INNIS & Gunn, the Edinburgh craft beer firm, has today issued a bond to raise £3 million to build its first ever brewery.
The firm, best known for its whisky finished beers, is enticing fans and investors to support the project with the promise of high returns on their investment.
For a minimum outlay of £500, investors can deposit funds in a four-year, fixed term mini-bond offering a gross annual interest rate of 7.25 per cent.
Alternatively, "beer aficionados" can choose to invest in a BeerBond offering an equivalent gross interest rate of 9 per cent per year. The return must be redeemed against beer from the Innis & Gunn online shop in the form of BeerBucks.
Innis & Gunn, which insists it is "very confident" of raising its target, will use the funds to build a state of the art brewery, as well as a bottling line and barrel store, in the south east of Scotland.
While he was unable to disclose the location, chief executive Dougal Sharp said negotiations over the site are at an "advanced" stage, noting that he is confident it will be secured.
He said the company, which aims to employ 35 staff at the site, is "absolutely committed to getting this brewery built as soon as we possibly can."
Innis & Gunn has made its beers in other breweries in Scotland since coming into being in 2003 when Mr Sharp, formerly head brewer at Edinburgh's Caledonian Brewery, stumbled across the idea of maturing beer in whisky barrels. While that model had worked so far, Mr Sharp said running its own brewery will allow the firm to be more flexible and creative.
He said: "Since we started we have been concentrating on brewing absolutely the best, most flavoursome beers we can for drinkers in the UK and in our international markets. We've done that by brewing in other companies breweries, so we have sent them our malt, our yeast, our hops, our people and that's worked really well for us.
"But of course you can't always do the things you want in other companies' breweries. With the explosion internationally of craft beer, and the growing interest in craft beer and people drinking better beer, we just think now is the right time to do this. So we've created the Innis & Gunn BeerBond because we felt it was the right thing for our fans and prospective investors."
With interest rates at a historic low of 0.5 per cent, and seemingly unlikely to rise this year, Mr Sharp said he is confident the prospect of a 7.25 per cent annual return will make the bond an attractive investment.
Asked whether this was an expensive way to raise finance, he said: "We could go to banks for the money, but the whole principle behind this, of doing the Innis & Gunn BeerBond, is we wanted to ask our fans, the drinkers around the UK, to contribute to the future success of the business.
"Building a brewery will enable us to brew beer that at the moment we just can't make.
"We just wanted to make it easy for our fans to participate. And we have chosen a bond because we felt it was the right thing for fans and investors.
"It is clear and it is simple, and the terms and benefits in the invitation document are clearly set out so anybody that invests knows exactly what they will receive and when.
"What we hoped was that the 7.25 per cent per annum in cash will really appeal to those with savings languishing in bank accounts with 0.1 per cent interest."
The bond has come amid a period of rapid growth at Innis & Gunn, which Mr Sharp said has grown at 31 per cent in each of the last two years. Turnover increased to £11.8m in 2014, up from £10.5m in 2013, as new it entered new markets such as Russia, Brazil, Italy, France and South Korea.
It also added to its headcount, which now stands at 50 globally, and introduced new brands in the shape of Toasted Oak IPA and Innis & Gunn Lager.
Mr Sharp said: "The craft beer trend is an international phenomenon. The trend of drinking good beer is absolutely here to stay. It's not just happening here, it is happening around the world. And Innis & Gunn is one of the companies which is driving the trend globally."
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