The REAL story behind BrewDog’s ‘sellout’ is that crowdfunding will only get you so far

The real story behind the news that BrewDog is copping more than £200 million from the private equity firm that also part-owns Pabst Blue Ribbon, is not, despite the howls of “hypocrisy!”, that nobody can resist a big juicy cheque, no matter how punk they claim to be. It is, rather more sadly, that crowdfunding will only get you so far, and if you have really big ambitions, you’re going to have to get in bed eventually with The Man.

Crowds of crowdfunders: a scene from the BrewDog AGM in Aberdeen earlier this month

The deal with TSG Consumer Partners, the $5bn 30-year-old San Francisco-based private equity firm, sees TSG acquire “approximately” 22 per cent of BrewDog for what the Sunday Times says is £213 million, split between a £100 million investment in the firm and £113 million paid to existing shareholders.

Of the two founders, James Watt is seeing his stake in the firm drop from 35 per cent to 25 per cent and Martin Dickie’s slice goes down from 30 per cent to 22. It’s not clear (to me, anyway) if that dilution is because the pair are selling 18 per cent of the firm between them to TSG, or some of the fall in their percentage ownership comes from new shares being issued: the Sunday Times says one of the motions passed at last month’s BrewDog AGMEGM in Aberdeen saw the creation of a new class of preferred shares, which would guarantee TSG a minimum compound annual return of 18 per cent if the company is bought or floated. There’s a fair bit of dilution, I reckon, or the figures for how much existing shareholders are getting out of the deal don’t add up. But even so, I’d say James is receiving north of £50 million and Martin more than £40 million. Not bad for ten years of being rude about the rest of the UK brewing industry and winding up the Portman Group. Looks like Dr Johnson’s comment more than 230 years ago about selling a brewery being the way to become rich beyond the dreams of avarice is still true. According to Watt, the sums in the deal mean BrewDog now has an enterprise value of £1bn (I make it £968 million, but hey, £32 million is mere loose change), thus making it the first new British brewery “unicorn”.

The most important figure, however, is the £100 million BrewDog now has to play with. That’s four times the amount the company has raised so far through its Equity for Punks crowdfunding schemes, which have given it more than 50,000 shareholders, but taken six years. The company is currently attempting to get $50 million through Equity for Punks USA, though this does not appear to be going anything like as well as its British crowdfunding efforts: the latest figures seem to suggest only $3.5 million or so has been gathered in. That size of sum doesn’t go very far: the hotel and sour beer plant BrewDog is building next to its new brewery in Columbus, Ohio, which finally opened in March, several months late, is costing $6 million. Earlier this month the company announced that it was looking to open breweries in Asia and Australia: based on how much it spent on the Ellon brewery in Aberdeen, that’s £40 million to £50 million that will be needed, in addition to the money required for the planned expansions in Ellon and Columbus. Crowdfunding simply won’t cover expansion of that magnitude.

Tying up with someone like TSG was pretty inevitable, then, if Watt and Dickie wanted to maintain the momentum they have built up with BrewDog. And why should they not? Is it somehow not “punk” to want to be as successful as you can be? Are they meant to say: “No, that’s it for us, really, we’re just going to sit on our arrises from now on”? If you believe in your product, surely you should want to reach as many people with it as possible, however that possibility has to come about? As Watt said in the note that went out to shareholders announcing the TSG deal, it represents “a launch pad for us to turbocharge our mission to make the world as passionate about craft beer as we are.”

Some have declared the TSG deal a betrayal of all the people who bought shares in BrewDog apparently believing that Watt and Dickie would never “sell out”; but this “betrayal” involves a pretty enormous return on those Equity for Punk backers’ investments. As Watt said: “Shares purchased in Equity for Punks I, which closed in February 2010, are now worth 2,800 per cent of their original value. Even craft beer fans who invested in Equity for Punks IV last year have seen the value of their shareholding increase by 177 per cent in just one year.” You don’t get that sort of return putting your money in Nationwide.

Mind, it was perhaps a little naughty of BrewDog to describe TSG as “one of the world’s leading growth funds with successful investments in global brands like Pop Chips and Vitamin Water” without adding that it also has a substantial minority holding in Pabst, purveyor of just the sort of industrial brews Watt and Dickie swore they would never sell out to. I am sure Alastair Hook and the guys at Meantime, whose beers BrewDog withdrew from its bars after the Greenwich brewer was bought by SAB Miller, are smiling sardonically.

No, Heineken, the alcohol-free beer market is NOT going to double in the next four years.

St Peter’s Without Any Redeeming Features

It’s deja bu time again in the world of Big Beer, with the return of excited prognostications for the no alcohol/low alcohol sector. All the marketing “experts” involved in the last round of predictions about how fast sales of no alcohol/low alcohol beers were going to expand have now retired or died, apparently – to be fair, it was 25 years ago – and a new generation is again falling for the fallacy of unwarranted extrapolation.

