Investor Notice
This Offer is conditional on the completion of the rights issue offered to existing shareholders and the company raising at least $2m. By applying for an investment in the Offer, you are committing to subscribing for the amount in your application. The company will endeavour to allocate to you your full application amount, however this may need to be scaled back if the Offer and Rights Issue are oversubscribed or the retail investment limit is exceeded.
A maximum of $2m can be raised from retail investors in reliance on Snowball Effect’s equity crowdfunding licence, with the balance available only to wholesale investors. If you are a wholesale investor, please ensure you select the 'wholesale' option when investing to allow a greater opportunity for those who are not wholesale investors to be able to participate, and for the company to maximise the capital raised in this round.
The company will confirm your final allocation and investment amount at the end of the application period. Payment for your investment will only need to be settled once your investment allocation has been confirmed by the company.
INVESTMENT HIGHLIGHTS
- Leading independent NZ craft brewery, with a nationally recognised brand, award winning brewery and strong craft DNA.
- Consistent revenue growth since inception in 2013, generating NZD 10.6 million of revenue in FY22, with a compound average growth rate (CAGR) of 55% since FY17.
- Diverse distribution and sale channels, sold in more than 1,000 retail, off-licence and hospitality outlets around NZ, and shortly 150 Vintage Cellars and First Choice retail stores in Australia.
- A newly recruited leadership team with the collective capability to drive future growth, supported by a highly qualified board and robust governance.
- Well positioned for growth, with an organisational structure and platform designed to scale the business into a large independent craft brewery.
- State-of-the-art brewing facilities providing world class brewing capacity and capability.
- A clear strategy focused on driving value from a strong brand identity, growing distribution across multiple channels and geographies, and continued investment in the brewery to increase capacity and improve margins.
- Newly established grocery distribution in Australia, and reciprocal licensing partnership with Californian based Ballast Point Brewing Company, creating brand recognition in overseas markets and a unique platform to support future growth.
EXECUTIVE SUMMARY
Behemoth was founded in 2013 by Andrew Childs and has rapidly grown into one of NZ’s favourite and most awarded independent craft breweries. We have released more than 500 unique beers, won more than 150 awards, and produced more than 4 million litres of beer since inception. We enjoy experimenting with ingredients and creating beer big on flavour, while prioritising the release of new beers and styles that our customers expect and deserve.
We have grown every year since inception, generating NZD 10.6 million of revenue in FY22, at a compound average growth rate (CAGR) of 55% since FY17. Our beer is now sold in more than 1,000 retail, off-licence and hospitality outlets around NZ, and will shortly be launched in Coles, providing access to 150 stores across the Vintage Cellars and First Choice retail stores in Australia. A key to our success to date has come from developing a strong national brand, aligning product development with an understanding of consumer trends and building strong and diversified sales channels.
Our mascot, Churly represents quality, craft and innovation, and provides us with a unique advantage in a crowded craft beer marketplace; allowing us to perpetually reinforce our brand’s relevance and connect with the community by referencing topical events. Quirky and fun, Churly is NZ’s most engaging craft-beer character (bringing joy to Behemoth consumers with each new beer). Churly will feature strongly as we build brand awareness overseas by referencing local events and politics in those markets.
The investment in our brewery since our last capital raise has been rewarded with our brewery being awarded the 2022 Champion Medium New Zealand Brewery by the Brewers Guild of New Zealand. This was a truly proud moment for the whole team, and a great reward for 9 years of hard work. We plan to continue investing in our brewery to drive quality, capacity and margin improvement.
We have assembled a highly qualified and experienced board, and put in place a robust corporate governance structure to support the ongoing transition into a large independent craft brewery. In anticipation of the next growth stage, we have invested materially in all business functions, recruiting an experienced, skilled and results oriented leadership team.
We are now producing and distributing beer from Ballast Point Brewing Company, the 3rd largest independent craft brewery in California. We have a reciprocal agreement with Ballast Point under which they brew and distribute Behemoth beer in California, representing our first export under licence arrangement. We will continue to develop similar strategic partnerships with other key international brewers.
Following our launch into Vintage Cellars and First Choice, we will move from one dedicated export and online resource to recruiting local resources in Australia to lead the sales and marketing initiatives and support expansion within the independent retail channel, as well as launch a dedicated online store in Australia.
Craft beer continues to be one of the fastest growing alcoholic drinks categories in NZ, and much like the trend from mainstream to craft beer over the last ten years, consumers are now also seeking more premium, handcrafted beers. Within the beer market, low and non-alcoholic beers have become the fastest growing segment in recent years. We recently launched a non-alcoholic hazy IPA, branded “Responsibly”, which received positive consumer reviews and sold 50% of our first batch within the first day. Creating a range of low and non-alcoholic craft beers is a key product development priority for us.
