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Copperworks Distilling Co.

2018 "Distillery of The Year" intends to double whiskey production and sales

Seattle Washington
Alcohol Retail Main Street Community Distillery

Copperworks Distilling Co.

2018 "Distillery of The Year" intends to double whiskey production and sales

We asked the question, “How would spirits taste if they were distilled from superior craft beer, without hops, rather than from the standard methods and ingredients that traditional distilleries use?” The answer became our founding principle and is so fundamental that we put it on every Copperworks label: "From great brewing comes great spirits.”
Jason Parker Co-Founder/President @ Copperworks Distilling Co.
Last Funded April 2020!

$779,558
total funds raised

414
total investors

  • Updates 7
  • About
  • Reviews188
  • Ask a Question 43

Why you may want to support us...

1 More than six years of successful operation with increased annual revenue and sales volume. Best year ever in 2019 with $915,000 in revenue.
2 A seasoned industry professional directs the company. Experienced, trained staff and high-capacity equipment allow quick growth.
3 Stunning showpiece distillery and tasting room in highly visible waterfront location; 30K+ visitors to the distillery in 2019.
4 Located in tourist district: 6.7 million visitors to the Seattle waterfront in 2019; expected to surpass 20 million by 2024.
5 Internationally recognized products: Copperworks whiskey and gins have won double-gold medals and scored 94 - 96 points in competitions.
6 Thorough distribution in WA State: Placed in 340+ bar/restaurant accounts and 130+ retailer accounts.
7 More than 260 barrels of whiskey aging in inventory. Demand exceeds our supply of mature whiskey.

Why investors us

we've raised $3,576,336 since our founding
Longtime fans of your whiskey. Now get this thing rolling!
Jacob James Gano
on 04/30/2020
Quality brand with solid future prospects
Goran Biljetina
on 04/30/2020
New to this but not new to doing market research and identifying new opportunities.

Our team

And Our Major Accomplishments
Jason Parker
Co-Founder/President
Jason was the first brewer at Pike Place Brewery in 1989, helped open Fish Tale Ales in Olympia, WA, worked at Red Hook Brewery, and helped build and run Pyramid Brewing in Seattle, WA. He's now making American Single Malt Whiskey from malted barley.
Micah Nutt
Co-Founder/Vice President
Micah, a long-time software engineer who is also a skilled and technical home brewer, ran the distilling operations at Copperworks for the first 5 years. Before retiring from daily production in June 2019, he spent 6 months training our distillers.
Jeffrey Kanof
Vice President/Co-Owner
Jeff is an attorney who headed west to be part of the craft spirits movement. After assisting in launching Letterpress Distilling in Seattle, he joined Copperworks and is now spreading the word of American Single Malt Whiskey.

In the news

Seattle Washington
alcohol retail main street community distillery

From Great Brewing Comes Great Spirits

At Copperworks Distilling, we started with what we know: brewing beer. We brewed a Pale Ale, and a Scotch Ale, and then then we distilled the alcohol out of them to turn them into Whiskey, Vodka, and Gin.

Scottish Stills on the Seattle Waterfront

We built our distillery in the heart of the Seattle Waterfront, where millions (~10 million in 2019) visitors go each year. Our stills were hand-hammered in the highlands of Scotland, and are visible right behind our floor-to-ceiling windows in the tasting room.

We Won!

Our products have won dozens of awards and accolades, and in 2018, we were named Distillery Of The Year by the American Distilling Institute!

We Sell Everything We Can Make

Every year, we sell everything we can make, with some releases selling out in just a few days.

Now's The Time To Grow

Vodka and gin can be sold in the same year they are made, but whiskey takes 3-6 years to mature before it's ready to sell. We've proven that our whiskey is delicious. Now is the time to make more so we can continue to grow our sales in the future.

