DTC UPDATE

Good Afternoon Team,

 A quick update for everyone today.

 We started our direct-to-consumer (DTC) beer shipping division before COVID-19, which was extremely beneficial to our company at the time and we were glad to have it. However, over the past few years, shipping beer DTC has become less and less appealing and we have decided to stop shipping beer by the end of this month to refocus those efforts where we continue to grow. The major factors that went into this decision were:

• Poor service/delivery performance from shipping company leading to missed, lost, or damaged shipments.

• Resulting customer service issues impacting our brand experience.

• Rising shipping and packaging costs.

• Reduced DTC demand and shrinking profit margins due to costs including COGS, software, packaging, shipping, labor, and marketing, making it our least profitable sales channel.

• Better profit margins and customer experience through wholesale opportunities.

• Need to allocate staff time to other expanding business areas.

We may revisit it in the future if market conditions change, but for now, we believe our resources are better utilized elsewhere in the business.

 From the consumer side, we have a lot of great DTC customers across the state who will no doubt be bummed, and we will be reaching out to them. We value our DTC customers and will communicate alternative ways for them to obtain our beer through local options, wholesale, or third-party delivery partners.

 We will message customers this week and next about the updates and Thursday, June 27 will be our last shipping day. We wanted to make sure you all were in the know before we communicated with the public. Please reach out to me directly with any questions. Thank you!

As most of you are aware, today, we are moving towards some changes in how our company is structured to ensure Pure Project is financially sustainable into the future.

In the spirit of transparency, the past two years have been challenging, with declining retail sales and rising production costs. The Craft Beer industry is facing a downturn, and we’ve seen peers close shop.

As leaders, we are committed to preventing that from happening to Pure.

Rest assured, Pure Project is not closing. That said, we need to make some course corrections to restore profitability, ensure our longevity, and continue to create long-term careers for our employees. Further, while we do not take any of these decisions lightly, they allow us to retain full-time positions while others resort to layoffs.

To learn more about these changes, please review the slides that HR and Leadership have put together:

RESTRUCTURING SLIDES

Additionally, we have been working hard to find efficiencies across all departments, trim excess costs, and re-negotiate contracts. While this work will be ongoing and necessary, we are taking the appropriate steps to remain well-positioned in an uncertain economic environment.

These changes stem from the company not meeting its goals, not from any specific individual. We have faced many challenges in our nearly eight years of existence, and these past three years have been the toughest. We’re not perfect, but we will continue to preserve our founding culture and ethos.

To Recap:

• Pure Project is OK, but we’re readjusting to find profitability in a changing market.

• These changes will safeguard full-time positions and drive profitability.

If you have any questions, concerns, or feedback, please speak with your direct manager, or as always, you can contact the owners directly.

You can use the Suggestion Box, but note that anonymous feedback won’t receive direct follow-up:

SUGGESTION BOX

Thank you for believing in us and the vision of Pure Project. We appreciate your continued support as we navigate these changes, and we value each and every one of you.

Jesse, Mat & Winslow 

We want to take a moment to share with everyone the overall results of our Satisfaction Survey.

First, THANK YOU for providing your honest opinion. We feel lucky to have a team that feels comfortable expressing their ideas to help us to be a better company.

Our "LOVE YOUR JOB" goal is directly connected to this survey, and we will work hard to make Pure Projet the best company you've ever worked for.

Good afternoon Team!

We wanted to take a moment to thank everyone for such an amazing 7-year celebration over the weekend! This was by far the largest and smoothest and ran anniversary party we’ve had, and all our fans attending seemed to really appreciate all the hard work and effort put into making it such a special day for them.

So thank you very much. We really appreciate it. Not only those who helped put on the event or worked at the anniversary but also those of you who held it down at our taprooms the day of the event and managed those crowds. It ALL matters, and we couldn’t have done this without you!

We acknowledge that this past year was a time of rapid change across our industry and the economy as a whole. As we look forward with optimism for the year ahead, we want to thank you again for choosing Pure Project and believing not only in the vision of Pure and using Beer as a Force for Good but also for believing in us and your fellow team members as well. Cheers to 7 Years! (and making 8 even better! )

Jesse, Mat & Winslow

Good afternoon Team,

I hope everyone enjoyed their holidays and was able to spend quality time with their loved ones.

As we enter a new year we felt it was important to provide a quick update and acknowledge some recent changes that we’ve made in the business.

