Crossover Event: Beavertown & Heineken

Heineken sign

Beavertown has sold a substantial stake to Heineken  — they’re not specifying how much but 49 per cent seems a reasonable assumption — and our Twitter mentions have gone a bit mad.

That’s because a few weeks ago, you might recall, we wrote a piece reflecting on signs one might look out for to indicate that a brewery is readying itself for sale, pointing to Beavertown as an example of a firm that seemed to be glowing hot.
Now, let’s be clear: our post was actually pretty tentative — might this, possibly that — and, though we named AB-InBev as a possible suitor in the quick Tweet we fired off before the post, we didn’t specify any names in the post proper because we didn’t have a clue.
Even if we’d guessed Heineken would have been low down the list given its fairly recent acquisition of another London brewery, Brixton.
(Although within minutes of our posting multiple people had messaged us to say, “It’s Heineken”, and proper journalists soon ferreted out the story.)
So, yes, we’re feeling pleased that our logic was tested and seems to have held up but, no, we don’t feel like soothsayers or a pair of Mystic Megs. What we came up with was half educated guess, half luck.
In the PR around today’s news Beavertown has addressed a few important points head on, admitting to having swerved telling the truth because (as we acknowledged in our post) businesses don’t generally talk about deals while they’re being negotiated and, indeed, are usually legally prohibited from doing so:
It’s been an uncomfortable few weeks as speculative rumours have been flying about.  The reality is that sometimes in business you can’t share everything and I’m a true believer in not talking about anything unless it is a done deal, and up until this very day there was no deal.
It’s at this point, though, that we’ll refer to an even older post of ours, from May last year: breweries could avoid a lot of the criticism and high emotion that hits on takeover day, and lingers for months and even years after, if they made a point of saying from much earlier on in the cycle something like, “We sometimes talk to potential investors and would never rule out selling a stake in the company, just so you know.”
People will probably understand if you have to keep the specifics of particular deals quiet, as long as the very idea that you might be talking to whichever global giant isn’t a nasty surprise.
Whatever the logistics behind the decision, however good the news for the company, regardless of whether the beer stays the same, there will always be people who feel stung when a company which was selling a set of values as much as pale ale decides that one of those values doesn’t matter any more.

Getting in Shape for Takeover

Reading tea leaves in a cup.

Without insider intelligence it’s impossible to say with any certainty whether a brewery is about to be taken over by a larger national or multi-national but we reckon there are a few things to look out for.

First comes a shift from purism to pragmatism. Smallness, independence and provenance, once both sacred values and selling points, get dropped.

There might be surprising partnerships with ‘evil’ companies; there may be contracts to supply supermarkets; or plans to have beer produced under contract, with more or less transparency.

This kind of thing usually comes with a rush of blurb explaining how, actually, this way is even crafter because it widens access to the product, challenges the status quo, and so on, and so forth. But what it also happens to do is send a signal like animal hormones in mating season: we’ve grown up now; we understand how it works in the real world; we’re people you can do business with.

The tying off of loose ends is another thing to watch out for, e.g. the sudden settling of legal disputes, which few potential buyers will want to acquire as part of any bundle. Camden settled their dispute with Redwell over the trademark for Hells, for example, at around the time of its takeover by AB-InBev. (We understand that reporting of this news came much later than the settlement itself, though it’s possible we’ve got the wrong end of the stick.)

Along the same lines, one might read something into the winding up of fun but marginal parts of the business.

The emergence of a dominant beer in the portfolio might be the biggest red flag of all. (Or green, depending on your point of view.) Big multinational firms are drawn to lagers, pale ales, wheat beers and increasingly, we’ve observed, session IPAs. These are products with mainstream appeal, that people can and will drink for an entire session or buy by the six-pack, and which fill a gap in their portfolios of Craft Brands. If they’re already in supermarkets and chain pubs (see above) all the better.

