Heineken ownership may give Beavertown the critical mass it craves
How long will Brewdog be the king of craft? With Heineken having last week turned its minority stake in Beavertown into outright ownership, and BrewDog closing pubs over energy costs this year, and facing continued PR backlash, the question looks increasingly moot.
Heineken’s move comes after recent strong performances for Beavertown in retail, with the brand benefiting from range consolidation among retailers. Its two core beers logged strong growth in 2021, with Neck Oil adding 50.11% (£4.8m) and Gamma Ray adding 20% (£1.2m) [Nielsen Scantrack MAT w/e 1 January 2022].
This was while beers from Camden and Innis & Gunn – and even BrewDog’s flagship Punk IPA – saw value declines, and other smaller brands struggled during the pandemic. Neck Oil’s £14.3m in sales even looked to be within touching distance of BrewDog Lost Lager’s £16.9m.
Given such figures and Heineken’s history of building on minority stakes, the purchase of Beavertown is not entirely surprising. As the founder and outgoing CEO Logan Plant says: “This is the natural next step for Beavertown, following the partnership with Heineken UK for the last four years.”
Plant is shifting into an advisory role, and will be replaced by new managing director Jochen Van Esch, previously craft development director at Heineken. The changes “will allow Beavertown to continue to expand and flourish while at the same time remaining committed to our independent creativity and mission to create great beer” Plant says.
Little else is set to shift. The hospitality strategy, which includes a taproom in Tottenham and the Beavertown Corner Pin pub, will remain the same. “We will continue to build on our existing distribution, putting our beers in the right places for the business, retailer and consumer,” Plant adds.
Heineken’s purchase signals the company is confident in Beavertown’s approach. “What Heineken tends to do is take one step with a minority stake, then they look at whether it’s a good fit,” says Rabobank senior beverages analyst Francois Sonneville.
“Why change a winning formula? I think the fact they came to an agreement probably means they’re happy with how it’s going.”
Brand ambition
That may the case for now, but recent moves are revealing of the level of ambition behind the brand.
Back in May, it added its first gluten-free beer, a 4.7% dry-hopped IPA called Critical Mass (rsp: £2.30/330ml). Later that month it released a light lager, Sunlight, with a 3.8% abv (rsp: £2.10/330ml).
Both rolled into the brand’s web shop at around the time Beavertown announced a monthly subscription service. For between £36 and £55, shoppers can pick 24 core beers. Such developments bring it more squarely against BrewDog, which also has a subscription service.
Some question whether its ‘craft’ brand status will inevitably be watered down to a degree as a result of its founder’s move to the periphery.
Retaining Plant as an advisor might retain the history of a beer brand started from a kitchen table, but this situation cannot last forever. “There is also a group of drinkers that like the owner rather than the brand,” says Sonneville. “When he leaves there will be people that say the beer has now changed.”
Heineken’s outright ownership of Beavertown also means it will be increasingly analysed as part of the multinational’s portfolio, especially against Brixton Brewery, which it bought in February 2021. Sonneville argues there will come a point where the two brands will likely be moved into different tiers to avoid them cannibalising each other’s sales.
But as the bigger seller, Beavertown looks better placed to take on BrewDog than any other craft beer in Heineken’s stable, even if it still has a gulf in sales to overcome. Heineken will hope that its tried and true strategy can make up the difference.
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