The Dutch giant Heineken is leading the charge, with the launch in the UK of Heineken 0.0. Currently no-alcohol beer has a tiny one per cent slice of the UK beer market, but David Lette, head of premium brands at Heineken, is popping up in the trade press declaring that he expects to see the alcohol-free beer category double in the next three to four years, and announcing that to make sure Heineken gets its share of this, it is putting £2.5m behind the launch of 0.0, with a £1.5m consumer advertising campaign breaking in July.

If they had given me a tiny one per cent slice of that marketing spend – just £25,000, chaps, very reasonable against what other consulting companies will charge you – I could have saved them all the rest of their money by assuring them that it ain’t going to happen: there will be no doubling of no-alcohol beer sales. And I hate to pour icy water all over young entrepreneurs, but the message is the same for the team behind Nirvana Brewery, East London’s latest, which started at the beginning of this year as the country’s first dedicated no/low alcohol brewery. The no alcohol/low alcohol beer market didn’t take off back in the early 1990s, for a variety of reasons, and for just those same reasons it’s not going to take off now.

In 1987 beer marketeers were even more optimistic about the future of alcohol-free beer, after it had apparently doubled sales in a year, to be worth £45 million, with predictions that it would grow tenfold by 1999. Barbican, the market leader, made by Bass, which had been launched in 1979, was spending £2.5m on an advertising campaign to fight off new entrants such as Kaliber, from Guinness, and Swan Light, from Allied, the first draught low-alcohol beer. Barbican’s first television ad campaign had featured Lawrie McMenemy, then the highly successful manager of Southampton, declaring: “It’s great, man.” McMenemy was later prosecuted for drink-driving, suggesting he perhaps didn’t think Barbican was quite as great as he had been paid to claim. Kaliber had signed up comedians Lenny Henry and Billy Connolly, and the actor Michael Elphick, to act as spokesdrinkers: another example of the dangers of celebrity endorsers, since Elphick was to die in 2002 of a heart attack not helped by his drinking up to two litres of spirits a day.

Thirty years on, that £45 million the alcohol-free beer market was valued at in 1987 pounds is equal to around £180 million in 2017 pounds – which is more or less what today’s alcohol-free beer market in the UK is worth. In other words, in three decades the sector hasn’t grown at all, in real terms. But 30 years ago, David Lette, today head of premium brands at Heineken UK, was studying for his International Baccalaureate at college in Singapore, according to his LinkedIn biography, and he didn’t join Heineken until 2002, thus missing out on the first great failure of non-alcoholic beer to live up to the extrapolations, and probably explaining why he is so optimistic today that the extrapolations for the no/low alcohol beer market are going to come true.

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Cloudwater, quality and Camra dinosaurs

If you think the major problem facing the Campaign for Real Ale today is whether or not to embrace “craft keg”, or how to prevent more pub closures, then like the campaign itself you’re failing to acknowledge the elephant not just dominating the room but loudly trumpeting in your ear – the latest trumpeting being the news that Cloudwater, the highly regarded Manchester brewer barely two years old, is to give up making cask beer. That elephant is the one marked in big letters down both flanks “poor beer quality”, and despite Camra being founded 46 years ago to fight that exact battle, and – originally – that battle alone, it’s still a war far, far from won.

Cloudwater: no more cask

When Cloudwater started in 2015, the plurality of its output was in cask – 45 per cent, against 25 per cent in keg and the rest in bottle. Last year that was down to 23 per cent in cask, and the rest split almost evenly between bottle and keg. Now, with a new canning line starting up, co-founder Paul Jones says cask production is being halted, and the expected output for 2017 will be 60 per cent keg, 40 per cent bottle and can – with the aim to more than double annual turnover from £1.15million to £2.7 million and 13,000hl/8,000 barrels. Paul lists several reasons for dropping cask: the price the market will accept, which is less than the price it will accept for keg beer, despite all the expense of racking, handling and collection casks on insufficient margin; the fact that, tbh, Cloudwater finds the beers it can sell in keg and bottle more exciting than those it can sell in cask; and finally, and most pertinently to this debate, “another often encountered set of issues”, the quality problem. In his end-of-year blog round-up, Paul complained that slightly hazy casks of keg were being “flatly refused” without being tasted, while casks tasting of diacetyl, either through brewing faults or because they were being served too young, are “all too often good to go”.

Cask beer, Paul said, “should take pride of place in every bar and pub”, but it “requires not just the same skill and discipline as keg beer to brew but also requires excellent stewardship to be pulled in to a glass in a way that best represents the establishment, the brewer and the rich and varied heritage of cask beer in the UK.” He doesn’t say so directly, but the implication is clear: Cloudwater doesn’t believe that the “excellent stewardship” is there at the point of sale in enough bars to present any cask beer it produces in the way that would give the best possible result for the customer.

