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.”
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)
I see the Guardian is suggesting ABI paid a total price of nearly £85m for Camden Town, which is within throwing distance of the £100m a (different) senior London brewer suggested to me that SAB Miller paid for Meantime Brewing earlier this year. That same man also suggested that I wasn’t far wrong when I said at the time that Meantime was actually worth about £25m. “Worth” here means “what you ought to pay based on a realistic return on your investment, given a company’s current turnover and pre-tax profit”, though in the real world, of course, “worth” means “what someone is prepared to pay”. So in that sense, Meantime IS worth £100m. But when I was at business college, a company’s worth was generally reckoned to be one times turnover or ten times PTP, which would put a value on Camden Town of £9 million tops – maybe £18 million if you were being optimistic.
But it’s all about snatching territory before others do: the craft lager/craft beer market is where the growth is, and ABI knew that if it didn’t grab Camden Town, someone else would, which would leave it struggling to find an equivalent scaleable brand. (Incidentally, nobody seems to have pointed out the irony of ABI buying one London lager brewery barely a month after it had closed another one.)
Of course, while ABI was negotiating to acquire Camden Town it was also hunting very much bigger game, namely SAB Miller, and it must have been embarrassed to realise that with SAB in the bag, it was going to own TWO London craft brewers, with Meantime as well. Hence, no doubt, the announcement that Meantime is to be sold off, along with other brands such as Grolsch and Peroni. In many London pubs, where you find Camden Town you often find Meantime as well: competition authorities would not smile on ABI owning both. But that raises the interesting question: who’s going to buy Meantime? I am told that a management buy-back is not considered likely, but apart from Heineken, which already has Caledonian developing a craft offer for it in the UK, I can’t think of an obvious buyer.
The Twatterati have been going bonkers at Camden Town’s alleged sell-out, with comments such as “Another one to avoid from now on, like Meantime”. It is the panto season, I suppose, where moustachioed villains called Jasper are there to be booed and hissed. But Mr Cuppaidge has done extremely well for his investors, and under ABI, Camden Town looks like continuing to supply London’s – and Britain’s – bar tops with considerably more interesting beer than might otherwise have been available. Not in BrewDog bars, of course, where James Watt, who has never knowingly ignored a publicity opportunity, has announced that Camden Town beers will now be boycotted.) But of course, they’re missing the point: the overwhelming majority of drinkers simply do not care who brews Camden Town’s beers. They’re only interested in enjoing drinking them.
Meanwhile the question is – who’s next? I’m not sure anyone in the UK has both the immediate brand clout and the availability to be a realistic acquisition target (BrewDog has the clout, of course, but Messers Watt and Dickie are having far too much fun to want to sell, I suggest, and anyway if they did there would be an irony explosion so huge it would leave most of North East Scotland a glowing desert.) Instead, I’d look to Italy for the next big acquisition of a craft brewer by a global marque, followed closely by Poland.