Editorial – Texas Big Beer Crowdfunding

Crowdfunding allows people to use the internet to globally ask people for financial assistance. In the past, I’ve had individuals and businesses send me requests for money ranging from helping out with medical bills, helping a family member who suddenly lost a spouse with funeral expenses, and helping a brewery with changing their licensing from a production brewery to a brewpub.

The gray area surrounds whether or not the information supplied is valid and whether the cause is worthy enough to donate. I’ve contributed to several crowdfunding campaigns because it feels good to help people in need with the hope that the money will be used wisely to their benefit. The situation at Texas Big Beer Brewery out in Buna is a difficult one to swallow.

Recently, a crowdfunding effort to raise money on GoFundMe was started to help the brewery pay their TABC license renewals. This is greatly concerning because these are general operational costs of the business. The brewery claims that “due to a chain of recent costly events we find ourselves unable to renew our two year TABC required licenses. If we do not renew our license by mid January we will be forced to cease operation and lay everybody off.” While this is unfortunate, it appears the real reason why they are in this predicament stems from capital management and lack of reserve issues.

First of all, I have no doubt they need assistance to keep their operation going. They have noted a series of unfortunate events that have caused their current financial difficulties. Their general liability insurance doubled, they had to rebuild their cargo van’s transmission, a water line in the brewery busted and soaked all of their pallets of barley which led to lost inventory, they had to purchase another grain mill, etc. However, many of these issues are normal pitfalls that surround being a small business owner, much less a brewery owner. Things will go wrong and it’s important to either have the capital reserves to repair and address the issues or have the capacity to borrow to sustain business.

When researching their most recent crowdfunding request, we stumbled upon some facts that clouded the situation and made the request a bit odd. On October 19, 2015, the Beaumont Enterprise featured an article about the brewery and their brewery bar expansion. The article quoted owner John McKissack as saying, “We’re not taking on any debt. We’re trying to let our process help us expand.” It also cites that business has been good at the brewery allowing them to install a new brew system in 2014 quadrupling production and “the profit has allowed the McKissicks [sic] to open the outside bar.”

If the brewery was so profitable at print, why are they asking for money to renew their TABC licenses less than three weeks later? The dates for license renewals are known and do not sneak up on breweries, so this is confusing to me as the consumer. Either that, or the profitability Mr. McKissack boasts of in the Beaumont Enterprise article was greatly exaggerated. For clarification, we were contacted by Cassandra Lowe, the brewery bar manager for Texas Big Beer, who stated “this GoFundMe is simply asking for money to help keep us alive for the next year.”

Asking for money is one thing, but the East Texas brewery has made a habit of asking for money on various crowdfunding sites with three separate requests over the past 15 months. The requests range from the large campaign seeking $8,000 to cover their state license renewals down to small campaigns designed to bring another idea to life and to repair a car.

The first request in August 2014 was a Kickstarter campaign to create, manufacture, and sell a card game called Tap Wars. Designed for craft beer enthusiasts, it was supposed to be a game that educated people on craft beer and the various aspects pertaining to the world of beer. While the game does look educational and fun, using the brewery’s social media presence and logo to support the program means it is something for which the brewery is asking money. The amount of money needed was a bit surprising as $25,000 was the Kickstarter goal. This clearly was no small undertaking.

Crowdfunding attempt #2 occurred in November 2014. The brewery setup a GoFundMe account to fix up their “Longhorn Lincoln Taxi” to help take homeless people to and from their church. Granted, this is a noble cause that shows the owners, John and Tammy McKissack, are compassionate and warm people. Again, the brewery used its social media sites to promote and ask for the help to repair their own personal vehicle. After discovering this, I found that the request was only for $485. However, it appears they did not have the capital reserves on hand to cover this small cost.

My fear with giving money to an organization for sustainability reasons relates to the ability to anticipate and plan for future issues. Should another catastrophic event occur, would the brewery need to launch another crowdfunding effort to sustain again? Problems are going to occur that cannot be anticipated. However, if the brewery and the owners needed to launch a GoFundMe campaign to raise $485 for vehicle repairs, how would they be able to address the costs if a fermenter failed or if a mash tun needed repair? These potential issues are not addressed in the current GoFundMe campaign under the section “Some of the steps being taken to ensure this does not happen again”

Let’s get this straight, it’s clear the McKissacks are hard-working people who have done a majority of the work at the brewery themselves. They have fallen on difficult times financially. I am not saying they don’t need help. I enjoy helping others and I’m sure most people do too. If somebody is in need, human nature is to give somebody a helping hand and a chance to succeed. This is different. Texas Big Beer has asked for money multiple times and it seems like this may never stop due to a lack of capital to address major issues associated with being a brewery owner. At what point does the brewery stop asking for money from the consumer and utilize loans like many other breweries? What is the long-term plan for the brewery and how will they address major maintenance issues that could arise? That is the question you need to ask yourself before contributing to their campaign.

Overall, I want them to succeed and continue to produce craft beer. The East Texas market is under-represented and the presence of a craft brewery in the Golden Triangle region is sorely needed to grow the craft beer industry in the area. However, crowdfunding to pay for normal operational costs is worrisome and makes me question how the brewery will deal with any other major event.