It is not alone. I interviewed a number of leading names in the UK brewing world on the subject of beer quality recently, and they all agreed there is still a huge, huge problem. Rob Lovatt, head brewer and production director at Thornbridge in Derbyshire, another of the half dozen or so most admired new breweries in the UK, said: “Despite being extremely proud of the craft beer revolution in the UK, I often shy away from ordering a new craft beer unless I’m damn sure it’s going to be a good pint. Often craft beer can be not just hazy but actively soupy, flat and/or oxidised, and people are expected to pay a premium for these beers.” Alastair Hook, founder of Meantime Brewing in Greenwich, London, the most successful new brewery start-up in the past 45 years, and now owned by the Japanese brewer Asahi, has consistently refused to involve Meantime in the “cask ale” segment, believing that whatever bonuses cask-conditioned ale might bring in terms of flavour, the downsides of lack of stability and openness to infection inevitable with cask beer mean the customer is much better off with the consistency provided by “craft keg”.

However, he said, and this is a vital point regularly ignored, “all of the afflictions that cask ale suffers from apply to brewery-conditioned beers, and this is where there is a major threat to all beer regardless of type. Poor line cleaning, interchanging beers, many of which are infected because of poor practice at the brewery, warm storage, warm chain distribution, antiquated dispense systems that cannot be cleaned, all paint a worrying picture. The first wave of craft breweries in the US fell foul of quality issues in the 1990s. Hundreds didn’t make the next decade. If brewers in the UK are complacent, the same will happen here. Meantime invests hundreds of thousands of pounds annually to counter this threat. The threat is real – and as we say in industry, you are only as good as your last beer.”

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How I helped brew a black gose in the backstreets of Shenzhen

Beer can take you to some strange and unexpected places. On Sunday I was in the sweaty backstreets of Baishizou, a faintly dodgy suburb in Shenzhen, southern China, visiting a cramped and not necessarily fully legal microbrewery on the ground floor of a somewhat scrubby apartment building. My mission: to help the brewery’s owner, a former US military man called Joe Finkenbinder, and another American brewer, Dave Byrn of the Pasteur Street brewery in Saigon, make the first ever Sino-Vietnamese collaboration beer, a black gose called Disputed Waters.

I am honorable – it's official

I am the honorable  Martyn Cornell – it’s official

The trip to Shenzhen, a city that has exploded from almost nothing to 11 million people in only 30 years, happened because I had been invited out to its southern neighbour, Hong Kong, to be an “honorable judge” (that’s what it said on my name tag) in the first ever beer competition solely for commercial Hong Kong brewers. When I was working in Hong Kong in 2011 I helped get the city’s first beer festival some publicity, and the festival organiser, Jonathan So, became a mate. At that time there were just two microbreweries in the city, and one of those closed soon after, so that when I left Hong Kong in 2013 there was only one left.

Since then brewery numbers in the former British possession have taken off like the rockets the Chinese have been making for 800 years: ten by the end of 2015, and then doubling to 20 today. So when Jonathan emailed to ask if I would like to be a judge in the first Hong Kong beer championship, as part of the city’s fifth beer festival, I was straight onto Expedia looking up flight times, delighted to have the opportunity to finally try beer made by all the bastards who had cruelly waited until I left the city and gone back to London – where the new small brewery scene had also boomed in my absence – to start brewing commercially.

Then Joe Finkenbinder, who was also one of the judges, emailed to ask if I would like to cross the border into China, visit his brewing set-up, which is barely two years old itself, and take part in a collaboration brew with Dave Byrn. When you’ve already travelled 6,000 miles, a few extra don’t matter: and anyway, how many lifetimes have I got left to take the rare chance to visit a Chinese microbrewery? Continue reading

AB InBev acquires Camden Town: least surprising news in the history of beer

I was actually speaking to a senior London brewer about something else entirely on Monday when he asked me if I had heard that AB InBev had bought the Camden Town Brewery, and my instant response was: “That’s the least surprising news I’ve ever heard.”

Jasper Cuppaidge, evil mustachio-twirling villain – if you believe Twitter …

Jasper Cuppaidge, evil mustachio-twirling villain – that is, if you believe Twitter …

Camden Town has always seemed to me the Brewery Most Likely to Sell Out to a Big Buyer – certainly since its beers started appearing on bartops all over London. It’s got a great brand name, picking up the associations of a part of the capital that is somehow, at least in its image, gritty, urban, young, trendy and authentic all at the same time (possibly relevant trivia: Camden is where Scrooge’s clerk Bob Cratchit and his family lived, which suggests the place has had a reputation for cheery grittiness since Dickens’s time).