Going into last year (2022) we set some pretty lofty goals for the company. Of course, at that time no one could have anticipated the record inflation, ongoing war, or a worldwide recession, and thus our sales and costs have been impacted across the board. All of these factors compounded to directly affect some of our core goals around sales and growth and, therefore, our plans as a company.

For example, we were staffed to be a 10,000-barrel-a-year brewery and sell a large portion of that beer through the taprooms. Unfortunately, we missed that mark by quite a large margin in 2022. We finished the year with around 6,300 barrels produced and lower-than-anticipated taproom sales.

We are sure you have seen many of the closures and sales of other breweries in the last six months and, in full transparency, we think that trend will likely continue for a bit. That said, over the past 90 days our leadership team has been focusing on improving efficiencies, cutting expenses, reducing labor in all departments, and making the necessary changes to ensure that Pure Project can sustain and thrive through the upcoming year(s). We feel confident that the changes we’ve made are enough to get us through this slow time of year and we are optimistic for 2023 and the future.

To be sure, it is not all doom and gloom. We believe there is much to be optimistic about here at Pure Project: more efficient ways to produce our beer, more ability to sell beer wholesale, our amazing staff, and a strong and still-growing brand in a market that will—for better or worse—have fewer breweries.

While the hard choices that sometimes have to be made in a business are never fun, please rest assured that all the recent changes have been put in place to ensure that Pure Project is here to stay.

If you have any questions or concerns you can always reach out to your management team, Juliana in HR, or the owners directly. Your direct manager will also be making themselves available to answer any questions and meet with you in person. If you would like to chat with them right away, please message them to set up a time to chat.

Thank you again for all you do here at Pure and for your continued trust and patience as we navigate these unprecedented times.

P.S. We’ll be providing more in-depth details on where we ended with 2022 goals as well as our 2023 goals and future plans soon. Hint: We actually did pretty well in comparison to many of our industry peers and we have a lot to be thankful for. More details to come soon.

Mat, Winslow, & Jesse

Hi everyone!! 

We are excited to announce a new position back online: Sales Representative for the San Diego Area. 

Below are some important facts about this role:

• This position requires at least 2 years of recent experience in beverage or alcohol on-premises sales.

• We need someone with a significant number of connections to hit the ground running and be able to sell Pure beer within the first 30-60 days.  

• The pay is heavily concentrated on sales commission. 

• Position posted on our website > Click HERE

• Referral bonus: $200 + $50 added to Gift Card

• Internal application > Click HERE

Hi Team,

Probably you have already crossed by one of those beautiful souls over the last weeks. We are glad to add FOUR Team Members to the Pure Project family!! Let's get to know them a little bit better:

Dear Team,

It’s been one week since the Supreme Court’s decision on Roe v Wade. Reproductive health is a deeply personal and nuanced conversation and, no matter where you fall on the issue, the fact is that last week’s decision will have an impact on the healthcare landscape in our country. While we reside in California and will likely not feel the direct impact to reproductive health access in our state, we want to acknowledge that this change could still have an impact on our employees—indirectly, mentally, emotionally.

Last week’s event is another in a long list of prolonged uncertainties we are experiencing in our country (global pandemic, social and political unrest, to name only a couple), and uncertainty can be challenging to deal with. We want to take this space to remind you that Pure Project values the health and wellness of its employees. We want you to know that our health plan coverage will not change with the recent ruling. And should you need additional support during this time (or any time), we are here for you: Please reach out to your manager or our HR manager for resources, strategies, or with any concerns.

Thank you for being a part of this team; we appreciate each and every one of you.

Hi Team,

As our team grows, it is important to expand our education and keep a consistent level of services throughout all our taprooms. The FOH team plays a vital role in showing our guests what makes Pure Project special and why each detail matters.

We'd like to announce that we'll be opening one Education Lead position to support the South Taprooms (focus on Balboa and North Park).

This position will be working side by side with the taprooms leadership team to strength the overall knowledge of our beertenders.

See below additional details of this role:

• Requirements:

• Availablity to work in both south taprooms.

• Position is available only for full-time (30+ hours a week) beertenders.

• High level of beer knowledge (Cicerone level 2 or Beer Jdge Cerification is a plus but not required)

• Time commitment: Initially, 2 to 4 hours per week of "office" work (meetings with Chris L & Devin, preparing documentation/SOPs, events, Pure Academy, etc.)

• Click here to see the full job description and apply by 06/07 by clicking this link.

If you have any questions, please reach out to Kira or Chris L.

Cheers!