two through the completion of the term of the loan. – – – – – Contact: Robert B. Andrews 165 Savannah Drive Strasburg, VA 22657 randrews@hopsfromvirginia.com

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