But it ought to be expected that the brewery is a great brand: founder Jasper Cuppaidge is married to the daughter of Sir John Hegarty, a partner in Bartle Bogle Hegarty, one of Britain’s most renowned advertising people, the man who gave us Vorsprung Durch Technik and Nick Kamen stripping to his boxers in a launderette to advertise Levi’s, and who is – or was – Camden Town’s chairman. If Hegarty and his ad world pals didn’t stump up the initial funding that allowed Cuppaidge to install all that shiny brewing kit from Germany’s Braukon in a Kentish Town railway arch in 2010, then I WOULD be surprised. And if there wasn’t always the possibility of a trade sale in the business plan, I’d be pretty surprised there too. (More trivia: Hegarty apparently designed Camden Town’s logo, with the horseshoe shape a nod to the Horseshoe in Hampstead where Cuppaidge started brewing)

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Caley’s self- crafted approach to being craft

Are you a mature but still lively Victorian brewery? Do you worry that younger breweries, with their weird American hop varieties, shiny stainless steel lauter tuns and one-off wacky recipes, are luring your customers away? Is your 150-barrel minimum brewlength too inflexible to make experimental brews on? Worry no more: install your own microbrewery on the premises, and you too can be hitting the bartops with mango-flavoured double IPAs and smoked malt saisons. Comes with clip-on manbun and removable extra-bushy beard for all brewhouse operatives …

That’s unfairly sarcastic: I have no problems at all with big brewers who respond to the craft micro-brewery challenge by bringing in their own tiny set-up: I had great fun playing with the 10-barrel mini-brewery Brains installed at its site in Cardiff. The Brains plant, like those installed at Shepherd Neame in Kent, Hook Norton in Oxfordshire and Adnams in Suffolk, is designed to brew short-run one-off beers for selling in the company’s pubs. The Caledonian brewery in Edinburgh, however, has gone for something craftily different: an on-site microbrewery that is solely for experimenting with, making brews that, should they prove to be successful, will then be scaled up for commercial production in the main brewery.

The Caledonian brewery, Edinburgh in 1989

The Caledonian brewery, Edinburgh in 1989

I last visited the Caledonian brewery more than a quarter of a century ago, in 1989, which was just two years after it had been the subject of a management buy-out to acquire it from Vaux, the Sunderland brewer, which had bought it in 1919. The brewery was founded by George Lorimer and Robert Clark in 1869, and Vaux took it over to supply the North East of England with Scotch Ale, a style of dark, fruity beer then very popular in the region. Edinburgh was once the third biggest brewing city in Britain, after Burton and London, and even in 1958 it has 18 surviving breweries. One upon one they closed: Vaux announced it wanted to shut the Caledonian in 1985. Fortunately for posterity, its then managing director, Dan Kane, an active Camra member, and his head brewer, Russell Sharp, felt there was enough demand for the traditional beer it made for the business to be viable on its own. In a regular irony, the lack of investment by Vaux over the years meant the Caledonian brewery still retained old-style equipment long replaced elsewhere, most notably open direct-fired coppers, which gave the brewery an excellent marketing story.

Steaming wort runs into an open copper at the Caledonian brewerry, Edinburgh, in 1989

Steaming wort runs into an open copper at the Caledonian brewery, Edinburgh, in 1989

Despite a couple of fires at the brewery in the 1990s, those coppers are still there (though one is a replica, replacing a vessel lost in the fire of 1998, and they now appear to have suspended lids I don’t remember from before). Brewery manager Craig Steven says the now unique coppers give all the brewery’s beers a distinctive rotundity he always recognises in blind tastings. In 1991 the brewery launched a golden IPA using the name of another old Edinburgh operation, Deuchar’s, which had closed in 1961. That beer’s popularity was cemented with the award of the Champion Beer of Britain title by Camra in 2002, and it remains one of the UK’s best-selling cask ales. Then in 2004 the Caledonian Brewery lost its independence again, being bought by Scottish & Newcastle after S&N closed the old McEwan’s Fountainbridge brewery in Edinburgh. Just four years later the Dutch giant Heineken swooped on S&N, and Caledonian is now the second-smallest brewery (out of 165-plus) in what is currently the world’s third-largest brewing group.

