OGDEN — From a vacant field in an industrial park taking shape in west Ogden, the operators of Ogden’s Own Distillery envision a new building and a new future.
With an injection of up to $1.9 million, partially via an online crowdfunding campaign, they hope to bolster sales outside Utah throughout the Southwest. Efforts have already resulted in the commitment of $1.77 million from would-be investors and, on top of that, company officials are also planning to seek an additional $5 million in equity capital to aid with growth.
Given U.S. Securities and Exchange Commission regulations governing fundraising, Steve Conlin, the Ogden’s Own managing partner, and other company officials are mum on the effort. But records and material available per the fundraising initiative and the plans for the new 30,000-square-foot building offer insights into the company’s vision.
“Now we’re not a startup in any sense of the terms. We’ve been around for 10 years,” says a video promoting the company’s plans, touting steady revenue growth and existing distribution in Utah and surrounding states. “But it’s really time for us to expand and take a leap forward.”
Ogden’s Own, a craft distiller launched in 2009, sells several brands of hard liquor, produced at its 6,000-square-foot facility at 3075 Grant Ave. in downtown Ogden. Its top-selling and most known brand is Five Wives vodka, but it also sells various whiskey liqueurs, including Porter’s Fire, as well as Underground Herbal Spirit and Madam Pattirini Gin.
Distributors have asked for more product, according to the promo video, but the existing Grant Avenue facility is “production constrained,” hence the expansion plans. The firm shipped 16,000 cases of product in 2018 and the expanded facility, expected to be completed in the fall, would be able to produce up to 100,000 cases a year.
The $1.9 million being sought via the sale of common stock to new investors wouldn’t be used to build the new facility. Zion’s Bank and the city of Ogden are assisting in financing of the planned new building at 615 W. Stockman Way west of the old Exchange building in the nascent Ogden Business Exchange development.
Rather, the $1.9 million, if it’s all secured, would be used, in part, to bolster expansion into Arizona, Nevada, California and New Mexico and to acquire new inventory to aid in the growth.
The video noted a new distribution agreement with Kroger, which operates nearly 2,800 stores and supermarkets around the country, to distribute Ogden’s Own products in its Smith’s supermarket locations around the Southwest. Ogden’s Own launched a pilot program in the Las Vegas, Nevada, area last fall at 35 supermarket locations, on top of the 44 state liquor store locations in Utah.
“So we’re almost doubling our footprint of shelf space in one little city, and it’s been received really well,” the video states. The pilot program is to be extended to 65 more stores across Nevada, Arizona and New Mexico. When the new facility is operable, plans call for expansion into California into Kroger’s Ralphs locations there.
Ogden’s Own production, which totaled 16,000 cases in 2018, should reach 50,000 cases in 2021 or 2022, the video states, “and that’s where acquisitions usually take place in this industry.” The video doesn’t explicitly state that acquisition by a larger firm is the goal, but it references recent acquisitions of other craft distillers by larger firms. The price tag of such transactions is typically 11 times to 16 times the value of annual sales of the firm being bought.
In other disclosure statements, Ogden’s Own again broaches the notion of acquisition. “Investors will be entitled to receive a return of their investment only through a sale or merger of the company or otherwise as contemplated by the shareholders agreement,” one document reads.
In 2014, according to information supplied by Ogden’s Own, the firm generated $1.23 million in sales and net income of $24,425. Sales rose to $2.25 million last year with $546,291 in profits. Looking forward, the company estimates sales to reach $9.03 million by 2023 with $1.83 million in profits.
“We’re a company that’s enjoying some healthy success. We know what we’re doing. We’re able to produce and it’s a very low-cost, high-margin business, “ the promo video says.