Investor Q&A

Expand all
What does your company do?
Copperworks Distilling Co. produces American Single Malt Whiskey, gin, and vodka, all from a base of malted barley. We sell our spirits through our tasting room and retail store on the downtown Seattle waterfront and in distribution to bars, restaurants, grocery stores, and liquor stores throughout Washington State.
Where will your company be in 5 years?
For the next two to three years, Copperworks will maximize production and build up inventory of aging whiskey by utilizing our current equipment and brewing partners. As we grow, we will outgrow both our current production facility and the ability of our brewing partners to scale to our needs. Therefore, we intend to build or buy our own brewing facility and barrel warehouse where we can continue to increase our aged whiskey stock. With increased inventory, we’ll open additional markets.
Why did you choose this idea?
We asked the question, “How would spirits taste if they were distilled from superior craft beer, without hops, rather than from the standard methods and ingredients that traditional distilleries use?” The answer became our founding principle and is so fundamental that we put it on every Copperworks label: "From great brewing comes great spirits.”
What is American Single Malt Whiskey and why is it significant?
American Single Malt Whiskey is the first new category of whiskey made in the United States since the creation of bourbon in the late 1700’s. The American Single Malt Whiskey category is not yet defined legally by the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) which is a huge opportunity for Copperworks. It allows Copperworks and a handful of other pioneering American distilleries to be instrumental in developing the category definition, in terms of both flavor and legal requirements. Copperworks is proud to be one of the founding members of the American Single Malt Whiskey Commission, a non-profit trade organization working to establish, promote, and protect the rapidly growing category of American Single Malt Whiskey.
How much product have you sold?
In 2019, we sold roughly 22,519 bottles (1,877 12-bottle cases) of Copperworks spirits. This was up from approximately 20,505 bottles (1,709 12-bottle cases) in 2018 and 16,942 bottles (1,412 12-bottle cases) in 2017. Since we have intentionally limited our distribution due to limitations in product supply, 87% of these sales were achieved in our home state of Washington.
When and how do you expect to be profitable?
Upon receiving investment capital, we will immediately increase whiskey production and pursue strategic new markets. (We consider a “new market” to be a state, territory, or country where we don’t currently sell.) Over the next four years, we expect to have grown our home market sales substantially and expanded into at least six markets. At that point, we expect to be profitable and able to continue producing large quantities of whiskey for the future.
How did Copperworks get started?
Copperworks’ Founder and President, Jason Parker, started and grew his career as a brewer in the early days of the craft beer brewing boom. He recognized in 2008 that the crafts spirits industry was on the same market trajectory that he had experienced with beer. Jason and Micah Nutt, brewing friends for decades, began to dream of a distillery that would use high-quality craft beer as the base, rather than the “wash” used by traditional distilleries, to make more flavorful single malt whiskey. They commissioned a set of four hand-hammered traditional Scottish copper stills from one of the world’s leading still manufacturers and procured a high-foot traffic tourist location on the Seattle waterfront. In October 2013, Copperworks opened with sales of vodka and gin – and three months later, Copperworks Gin won a gold medal in the world’s largest spirits competition. Three years later, Copperworks launched its American Single Malt Whiskey to enthusiastic consumer and beverage industry acclaim.
What role do strategic partnerships play in your business strategy?
Strategic partnerships with the alcohol and agricultural industries are fundamental to Copperworks business strategy and to our success to date. We are dedicated to growing and serving mutually beneficial relationships with all aspects of the grain-to-glass community. With Jason’s brewing experience and history, we have strong, “insider” relationships with the local brewing community—the partners and potential partners with whom we brew the beer from which Copperworks spirits are made. We have strong relationships with the local bartending community, and we have had thousands of industry professionals (bartenders, bar owners, retail store associates, etc.) tour our facility. We are also at the beginning of partnerships with some of the world’s most well-regarded independent bottlers that will allow our whiskey to be featured in markets that we currently don't have the capacity to support under our own label. And the relationships of which we are especially proud: with small, independent local farms who grow the unique varieties of barley we use in several of our whiskey releases.
Where do you sell your products?
Demand for Copperworks spirits outpaces our supply, so almost all our sales are from distribution and consumer sales in Washington State. We achieve a substantial portion of revenue from direct-to-consumer sales in our tasting room. Through our distribution partner in Washington State, we are placed in roughly 345 bars and restaurants and 135 liquor/grocery retail locations. This level of sales has been accomplished with constrained sales and marketing efforts, due to lack of capital. With additional funding, we will hire a dedicated salesperson and fully fund marketing programs to grow brand awareness and revenue.
What are Copperworks’ biggest challenges?
Our foremost challenge is lack of capital. This has constrained how much whiskey we can produce and thus prevented us from fulfilling the growing demand for our products. The lack of available cash has prevented us from hiring a dedicated salesperson and limited marketing efforts. With capital raised in this equity crowd-funding effort, we will ramp up whiskey inventory, as well as sales and marketing resources and efforts, to grow the company.
Who are your competitors?
Perhaps surprisingly, our main competitors are not within the craft spirits market. We believe in the adage of “a rising tide lifts all boats.” If a consumer has a great experience with a non-Copperworks craft spirit, that consumer is more likely to search out other superior craft spirits, leading them to discover and try our spirits. We believe our main competition comes from larger spirit brands and other beverage options that lead consumers away from spirits, such as beer, wine, CBD products, marijuana, and non-alcoholic options.
How do you stand out among the rapidly growing number of craft distilleries in the U.S.?
We’ve invested in product packaging (bottle choice, label design, embellishments promoting product awards, etc.) that we believe stands out on shelves in bars and retail stores. We have an authentic, memorable story that complements the unique flavor in our spirits. We focus on the emerging category of American Single Malt Whiskey, which plays to our expertise and production abilities, thus we can be a market leader. And we work hard to offer customers an extraordinary brand and tasting experience. We encourage people to taste our products at every opportunity — through off-site events, in-store tastings, or by visiting our distillery. When people have the opportunity to taste our spirits, we find we have a great sell-through rate.
How do you plan to grow Copperworks sales?
With additional capital, we intend to quickly grow Copperworks to a large, well-known, regional spirits brand. With expanded whiskey production, we will move toward fulfilling the demand for our products. We will continue to grow sales in our current market of Washington State with our current successful, focused distribution footprint and we will move into new geographical markets.

