Meantime 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?'”
A board meeting at Meantime took an hour to debate the deal, and Miller and Hook then visited most of the company’s 60-plus shareholders individually. “We’re very close to our shareholders, we know them well, we’ve talked to them, we’ve communicated with them on a regular basis, they know they can pick up the phone and talk to Alastair or myself at any time,” Miller said. “They’re all very happy people They’ve known the company’s journey intimately, and they’re delighted, not just because of what they’re going to get but because of where Meantime is now going. They can see the appetite SAB have for taking it to the next level.” Many shareholders are Hook’s family and friends, and around 40 per cent, Miller estimated, have been shareholders from the start of the company in 1999, while about a quarter of the employees of Meantime Brewing Company are also shareholders.
Looking at further possible takeovers in the UK craft brewing scene, Miller said: “From a modern craft beer perspective, ie keg, cold, unpasteurised, modern styles and genres of beers, there’s not really that many that can be bought, I would suggest, in the UK. Our peer group is essentially Camden, BrewDog, Thornbridge. At Thornbridge, Jim [Harrison] is probably happy doing what he’s doing, I can’t speak for what his next steps or strategy are, but it’s clear what’s happening at Camden and BrewDog, they’re going down the crowd-sourcing route and they’re trying to build their capability incrementally. That’s a thoroughly commendable route, but it’s a tougher one than partnering with a global brewer that will let you get on with it and support you.”
On the possibility of Meantime beers being brewed away from Greenwich, Miller said: “We’ve got plans to take the brewery up to a quarter of a million hectolitres [150,000 barrels] within the next 18 months to two years, and we can go a bit further than that in Greenwich.” The new experimental brewery at Greenwich is due to be commissioned in August, “and then I’m going to have to hold Mr Hook back! Anything that is shiny and goes ‘ping!’, he’ll be on it like a rash!”
There was “a buzz of excitement” among Meantime’s senior managers after the news was announced, Miller said. “We’re all looking forward to the opportunities that partnering SAB Miller brings. This isn’t a deal where we’re putting our feet up, going and lying in the sun. This is, ‘Right, how do we kick on again?’ I know Sue [Clark, managing director, SABMiller Europe, to whom Miller will now report] is extremely excited – she runs all the markets in Europe, and you can see her eyes lighting up. I think this is a great story for British beer. If we can take Meantime around the world under the SAB capability, I think it’s really a great news story for Britain.”
SAB Miller is certainly buying into a success story. Beer volumes at Meantime grew by almost 60% in 2014, to something on the order of 80,000 hectolitres, and the company has grown tenfold since 2010. Turnover was £17m, and that will at least triple if it does hit that quarter-of-a-million-hectolitre target by 2018. (That makes it a very interesting exercise to try to work out what SAB Miller paid, because it won’t have been based on past earnings, but future ones: somewhere around £20 million to £30 million would be my guess, though if anyone wants to tell me I’m totally wrong I’m prepared to delete this comment …) SAB Miller is involved in two big markets in Europe where craft beer is rocketing away, Poland and Italy, and Meantime makes just the kind of stylish, not too far out product that would bee an ideal introduction to people wanting to explore craft beer, but not be frightened by it.
Of course, the haters and sneerers fell upon the news of Meantime’s sale with joy, although typically, they couldn’t get their stories to agree: while many commentators seemed to believe Meantime beers really weren’t up to much, one would declare that “Yakima Red remains one of the most insipid and uninspired beers I’ve ever tried,” while another insisted that “Yakima Red is the only decent one in their line up.” (Both genuine comments, one from Facebook, the other from a commenter on the Guardian‘s story about the takeover.) Come on, haters – do try at least to sneer from the same songsheet.
I also felt sorry for Tom Stainer, head of communications at Camra, who, asked for a comment on the story by the Guardian, felt obliged to parrot the party line and say: “We would urge the brewery to consider returning to brewing real ale in the future.” If he wasn’t a mate of mine, I’d have rung him up and said, “Hey, grandad, you really, really don’t get the craft beer scene, do you?”
I don’t mind admitting I’m a Meantime fanboy, and I’m delighted for everybody there that they’ve now got the strength of a brewing giant behind them to power their expansion. Anybody who knows Alastair Hook will be very aware that he’s not a man to compromise (which is why he won’t do cask ale), and I don’t doubt at all that as long as he still has anything to do with the brewery, its beers will continue to be among the best and most reliable available.
1983 Teenager Alastair Hook, a great fan of the cask ales he drank around his home in South London, visits the Hopland Brewery in Mendocino, California, only the second brewpub to be set up in the United States, and is hugely impressed with the flavours he finds in the brewery’s chilled, kegged beers.
1985 Hook, who back-packed across Europe and Asia with Michael Jackson’s Pocket Guide to Beer at the age of 17, realises he has a growing passion for beer and quits his Economic and Social History degree at York University (where he was doing a research project on Guinness) to take up a brewing degree at Heriot-Watt University in Edinburgh.
1988 Hook graduates from Heriot-Watt, learns German and enrols at the University of Munich’s Weihenstephan campus, the most famous brewing school in Germany, for postgraduate study. His first job upon graduating is for a German brewery, Kaltenberg, in Italy.
1991 Hook is asked to set up a German-style brewhouse at the Packhorse Brewery in Ashford, Kent, brewing Continental-style beers including Dunkle (dark) lager, Vienna and Pilsen-style lagers and Dortmunder Alt. The brewery closes in 1994, and Hook turns to importing beers to sell in the UK to make a living, using his contacts in Germany.
1995 Hook helps set up the Freedom Brewing Co in Fulham with property developer Ewan Eastham, making a non-pasteurised, bottled Pilsen-style beer.
1996 Hook is poached by the restaurateur-cum-entrepreneur Oliver Peynton to open Mash and Air, a brewery-and-restaurant in Manchester.
1998 Hook and Peynton open a branch of Mash and Air off Regent Street in Central London called simply Mash.
1999 Hook raises more than £500,000 from family and friends to launch the Meantime Brewing Company on Penhall Road, Charlton, South London, close to Charlton Athletic football club, where Hook is a season ticket holder.
2000 In April, Meantime brews its first beer, Union Lager.
2001 Meantime opens its first pub, the Greenwich Union.
2007 Output at Meantime hits 13,000 hectolitres a year,. A further £500,000 has been raised from shareholders to install a modern packaging line.
2008 Hook is named the Brewer of the Year by the British Guild of Beer Writers.
2010 Meantime opens its new brewery in Blackwall Lane, Greenwich at a cost of £2m. At the same time it opens a six-barrel microbrewery and restaurant at the Old Brewery in the Old Royal Naval College in Greenwich, costing £200,000.
2011 Meantime announces it wants to increase production fourfold from 25,000 hectolitres a year to 100,000hl in the coming five years. Nick Miller, former managing director at SAB Miller UK’s operating company, Miller Brands, becomes the brewery’s new chief executive.
2013 Meantime launches Brewery Fresh, the UK’s first tank beer, delivering its London Lager unpasteurised and without extraneous carbonation from specially installed five-hectolitre (880-pint) cellar tanks.
2014 Meantime builds an “urban hop farm” on the banks of the River Thames directly on the Greenwich Meridian Line. Meanwhile the brewery closes in on 70,000 hectolitres a year.
2015 Meantime is acquired by SAB Miller for an undisclosed sum, to spearhead the brewing giant’s assault on the European craft beer market.