Marble bust of George Lorimer, founder of ther Caledonian brewery

Marble bust of George Lorimer, founder of the Caledonian brewery

Which is why, presumably, they can afford to fly me up to Edinburgh, stick me in a four-star hotel, take me out for a very fine dinner in one of the Scottish capital’s best eateries, and all so I can see the new “Wee George” microbrewery (named for George Lorimer) and try the first beer to be scaled up and rolled out after trials on Wee George, an American-style IPA called Coast to Coast. There are those beer writers who would turn down being filled full of roast venison at a brewer’s expense in the belief that it would compromise their independence: I like to claim I’m not that cheaply influenced. (That is to say, you CAN influence me, but it will cost you lots …)

Talking of independence, Caledonian’s MD, Andy Maddock, who joined the Scottish brewer in March last year after six years as a senior sales and marketing man at Heineken, says his operation has an “arm’s length” relationship with its Dutch parent, allowing it to be entrepreneurial and to follow its own path as a “modern craft brewer”. There seems to be considerable fondness for the Caledonian brewery at the top in Heineken: they like its hands-on old fashionedness, and Michel de Carvalho, husband of Charlene Heineken, who inherited the business from her father Freddie in 2002, has apparently said Deuchars is his favourite beer.

Three Caledonian keg tapsThe advantages Caledonian has over most of its rivals, of course, are that as part of a huge conglomerate its financing is cheaper to arrange than a totally independent operator could manage, though it still has to have “all the rigour” in its budgets that any commercial operation has to have; and it can use its Heineken connections to get into other markets. Currently 95 per cent of sales are “domestic”, but in the next four to five years, Maddock says, he wants to see exports increasing, with Deuchars in particular and also Coast to Coast and the brewery’s new “craft lager”, Three Hop, being aimed at Western Europe. He also wants to see Caledonian’s beers making a bigger impact in the off-trade (“We haven’t punched our weight there yet,” Maddock says), and a greater awareness among drinkers that Deuchers is a Caledonian beer: it appears many Deuchars drinkers don’t actually know who makes it.

An original Deuchar's brewery mirror, now in the tasting bar at the Caledonian brewery, rescuded from a pub in Bath

An original Deuchar’s brewery mirror, now in the tasting bar at the Caledonian brewery, rescued from a pub in Bath

On the other hand, they know why they drink it, or at least Caledonian does: “drinkability”, that mysterious characteristic no brewer knows for certain how to achieve, but which is vital for a beer to win a substantial slice of the market. Strangely, Caledonian is one of the few breweries I’ve visited where “drinkability” has been emphatically placed in the heart of the business strategy. Maddock says that the future of Caledonian will be based on a “modern” range, with beers such as Coast to Coast, that emphasises “distinctiveness and accessibility”, and a “traditional” range, led by Deuchars, where “drinkability is really important”. The idea, clearly, is that if you fancy trying one of those new craft beers, you can be reassured by the Caledonian name that it won’t be a frightening experience you’ll never want to repeat; and if you’re looking for something comfortable and more familiar, Caledonian has that for you as well. “Comfortable and familiar” are, frankly, far too under-rated among beer raters: most people most of the time don’t want to be challenged by their beer. Indeed, probably, most people don’t want to be challenged by their beer any of the time. “Predictable but not boring” is a great position for your brand to take, if you can capture it. “Predictable” also has to mean “predictably good”, of course, and part of that means making sure your raw materials are top quality: Caledonian has insisted for a long time on using what it says is the best malting barley in the world, from the east coast of Britain, both Southern Scotland and East Anglia, it also only uses whole-leaf hops, and it has now altered the way it buys hops, eschewing the traditional hessian hopsack for vacuum-packing in foil, believing this to keep the hops fresh for longer.

THe 'Wee George' microbrewery set-up at the Caley

The ‘Wee George’ microbrewery set-up at the Caley: note mini-hopback above the drain

So to Wee George: Caledonian’s answer to the fact that there are now 100 breweries in Scotland, very few of which can match it with the popularity of its “traditional” line-up, but at least some of which offer are going to have widespread appeal – “widespread appeal” being the market sector Andy Maddock and his crew would like to own most of, thank you. It’s a £100,000 collection of hand-assembled stainless-steel kit capable of producing just 400 litres at a time, around a thirtieth of the main brewery’s capacity, but it has its own filler that can be used to put the beer into bottle, cask or keg, and it even has a hopback, just like the “big” brewery. Hopbacks are an old-fashioned item of kit today, replaced almost everywhere by whirlpools, but brewers who have kept them have realised that a hopback can be a terrific tool for adding all sorts of flavour to your hot wort. The new kit went in on June 1, and since then it has been producing one beer a week – the first being a version of Deuchar’s IPA, presumably to see how different the recipe would turn out on the Wee George kit compared to the Big George kit. Scaleablity was a problem at first, but the Caley brewers are getting better, they told me, at working out what tweaks were likely to be needed to translate a brew from Wee George to the main brewery.