Financials

Copperworks Distilling Co. has financial statements ending December 31 2018. Our cash in hand is $5,575.28, as of February 2020. Over the three months prior, revenues averaged $79,399.90/month, cost of goods sold has averaged $23,689.86/month, and operational expenses have averaged $55,700.97/month.

At a Glance

January 1 to December 31
$857,229 +12%
Revenue
-$17,886
Net Loss
$298,862 +39%
Short Term Debt
$0
Raised in 2018
$5,575
Cash on Hand
As of 02/ 9/20
Income
Balance
Narrative
A note from Wefunder. Unlike companies on the NASDAQ, early-stage startups have little operating history. Financial analysis is not as useful when there is limited data. It's more important to predict the size of the future market. If the founder achieves their vision, will enough customers pay the company enough money?

It's also common for fast-growing startups to lose money even faster: they are investing in future growth. In these cases, it's often better to check if the Cost of User Acquisition (CAC) is lower than the Lifetime Value (LTV) of that customer. If one spends $1000 today to make $10,000 over the next five years, that may be a smart bet. Amazon is a famous example of re-investing potential profits to maximize growth over 20 years.
Net Margin:
-2%
Gross Margin:
53%
Return on Assets:
-1%
Earnings per Share:
-$0.00
Revenue per Employee:
$142,872
Cash to Assets:
2%
Revenue to Receivables:
2,233%
Debt Ratio:
82%
Copperworks Distilling Financial Review - 2016 2017 2018.pdf

Risks

1

Small Business:

Copperworks’ future success depends on the efforts and relationships of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
2

Industry:

The current distilled spirits market growth could slow or stop in the future which may adversely affect the company.
3

Distribution:

