How does BeerFit make money?
Revenue is generated from three main sources. Actual figures presented for YTD 2016
1 – Ticket sales – $613,000+
2 – Sponsorship sales – $61,000
3 – Merchandise sales $56,000 ($42,000 on site | $14,000 online)
As the company grows all of these revenue streams will grow in tandem. Ticket sales should increase YoY as we return to previous markets and leverage a growing database. Sponsorship sales are highly correlated to the number of customers and potential impressions. Merchandise sales are derivative of total site traffic, event participants and overall database growth.
How does BeerFit acquire customers?
BeerFit employs a variety of methods to generate awareness and sell tickets to customers.
1. Earned Media – National and local press coverage generates initial awareness and interest in the brand
2. Owned Media – We sell the majority of our tickets through our website which has been optimized for email capture and pushing customers into the conversion funnel. Our blog, social media platforms and email database are all key to customer acquisition. Email communication is the primary channel to promote events, new products and updates as the event date nears
3. Paid Media – Facebook and Instagram have proven to be cost-effective channels to reach a highly targeted demographic. These channels are used closer to the event date when customers are most likely to make a purchase.
Why should I invest in BeerFit?
BeerFit is a proven company run by an experienced team passionate about live events, running and beer. Over 80% of events have been cash flow positive since inception providing a much lower risk investment with acquisition opportunities. The series has quickly expanded nationally while building an impressive owned media database across email and social channels. The company is run by executives from Tough Mudder adept at building scalable systems for efficient growth and profit optimization.
Does BeerFit have insurance?
Yes. BeerFit has an impressive array of insurance policies designed to protect the company and investors. Current policies include
– $10M umbrella policy
– $2M per occurence general liability
– $1M liquor liability policy
How does BeerFit approach responsibility and liability while serving alcohol?
BeerFit has made significant investments and developed a comprehensive approach to reduce liability and provide protection to the company and investors
Current policies include
- $10M umbrella policy
- $2M general aggregate policy
- $1M liquor liability policy
The company has developed the following approach to mitigate risk and shift liability to the consumer and vendors (e.g., bartenders)
- Every competitor must complete an online waiver to compete
- Every competitor must complete an online survey prior to the event answering one simple question – “How will you get home safely from the event?”. The multiple choices are public transportation, private transportation (Uber) or designated driver.
- All competitors must attest that they are 21 years of age and present a valid ID to an off duty police officer to gain entry
- Every competitor must sign a waiver on site to gain entry to the event
- All bartenders are hired under contract to enforce state and local laws and retain the right to refuse service to anyone
- Every event site has ample signage stating the following responsibility policy displayed on our site
What assets does the company own?
BeerFit’s most valuable assets are the intellectual property (IP) and customer databases that have been built over the last 18 months.
- Registered trademarks include Brew Mile and BeerFit in numerous categories from live events, beer festivals, running races and merchandise sales
- BeerFit has a growing email database of over 110,000 subscribers
- Social Media channels boast a combined 70,000 followers across Facebook, Twitter and Instagram
The company also owns all event production needs including inflatables, branded tents, event signage and merchandise inventory to name a few.
Did any of the founders invest their own money into BeerFit?
Yes. Both founders, Marc Hodulich and Matt Johnson, invested over $50,000 into the startup costs of BeerFit. Both founders have also contributed an impressive amount of sweat equity by working without a salary over the first 15 months.
What will BeerFit do with the capital raised?
Money invested through Wefunder will fund additional events and be used to market existing events resulting in more awareness, ticket sales and profitability. Investments will fund BeerFit new event, The Power Hour Run, hitting markets this fall.
BeerFit will invest in a sponsorship sales role to grow top line revenue and maximize on the growing database of customers.
Additional capital will yield buying power for scalable operational expenses such as t-shirts, medals, bibs and other swag items.
What are you building?
We’re building a national running series focused on unique events combining a good run and an ice cold beer. I think that you’ve seen a proliferation of fun runs across the country, and we’re really about bringing the broader community of runners and beer lovers together.
How did you decide to work on this project?
