8 BREWING & BEVERAGE INDUSTRIES BUSINESS When I first started writing about beer in the late 1990s, it seemed to be perpetually on the ropes, especially if you took at face value the pronouncements coming from CAMRA. Headlines in its house newspaper What’s Brewing resonated like battle-cries for the faithful, as issue after issue featured one crisis after another: smooth-flow (remember that?), cross-Channel cheap booze, brewery closures and duty increases. Let’s fast-forward to now and beer hasn’t been so exciting since the end of the 19th century. Sure, pubs are closing and quality can vary from bar to bar, but we also have nearly 2,000 breweries, producing all manner of beers, both dispensed from cask and keg. Meanwhile beers from all over the world are easily found in supermarkets and bottle shops. Craft beer bars are common in many cities and towns, while beery social media proclamations chat away like a flock of starlings in full murmuration. However (and you knew that there was going to be a however), I’d also say that this excitement masks a more unsettled reality, if the recent fortunes of a couple of breweries are anything to go by. Whatever the declaration from a brewery of its passion for mashing in, its citation of craft and the quality of its beers, there is still the need for finance. Currently, it costs between £10-80,000 to start your own brewery — though anecdotal evidence would suggest that there’s little change from £100,000 (or even more) if you start in London. This doesn’t take into account the cost of learning to brew, kegs and barrels, raw materials and trying to sell the stuff. This brings me to BrewDog, whose founders used a bank loan of £20,000 to start their brewery. Then they began their ‘equity for punks’ capital raising scheme, and more recently 22% of the company was sold to a San Francisco-based private equity firm, after it had been valued at £1bn. This was seen as a betrayal of their punk ideals by some, who conveniently forgot that brewing is a business, albeit one that generates a lot of passion. Quoted in the Publican’s Morning Advertiser, co founder James Watt dismissed claims that BrewDog was no longer independent: ‘If you are selling out, you’re out [of the business] so this is the opposite of a sell-out. If it was a sell-out, I would be on a beach somewhere and not working my arse off for the next 10 years! It was a minority deal so if TSG owns 22.3% of our business, I remain the single largest shareholder meaning we are still free to run the company exactly as we wish.’ At the same time I read about another brewery, which was in a totally different financial situation. This was Cumbria’s Hardknott, whose founder Dave Bailey, it is fair to say, was motivated by BrewDog when he switched his beers from straightforward cask to something more boldly flavoured (ok let’s say hoppier). However, unlike BrewDog, Hardknott are far from flush with cash (as Bailey has written about at hardknott.blogspot.co.uk) though he was determined to keep the brewery going. ‘We are into our 12th year of brewing,’ he told me. ‘We always wanted to be different and to produce beers we believed in, rather than just conform to the lowest common denominator. We have a vision. We know what we want to achieve and my current activities are mostly focussed on developing a plan that has wings, and not just flappy things making a lot of turbulence but no height. ‘Focusing on quality, innovation and holding true to our values has to be a very big part of where we need to be. Sending that message out to the world is also key to what we do. Inevitably marketing rhetoric or not, we absolutely have to convince the world of our deep and enduring passion for what we do.’ To this end Bailey has sold his house to raise funds and pay off debts and along with wife Ann has moved into a rented cottage. Naturally he was not at liberty to discuss his plans for the future, but a sense of positivism and confidence shone through the conversation I had with him. When thinking of the varying fortunes of BrewDog and Hardknott, it’s almost on a par with those great Victorian novels that looked at the division in the country at the time (Elizabeth Gaskell’s North And South springs to mind). From the outside it all looks so exciting, but the reality is far grittier. Breweries are people’s livelihoods as well as their dreams and if they decide to accept money from an outside source to further these dreams, then it needs to be understood rather than dismissed as if it was a major war crime. Whether Hardknott go down a similar route to BrewDog, I don’t know, but if they do then I wish them all the best. A final thought: next time you read someone on the magic of brewing and romance of beer, recall the words of Dr Johnson uttered in 1781 during the sale of London brewery Thrale (and compare and contrast BrewDog’s windfall and Dave Bailey’s rented cottage): ‘We are not here,’ said Johnson, on the day of the sale, ‘to sell a parcel of boilers and vats, but the potentiality of growing rich beyond the dreams of avarice.’ He got it half right. Adrian Tierney-Jones Adrian Tierney-Jones A tale of two breweries Adrian Tierney-Jones is a freelance journalist whose work also appears in the Daily Telegraph, All About Beer, Beer, Original Gravity, Sunday Times Travel Magazine, and Publican’s Morning Advertiser amongst many others. He’s been writing books since 2002 and they include West Country Ales, Great British Pubs, Britain’s Beer Revolution (co-written with Roger Protz) and his latest The Seven Moods of Craft Beer; general editor of 1001 Beers To Try Before You Die and contributor to The Oxford Companion to Beer, World Beer and 1001 Restaurants You Must Experience Before You Die. Chair of Judges at the World Beer Awards and also on the jury at the Brussels Beer Challenge, Dutch Beer Challenge and the Copa Latinoamericana de Cervezas Artesanales in Peru. 8_Layout 1 16/05/2017 13:30 Page 1