CEO says Bottoms Up poised for growth despite tax abatement setback

GrinOn Industries LLC, the maker of the Bottoms Up beer-dispensing system that fills cups from the bottom, lost its tax abatement from the city on Wednesday for not meeting the growth expectations it laid out five years ago.

But CEO Josh Springer said he believes his company—which he moved from Washington state to Indianapolis in 2011—is just getting started and that “2017 will be the year we start to see real growth.”

Springer said he was green in 2011 when his firm made the commitment with the Metropolitan Development Commission to invest $2.5 million in manufacturing and information technology equipment, and create 40 jobs with an average wage of $17 per hour.

The MDC voted unanimously on Wednesday to terminate the company’s tax abatement, according to Department of Metropolitan Development spokeswoman Lindsey Richardt.

After getting the tax abatement, Springer said he encountered the “normal hurdles” of running a business—including manufacturing issues and challenges working with the firm’s expected clientele—that slowed the company in relation to its growth plan.

“Everything was going to work out perfectly in my mind,” Springer said. “There’s been a lot more hurdles in developing the foundation, which everything is built on. It took us four years longer than we originally had anticipated.”

One of the key challenges was finding partners to manufacture the cups with holes on the bottom that work with the company’s system, Springer said, as well as other components of the system, including its valves, electronics and controls.

The Bottoms Up beer dispenser features a specially designed cup that is placed on a nozzle to fill it from the bottom, eliminating the too-foamy head that slows traditional tap pours and ultimately can waste beer. A magnetic disc at the bottom of the cup instantly seals the nozzle hole by adhering to a metal ring surrounding it.

The system can fill as many as 62 pint cups in one minute, the company says. (In 2012, IBJ featured the system in a video feature, directly below.)

The other challenge came in working with GrinOn’s expected clientele: sports stadiums and teams.

Springer said the company was “trying to swing for the fences” in terms of putting its product on the market, but found there is a lot of “red tape” in that environment. So the company is now trying to focus on putting its equipment in bars and restaurants.

“We backed away from doing anything with stadiums,” Springer said. “You can go to mom-and-pop shops, single-owner bars and restaurants, show them how everything works and have a sale closed in a couple months versus working with a stadium.”

But Springer said another hurdle is that the sales pitch for the Bottoms Up system forces potential clients to think about their costs in a different way.

Bottoms Up reduces beer waste, but Springer said many bars and restaurants don’t have ways to track their waste to know that his system would be a good investment. 

It requires making a larger up-front investment in the system itself, and paying more for cups with holes in the bottom than they would for normal ones.

“The cost of beer they are wasting is more than the cup price,” Springer said. “Getting that understood at a corporate level is quite a bit harder than expected.”

Springer said he is encouraged about the growth track his company is on.

The company still has between 14 and 16 employees, and Springer said revenue is “flat” compared to its 2011 level of $5 million.

Springer wouldn’t divulge revenue expectations for 2017, but he said “we did more business in January of this year than we did the first quarter of last year.”

The company expects to surpass $5 million in revenue this year.