The announcement that Nexus Brewery was seeking investors in expanding its Blue Smokehouse location seemed to catch some folks by surprise in the craft beer community. There were quite a few who told us that they were afraid it was a last-ditch effort to keep the company afloat.
Last week, I sat down with owner Ken Carson to learn more about what is going on, why nobody should panic, and how people with more money than me can jump on board as investors.
“This one struck me (as) interesting in that it was a community-type deal that was just like group funding,” Carson said, referring to the large number of past Kickstarter and GoFundMe efforts by breweries. “It probably is not as prevalent as it used to be, but a few years ago it was really popular — group funding where a brewery could open up and have a project they want to do or something like that, and people would just give them money. You’d get a baseball cap or a membership to the brewery or something like that if you donated $250 and so on, and that was all you would get.”
Instead of going that route, Carson found Mainvest, a company that helps businesses and their loyal customers come together in partnership.
“This thing interested me in that they offered a return,” he said. “I’ve always been big on memberships and things like that. The mug club, I think our mug club is I’ve purposely built it as strong as I could, giving discounts on food and beer. I thought, well, this is really in another way, right now the average is about $1,000. We’ve got some people at $250 and some as high as $4,500. We’re up to, well, this morning it was $16,700. The goal is to get it at least over $100,000.”
Since our interview, the total has gone over $40,000. That is money that Carson could have taken out in a loan, but as a former banker himself, he shared an interesting perspective on the current financial climate.
“I felt like if I had, say, 100 people that were invested in that building down there, it would be worth the expense of paying the higher returns,” Carson said. “I could get the money from the bank. The reality is I could actually get it. But, I think during this time period, being considerate to the bankers, because I used to be one, this is a hard time for someone to figure if they should loan money to somebody. Looking at projections is all you’ve got, and who knows what’s going to happen in the next few months.”
The primary purpose of seeking investors in the Blue Smokehouse goes back to what we learned before it even opened. The actual amount of the building at 1511 Broadway Blvd. SE being used right now is only about half of the total structure.
“The use of the money, so we still have 3,000 square feet on the west side of the building that includes a stage, a full stage, and two large restrooms, and we’ll also put in a bar,” Carson said. “That was one thing that is lacking there is a place to sit down and have beer and not be part of the dinner crowd.”
The expansion into the west half of the former Navajo Elks Club building was always in the works, but the arrival of the coronavirus pandemic slowed everything to a halt.
“We were starting to do well in March,” Carson said. “The year started off so good. All the expenses from starting a new businesses started washing away, and then March hit. We actually had a record month at the beginning of March. Then all of a sudden this thing hit. I’ve talked to a lot of businesses and a lot of people were doing well. For us, we were picking up the soccer games and the basketball games (crowds). People were starting to find out that we were an alternative that probably in some ways were even easier to get to after a game or even before a game than Quarters. Everything was going in the right direction.”
Carson initially shut down the Blue Smokehouse when the pandemic hit, but eventually got it back up and running in May as restrictions were eased by the State of New Mexico.
“We did close for a couple of months, but interestingly enough, my sales are not much further, probably about 25-percent down from before the pandemic,” he said. “I cut half my hours by closing on Monday and Tuesday, so that’s worked out really well.”
Those sales figures have convinced Carson that the Blue Smokehouse still has a future, and a full expansion into all corners of the building will make that future even brighter.
“They give a good return in relationship to the risk, I think, but I’m probably looking at it from my perspective,” he said. “We’ve been here (at the brewery) for nine-and-a-half years. We’ve done well in establishing ourselves here in the Pan-Am location. It’s only a matter of a few months, I feel, that we’ll get ourselves on the top of the list of the best barbecue in New Mexico within not too long of a period of time. It took us about two or three years to get our food to where it was recognized. We’re only at the one-year mark and a few months (at Blue) with the pandemic mixed in.”
Anyone interested in possibly investing in the Blue Smokehouse can visit the link above, or contact Mainvest or Nexus directly for more information. We are just happy to report that things are going well (by 2020 standards) at both Nexus locations. The though of losing fried chicken, fried ribs, and the Scotch Ale is just too much to bear, so this was a welcome bit of good news.
A big thanks to Ken for the interview and lunch, of course, since one cannot visit either Nexus taproom without getting something to eat, right?
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