The first Wee George beer to make it from experiment to scaled-up bar-top brand, Coast to Coast, was pushed through in eight weeks, which shows that for a 146-year-old, the Caley can be nimble enough when it wants to be: most big breweries barely have a meetings cycle that short, never mind the NPD pipeline. The name comes from the combination of West Coast of American hops – Simcoe, apparently – with East Coast of Britain barley. It’s a perfectly fine craft-beer-with-training-wheels, I suspect there’s an as yet untapped market for such brews among people looking for a beer to have when you’re only popping in for one and you want something with more flavour that usual but not TOO much, and I’d give it a fair chance of doing very well. Though if I were any good at predictions, I’d be much richer than I am.

Many thanks to the Caley crew for taking me north to meet Wee George, and I look forward to tasting future roll-outs.

Mash run with Steele's masher, Caledonian brewery

Mash run with Steele’s masher, Caledonian brewery

Inside the drained mash tun, with the grains still waiting to be removed

Inside the drained mash tun, with the grains still waiting to be removed

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Filling a copper at the Caledonian brewery, 2015

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One of the three copper coppers at the Caledonian brewery

A lovely rocky head in a fermenting square at the Caledonian brewery

A lovely rocky head in a fermenting square at the Caledonian brewery

A steaming louvre over the copper room at ther Caledonian brewery

A steaming louvre over the copper room at the Caledonian brewery

Caledonian brewery, Edinburgh, 2015

Caledonian brewery, Edinburgh, 2015

 

Ciao Biella: an Italian family brewery woos the bloggerati

You can hardly get fresher beer than from a bottle snatched off the production line by the managing director of the brewery, only seconds after it had been filled and capped – and, indeed, it’s excellent, cold, refreshingly flavourful and welcome, even at 10.30 in the morning. Mind, there are few or no Anglo-Saxon breweries where this would be possible, since health’n’safety barriers would be in place to prevent anyone from being able to reach across into the filling machinery and grab a passing bottle from the conveyor. However, this is Italy: while in a British brewery everybody would be forced into hi-vis jackets, ear protectors and goggles, here, where life is visibly more relaxed, visitors can wander about unworried by the HSE.

Menabrea brewery managing director Franco Thedy pulls a bottle out of the line

Menabrea brewery managing director Franco Thedy pulls a bottle out of the line

I am at Menabrea (pronounced roughly “MENahBRAYah”), one of the few surviving family-run Italian breweries, with roots that go back to before Italy was a single country. Menabrea is based in the town of Biella in Piedmont, 1,400 feet up in the foothills of the Alps, 40 miles from Turin to the south-west and 50 miles from Milan to the east. It is a town of 46,000 people, with soft water coming down from the Alps that, with plenty of nearby pastureland for sheep, has encouraged a local woollen industry: the town is home to Cerruti and Fila, among others. That same soft water is also very good for brewing lagers.

Inside the Menabrea brewery in Biella

Inside the Menabrea brewery in Biella

The brewery was started in 1846 by a couple of cafe owners, Antonio and Gian Battista Caraccio, and Antoine Welf, from Gressoney in the Aosta valley, to the north-west of Biella. Welf was a Walser, that is, a speaker of the Walliser dialect of German found in the Swiss canton of Valais and surrounding territories such as Aosta. Welf disappears, and in 1854 the Caraccio brothers started leasing the brewery in Biella to another Walser, Anton Zimmermann, also from Gressoney, and his compatriot Jean Joseph Menabreaz (sic), who were already running a brewery in the town of Aosta itself. Piedmont – and Aosta – were at that time part of the Kingdom of Sardinia, ruled by the House of Savoy, but in 1861, with some help from the French and Giuseppe Garibaldi, Victor Emmanuel, King of Sardinia, was able to declare himself King of a more-or-less united Italy. Three years later, in 1864, Zimmermann and Menabreaz – now, post-unification, with Italianised first names, Antonio and Giuseppe, and, in the latter’s case, a more Italian-looking surname as well, with the final “z” disappearing – bought the brewery in Biella from the Caraccios.

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Why Meantime sold up to SAB Miller – the inside story

PrintMeantime Brewing’s surprise sale to SAB Miller, the second largest brewing company in the world, was prompted by a growing realisation at the Greenwich-based craft brewer that it did not have the resources and capability itself to move on up to the next stage of its growth journey, the company’s chief executive has revealed.

Nick Miller, who joined Meantime as CEO in 2011, said that he and Alastair Hook, the company’s founder, and the rest of the board were already looking at a tie-up with a big brewer as one of the strategic options that could be followed to enable the company to grow further. “We were on the cusp of making a decision that partnership was a better route than going to refinance,” he said. “I think we may have gone to a process later this year, could have gone for a float, could have gone for private equity money, could have gone to AIM, though that’s a hugely costly and time-consuming exercise, could have gone for a joint venture with a PE house, could have sold out to a major brewer, could have gone crowd-funding, could have borrowed money from the bank. But it’s a bit more than just a financial requireement. It’s ‘have you got the brewing capability, the engineering capability, the route-to-market capability, the global reach capability?’