Although the pandemic caused us to pause investment in further hospitality venues, Churly’s Brewpub + Eatery and Churly’s Rise have continued to grow and we will continue to selectively consider new venues where the location, economics and potential brand enhancement are attractive.
The business has grown substantially over the last 9 years; from contract brewing to a fully operational in-house brewery and popular brewpub, from NZ focused sales to international partnerships and distribution, and from a founder-led small team to a highly skilled leadership team supported by a strong board with majority independent representation, all of which has been achieved without losing sight of our northern star, being an innovative craft beer business.
Our newly established grocery distribution in Australia and reciprocal export licensing partnership with Ballast Point in California will develop brand recognition in key overseas markets, creating a unique platform to support future growth opportunities in those larger craft beer markets.
Our medium term strategy is focused on leveraging our strong brand and platform to scale the business into a large independent craft brewery, while maintaining the characteristics and spirit inherent in our identity.
We are now raising up to NZD 3 million of new growth capital to support our growth, and invite you to support us on the next stage of our journey.
BOARD OF DIRECTORS AND LEADERSHIP TEAM
We have assembled a highly qualified and experienced board to support the development and execution of our strategy.
The board recognised that it was fundamental to the next stage of our growth that we assemble a highly skilled and relevantly experienced leadership team with the collective ability to execute on the core elements of our strategy. With this in mind, each person has been recruited for their specific expertise and experience.
Julian Davidson Chair and Non-Executive Director
Julian is an internationally recognised liquor industry leader. Julian spent 15 years with Lion (Australia and NZ) in senior finance and leadership roles, including 3 years as Managing Director of Lion NZ, and 7 years with Independent Liquor, including 5 years as CEO. Julian is a member of the NZ Chartered Accountants and has a Programme for Management Development (PMD) from Harvard. Julian was appointed as a non-executive director and chair of Behemoth in 2022.
Andrew Childs Executive Director/Co-CEO
Andrew is the founder and Co-CEO of Behemoth, responsible for brewing operations, product development and logistics. Andrew’s passion for great beer and entrepreneurial spirit inspired him to leave the legal profession to establish Behemoth in 2013. Andrew has led the growth of the business from a turnover of NZD 258 thousand in FY15 to NZD 10.6 million in FY22. Andrew has led all external aspects of the business including sales, brand direction, marketing strategy and key business relationships. Andrew’s main passion is creating new beers and developing the taste experience for Behemoth’s consumers. Andrew is focused on driving the overall Behemoth growth strategy which is collectively formed by the board of directors and senior management team.
Brett Sutton Non-Executive Director
Brett is an experienced independent Director. Brett previously held senior executive positions at the New Zealand Superannuation Fund where he was Head of Direct Investments, and Todd Capital Limited where he managed a portfolio of strategic equity investments. Brett is currently the Chair of Stevenson Group, Mint Asset Management and Woolyarns Holdings, Deputy Chair of the Co-operative Bank and Medical Assurance Society, and a director of Asmuss Group. Brett was appointed as a non-executive director of Behemoth in 2022.
John Mcconnell Non-Executive Director
John is a Chartered Member of the Institute of Directors, and has had an extensive career in various blue chip corporations, including seven years with Lion Nathan in various senior sales and marketing roles, followed by leadership roles at ASX listed Wesfarmers and a number of privately held companies across a variety of industries including, manufacturing, FMCG, food and beverage, hospitality, professional services and industrial distribution. John founded successful brewing-related businesses, NZ Craft Brewing Co. Ltd in 2017, and Craft Box Direct Ltd in 2019. John brings a valuable resource to Behemoth, leveraging his experience balancing long-term strategic growth priorities with immediate sales, cost and rapid change deliverables. John was appointed as a non-executive director of Behemoth in 2019.
Hannah Miller Childs Co-CEO
Hannah is the Co-CEO of Behemoth, responsible for hospitality operations, finance and human resources, in addition to contributing on a daily basis to all aspects of the business. Hannah’s devotion to great food and the art of hospitality led her to an international career in restaurants; training as a chef, butcher, charcutier, and front of house manager after completing her degree at The Culinary Institute of America. With 20 years of experience on 6 continents, Hannah has not only inspired a creative menu for Churly’s, influenced by her passion for nose-to-tail eating, but challenges the greater Behemoth team to chase their dreams and always be better than they were the day before. Hannah is known for having an eye for detail and is often referred to as “Behemoth’s glue”.