I ran track in college and, at the end of every hard-fought season, did a beer mile. That was one of the things I looked forward to the most: putting in all this hard work and then doing this crazy challenge with my teammates. After college I saw an opportunity to bring this challenge and celebration of beer and running to the masses. Our first event, The Brew Mile, was an immediate success and has propelled us to launching more distance oriented challenges with the promise of cold beer at the finish.
What is a beer mile?
A beer mile is where you have the opportunity to drink a beer every quarter mile over the course of a mile. 4 beers. 1 mile. We have built our version, The Brew Mile, to celebrate the ethos of the beer mile in a safe, responsible and large scale format. This new format for the Brew Mile opens up the experience of a beer mile to everyone. The beer mile was a track event done on very small scales; the Brew Mile allows thousands of people to participate in that same thing.
The beer mile has a load of rules and regulations behind it and gets really intense; we wanted ours to just be really fun for people. We’re also really tuned in to safety; there’s water at each beer station and no requirement to drink the beers. With the Brew Mile, the four beers are an opportunity not a requirement. Really, it’s just a celebration of running and beer together.
What new events are you adding to BeerFit?
With the success of the Brew Mile, we saw the real potential in reaching out to the broader distance running community and introducing something totally new, The Power Hour Run. The Brew Mile introduced many non-runners to running and now we are bringing a totally new format to established runners. The Power Hour Run asks distance runners a simple question; How many miles can you run in an hour?
What is the Power Hour Run?
Right now, we’re launching a new event called the Power Hour Run. It’s a 60-minute timed run, where runners, endurance runners specifically, try to run as many one-mile loops as they can within an hour. At the end of the hour long run, runners earn a performance tee emblazoned with the number of miles they were able to run in that timeframe.
We keep the intensity going by emphasizing that this is a run where you have to earn your reward. You don’t just get a participation medal, you don’t just get a shirt for showing up. You only get one if you can run at least 3 miles during the run. Runners doing more miles earn a different color tees highlighting their mileage total during the race.
With the Power Hour, we’re reinventing what the challenge in distance running is. It’s not just about finishing the race. It refocuses running on a competition with yourself, setting new PRs and new goals.
What’s the difference between the Brew Mile and the Power Hour Run?
The Power Hour Run is geared more toward half-marathoners, 10K runners, and other distance runners. The Brew Mile is geared towards the more fun-run type people and the beer lovers, and focuses on giving them a unique challenge by adding beer to the course. The two work great side by side as they both present new formats and challenges to elite and casual runners alike.
How do you differentiate yourself from other fun runs?
There’s been a real proliferation of 5Ks that have a theme. The race distance is always the same and nothing is really unique about the challenge. At BeerFit, the events themselves present a new challenge. The Power Hour Run challenges runners to see how far they can run in an hour, while The Brew Mile offers the unique mix of running and beer done simultaneously. We’re a company that’s built around this unique idea that you have to earn your beer.
In launching The Power Hour we are flipping traditional racing on its head. On other runs, you’re given the same distance as everyone else and are judged on how quickly you can cover that distance. Here, we’re giving you just one hour, and you’re judged on how far you can push yourself within that timeframe.
Generally though, across all our races, our main difference is the level of production we put behind our runs. We’re founded by former executives from Tough Mudder, and so we have a lot of event experience on the team. We’re doubling down on our production and entertainment expertise with BeerFit. We’re pushing beyond the format of a running to include other activations surrounding the race itself.
Can you walk us through the production? What makes your events so enjoyable?
First off, you’re part of a big event. It’s not just a race; it’s a celebration of running and beer. Involving sponsors is a big part of that. They’ll put on games pre-race and post-race, so there’s always things to do. We’ll have a 20 foot tall beer pong inflatable. Of course, you can’t actually play a game of 20 ft tall beer pong, but it’s an activation: you can still throw a ball up and see if you can make a shot at 10, 12, 15 feet high and win different prizes. That’s not to say there isn’t plenty of beer involved, as well— there is. You’re finished running and pushing yourself to the limit. What better way to celebrate than with an ice-cold beer afterwards?