“The financial side wasn’t that much of an issue to us, because we’ve got a very good relationship with our bank. They’ve been trying to chuck money at us for a while now. It was more about, ‘how do you sustain the growth, relative to the capabilities within the organisation?’ That was the key strategic challenge for us, and the partnership with SAB really helps with that.”

A chance meeting in March this year began the process that led to the sale, Miller revealed: “A very old friend of mine, who I had worked with, was having his 50th birthday party, and he rang me up and said, ‘I’d like to buy some pale ale to complement Peroni at my party.’ So he came over, and we sat down and had a beer and a bite to eat, and he said, ‘What are you doing with the business?’ I said, ‘Well, we’re coming to a stage where we need to look at capability and resources. We’ve got a number of options, we could do it ourselves, but we might be better off with a partnership with a brewer that gives us the capabilities that we need.’ Four or five days later his boss at SAB Miller came to me and said, ‘Look, here’s an opportunity for you, would you consider it?'”

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Why Greene King doesn’t care that the haters hate its IPA

Hard luck, haters: Greene King knows you don’t like its IPA, you think it’s too bland, “not a real IPA” at 3.6% abv, and it doesn’t care at all. Not the tiniest drop. In fact it’s probably quite pleased you don’t like it. You’re not its target market – it’s after a vastly larger constituency. If you liked its IPA, it’s fairly sure those people that Greene King would most like to capture to and in the cask ale market, young people, people still with a lifetime of drinking ahead of them, wouldn’t like it – and for that reason, the Bury St Edmunds crew have no intention of changing their IPA just to make you happy. In fact they’re not changing it at all – except to shake up its look, and put £2m in media spend behind it.

Greene King IPA new look

The new look

Of course, it’s not just Greene King IPA that has hosepipes of vitriol directed at it by the Camra hardcore. Any widely available  cask ale gets the same – Fuller’s London Pride and Sharp’s DoomBar are equally hated, without the haters apparently being able to work out that the reason why these beers are widely available is because lots of people actually like drinking them, even if the haters don’t.

Indeed, it’s the popularity that is prompting the Bury St Edmunds crew into its current push. To its obvious delight, and, I suspect, slight surprise, Greene King has discovered that the flood of new young drinkers coming into the cask ale market find Greene King IPA just the sort of beer they want: there’s more to it that can be found in a pint of lager, but it’s still reasonably safe and unthreatening.

At a launch on Monday night in a bar near Oxford Circus in London to announce a new look for Greene King IPA, and other initiatives including a new website to educate licensees and bar staff on cellar management and how to serve the perfect pint, Dom South marketing director for brewing and brands at Greene King, quoted figures from a survey done last year for the Campaign for Real Ale showing that 15% of all cask drinkers tried cask ale for the first time in the past three years, and 65% of those new drinkers are aged 16 to 24. “We’re seeing a complete revolutionary shift in the drinker base coming into cask ale, which is exciting, because it means that this category, for the future, is in rude health,” South said. And where does Greene King IPA fit in here? “When you look at what those young drinkers want, from a cask ale brand, or just a beer, the three things a new young entrant wants are, first, something that feels right to them, a reflection of themselves, that makes them feel good about drinking the beer,” South said. “They want something a little bit modern, a little bit contemporary. The second thing is, they expect the beer to taste good – but let’s face it, too many pints in the UK are served sub-standard.

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Place-based beers and 13-year-old Special Brew

I have a new “magic beer moment” to savour: drinking 13-year-old Carlsberg Special Brew in the cellars of the Jacobsen brewery in Copenhagen.

den Lille Havfrue

If you’re in Copenhagen you do, really, have to go and pay your respects to den Lille Havfrue

Actually, that was just one of a number of great moments during my trip to Denmark earlier this month to talk about “beer and terroir from an international perspective” to a bunch of brewers not just from Denmark, but Norway and Sweden as well, as part of a conference in the town of Korsør organised by the New Nordic Beer movement (Ny Nordisk Øl, pronounced roughly “noo nordisk ohl”). The men leading the campaign are two brewers, Anders Kissmeyer, formerly of the award-winning Copenhagen brewery Nørrebro Bryghus, and Per Kølster of Kølster Malt og Øl in the appropriately named village of Humlebæk – “Hops Creek” – north of Copenhagen, and PR man Christian Andersen. The idea of Ny Nordisk Øl is to forge a distinctly Nordic take on brewing, using Nordic traditions and, most especially, Nordic ingredients – not just flavourings, such as heather, sweet gale and wormwood, but yeast and other micro-organisms sourced specifically from a Nordic environment, in just exactly the same way as the New Nordic Cuisine movement has fused tradition and modernity to create a style of cooking that is rooted in a place and yet free to experiment (the success of which effort can be judged by the fact that the Copenhagen restaurant Noma, short for “Nordisk Mad”, or “Nordic Food”, which is one of the leaders of New Nordic Cuisine, has been voted “best restaurant in the world” by its peers in four out of the past five years). In a world where the craft beer movement seems intent on replacing one kind of ubiquity – bland Big Brewer lager – with another – highly hopped fruit-salad pale ales – it’s a trumpet-call to battle on behalf of individualistic, rooted, idiosyncratic beers, made by brewers intent on arriving at something that could only have been made in one place and at one time, that excites me greatly.

