What’s been going on in the craft beer market? It should be no surprise that despite the summer respite there’s been no shortage of news and developments. Here’s our latest update of key news and trends in the craft beer sector.
In August beer fans got to sample wares from 300 brewers at the London Beer Festival. The CAMRA-organised event featured over 900 real ales, ciders and perrys. The article notes that the growth in independent breweries was attracting a young audience to the event. The article also notes the challenge of defining craft beer and how it differs to real ale.
Is craft going mainstream? The Guardian thinks so citing rising interest from supermarkets as they stock an increasing range of own-label craft beers.
In Ireland there’s been a massive growth in craft beer with the number of small brewers tripling. Craft’s share of the overall market in the Republic is very low compared to the UK and US. Last year it accounted for just 1.2% of the market but is expected to reach 3.3% by 2016.
This month sees the launch of United Craft Brewers an association to promote and protect the interests of UK craft brewers. The Guardian notes the difficulty in defining what is and isn’t craft beer as well as the need for such a body as the big brewers look to enter the market.
Whilst craft beer fans and micro-brewers may have an issue with big beer’s interest in the sector, it’s not stopping the global players. Last week US craft brewer Lagunitas announced that it had sold 50% of the business to Heineken. As expected the news has been met with some criticism. BrewDog’s CEO James Watt tweeted that:
We will no longer be serving @lagunitasbeer in any of our bars.
— James Watt (@BrewDogJames) September 9, 2015
Despite the criticism this shouldn’t have come as a surprise. In August Reuters reported that Lagunitas was exploring strategic options including selling equity in the business. It’s not just Lagunitas either. San Diego’s Saint Archer has sold a majority stake in their two-year old brewery to MillerCoors.
Elsewhere in the US Stone Brewing’s CEO Greg Koch began the search for a replacement CEO as he shifts his focus to the brewery’s long-term strategy. This isn’t the prelude to a sale though as Koch is adamant that they aren’t interested in cashing in, noting that artisan businesses and commodity businesses can’t operate together.
The potential for the craft beer market is encouraging smaller brewers to expand and to consider how to raise finance. Innis & Gunn launched a crowdfunding drive in April looking to borrow £3 million (though the Innis & Gunn BeerBond). Unlike brewers who’ve given away equity to raise finance, Innis & Gunn opted for the more expensive debt-based finance. The move has paid off as they’ve hit their funding target and are now looking to build their new brewery.
BrewDog’s expansion and fundraising are back in the news. The business announced that it was the first brewer to seek debt and equity based finance on Crowdcube. Ignoring the PR spin, it appears that their ambitious plan to raise £25 million from Equity for Punks has proven more difficult than anticipated. Instead BrewDog decided to raise some of the funds via 4 year bonds paying 6.5% interest.
So another busy quarter with the craft beer market continuing to expand and the likelihood of more acquisitions as the bigger players seek to benefit from consumer interest in craft beer and real ale.