All of this is a roundabout way of saying that, thinking back on the trajectories of Meantime, Sharp’s, Camden and others, we’d put money on Beavertown being bought up before too long.

Of course Beavertown says this:

Twitter conversation: a takeover is not going to happen, says Beavertown.

But that doesn’t change our gut instincts. After all, the one indicator of an impending takeover you can guarantee you’ll never get is any explicit announcement of intent before a deal has been finalised.

News, Nuggets & Longreads 14 April 2018: Beer Duty, Beavertown, Baudelaire

Here’s all the writing about beer from the past week that most engaged, informed or entertained us, from the Fall of the Craft Beer Empire to Gamma Ray in Waitrose.

Well, most of the past week — we wrote this post at breakfast time on Friday and scheduled it to post, so if anything exciting happened on Friday afternoon, we probably missed it. We are now on holiday for a week and a bit which means no round-up next weekend. If you want a fix of links in the meantime check out Stan Hieronymus’s Monday post and Alan McLeod’s on Thursday.


Adapted from ‘The End is Nigh’ by Jason Cartwright on FLICKR, CC BY 2.0

We’ll start with a piece by Pete Brown which prods at the kind of would-be sensational news story based on a piece of research you have to pay to read in full:

“Have you noticed a decline in the demand for craft beer? Why do you think this is?”

I stared at the question, cognitive dissonance making me feel momentarily floaty…. The reason I was confused is that it hasn’t happened – not yet. When I got these questions, I’d just delivered the keynote speech to the SIBA conference. To write it, I’d had to do a lot of digging. I’d discovered that craft beer volume increased by 23 per cent last year, and that analysts are predicting continued growth until at least 2021. I’d learned that business leaders in the food and beverage industry had named craft beer the most important trend across the whole of food and drink – comfortably ahead of low alcohol drinks, artisan coffee and craft spirits – for the fifth year running.

Continue reading “News, Nuggets & Longreads 14 April 2018: Beer Duty, Beavertown, Baudelaire”

News, Nuggets & Longreads 16 September 2017: Beavertown, Burials, Biggsy

Here’s everything beer- and pub-related that caught our eye in the last week, from viking funerals to mysterious pressure groups.

Continue reading “News, Nuggets & Longreads 16 September 2017: Beavertown, Burials, Biggsy”

Infantile?

Label for Partizan X ale w. crossed dinosaurs.
Art by Alec Doherty. SOURCE: Partizan Brewing Archive.

We’re working on an article about mild in the 21st century, research for which prompted this statement in an email from Andy Smith at Partizan:

The beer was originally simply called mild… We then decided to rebrand as X… This worked OK but not as well as we’d hoped. It was at this stage we put dinosaurs on the label and sales rocketed! I kid you not. It sells as well if not better now as our other dark beers. Dinosaurs! Now we spend our weekends hearing how cute the dinosaurs are (recently changed) and  answering the question what is X?

That’s funny, of course, but also made us think, ‘Huh. So craft beer drinkers are like children?’

We’ve observed before, as has almost everyone else who’s written a tedious think-piece on the subject, that craft beer in cans has been successful partly because they are tactile and colourful, bright and toy-like. Beavertown Brewery’s cartoon-laden designs in particular suggest material for an (admittedly slightly weird) animated series and also make them look like a bit like soft drinks. (Gamma Ray more so than this example we have at hand.)

Beavertown Smog Rocket design.
Art by Nick Dwyer. Source: Beavertown Brewery.

And sometimes, with fruit and residual sweetness and novelty flavourings and higher carbonation, the hippest beers can taste a bit like soft drinks too.

Of course we checked ourselves fairly promptly: one person’s infantile is, of course, another person’s fun, and we understand that you humans enjoy this emotion fun is good.

And even if it is infantile, is that a bad thing? One key reason people drink is to reduce the pressures of adult life and the pub is where grown-ups go to play.

This is a question we’re going to have in mind from now on, though, especially when we find ourselves considering the generation gap between real ale culture and craft beer. (Def 2.)