Hærvejs Lyng

Hærvejs Lyng heather beer: the ‘hær’ in Hærvejs is the same as the here in Hereford

Judging by the number of highly enthusiastic Nordic brewers I met in Korsør – I’m guessing, but there must have been 50 or 60 attendees – and the excellent Ny Nordisk Øl-inspired beers I drank there, it’s a movement with a good weight of support behind it, and terrific results to show those wondering if “beer terroir” is just a gimmick. There have been various names given to the sort of products brewers involved in the Ny Nordisk Øl movement are making, but the one I like best comes from the United States – “place-based beers”. Fortunately I was able to tell the Nordic supporters of “place-based beer” that they are far from alone. In the United States, in Australia, in New Zealand, in Italy and France, there are plenty of others pursuing the same goal, of making beers with what one American called “the essence of here” in them. (I’ll be putting up my presentation on this blog, and naming names, later in the week). The bad news is that in what one might call the “Old World”, there is much less interest in the concept of “beer terroir”.

Hø Øl, or 'Hay Ale',

Mark Hø Øl, or ‘Hay Ale’, once brewed in Britain

One of the ironies of trying to find “beer terroir” today is that once, of course, all beers were local, and reflected their local environment, local ingredients (local hop varieties, “land-race” strains of barley, local water, local yeasts) and local traditions. Porter, the world’s first “industrial” beer, the popularity of which powered the growth of what became the world’s largest breweries at the time, was developed in London as a local beer for local people, satisfying the desire of the city’s working classes for a refreshing calorie-filled beer, brewed using brown malt made in Ware, Hertfordshire, 20 miles to the north, hops from Kent, just to the east, and London well-water, full of calcium carbonate, which helps make good dark beers; matured using giant vats, a technique invented by and originally unique to London brewers; and served using methods of blending old and new beer specifically reflecting customers tastes, while being drunk with foods it was regarded as a particularly fine accompaniment to: boiled beef and carrots, for example, a very traditional old London dish. Even pilsner, the most widely reproduced beer style in the world began as a beer very much reflecting its Bohemian locality: made with Moravian malted barley, local Saaz hops and its home town’s particularly soft water. Coming from the other direction, brewing traditions that are still deeply rooted in the local landscape – in particular the Belgian brews such as Lambic – now seem to be as reproducable as pilsen became, and almost as global. Every American brewer seems to want to make a Belgian ale laden with Brettanomyces bruxellensis, and they can buy that yeast right off the shelf, rather than having to move to Payottenland. When you see a brewery in Britain making a Gooseberry Gose, a variation on a style of beer from Saxony that was effectively unknown until a few years ago, you know you’re living in a world where “local” appears to mean very little.

Xperimentet No 2, beiitered with sea wormwood ('strandmalurt' in Danish

Xperimentet No 2, bittered with sea wormwood (‘strandmalurt’ in Danish)

Which is what the supporters of Ny Nordisk Øl are fighting against – and although they don’t have many fellow travellers in the rest of Europe, it’s to be hoped that when other brewers start tasting the beers that Ny Nordisk Øl has inspired, it will spur them to produce ales that reflect their own places. Here are my notes on some of the “place-based beers” I tried in Denmark: An unlabelled (IIRC – although I may just have failed to record the name) ale brewed with sea wormwood (less bitter than the wormwood used in absinthe), camomile and sea buckthorn, three popular flavourings with Nordic brewers seeking to make a hopless ale. This had a lovely, deep, tongue-coating, very up-front bitterness, a pale, slightly cloudy appearance, a mouthfilling rotundity, and finally a sweetness under a full, vegetally/weedy flavour. Ny Nordisk Hærvejs Lyng from the Vyborg Bryghus: a hop-free heather beer with a massive nose of honey, and liquid honey in the mouth but with a sharp tart lemony undertone, lightly petillant with no head. It’s alcoholic lemon and honey cough sweets. (The ale is named for the Hærvejen, or “Army Way”, a road that runs down the Jutland peninsula from Viborg to, eventually, Hamburg.) Continue reading