Pilot Project Brewing considered going to the Chicago suburbs to expand its unique model of launching new beer brands, but found an opportunity north of the border — so it flew to Milwaukee instead.
The Logan Square brewery will continue to produce small and experimental batches for a number of emerging Chicago brands, but the majority of its production will take place in a 43,000-square-foot former Pabst warehouse that Milwaukee Brewing Co. has converted into a massive, modern facility in 2018. Milwaukee Brewing announced in August that it was vacating the building.
In a deal closing Thursday, Pilot Project will acquire Milwaukee Brewing’s equipment and lease the building for an undisclosed price. Website OnMilwaukee first reported the news in late August, but Pilot Project didn’t confirm the acquisition until Thursday.
The $8 million project will be funded with an investment by Chicago-based alcoholic beverages venture capital firm InvestBev, which is taking a minority interest in the Chicago and Milwaukee operations, as well as future expansion, according to Dan Abel, co-founder of the pilot.
Abel said he envisages further growth for the pilot, including additional small breweries and taprooms – similar to the Logan Square model – in Los Angeles, Miami, London and other cities he described as “culturally rich premium markets.”
The pilot quickly ran out of capacity after starting in 2019, Abel said, and has contracted out production to several other Chicago breweries. That production will be moved to the Milwaukee site, which also has a beer garden, taproom, and restaurant.
“We want to support growth for as long as (a client) is willing to work with us, but we also don’t want to be held back from bringing new and fresh ideas to market,” said Abel. “Now we can do both together.”
Pilot Project has founded more than 13 breweries and beverage companies since its inception, including breweries Funkytown and Azadi, as well as hard kombucha brands Luna Bay and ROVM. The pilot project model aims to boost new brands until they are able to become self-sufficient; One example is Duneyrr, which piloted beer before taking over a space formerly used by Motor Row Brewing in 2021.
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The pilot can produce about 3,500 kegs of beer per year at its Logan Square brewery. The Milwaukee facility can produce up to 75,000 barrels per year, with the possibility of expanding to about 200,000, Abel said.
With the expanded production, Pilot Project plans to launch between five to 10 brands annually, most of which will be based out of Chicago, Abel said.
Abel said the pilot project began exploring an expansion in the summer of 2021 and is targeting a site in the northern suburbs of Niles. The deal was slow to move forward, however, and the lure of growing and acquiring a turnkey operation in what he dubbed the “beer market” other than Chicago became enticing.
After Pilot Project initially raised $500,000 to start the business, Pilot Project needed deeper pockets to fund its expansion, said Abel, who found it at InvestBev, a company with a broad portfolio of casks of Kentucky bourbon from canned cocktails to virtual cloud software.
“Partnering with Dan and the team at Pilot Project will change the game in the contract distillery and community brewery category,” said Brian Rosen, managing general partner of InvestBev, in a statement. “We look for disruptors in all of our investments, and the pilot is certainly redefining the business model. We are excited to be involved with the Milwaukee and Chicago facilities and look forward to national expansion.”
The pilot’s head brewer, Glenn Allen, a veteran of Goose Island, Lagunitas and Revolution Brewing, will oversee production at the Milwaukee facility. Damian Padilla will be chief brewer in Chicago, Abel said.