Richard Justice CFO
Richard has wide ranging experience as a CFO, General Manager & Board Member in both the corporate sector and in early stage businesses, helping them to grow and scale internationally. With a background in finance, Richard has been involved in capital raising in New Zealand, Australia, Canada and the USA, with experience as CFO for listed companies in Australia, Canada and the USA, as well as being COO and later CEO of a NASDAQ listed business, and more recently being active in supporting start-up businesses. Richard is currently the NZ Regional Director for The CFO Centre, with him and his team of experienced CFOs providing part-time CFO services to businesses that benefit from the skills and experience available, without the cost of a full time employee.
Jeremy Wright Brewery Operations and Site Manager
Jeremy joined Behemoth in 2021 from Pernod Ricard Winemakers where he was leading their New Zealand operations as Operations Director. Described by his peers as being down-to-earth, well organised, and pragmatic, Jeremy leads the operations team by example while making daily improvements to Behemoth’s systems and processes. Jeremy also oversees the current expansion plans, while continuously improving brewery efficiency.
Greg Byrne National Sales Manager
Originally from the UK, Greg moved out to NZ 4 years ago. He has a strong background in the wine and spirits industry, having worked for William Grant & Sons, where he was selling spirits into large FMCG players like Tesco and Lidl. This experience transferred over into more recent FMCG sales roles with Red Bull NZ and SC Johnson where he was the category manager for Foodstuffs. It was his passion for quality drinks (specifically Hazy IPAs) that led him back into the alcohol industry where he now leads Behemoth’s sales team of five.
Tim Mapa Finance Manager
With a background in finance, banking, corporate treasury and being highly skilled in FMCG information systems, Tim is a welcome addition to the Senior Management team. Over the last three years, as a Finance and Information Systems Manager at Pure Delish, Tim provided financial analysis, support, recommendations and made significant system improvements to increase overall productivity of a growing business. In his previous assignments, he was also well acquainted with NZ and AU corporate treasury, while handling treasury back-office functions for corporate clients including Fletcher Building, The Warehouse Group, T&G Group, and CFS Australia. Tim is an associate member of CPA Australia and holds a Master’s degree in Professional Accounting (MPA) in NZ. Tim is an inspirational team player and finds great satisfaction in making the team’s lives easier through system improvements and accuracy in financial reporting.
Upokoina George-Yates Hospitality General Manager
“U”, as he’s most commonly known, joined Behemoth in early 2020 to be the head of our new, at the time, hospitality arm of the business. Countless lockdowns and two venues later (with a third on the way), U continues to lead his growing team through innovation, determination, and a sheer will to succeed. Coming to us from the Britomart Hospitality Group, U is well-versed in the importance of tailoring the customer experience while maintaining margin and looking after a team. U does this with ease and a genuine grin on his face.
Naina Gupta Human Relations Manager
Naina Gupta is no stranger to the “ins and outs” of working with people. Joining the team in May of this year, Naina’s previous roles have included Senior Employment Relations Advisor at Restaurant Brands and Ryman Healthcare Limited. Naina is passionate about people and believes that most problems can be solved by having a good conversation and building strong relationships. While this is Naina’s first role working in the alcohol industry, her results-driven focus is a great compliment to the Behemoth team.
Brent Nielsen Export and E-Commerce Manager
Brent is not only one of Behemoth’s earliest Chur-holders but acted as our Australian brand ambassador (Chur Brewing Company) for the past 8 years before coming home to NZ and officially joining the crew. Brent joins us with a background in Project Management and Supply Chain Optimisation from within the e-commerce and logistics industry and is leading the charge of building out our new go-to-market strategy in Australia.
Nick Lurman (Uzir Design) Graphic Designer and Illustrator
An 80’s kid from stunning NZ with a passion for good music and even better beer, he’s always had a strong affiliation with design and opening his sketchbook to put pencil to paper. This naturally led him down the path of the creative industry. After cultivating his technique in an agency, he started his own brand as a freelance designer wearing a plethora of hats both figuratively and literally. He brought his culmination of illustration and design experience to the Behemoth table in order to foster the existing tone while adding his personal flair and value to the brand.Warning statement
It's crucial for you to understand the characteristics and risks of this investment opportunity. New Zealand law normally requires people who offer financial products to provide in-depth information to investors before they invest. The usual rules do not apply to offers by companies through Snowball Effect. As a result, you may not be given all the information you need to make an informed decision. Investing is risky. Some of the key risks include loss of capital, illiquidity, lack of returns, dilution, loss of key people and customers, and lack of control. You should only invest money that you can afford to lose.