This morning saw news that US brewing giant SABMiller had purchased UK craft brewer Meantime for an undisclosed sum. The acquisition will see Meantime operate as an independent brewery with SABMiller looking to drive expansion and exports of Meantime’s award-winning brews. With the craft beer market booming, is this a one-off purchase or is it the start of a wave of purchases of nimble, profitable craft brewers by ‘big brewing’?
Craft brewers are an attractive target for acquisition
Craft beers are winning over consumers with a focus on local communities, provenance and flavour: often pitched as a direct challenge to the bland, mass-produced products from the global brewing conglomerates.
With the big brands often sold at a discount in retail outlets and their margins challenged in pubs and bars, it’s no wonder that the attention is focused on the craft beer sector. Earlier this year Anhauser Bausch purchased US craft brewer Elysium it’s fifth craft brewery acquisition. In the UK 2011’s purchase of Sharps Brewery by Molson Coors put craft beer into the public consciousness (and no doubt inspired many of the more recent entrants into the market).
Perhaps one challenge for the big brewers is younger consumer’s propensity to constantly seek out new flavours and styles. This presents a challenge as an acquirer might struggle to drive loyalty as consumers look for the next cool thing.
Who will be the next craft brewer to succumb to a takeover? Here’s our highly speculative list of the top 3 prospects:
Thornbidge Brewery: The Derbyshire brewery has established a reputation for its range of award-wining beers include Jaipur, Kipling and Wild Swan. Its focus on quality as well as experimentation has won it many fans.
Beavertown Brewery: Beavertown’s great beers are matched by their equally iconic branding and design. Though this is a very small brewer, the beer’s premium pricing and hipster audience would make it an attractive addition to any brand portfolio.
Bristol Beer Factory: Another great craft brewery with fantastic beers and a loyal fanbase.
BrewDog is notable by its absence and is currently funding the next stage of its growth with a £25million round of crowdfunding. It’s unlikely that BrewDog will forgo its independence just yet, if at all. It’s built the entire brand on rejecting the bland, corporate beers of the brewing giants. A sale of the brewer that many see as the ‘soul’ of craft beer to a conglomerate has the potential to cause irreparable damage to the brand in the eyes of consumers.
As for the rest of the craft beer sector, neither the squeeze on margins of the big brewers nor the consumer preference for newer, more flavoursome beers is likely to abate anytime soon. It’s almost certain that the future has more acquisitions of UK and US craft brewers in store.