Pilot Venture Brewing thought-about heading to the Chicago suburbs to develop its distinctive mannequin of launching new beer manufacturers, however discovered alternative north of the border — so it’s Milwaukee-bound as an alternative.

The Logan Sq. brewery will proceed producing small and experimental batches for an array of upstart manufacturers in Chicago, however the bulk of its manufacturing will probably be in a 43,000-square-foot former Pabst warehouse that Milwaukee Brewing Co. transformed to an unlimited, trendy facility in 2018. Milwaukee Brewing introduced in August it was vacating the constructing.

In a deal that closes Thursday, Pilot Venture is buying Milwaukee Brewing’s tools and lease on the constructing for an undisclosed value. The web site OnMilwaukee first reported the information in late August, however Pilot Venture didn’t verify the acquisition till Thursday.

The $8 million undertaking is being financed with an funding from Chicago-based alcoholic beverage enterprise capital agency InvestBev, which Pilot Venture co-founder Dan Abel mentioned is buying a minority stake within the Chicago and Milwaukee operations, in addition to future enlargement.

Abel mentioned he envisions continued progress for Pilot Venture, together with further small breweries and taprooms — akin to the Logan Sq. mannequin — in Los Angeles, Miami, London and different cities he described as “culturally wealthy, premium markets.”

Pilot Venture rapidly ran out of capability after launching in 2019, Abel mentioned, and has subcontracted manufacturing at a number of different Chicago breweries. That manufacturing will probably be shifted to the Milwaukee location, which additionally encompasses a beer backyard, a taproom and a restaurant.

“We need to assist progress for so long as (a shopper is) keen to work with us, however we additionally don’t need to be inhibited from launching new and contemporary concepts,” Abel mentioned. “Now we are able to do each in tandem.”

Pilot Venture has launched greater than 13 breweries and beverage corporations since its founding, together with Funkytown and Azadi breweries, and Luna Bay and ROVM arduous kombucha manufacturers. The Pilot Venture mannequin is supposed to kick-start new manufacturers till they’re in a position to department out on their very own; an instance consists of Duneyrr, which produced beer at Pilot Venture earlier than taking on an area previously occupied by Motor Row Brewing in 2021.

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Pilot Venture is ready to produce about 3,500 barrels of beer per yr at its Logan Sq. brewery. On the Milwaukee facility, will probably be in a position to make as a lot as 75,000 barrels per yr, with the chance to develop to about 200,000, Abel mentioned.

With the expanded manufacturing, Pilot Venture plans to launch between 5 to 10 manufacturers yearly, most of which is able to originate in Chicago, Abel mentioned.

Abel mentioned Pilot Venture started exploring an enlargement through the summer time 2021, eyeing a location in Niles. Nevertheless, the deal was sluggish to develop, and the lure of rising in what he described as a “beer-focused market” apart from Chicago, in addition to buying a turnkey operation, grew to become attractive.

After initially elevating $500,000 to launch the enterprise, Pilot Venture wanted deeper pockets to fund the enlargement, Abel mentioned, which it discovered with InvestBev, an organization with a broad portfolio starting from barrels of Kentucky bourbon to canned cocktails to digital cloud software program.

“Partnering with Dan and the group at Pilot Venture will probably be recreation altering for the contract distilling and neighborhood brewing class,” InvestBev managing normal companion Brian Rosen mentioned in an announcement. “We search for disrupters in all our investments and Pilot Venture is actually redefining the enterprise mannequin. We’re excited to be concerned within the Milwaukee and Chicago amenities and stay up for a nationwide enlargement.”

Pilot Venture’s head brewer, Glenn Allen, a veteran of Goose Island, Lagunitas and Revolution Brewing, will oversee manufacturing on the Milwaukee facility. Damian Padilla will develop into head brewer in Chicago, Abel mentioned.

jbnoel@chicagotribune.com