Washington USA: The Yakima Brewing and Malting Co. announced November 26 it would offer 500,000 shares of preferred stock in hopes of raising money to boost production for a popular new beer. Yakima Brewing, which was bought by parent company Black Bear Brewing Co. of Atlanta, Fla., in January 2002, comprises Grant's Brew Pub in Yakima and a separate 35,000-square-foot brewery, according to Associated Press.

Sales of Grant's Mandarin Hefeweizen beer are on track to beat company records. The company has been unable to keep up with consumer demand but hopes raising capital will enable it to increase production. Mandarin is available in Washington, Oregon, Idaho, California, Arizona and Florida in bottles and on draft.

Yakima Brewing also wants to expand the line to more of the 20 to 25 states where its beers are now sold. "We felt like it was really important to us to not just get the product out into a few states, but to release it nationally so no one (scooped) us," said Paul Brown, an officer and director of the company.

As a preferred stock, shares will sell for $1 each and pay a 7.75 % semiannual dividend, Brown said. Investors in Yakima Brewing would have the option to convert their preferred shares to common stock shares in that company or its parent company. Yakima Brewing hopes to raise $500,000, which will go toward production of Mandarin Hefeweizen. Brown said the company anticipates producing 1,000 barrels of the fruity beer each month next year. That compares to total average monthly production of about 350 barrels for all of its other beers combined in 2002.

The Mandarin Hefeweizen was introduced in April, after veteran brewmaster Darren Waytuck spent the winter tinkering with a couple of formulas for new beers. It was tested at the company's pub and in bars in Spokane and Seattle. Brown said the company expects sales of Mandarin this year to surpass its signature Scottish Ale, a perennial best seller. Total 2003 sales will be between $1.5 million and $2 million, Brown said.

A preferred stock offering to raise capital is not common, but is not unheard of in the craft brewing industry. Cindy Jones, sales and marketing director for the Boulder, Colo.-based Association of Brewers, said her organization hasn't heard of other craft brewers making such a move. "That's pretty creative," she said. "I'd like to see how that turns out."

01 December, 2003