Who are your customers?
The demographic is pretty straightforward: runners and beer-lovers. Beyond that, you see two major trends bringing people into the event. With the Brew Mile, we see a demographic that cares a lot about the experience. They want to try new things, be outside, and just try a new challenge. The Brew Mile draws a crowd of people looking to be entertained. The Power Hour, on the other hand, draws in runners looking for a new kind of challenge. It’s an event created by runners, for runners. It’s much more geared toward distance runners and endurance athletes who are looking for something new within the running community.
What is your long-term vision for BeerFit?
BeerFit is bringing a whole new demographic into running. BeerFit will become the race series to bring runners and beer lovers together on a very large scale. That’s a natural alliance; time and time again you’ll see running clubs finishing at a bar. BeerFit is really a lifestyle company built around this really unique marriage of running and beer.
We’re building those events into a lifestyle brand; we have an online shop and we sell merchandise, and we’re seeing that pick up more and more. We’re really becoming the all-encompassing place that’s a celebration of runners who really like to earn their beer and share it with others who are like-minded.
The real future of the company, though, is around expansion into events like the Power Hour, which is what we’re currently raising funds for. Bigger picture, our goal is to bring new formats into running, while always ending each celebration with an ice cold beer.
Why do you see such a demand for innovation in the running community?
As a runner, you’re constantly looking for a reason to do a race. You’ll find that people will look for an exotic location, or a distance they haven’t done, or what medal or t-shirt they can get from it. More than anything, they’re looking for a new challenge.
That’s why we’re so excited about The Power Hour Run. No one out there in the space is creating a course this innovative: one that challenges runners of every ability level to just go out and do their best for an hour, pushing your own boundaries. BeerFit as a brand has been all about innovating on different ways to challenge yourself. With the Brew Mile, we created the fun challenge of drinking beer while you run. With the Power Hour, we’re shifting to the very serious challenge of testing your body for an hour and seeing how far you can go.
With the Power Hour, you’ve never just finished the race. You always have a reason to come back and earn that next level. If you ran 6 miles this year, there’s a reason to come back and run 7. That’s not the case with conventional races. If you’ve done a 5K, you probably ran your best 5K time when you were in your early 20s, and there’s not a whole heck of a lot of reasons to go train hard for a 5K anymore. When you give people a new format to test themselves in, it’s something new to get those competitive juices flowing. It’s an opportunity to rise to the occasion and meet a challenge they haven’t faced before.
As we move forward, we’ll continue to roll out new formats and new ways to challenge runners, keeping them constantly engaged with reason to come back to our events over and over.
How big is the market?
Running is the most common fitness activity among active adults. If you look at the 2015 Running USA survey, the half marathon was the most popular race distance in America last year. There are over 13 million people just doing half marathons alone. That demographic of endurance athletes— people running for over one hour, 5 or 6 days a week— are the people the The Power Hour Run is geared toward.
On the other side of the running spectrum, you have the experiential consumer and the casual runner. We’ve been seeing a proliferation of themed races like the Color Run and Tough Mudder that have brought people into running, people who’ve probably never thought they’d do a 5K before. These are the people the Brew Mile is geared toward, with a little more of a party atmosphere, a more grown-up celebration of running and beer.
Within these two formats, there’s a very large demographic of people to target: tens of millions of runners at both ends of the spectrum. All these runners can find an experience for them within one series: BeerFit.
Who are your competitors and how are you different?
There’s an oversaturation in the space of the theme 5K market. At this point, you can think of any type of theme and people have put a 5K race around it. But, these theme runs are really surviving off of a gimmick. Beer, on the other hand, is substantive. It’s highly valued on its own, and even more so as part of a unique racing series. Using that, we differentiate ourselves by rewarding our runners with what we think is a genuine reward for their run: a good ice-cold beer.
