In the emerging industry of craft brewing, the decision to raise capital through Crowd-Sourced Funding (CSF) has been a tale of success for early adopters, cautious exploration for potential issuers and mixed results for investors.
As we reflect on 2023, where only a handful of breweries used CSF as a financing avenue, we unravel influencing factors and explore the exciting prospects that may make 2024 the year for the brewing industry to embrace CSF.
5 Insights from Mark Hubbard: Anticipating Shifting Trends
In aspiration of exposing useful insights, OnMarket’s Marketing Manager, Cassandra Diamantis, recently sat down with Mark Hubbard, Brewery Founder, former Brewery Owner and OnMarket’s Brewery Campaign Manager, to gain insights into the nuances of CSF adoption in the brewing sector.
Mark Hubbard pictured at Blizzard Brewing in 2016
In this interview, Mark highlights intriguing patterns amongst brewery owners in 2023 and provides compelling reasons why 2024 is poised to witness a surge in breweries turning to CSF for capital needs.
Insight #1: The Learning Curve for Breweries
Mark acknowledged that since its inception in Australia in 2018, there has been a necessary period of brewery owners familiarising themselves with the concept of CSF. Prior to its inception, many breweries were still navigating the landscape of traditional financing, so grasping the unique approach of CSF required a certain level of understanding, proof and acceptance. As the industry has greatly developed since 2018, the period of learning is beginning to transition to the period of execution.
“Adopting a new financing model requires a learning curve. In 2023, many breweries were in the process of assessing the potential benefits of CSF and understanding how it aligns with their growth ambitions,” Mark explained.
Insight #2: Gaining Trust in the CSF Model
Trust is paramount when it comes to financial matters, and the CSF model is no exception. Mark emphasised that time and case studies were needed for breweries to trust in the effectiveness of CSF and its ability to connect a business with a community of passionate investors.
“Trust is earned through experience. In 2023, some breweries were still observing how their peers fared with CSF campaigns before fully embracing the model. Trust-building is a journey, and we are seeing the groundwork being laid for a more confident approach in 2024,” Mark stated.
Insight #3: Regulatory Familiarisation
Navigating regulatory requirements can be a significant factor influencing financing decisions. Mark highlighted that in 2023, some breweries were in the process of familiarising themselves with regulatory aspects of CSF, understanding the legal framework to ensure compliance.
“Regulatory considerations play a crucial role in the decision-making process. Breweries took the time to ensure they fully understood the regulatory requirements associated with CSF, ensuring a smooth and compliant fundraising journey,” Mark noted.
Insight #4: Anticipation of Industry Shift in 2024
Mark expressed his optimism for a transformative year ahead. He anticipates that the brewing industry is now primed for a shift in mindset, with more owners recognising the potential of CSF to raise capital, build a community and amplify brand loyalty.
“I believe 2024 will be a game-changer. Breweries are realising that CSF is not just a funding source; it’s a strategic move that aligns with the values of the craft beer community. We’re entering a phase where CSF will become an integral part of the growth strategy for many breweries,” Mark forecasted.
“Additionally, in the challenging economic environment that breweries currently operate in, access to capital has never been more important. The number one reason business’ fail is due to a lack of capital. CSF is a powerful tool that can build a strong balance sheet, enhance cash flow and respond to market conditions.”
Insight #5: Changing Dynamics of Investor Engagement
Mark also discussed the dynamics of investor engagement, conveying that breweries are beginning to appreciate the unique connection that CSF fosters between founders and investors. As this appreciation develops, the appeal of CSF as a more inclusive and community-driven financing model is gaining traction.
"CSF Investors are not just providers of capital; they become advocates and enthusiasts for the brand. Breweries are recognising the power of investor engagement and how it can be leveraged to propel and expedite their growth ambitions," says Mark.
Blog in Summary: A Brewing Revolution in 2024
As we farewell 2023, a year of exploration and groundwork, we stand at the threshold of a brewing revolution. With the foundation laid, breweries are poised to embrace Crowd-Sourced Funding in 2024. The factors that once hesitated are now propelling the industry toward a new era of innovation, community-building, and financial empowerment.
Connect with Mark Hubbard at mark@onmarket.com.au and be part of the CSF revolution that awaits your brewery in 2024.