Thursday, 22 February 2018

When Do Breweries Sell Up?

So yeah, the Fullers buyout of Dark Star.

It's hard not to suspect that there will be more of this sort of thing to come, and Boak and Bailey have been pondering what you might want to look out for if you fancy playing "the prediction game." One of their conclusions is that breweries rarely seem to sell up in the heady hype-phase — it’s during the come down that they’re vulnerable.

In fact, I'd say that there's something else interesting here from that angle. A couple of years ago, at the height of the US craft acquisition fever, I noticed that a lot of the breweries being bought out were founded at about the same time. And that in fact, that there seemed to be a fairly standard age for selling up - a few years either side of 20 - and that this applied to a lot of British real ale breweries, too: Bath Ales, for instance, and Sharps. Since Dark Star (founded 1994) seem to fit reasonably well into that pattern, I thought I'd actually get some data and see if it stacks up.

Methodology: this is clearly a selective list, but it's selective based on what I can remember / have heard of - I haven't consciously picked and chosen examples to fit my theory. I've stuck to full acquisitions, or at least controlling stakes, rather than including partial things. The only example that I've deliberately excluded as a special case was the Brooklyn / Carlsberg takeover of London Fields. I've also ignored breweries that I wouldn't consider "newish" - Courage, for instance, or Hardy and Hansons, because I don't think it'd add much to the data. I generally haven't been particularly careful about how I define founding dates, having mostly gone with the first thing that I found on the web.

So here are the numbers:

BreweryYears IndependentAge When Sold
Camden 2010 - 2015 5
Wicked Weed 2012 - 2017 5
10 Barrel 2006 - 2014 8
Meantime 2000 - 2015 15
Sharps 1994 - 2011 17
Wychwood 1983 - 2002 19
Ballast Point 1996 - 2015 19
Elysian 1996 - 2015 19
Firestone Walker 1996 - 2015 19
Bath Ales1995 - 2016 21
Lagunitas 1993 - 2015 22
Goose Island 1988 - 2011 23
Dark Star 1994 - 2018 24
Boulevard 1989 - 2013 24
Achouffe 1982 - 2006 24
Ringwood 1978 - 2007 29

Make of that what you will.

Update: okay, here's one interpretation. With a few exceptions, people don't generally open breweries to get rich, they do it because it's fun and interesting. For the ones that are lucky enough to create a large and successful business the fun and interesting element keeps going for a while, but fifteen years down the line it starts to get samey. At this point "would you like to exchange personal control for a large amount of money (and maybe the opportunity to focus more on the parts of the business that you find interesting while we pay for some suits to handle the boring stuff)" seems like a more attractive offer than it did before.


  1. Seeing Ringwood and Wychwood in the list, like an idiot I went to see how old Brakspear were when their beers merged with the Marston's borg. They were... 281. OK, never mind.

    London Fields is a fascinating case - you could argue that what Carlsberg wanted to buy was basically just the name "London Fields", brewery shmewery. But that raises the question, are there any more like that - where the brewery basically ceased to exist, b/c all the acquirer really wanted was the brand? Camden, possibly?

    1. Hah, yes, I checked the same thing!

      And yeah, interesting. I guess there are quite a lot of times where the acquirer is after the reputation, but with London Fields it really was basically the name.

  2. In some cases retirement and/or ill-health will have been a factor as well. Alex Brodie was, I think, 66 when he sold a controlling stake in Hawkshead to Halewood. Every start-up business will ultimately need an exit strategy.

    1. Yes - another explanation here is that if you spend a few years getting industry experience / working in IT and then start your brewery at age thirty, by the time you've been running it for twenty years or so you might be starting to think about retirement, and the fact that you won't be running the brewery for ever anyway, and how handy a nice wodge of hard cash would be...

  3. I think you have to be careful reading too much into some takeovers, the reasons are always more complicated than they might seem, some are to do with the beer product, some are to do with the bricks & mortar pubs, some are to do with nixing a competitor and some are even to do with acquiring distribution deals, some are a combination of several of even the whole lot.