2. Executive Summary
One of a kind partnership with award winning Brewery and Media powerhouse
Scalable, low overhead business with high growth potential
Operating in a strong acquisitive environment
Strong focus on Texas as home market
Conservative Valuation and very attractive Preferred Security
3. Investment highlights
Official Beer of theCHIVE (28M monthly unique visitors); theCHIVE and Resignation Brewery (RB) are
subsidiaries of Resignation Holdings (RH)
Strong scalability due to partnership with Craft Brew Alliance (CBA)
- Excess capacity available at CBA breweries
- Access to the Anheuser-Busch Distribution Network (nationwide)
- Access to Canadian markets through BeerThirst
Minimal Operating Expenses
- Utilize shared design and business process services; Leverage internal marketing rates on all RH digital properties
(32M monthly unique visitors)
- All PPE, Sales, Manufacturing Costs, and Inventory owned by CBA
- RB responsible for marketing efforts and activating theCHIVE audience
Very strong Craft Beer market growing at over 15% per year
2015 resulted in most acquisitive environment ever in this sector
Attractive participating preferred security being offered in this raise
ResignationBrewery.com ResignationMedia.com theCHIVE.com theBERRY.com TheChivery.com
4. Company Overview
Developed by the creators of theCHIVE, KCCO Beer is marketed as part of the lifestyle brand to a massive audience
and staunch brand supporters
Entered 7 year partnership with CBA in September 2013
RB handles the majority of marketing in return for a fixed marketing fee per case and owns all the IP for branding and recipes;
in addition to merchandise rights (25% of revenue from RB merchandise sales on TheChivery)
Distributed to all 50 States and expanded to Alberta and British Columbia in late 2015
CBA handles the production, distribution, and sales of KCCO Beer utilizing their national sales team, 4 large scale
breweries (OR, WA, NH, TN), and national distribution agreement with Anheuser-Busch
Unprecedented start with over 31,000 barrels in first 2 years with only 1 national product at a time, sold in all 50 States
RB personnel consists of 3 employees; product sold by CBA sales team (~100)
Relationship to notable charitable causes through Chive Charities and a military coalition: Marcus Luttrell’s Team Never Quit, Chris
Kyle’s Frog Foundation, and the Boot Campaign
5. - Currently there are over 4,200 operating breweries in the U.S.; Craft breweries by definition produce under 6M barrels per year
- Craft beer represented 18% marketshare and 17% YTY growth in 2014 versus Total Beer growth at 0.5%
- Big Beer making high number of acquisitions to capture emerging brand equity and higher margins; organic shrinkage requires inorganic growth
- Most States require operating within the 3 Tier system - Brewer/Distributor/Retailer must remain independent
- Resignation Brewery does not fall in the 3 Tier System since CBA holds the brewing license - provides much greater flexibility
Beer Industry Basics
Traditional Brewery Contract Brewing Partner Brewing (RB Model)
PPE ($10M minimum)
Inventory Risk
Intellectual Property
Sales Team
Build Distribution Network
Procurement
Marketing
Regulatory Risk
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
6. Product Timeline
2013
September
2014
January November January March April July November
2015
AB
BC
Launched KCCO Black Lager
in 10 cities in September 2013
2013
Began shipping Black Lager
Nationally in January 2014
2014
Halted sales of Black Lager in
January 2015
2015
Introduced limited KCCO Gold Lager in
November 2014
Launched KCCO Gold Nationally in
March 2015
Launched KCCO White Wheat
exclusively in Texas in April 2015
KCCO Gold available in Alberta, CA in July
2015
KCCO Gold available in British Columbia,
CA in November 2015
7. 2016-17 Strategy - Audience
Texas as Home Market
- #2 Beer market in the U.S. & theCHIVE is headquartered in Austin
- Establish KCCO Beer as a Texas brand thru POS, events, and sampling blitz
- Increase high profile accounts (COTA) and partner with franchises
Military
- Active and Retired military represent 20% of theCHIVE’s monthly visitors
- Partnered programs with Frog Foundation, Team Never Quit, & Boot Campaign
- Increase POD on bases w/ samplings and better integrate military content online
ChiveTV
- Chive curated content delivered directly to bars (~500 locations) for free
- Running KCCO Beer ads as the only ad since inception
- KCCO Beer sold in alongside ChiveTV; expanding ChiveTV sales force
and supporting accounts through spend programs
8. 2016-17 Strategy - Actions
Increase and Align Marketing Resources
- Increase overall marketing spend by 3X; marketing surge for an emerging brand
- Expand digital presence outside theCHIVE; Expand to traditional media outlets near strong targeted account bases
- Increase event and sponsorship activity; including sampling blitz in Texas
- Utilize new ChiveTV field marketing representatives for Dallas, Houston, and San Antonio
