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[June 29, 2014]
Pittsburgh Post-Gazette Len Boselovic's Heard off the Street column [Pittsburgh Post-Gazette :: ]
(Pittsburgh Post-Gazette (PA) Via Acquire Media NewsEdge) June 29--Steve Young is out to do for beer what Keurig did for coffee.
The 28-year-old former stock analyst assembled a team that has developed Synek, a system for dispensing craft beers through a countertop appliance that keeps the brew cold and carbonated.
Synek is targeting craft brewers who can't afford to bottle or can their specialty brews and home brewers who need a better way to package and share their beer. The company believes its technology will help craft brewers sell more at wider profit margins and give consumers a chance to enjoy the product over a longer period of time.
"We haven'?t met a brewery yet that said this is a bad idea," said Mike Werner, 25, Synek's strategic director. "We know there'?s a packaging problem in this industry." Mr. Werner, who moonlights as a bartender at St. Louis' Urban Chestnut Craft Brewery, has finance and entrepreneurship degrees from the University of Wisconsin and has been a consultant to several startups.
"The idea here is to have a Keurig in the morning and a Synek at night," he said.
Last week, the St. Louis startup launched a Kickstarter campaign to raise $250,000 that will be used to refine the technology and bring it to market. Supporters who pledge at least $299 will receive a stainless steel version of the dispenser while those who contribute at least $375 will get a bronze model.
There'?s also the Over-Indulger pledge level: $1,500 or more gives a supporter six dispensers for the price of five. (Shipping not included.) Mr. Young, who earned a finance degree from Case Western Reserve University, developed the idea while covering the retail industry for Cleveland Research, a Cleveland investment firm. He noticed the proliferation of craft brewers, confirmed it was not a passing fad, then started figuring out what brewer and consumer needs were not being met.
The answer was packaging.
"We make great beer, but we can't get it into peoples'? homes easily" was the refrain Mr. Young kept hearing from craft brewers. Their distribution is limited because they cannot profitably bottle or can their beers, especially small batches.
While consumers can come to them and fill up growlers -- half-gallon glass jugs -- the growler beer has a shelf life about as long "as a toddler's attention span," Mr. Young says in a video posted on Synek'?s Kickstarter page.
Synek's solution is built around a high-tech, one-gallon pouch -- Synek calls it a cartridge -- that can be filled with beer. Home brewers can even age their beer in the cartridge.
"If you fill it right, it'?s got the shelf life of bottles," Mr. Young said.
While Synek's marketing materials put the shelf life at 30 days, Mr. Werner said, "It could last four or five months, just like a bottle." The cartridges can be stored in a refrigerator or in the dispenser, which keeps them chilled and prevents oxygen from getting in while a glass is poured. Synek does not recommend reusing the cartridges, but says they are recyclable. Current plans call for distributing them through craft brewers, who could slap their own labels on, allowing them to advertise their products in peoples'? homes.
"They're selling more of their beer. They don'?t have to bottle or can, and [their beer] is always at the highest quality," Mr. Werner said.
The team Mr. Young has assembled includes a few Anheuser-Busch employees who lost their job after America'?s largest brewer was taken over by 3G Capital, the cutthroat private equity firm that purchased Pittsburgh's H.J. Heinz Co. with Warren Buffett last year.
"They have a ton of talent and a lot of enthusiasm. Now that the red tape is off, it'?s amazing what they can do," Mr. Young said.
Synek is pronounced just like cynic and, according to the company's website, www.syneksystem.com, is supposed to be a play on that word. Mr. Young said one interested party thought it stood for "share your next exciting kraft(sic)" while Mr. Werner said someone suggested it was derived from "Steve Young Never Enjoys Kegging." The company'?s Kickstarter campaign will only be funded if contributors donate at least $250,000 by July 24. Late last week, the promotion had garnered about $14,000 in donations.
Mr. Young said the goal is not only to raise funds but to collect ideas from interested parties about how to tweak the technology and marketing. He said Synek has talked with potential investors who have deep enough pockets to finance the venture no matter what happens with the crowdfunding effort.
"This is happening because it is being supported by brewers regardless of our Kickstarter campaign," Mr. Young said.
Len Boselovic: 412-263-1941 or email@example.com ___ (c)2014 the Pittsburgh Post-Gazette Visit the Pittsburgh Post-Gazette at www.post-gazette.com Distributed by MCT Information Services
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