The spirits industry has seen a large amount of consolidation in the companies that handle distribution in recent years. As a result of the three-tier distribution system mandated by law in the U.S., Copperworks is substantively reliant on distribution companies. Further consolidation may make it difficult to expand distribution and lack of expanded distribution may have an adverse effect on the company.
4

Suppliers:

A portion of our future success is attributable to our relationships with key vendors and suppliers. Events related to such vendor and supplier relationships, such as loss of goods or services from such key vendors and suppliers, could adversely affect the company.
5

Political: 

A shift in the U.S. and international political climate could make it more challenging to sell our products in various markets and/or obtain the materials needed to create our products.
6

Competition:

The distilled spirits industry is fiercely competitive. The company will continue to face competition from other craft distillers as well as mass market distilleries and conglomerates with much larger marketing budgets.
7

COGS:

Cost of ingredients and raw materials used to create our products may fluctuate. Increased costs for packaging materials and ingredients could negatively impact our margins, cash flow, financial projections, and reduce our overall revenues.
8

Regulatory:

Most aspects of our business and our products are regulated at the local, state, and federal levels. The nature and scope of future legislation and regulations cannot be predicted. We anticipate that the company and our products will be in compliance with all applicable laws, rules, and regulations, but there still may be risks and costs that such laws, rules, and regulations may change with respect to present or future operations. Such changes and additional costs may increase the cost of investments and operations and may decrease the demand for products and services.
9

Real Estate:

A portion of our future success is attributable to our location. If we are unable to negotiate reasonable renewals of the lease on our current location, there may be an adverse effect on the company.
10

Tourism:

A portion of our future success depends on tourism on the Seattle waterfront. Construction projects and other factors may reduce the level of tourism-based foot traffic and perhaps have an adverse effect on the company.
11

Federal Excise Tax:

The U.S. Government could fail to extend or make permanent the Federal Excise Tax reduction, which lowered the $13.50 per proof gallon Federal Excise Tax rate to $2.70 per proof gallon. This tax is set to expire at the end of 2020. Legislation is currently being sponsored to extend it and make it permanent. If it fails to be extended or made permanent, our cash flow and profitability will be adversely affected.
12

Profitability:

We are not yet profitable and we believe we will continue to incur net losses for several more years due to expansion and growth. We may require additional capital in the future which we may not be able to obtain on acceptable terms, or at all. Our inability to raise such needed capital could restrict our future growth, severely limit our operations, or cause us to curtail or terminate our operations.
13

Past Performance/Future Results:

Copperworks has been in operations for more than six years and has had revenue growth every year, but past performance is not a guarantee of future results.
14

Natural Disaster:

An earthquake, flood, or other natural disaster could occur that would destroy our stocks of aging spirits and/or our entire facility.
15

Dilution:

Each investor's stake in Copperworks could be diluted due to the issuing of additional shares. In other words, if we issue more shares, the percentage of the company that you own will decrease. This increase in the number of shares outstanding could result from a stock offering (such as an initial public offering, another crowdfunding round, a venture capital round, or other types of investments).
16

Loss of Value:

Investing in a business through this investment model is a decision with inherent risks. Be aware that you could potentially lose a part or all of your investment. There are no guarantees that the company will succeed. Do not invest what you cannot afford to lose.
17

Founder Retirement:

Micah Nutt is now a non-working officer. The management team has been adjusted to accommodate this change, but it is possible that the company will not make the same progress as it would if he were working part or full time.
18

Micah Nutt is a part-time officer. As such, it is likely that the company will not make the same progress as it would if that were not the case.