Improve Target Marketing
- Advance geo-targeting campaign for very precise demographics within theCHIVE
- Create custom ad strategy for theBERRY to reach more female consumers
- Design ads/POS to include Texas, military, and Chive references when appropriate
Better Leverage Charitable Activity
- Strengthen the connection to Chive Charities thru events
- Increase frequency and presence for Patriot Pact Coalition programming
- Ignite the Drink With A Purpose campaign within Chive Nation activities
- Continue to leverage in-kind relationships for charities as sampling events
71% Awareness of which 28% Find the Product in Market
9. Resignation Media Properties - theCHIVE, theBERRY, TheChivery
- Over 21,000,000 impressions per month for KCCO Beer
- Product placement in daily galleries
- Dedicated Beer Locator on theCHIVE App
- Dedicated section within TheChivery; included in email and banner promotions
- Monthly social mentions on theCHIVE social outlets
Resignation Brewery
- ResignationBrewery.com has seen 357K unique visitors in prior 6 months
- Beer locator on theCHIVE App receives 3K clicks per week
- Facebook: 33K Likes
- Instagram: 30K Followers
- Twitter: 35K Followers
KCCO Beer Brand DIGITAL
Digital Presence on All Properties
10. Appendix
RB Personnel
Resignation Media Company Overview
KCCO Beer Brand
Chive Nation
Notable Media Coverage
Distribution Snapshot
Continued Craft Growth
2015 Industry Acquisition Activity
Merchandise
Future Can Design
11. RB Personnel
JOE MICHAELS PAT KILLORENJAKE MORROW
President Sales Director Marketing Manager
University of Notre Dame - Finance and Computer Applications
University of Notre Dame - MBA Corporate Finance
Certified Management Accountant
Created Resignation Brewery in 2013
Bethel University - Communication B.A.
Over 12 years sales experience
Virginia Tech University - Marketing
Has lead marketing efforts since 2013
12. Resignation Media
32M Monthly unique visitors
theCHIVE ranked #1 humor website in the U.S (comScore, Aug 2015)
Dedicated product placement and digital advertising to KCCO Beer
Owns TheChivery.com: online merchandising storefront of theCHIVE
KCCO Beer apparel and hard goods sold exclusively on TheChivery
Owner of flagship humor content websites; theCHIVE and theBERRY
ResignationBrewery.com ResignationMedia.com theCHIVE.com theBERRY.com TheChivery.com
13. The KCCO Beer Brand
Keep Calm and Chive On!
For years, our fans have had a love for all things Humor, Hotness, Humanity, and Heroes.
They soon found ways to connect offline and the KCCO lifestyle was born. With the creation
of KCCO Beer, the lifestyle was given a flavor, and its taste matched our community's commitment
to live every day to the fullest. Cheers high, often and always with a purpose.
14. HUMORHold my beer and watch this!
Hilarious moments captured in real-time
theCHIVE original videos
16. HUMANITYMaking the world 10% happier
Proud Supporter of Chive Charities
Helping the underdogs through the Chive Charities Fund
17. HEROeSKCCO Beer supports our nation's brave few!
Partnerships with several veteran-based charities
FO
U
N D A T I
O
N
CHR
IS KYLE F
ROG
TM
18. CHive nation
166
CHAPTERS
$3.5M
TOTAL RAISED
580K+
MEMBERS
Chive Chapters began forming organically all over the world. These are like minded
individuals organizing local groups that share a culture of camaraderie and charity in the
name of KCCO. theCHIVE has nurtured these groups and provided them with guidance on
how to present themselves and make the best possible impact on the needs of their communities.
22. Distribution
- Safeway 10.6% of Total Volume and 5.7% Points of Distribution
- Kroger 5.4% of Total Volume and 3.7% Points of Distribution
- HEB 3.3% of Total Volume and 0.7% Points of Distribution
Distributed to over 5,000 locations by AB Network in all 50 States plus Alberta and BC
Total U.S. 80% Off-Premise 20% On-Premise
Leading Chains:
Texas Only Distribution
70% Off-Premise 30% On-Premise (consistent with industry average)
Leading Chains:
- HEB 15.6% of Total Volume and 5.3% Points of Distribution
- Kroger 10.9% of Total Volume and 6.9% Points of Distribution
- Safeway 5.6% of Total Volume and 4.1% Points of Distribution
AVAILABLE IN ALL 50 states!
24. Acquisitive Environment
- 10 Barrel acquired by ABInbev at higher rate of $1,250/BBL (40K BBL output)
Unprecedented acquisition & investment activity in the sector
2014 Valuations were consistent at $1,000 per barrel of annual production
- Firestone Walker sold to Duvel for estimated $1,250/BBL (200K BBL output)
- Lagunitas sold 50% to Heineken for estimated $1,250/BBL (800K BBL output)
- St. Archer sold to SAB MillerCoors for estimated $1,000/BBL (35K BBL output)
- Ballast Point planned to IPO at estimated $1,287/BBL then sold to Constellation Brands for estimated $3,448/BBL (290K BBL output)
2015 Valuations showed considerable growth off the $1,000/BBL baseline
Big breweries are losing marketshare; the only way to reverse the trend is to grow through acquisition
