Topic: Beer Brand Buyouts

Topic: Beer Brand Buyouts

Let me take you back to Christmas 2015. The Lewisham and Greenwich NHS Choir topped the charts with ‘A Bridge Over You’; David Cameron was gearing up for a smooth-as-ya-like EU referendum; and back at Camden Town Brewery, Jasper Cuppaidge was about to receive one Hells of a stocking filler.

In a gigantic £85m deal, Cuppaidge sold his brewing business to AB InBev in what some would argue was the high-profile deal that triggered a number of substantial beer brand buyouts in the years that followed.

Of course, those people would perhaps be forgetting the sale of Goose Island to AB InBev in 2011 or even SABMiller scooping up Meantime in 2015, just a few months before the Camden Town deal. However, for whatever reason, it’s the far and wide distribution of Camden Hells and its other eponymous brands that sticks in the memory of so many.

As with any big money merger, come Christmas 2015, the industry was shaken and stirred through a whole host of reaction. Friends of Camden congratulated Cuppaidge and his team, as did a number of pub and bar operators. Then, on the flipside, independent brewers and retailers condemned the move, citing the damage it does to smaller brewers who subsequently lose out on distribution, stocking opportunities and various other business prospects. We all saw BrewDog bartenders ripping Camden Hells right off of their beer boards, right? It sent a clear message to their guests and, as always, did their PR reach no harm either.

So what followed? Well, some of the headline grabbers were Carlsberg buying London Fields in 2017; Heineken taking a £40m minority stake in Beavertown (June 2018); Magic Rock being acquired by Lion just two months after that; and then Fuller’s caught everyone off guard earlier this year by selling the entirety of its brands to Asahi. I’d argue the latter ruffled the most feathers, as millions watched what they saw as the pride of British beer head off on a new frontier. We’re all still watching those beers and ciders very closely.

Who cares?

That’s the question, isn’t it? Before writing this piece, I got thoroughly lost in an online sea of opinions, arguments, justifications, squabbles and sensibilities over big brewers buying out beer brands – all in the name of researching who cares and why. By and large (and this could be down to the company I keep on social media platforms), the majority of those who want to lend an opinion – damning or otherwise – are in some way linked to the industry in a professional capacity. They know brand history and can offer a measured perspective on what these deals mean for the businesses involved, large and small. While this consideration is 100% vital, just how much does that matter to pub and bar operators and the customers they serve? It’s a tough one to call.

Let’s take my friendship group. Despite associating with me, they typically have good taste. We just about creep into the millennial bracket, most of us have a beard of sorts, and all of us have enjoyed the craft beer wave of the last five or six years. What’s more, we’re still regular visitors to pubs and bars. I can remember the first time I heard one of them say: “Oh, mate, they’ve got Punk IPA on tap.” Then it was: “Oh, mate, Camden Hells…” More recently, “Neck Oil, mate” is the favourite of the month, with each buddy genuinely excited about the increased accessibility of what was previously a rare(ish) find. However, what’s important to point out here is that even with the rich stars of the show taking up more room on the bar, my friendship group continue to ask bartenders about the other beers on tap. The fact that big brewers own these brands doesn’t seem to come into it – in fact, none of my friends even know who owns what. They just want a beer.

Should they care?

Of course, there are arguments that the general consumer should pay more attention. It’s hard not to get swept up in the David vs Goliath metaphor when it comes to big brewers buying out beer brands and the effect that has on those brewers that haven’t sold up/received investment. There’s no denying that with supermarkets moving into single can sales of craft beer, bottle shops and, to a lesser extent, pubs and bars are even more up against it. Many would argue that such brand buyouts are already having a negative impact on craft breweries.

When Heineken invested in Beavertown last summer, we received a number of emails offering opinion on why craft brewery sales would become an industry-wide trend. However, such a trend can’t continue if fewer breweries of this size are in operation. In February, The Telegraph reported that 434 breweries opened in the UK in 2017, falling more than 15% from the 520 that launched in 2016. If the appetite for so many craft breweries begins to plateau, will the larger brewers still want to invest in big money acquisitions? Jonny Forsyth, global drinks analyst at market research group Mintel, told The Telegraph that “there is still growth, but the market is now much tougher for new entrants” and goes on to say that “if someone asked me to invest in a craft beer company now, I’d say ‘no way, that ship has long sailed.’”

I’m not so sure you can confidently link Forsyth’s perspective to that of AB InBev or Carlsberg, but as the latter ramps up its own-brand marketing under its new ‘probably not the best beer in the world’ message, does the Mintel man have a point? Lion has made no secret of being open to further brand purchases, neither has Heineken, but with no rumours waiting in wings, are we set for a quieter period in beer brand buyouts over the next few years, or is another Fuller’s/Asahi deal waiting to land with an almighty thud of controversy? I know I’m supposed to know about this sort of thing, but right now, your guess is as good as mine.