A truly overwhelming demand for our beer

To put it simply, our beer is in higher demand than our current production setup can meet. We are somewhat limited through these production constraints on securing more large-scale wholesale customers, like local grocery stores and large restaurant chains. We are in a just-in-time production scenario with our larger existing wholesale customers which often restricts the amount of beer styles available for our retail sales in our tap room. Without additional capacity, we would not be able to supply additional large wholesale customers as it is a struggle to keep up with our current setup. 

With the rapid expansion of our wholesale business (over 120% throughout the last year) and increased tap room traffic, we are having difficulty keeping up with demand for our beers both in kegs and in cans. While we haven’t missed any turns, production schedules are often in a hurry-up-and-wait scenario. Currently, we can only have 4 beers fermenting at any given time in 10 BBL batches at a maximum. While we can keg out beers as they finish fermentation and carbonation, we have to use a third party canner to can our beer. These constraints and a lack of flexibility (working around hard canning dates) can result in 25 - 30% unrealized production per month. By adding our own canning solution, we would then be able to aptly supply additional large wholesale customers.

We also have a very manual process for brewing our beers with our current equipment. While we are able to customize our orders and approach brewing creatively, our current process is time consuming and laborious. There are many efficiencies and consistencies that could be gained through simple automation and better equipment in the brew house, which would give us the ability to fulfill bigger wholesale orders. 

Scale up our infrastructure and capitalize on our momentum

We tackled our issue with inflexible canning dates by purchasing our own small canning line. This canning line will be activated and integrated into our daily operations by end of August 2021. The line allows us to package any beer at any time, whenever the beer is ready. We will need to upgrade the entire brew house at some point in the near future and go to a 20 BBL or 30 BBL brewing system and additional larger fermenters to hold that brew batch size. With an upgraded brew house capacity through investment, we would then look at automating and relieving some of the brew processes including grain preparation, water supply efficiencies, spent grain removal, and fermentation control.

With production constraints reduced with better capacity and flexibility, we can then in earnest pursue local grocers like Safeway and Bashas to carry some of our Arizona-specific flagship beers like Desert Distortion New England IPA, Englemann’s Elixir Prickly Pear Pale Ale, and Carbide Light Blonde Ale. We could then dedicate a salesperson to the big box stores like Total Wine, Safeway, Bashas, AJs, Whole Foods, and large chain restaurants like Cold Beer & Cheeseburgers. 

Lastly, we have first right of refusal on the building we are currently leasing so, as we grow, we are able to expand into the suites next to us. With sufficient funding, we are able to extend our 3350 square foot space up to 8,000 square feet by taking over the entire building. By simply adding 2,000 square feet, we would be able to create a cellaring area for production, a permanent canning line, a permanent grain crushing station, a secondary cooler for expanded wholesale business, as well as a dedicated keg cleaning station. We would be able to add 20 BBL or 30 BBL fermenters along the backside of the facility while extending the retail space in the front side of the building. This allows us to maximize production and increase retail sales for beers, events and merchandise. The additional space would also allow us to add a stage for ticketed events while keeping the tap room open.

Steady growth in an emerging market

*Sales information is for Bone Haus Brewing by Skullenwink LLC and its wholly owned subsidiary Bone Haus Brewing LLC, both referred to as Bone Haus Brewing. 

Our small operation has been generating stout revenue since our inception. While we were only open for eight months in 2018, we generated $126,291.54. In 2019, we generated $367,017.67, and in 2020, we generated $475,541.02, despite the pandemic. Our Q1 revenue for 2021 is $184,124.07 (roughly 42% up YoY,) and in April 2020, we had the best month we’ve ever had as we exceeded $75,000 in one month.  

In Arizona, where Bone Haus Brewing operates and sells, craft breweries sold $1.2 billion in beer throughout 2020 which ranks 22nd in the nation. Arizona craft breweries produced 181,006 barrels of beer in 2020. Bone Haus Brewing also ranks 51st out of 91 guild members in 2020 production volume as reported by the Arizona Brewer’s Guild only after being in operation for 3 years. (Source)

In September of 2020, we landed our first big box store customer, Total Wine & More. We also supply a local high-end grocery store called AJ’s Fine Foods and local Whole Foods. This milestone has really increased not only our wholesale income but also has positively sparked interest in our tap room and retail space. Many new customers tell us they tried a 4-pack of our beer from Total Wine & More and just had to come visit the tap room!

It’s not just a beer, it’s an experience

In the United States, the overall beer market is $94.1billion and the craft beer market is $22.2 billion (with a 12.3% market share). Craft breweries produced 22.8 million barrels of beer in 2020 (Source). Microbreweries, the classification for Bone Haus Brewing, were responsible for 18.8% of the 22.8 million barrel production volume in 2020.

We differentiate ourselves from any other brewery with deep branding, customer engagement, and the fulfillment of great tasting beer. When a customer walks into our tap room for the first time, they are usually in awe at the decor and the attention to detail in the theme and brand. We make everything on brand, even down to the restroom fixtures. We even try to hide the necessary technology as best we can since we are themed on a fictional history of legends and lore from the late 1800s in Arizona. At Bone Haus Brewing, we don’t just want you to have a great tasting beer; we want you to have an experience.

Bone Haus knows that a beer’s brand needs to go beyond the taproom, and our can artwork ensures that. Our black background label presents a contrasting backdrop for our colorful and striking artwork. The macabre style of artwork on each label has a vignette that expands the Bone Haus story, what we call The Bone Haus Chronicles. Each chronicle details the legend of Hans Von Biermann who inspired the Bone Haus brand. Also, every beer can artwork has a hidden number 13 that we challenge all of our drinkers to find. These labels are designed to first attract the eye of the customer amongst a very crowded retail space, engage them with the artwork and story, and deliver upon consumption with a delicious, high quality beer. 

Many breweries rely solely on their beer to get and retain customers which certainly can work, but we believe deeper customer engagement by forming a connection to the community alongside a high-quality, satisfying product is our winning formula. We believe that our beers are just an extension of our love for adventure and the community. That’s why we offer fun beer schools for the public, live music, and even yoga classes! We know that our connection to the community is the source of our success, which is why our three-pronged approach will lead to a deep connection with our customers and allow us to grow larger than most through the brand and fulfillment of those great tasting beers. 

A story that spans the nation

Our grand vision is to elevate the Bone Haus brand to a national level. We envision having multiple locations across the country that absorb the local legends and lore of their respective territories into a Bone Haus story and localized brand. It is our belief that once you create a special and unique destination with high quality products, you can expand on that idea and make it relevant to multiple local communities. Through a network of genuine, local connections, we will make Bone Haus Brewing a favorite in the nation. Become an investor in Bone Haus Brewing and help us bring our story to new heights.