Details

The Board of Directors

Director Occupation Joined
Jason Parker President @ Copperworks Distilling Co. 2011
Micah Nutt Vice President, Production @ Copperworks Distilling Co. 2011
Jeff Kanof Vice President, Sales @ Copperworks Distilling Co. 2019

Officers

Officer Title Joined
Jason Parker President   Secretary   2011
Micah Nutt Vice President   2011

Voting Power

Holder Securities Held Voting Power
Micah Nutt 8,474,547 Common shares 42.1%
Jason Parker 8,474,547 Common shares 42.1%

Past Equity Fundraises

Date Amount Security
$0 Priced Round
08/2016 $346,388 Priced Round
08/2016 $8,000 Priced Round
08/2016 $346,388 Priced Round
11/2011 $100,000 Priced Round
01/2011 $100,000 Priced Round
06/2019 $105,938 Priced Round
12/2016 $52,677 Priced Round
11/2019 $60,000 Loan
11/2014 $1,677,387 Loan

Outstanding Debts

Lender Issued Amount Oustanding Interest Maturity Current?
Micah Nutt 11/17/2014 $1,677,387 $1,677,388 1.9% 11/09/2023 Yes
John Parker 11/03/2019 $60,000 $56,368 1.59% 12/20/2020 Yes

Related Party Transactions

NameJohn Parker
Amount Invested$60,000
Transaction typeLoan
Issued11/02/2019
Outstanding principal plus interest$56,368 as of 02/2020
Interest1.59 per annum
Maturity12/20/2020
OutstandingYes
Current with paymentsYes
RelationshipRelative

 
NameJeffrey C Kanof
Amount Invested$105,938
Transaction typePriced Round
Issued06/19/2019
RelationshipDirector

2,118,767 shares were sold for $0.05 each.

 

Use of Funds

$250,000 92.5% towards whiskey production, and 7.5% towards Wefunder fees
$400,000 57.8% towards increased whiskey production, 34.7% towards additional production equipment and warehouse space rental, and 7.5% towards Wefunder fees
$550,000 42% towards increased whiskey production, 25.3% towards additional production equipment and warehouse space rental, 25.2% towards sales staff and support for WA market, and 7.5% towards Wefunder fees

$700,000 33% towards increased whiskey production, 19.9% towards additional production equipment and warehouse space rental, 19.8% towards sales staff and support for WA market, 19.8% towards sales staff and support for 3-4 new markets, and 7.5% towards Wefunder fees
$925,000 25% towards increased whiskey production, 15% towards additional production equipment and warehouse space rental, 15% towards sales staff and support for WA market, 15% towards sales staff and support for 3-4 new markets, 22.5% staff and support for events, and 7.5% towards Wefunder fees

$1,070,000 21.5% towards increased whiskey production, 13% towards additional production equipment and warehouse space rental, 13% towards sales staff and support for WA market, 13% towards sales staff and support for 3-4 new markets, 19.5% staff and support for events, 12.5% additional PR, advertising, design work, and new site planning, and 7.5% towards Wefunder fees

Capital Structure

Class of Security Securities
(or Amount)
Authorized		 Securities
(or Amount)
Outstanding		 Voting
Rights
Non Voting Common 3,000,000 0 No
Voting Common 37,000,000 20,128,339 Yes

Form C Filing on EDGAR

The Securities and Exchange Commission hosts the official Form C on their EDGAR web site.




Jeffrey Kanof on Apr 29
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
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Jeffrey Kanof on Apr 27
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
William Fleming, Adrianne Duvall, Wanda Lynn Sutton, and 24 others

Jeffrey Kanof on Apr 22
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
gin Special Release Product Launch
Randy Parsons, Candi Bailey, Eric Mckenzie, and 4 others

Jeffrey Kanof on Apr 3
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
James Taylor, Michael GLEASON, Craig Vom Lehn, and 5 others

Jeffrey Kanof on Mar 30
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
Niels Minamizawa Mathiesen, Candi Bailey, John H Reiher, and 4 others

Jeffrey Kanof on Mar 19
Vice President/Co-Owner @ Copperworks Distilling Co. Founder
Wanda Lynn Sutton, John Parker, Craig Vom Lehn, and 11 others

Jason Parker on Mar 11
Co-Founder/President @ Copperworks Distilling Co. Founder
John Parker, Lori Lull, Jeffrey Kanof, and 5 others


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