A reflection on the rise of investments into the Craft Beer industry.

Wednesday, 20 June 2018

Beavertown Neck Oil was a gateway beer for me, just like many other craft ale fans
If you follow any craft beer social media accounts you won’t have avoided the reports circulating around the possible ‘big beer’ acquisition of a minority stake into Beavertown, with The Times writing on 26th May that the London based brewery is in talks with industry giant Heineken . So when I sat drinking a pint of Neck Oil in the Wine Vaults a couple of weeks ago I started considering the vociferous reaction amongst fans of the UK craft beer industry.

Was I as mad as everyone else?

Well no, I wasn’t, but the news did bring some sadness. For me, like many others, two core beers from Beavertown (Gamma Ray and Neck Oil) were amongst my first experience of genuine contemporary craft beer. Then, as I explored the wonders of modern brewing, time and again I came back and was impressed by Beavertown beers such as Humuloid and Spresso. So this is where my hop related heavy heart was coming from; Beavertown for me are one of the originals of British craft brewing, blazing a trail for those that followed.

Spresso is one of my favourite coffee stouts
So if they can find themselves succumbing to the pound power of big beer, what hope is there for the rest?

Well I don’t think we need to worry too much; you only need to see the shelves in most supermarkets or the number of new craft beer bars and shops opening to see that it is a booming industry. With that there will be the obvious growth and there has to be a place in the market for breweries creating good beer on a large scale. You won’t find many British brewers that can fulfil the purchasing requirements of Tesco so it stands to reason that those with an established brand and customer base will be attractive prospects for an investment which then allows a substantial increase in production.

If this investment comes from big beer then it will cause issues for committed fans of craft brewing, not least due to the various horror stories about large beer producers attempting to create hop monopolies (mohopolies?) in certain regions. Paste Magazine's report into AB InBev's hop buying practise in South Africa makes for worrying reading and these bullish tactics effectively squeeze the ability of smaller breweries to secure their much needed supplies. This poses a clear risk to the independents.

Of course not every craft beer that you find in a high street store or supermarket is only there because of external cash injection from a global super producer or investment company; for every Meantime (owned by Asahi Group Holdings, the seventh largest beer producer in the world and readily stocked in UK supermarkets) you can find a Wild Beer or Wiper and True (both independent but now stocked in Waitrose).

But even if a brewery has received a financial investment, if it hasn't come via the deep but morally dubious pockets of a "big beer" is that still a problem? Well I don’t know about you but I really feel for anyone drinking rubbish beer, so if these monetary injections mean that cans of quality craft beer start hitting supermarket shelves I’m actually in support. 

Whereas supermarket buying powers means that certain beers will become more readily available, I don’t see this as being the death knell for independent bottle shops and bars. I predict that where your casual beer drinker may start opting for craft offerings, this will be at the expense of macro beer already on the supermarket shelves. For those us that really appreciate the best of UK craft beer, the specialist retailers (both online and shop based) are sure to remain our preferred outlets. The truly independent breweries that are able to supply the stock levels that larger retailer would need will remain the exception. It is in the discovery and support of the smaller breweries that the craft beer lover really reaps their rewards.

Meantime Brewery were sold to SAB Miller in 2015 and then on to Asahi Group Holdings in 2016
Personally I am unlikely to purchase from a brewery that is financially backed by a large super producer but it does not mean that I recoil in horror simply at the thought of small producers achieving the success that the majority of small business owners would bite your hand off for. More importantly for the companies involved, the onward success will be based upon increased market reach and a subsequent growth of customers far exceeding the numbers that may choose to turn away due to the lack of independence and "craft beer-ness." It's simple economics and demonstrates that when we're talking about the likes of Anheuser-Busch InBev, SABMiller and Heineken International, they can clearly afford to lose your custom when they look at the bigger picture.

Finally you have to consider what you would do in brewer's beer soaked shoes? With the inherent difficulties in starting a business, the long hours, the mortgaging (and re-mortgaging) of homes, the pressures on family, can you really begrudge the small producer who welcomes the financial security of serious cash injection. I’m not saying that this is the case for every acquisition but unless you really know the ins and outs of the balance sheet, maybe this is something that needs to be considered before a hard working brewery is labelled as a sell-out.

Ultimately you the consumer will vote with your wallets and as long as the true craft beer fans continue to support the independent breweries that we all hold dear, the future should remain bright.

Let me know below how you feel about the reported investment into Beavertown? If it goes through will you stop buying their beer?

Do you think Beavertown Beers will still find a place in your fridge?

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