The craft beverage industry is exploding across the country and the globe. Operating a successful craft brewery, winery, coffee shop or distillery requires a host of specialized equipment. Lincoln startup BrewBids is streamlining the process of buying and selling that equipment.
“There’s a huge boom in the craft beer industry, with a lot of new equipment and a lot of used equipment before long,” said Co-Founder Matt Johns. “We primarily started the business to fill a void in that market.”
BrewBids provides an online platform for buyers and sellers of beverage equipment.
“We’re a completely free online marketplace where sellers of any beverage equipment can list for free for potential buyers to search and find,” he said. “It’s eBay for beverage equipment.”
The company was started in 2015 by Johns and three other co-founders. Their initial focus was the craft beer industry, and the revenue model was a percentage of sales.
“We would charge a buyers fee originally,” he said. “If someone sold a fermentation tank for $10,000, we’d take $300.”
This approach helped get the business off the ground. But it also prompted the occasional under-the-table transaction that cut BrewBids out of the revenue stream.
“Being able to monetize a sale is so tough when they can just call the person and make the sale directly,” Johns said. “But if we could just collect some revenue to get the business going, it would be fine.”
Generating a revenue stream without a marketing budget was a difficult but necessary step toward growth.
“We knew we didn’t have a marketing budget and hoped it would grow itself,” Johns said. “Thankfully it has.”
After starting with bootstrap financing, BrewBids recently attracted outside investment. This has enabled the company to revamp its company website, invest in marketing, move away from the transaction revenue model and expand into other beverage industries.
“We always knew we wanted to expand but never had the capital,” Johns said. “When we brought five investors aboard, they said let’s go after the entire beverage industry.”
Expansion is helped by the fact that equipment for different beverage industries is very similar.
“There’s a huge amount of crossover between beer, wine, coffee, and distilleries,” Johns said. “A lot of the equipment is big stainless steel vats you can use for different beverages. There’s a lot of shuffling around for repurposed beverage equipment.”
Advertising and business profile revenue has now replaced transaction fees as the BrewBids revenue model.
“For any company in the beverage industry that does not have a great website (and many of them don’t), they now have the option to create a business profile on the BrewBids site,” Johns said. “This is a dedicated section for any company to showcase the products and services they offer, which really helps companies that lack in website development to reach a target market and use BrewBids to leverage their company.”
BrewBids is also aided by the presence in Lincoln of American Beer Equipment, one of the world’s largest manufacturers of beverage equipment.
“Being in a town with one of the biggest manufacturers has been great,” Johns said. “They’re a big advertiser, they passed us leads and gave us information.”
ABE, BrewBids and numerous craft breweries have made Lincoln a recognized name in the industry.
“It’s funny that Lincoln, Nebraska has a name in the industry for craft beer in general,” Johns said. “Putting Lincoln on a t-shirt gives you recognition. It’s cool to see Lincoln, in general, be that mecca.”
The profile of equipment for sale is evolving.
“Breweries are starting to go out of business, either because it’s not good beer or they don’t know how to operate a brewery,” Johns said. “We’re starting to see less one-off listings and more entire breweries for sale.”
Johns said the revamped website and having an investor who knows social media marketing is paying dividends.
“Marketing was a big void for us,” he said. “We started marketing in December. Now we’re pumping out ads and our web traffic has skyrocketed.”
“It’s exciting to see the growth we’ve experienced in the last half year,” he added.
Rod Armstrong is Vice President of Strategic Partnerships for AIM in Lincoln, Nebraska. He is a regular contributor to Silicon Prairie News.