Second Montague brewery plans to open later this year
Bogside Brewing hoping to raise more money through selling shares to public
After raising $326,000 in just a few weeks last year selling shares to Islanders, Bogside Brewing in Montague is hoping to raise another $150,000 this spring — helping owner David McGuire secure a mortgage and be able to open late this summer.
McGuire had planned to open Bogside last summer but found everything took longer than he'd hoped, especially renovating his brewery building in Montague. The exterior is almost finished and the interior is in progress, he said.
I'm excited to see the both of them opening and make Montague a destination.— Andy Daggett
"The road to success is always under construction," McGuire said. "We took on a bit bigger project than we first thought."
McGuire is in the midst of renovating a 10,000-square-foot space on Brook Street in Montague — on the "bog side" of Montague in days of yore — and wants it to be just so. Co-ordinating tradespeople has been a challenge, he said. He's also trying to do some of the work himself to save money — and he already works full-time as a provincial civil servant.
"Better to go a little slow up front and make sure that we had our ducks in a row so that we could have a sustainable business," he said.
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They'd even lured a Bavarian brewmaster from Germany to P.E.I. He's living in Charlottetown working on other projects for now, McGuire said.
"The brewery will get off the ground," McGuire stressed. "If it takes us a couple more months, great. If it takes us another year that's fine — we will absolutely, for sure, work at that till it's open."
Second in tiny town
Bogside would be P.E.I.'s sixth brewery and the second for Montague — a tiny town of just 2,100 people — but McGuire says there's enough interest in craft beer for both to be successful. A seventh brewery is also planned in Summerside this summer.
Copper Bottom Brewing beat McGuire to the finish line when they opened in the former Eastern Graphic building in Montague last fall.
The Maritime brewery business is very supportive of one another, he said. All of P.E.I.'s breweries have shown him around their establishments and given him helpful advice.
"I've been to neighbourhoods that have three or four or five breweries all within a block — that model works well," he said. "It's a chance for folks to collaborate — it's also a chance for the customer to come and have an experience and check two things out."
People in the town are eager to see the second brewery open.
"I'm excited to see the both of them opening and make Montague a destination," said the town's chief administrative officer Andy Daggett.
"It clusters them and gives people options — I think they're going to work together."
'Decent little business'
Montague is a hub for eastern P.E.I., as thousands visit the town daily to shop, bank and eat, McGuire said.
"When you look at the 15,000 to 20,000 cars that cross that bridge every day, there's a lot more than 2,100 people that call Montague their spot," McGuire said.
The market for craft beer continues to expand, he points out, with some P.E.I. craft breweries struggling to keep up with demand last summer.
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McGuire is also planning to sell cans and kegs of Bogside beer in liquor stores, restaurants and bars and hopes to eventually export in the Maritimes.
He's aiming to brew between 75,000 and 100,000 litres of beer. "Not a phenomenal amount, but enough to be a decent little business," he said.
Investment opportunity
More than two dozen Island shareholders have already each invested between $1,000 and $20,000 in the brewery. In return, under the province's Community Economic Development Business (CEBD) program, shareholders receive a 35 per cent income tax break if they remain invested for five years.
Better to own some of something than none of nothing!— David McGuire
While he says he hasn't made any promises, McGuire hopes Bogside will be able to pay investors dividends of about between three and five per cent within three years.
"We want to make it attractive for people to stay with us," McGuire said. "I think most breweries turn a profit by year three."
However, like most other investments, there's no guarantee shareholders will make a profit or even recoup their principal.
McGuire's is one of only four P.E.I. companies to use the CEDB program since it began seven years ago. The others are Royal Star Fisheries in Tignish, P.E.I., which raised $12.6 million, Solar Island Electric which raised $1.4 million and the movie Still the Water, which hopes to raise between $500,000 and $2 million this spring.
Bogside's current shareholder offering is for up to $3 million, but McGuire doesn't anticipate ever needing or wanting that much. "I think that's a 'stretch' goal for us as it is," he said.
Giving up equity
To become a CEDB, McGuire had to set up a company with a board of directors and will have to open the books to shareholders at annual meetings.
The access to capital is worth the relinquishing of autonomy, he says.
"I'm of the opinion that we're trying to build a 20-, 30-year business, and it certainly solves a bit of the marketing challenge for us to get local people involved — they've got a vested interest," he said.
"We looked at it and said, better to own some of something than none of nothing!" he said with a smile. "So we were willing to part with some shares."
The brewery has spent a small portion of the $326,000 in CEDB money on building renovations, McGuire said.
He's planning to use the brewery for a Saturday morning local farmers market. The restaurant would specialize in local foods and barbecued meats.
Including a large outdoor patio, the establishment will likely seat about 150 people, McGuire said. He's planning to hire about 10 employees to start.
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