In the endurance space, there are certainly some other great players. The Rock ‘n’ Roll marathon series would be a direct competitor, as well as the Hot Chocolate Run, which is a 15K timed race. The difference here is that we’re giving you an entirely new challenge that is time-based. While these other endurance races will have you running for more than an hour, we believe this is actually more of a challenge because it really requires that you operate at 100% for the full hour. The goal is bigger than just crossing the finish line. Put simply – no one offers a time-based format. The Power Hour fills that gap with a one hour timed run answering the question — How far can you run in an hour?
Another main differentiator in the endurance space is that we’re not about participation medals, we’re not about everyone getting something just for showing up or paying their entry fee. We’re about you earning what you take home and being proud of the effort that you put forwards. It’s not just about finishing, it’s about achieving your personal best.
How many events have you run, and how profitable have they been?
We’ve been in business for two years, and have produced 20 events since inception. Events, on average, operate at a 40% margin. The major ways we make money is through selling tickets and securing sponsorships. Other derivative revenue streams can be quite lucrative as events grow in size. We capitalize on our events through beer and food sales, parking revenue and merchandise sales from the event.
These factors increase year over year over year as you build your list and marketing. The more tickets you sell, the more derivative revenue you’ll have, the more sponsorships you’re able to sell. We’re constantly bringing in new people through digital advertising, marketing partnerships, and through our growing email list. And then, when they’ve bought their tickets and are at the race, it’s about delivering a really top-shelf performance to get them coming back the next year.
What is your growth strategy?
Growth will come from launching new event formats, activating in new cities and returning to successful markets with repeat customers.
Right now, we’re focusing on pouring a lot of time, energy, and resources into the launch of the Power Hour Run. Looking ahead over the next year, we’ll be focused on producing larger and larger events that can penetrate the market deeper, and producing more profitable events. With the Power Hour particularly, we’re looking to tap into a base that is much more likely to make our run an annual event rather than a one-off fun afternoon.
Can you tell us about your team?
I [Marc Hodulich] ran college track at Auburn and was a management consultant in New York City. I started a charity event, the Wall Street Decathlon, which I sold out of last year. It’s been a very highly covered event in the media.
My business partner, Matt Johnson, was Chief Marketing Officer at Tough Mudder. Prior to that, he was at SeamlessWeb and helped grow that substantially. We met through a mutual friend, and we were both looking for a new challenge, so we decided to build this together.
We’ve hired some key employees, as well. Garth Wilson and Reed Raskin are both from Tough Mudder and had overseen course design and venue acquisitions, respectively, at Tough Mudder. We formed the team based on a very high standard of event production, with a strong foundation in sponsorship sales and partnerships. Our pedigree in creating new events is coupled with the experience to scale things quickly, do things profitable and reliably, and overall just deliver events and a very high scale and level.
The BeerFit staff comes with a wealth of live event experience through one of the world’s most successful event companies, Tough Mudder. We bring the rigor, expertise and the management leadership to execute top level events and take advantage of what we believe is a gap in the running market.
RISKS SPECIFIC TO BEERFIT RUNNING SERIES
1. Lack of market traction
2. Increased marketing costs due to increasing demand for digital advertising channels, Facebook | Instagram specifically
3. State alcohol laws could change adversely affecting the company’s ability to host events in certain states
4. Permitting may be denied or delayed in markets requiring the cancellation of events or postponement to later dates
5. Theft, fire or other extreme weather that could destroy or adversely damage the trailer and contents resulting in loss of all branded items needed to host events. Insurance would cover costs but lost time could result in cancelled events, refunds and loss of revenue.
6. Competition – event series are easily copied and competitors may erode ticket sales, margins and ability to scale quickly
7. Bodily injury during or after an event could leave the company liable for personal injury lawsuits and civil claims. The company has set up a robust responsibility and insurance program but the risk still exists.
8. Loss of key personnel could adversely affect the company’s ability to market and host events. This should be mitigated through the use of employee stock option plans but is not a guarantee.
Read the Form C filed with the SEC for other important disclosures, like financial statements, Directors, Officers, shareholders with more than 20% of voting rights, and more.
THE FUNDING PORTAL
BeerFit Running Series is conducting a Regulation Crowdfunding offering viaWefunder Portal LLC. CRD Number: #283503.