THE GIST
Beavertown Brewery has confirmed rumors, of which there were many, that it is selling a minority share in the company to Heineken. The Dutch brewing giant is set to invest £40 million ($53M) in the North London-based brewery for an undisclosed stake in the business.
With the investment in place, Beavertown plans to build a state-of-the-art brewery and visitor experience dubbed “Beaverworld.” The 125,000-square-foot site will feature a fully-automated 150hl (128-BBL) brewhouse and a total on-site capacity of 450,000hl (383,000 BBLs). The new facility will be located in London, though a specific location hasn’t been revealed, and is expected to eventually create up to 150 new jobs. It’s slated to open in autumn 2019.
Beavertown was established in 2012 by Logan Plant (son of Led Zeppelin frontman Robert Plant) in the kitchen of Duke’s Brew and Que—a now-defunct restaurant that was also owned by Logan Plant. Taking its moniker from the affectionate nickname given by locals to its original home of De Beauvoir Town, Hackney, Beavertown relocated to its current home in Tottenham, North London, in May 2014.
Until now, the brewery was solely owned by Plant and his wife, Bridget, who will remain majority shareholders in the business. There are also no plans to close down its existing site once the move is complete. The current facility will be used for brewing special releases and seasonals. Additionally, the brewery’s Tempus mixed-fermentation and barrel-aging project will be expanded.
WHY IT MATTERS
Those who have witnessed the meteoric rise of Beavertown over its six years of existence will likely be unsurprised by this move. Plant has never been shy about his longterm ambitions for the business, often speaking of his desire to make Beaverworld a reality—including in an interview with GBH back in 2016. It’s a destination play that, in recent years, has become more common in the U.S. However, the method of that expansion—Plant’s decision to sell a stake in the business to a multinational conglomerate—comes as a surprise based on prior statements.
Speaking with GBH about the decision to sell part of his business, Plant says expansion plans have been in the works for almost two years. He confirmed that multiple financial options were considered and rejected over the last seven months, including crowdfunding, borrowing from a bank, private equity, and conversations with “several brewers from all different walks of life, from all over the world.”
Ultimately, he says those options wouldn't give the brewery the kind of financial support required to fulfill an ambitious project like Beaverworld. That left Heineken, with its experience and available resources as an established, larger brewer. Plant says he was assured that the company would have a hands-off approach toward Beavertown, which led to the deal. The brewery currently employs 82 people, up from just four in 2013. The investment will not affect existing employee bonus and benefit systems, which the brewery already has in place.
During his investment research, Plant says he spoke with Lagunitas founder Tony Magee, who sold an initial 50% of his business to Heineken for a reported $500 million in August 2015, before selling the remaining stake in May 2017. Although he was unwilling to disclose any details about the conversation, Plant is adamant that his sale of a minority stake in Beavertown is not a precursor toward a similar path of full control.
“The red line with us is that this is a minority investment. This is about us, it’s about our vision and ambition,” Plant tells GBH. “[Heineken] is looking to let us get on with doing exactly what we do, with the people that we do it with. Why would you come in and change something that many people perceive to be so special?”
Although Plant seems cautious of change, the very nature of building Beaverworld demonstrates significant potential within the British beer industry, as breweries like his expand both their size and influence. He adds that, with its minority stake, Heineken's many avenues to market would only be made available to Beavertown if requested. This includes its UK distribution platform and about 3,000 retail outlets under its Star Pubs & Bars brand (which also recently received a £44M ($58M) investment from its owner)—essentially tied houses that serve Heineken-family products.
Plant says that the recent partnership with Tottenham Hotspur Football Club and the closure of Duke’s Brew and Que have no connection to the Heineken deal. Talks of building a brewpub and serving its beer within Tottenham’s new £850M ($1.12B) stadium—in which Heineken is also the official beer partner—began two years ago, alongside more general plans for expansion that have been in place for around the same amount of time. He also says that Duke’s—Beavertown’s original location—was “losing money hand over fist,” blaming doubling rents and a 40% increase in both pork and beef prices (the increase due to the plummeting Pound as Brexit negotiations draw on) over the last 18 months for the closure.
The Beavertown owner has long been an outspoken advocate against “Big Beer.” The brewery even debuted its own beer festival, The Beavertown Extravaganza, in September 2017, where he launched a rallying cry against the evils of multinational brewers during his opening remarks. [Disclosure: Good Beer Hunting partnered with Beavertown on a series of talks, panels, and seminars at the Extravaganza.] Plant warned that “the puppet master that is Big Beer is stirring and starting to swipe its tentacles far and wide across this beer industry.”
But with his Beaverworld vision already in its early stages, Plant must have been contemplating how to fund the ambitious project at that time. His defense of the diatribe sounds a lot like what many other brewery owners have said in the wake of investment from larger brewers.
“Nothing has changed. It’s a statement that was at the forefront of our minds when entering into this recent fundraising process. In our collaboration with Heineken, there is no puppet or puppet master,” Plant tells GBH. “Where we are headed does not change one bit. This investment simply means we get to make Beaverworld a reality ASAP.”
Plant was quick to defend this year’s Extravaganza, planned for September, remarking that “the show must go on.” Not all breweries feel that way, however. Before the deal was even officially announced, The Veil announced via an Instagram Story that it had withdrawn from the event in the wake of Heineken rumours. The move called to mind Wicked Weed canceling its Funkatorium Invitational Festival after multiple breweries pulled out in the wake of its acquisition by Anheuser-Busch InBev in April 2017. It remains to be seen what the impact of this minority investment from Heineken will have on the growing list of breweries that are planning to attend. By comparison, Boulevard’s Boulevardia! festival is well-attended by craft brewers and fans each year without incedent after the brewery’s total acquisition by Duvel Moortgat.
Beavertown had previously refuted talk of a potential takeover on Twitter, following a blog post by beer writers Boak and Bailey that suggested the brewery was in the process of readying itself for a sale to AB InBev. Although the resulting news turned out to be a minority stake to an entirely different company, it will no doubt see Beavertown come under fire from supporters who were assured of its continued independence.
“One of the key objectives throughout the whole process was about myself and Team Beaver remaining in control of everything we do,” Plant tells GBH of the tweets. “This, to me, symbolizes independence. We still have the complete freedom of thought, action, and vision.”
And then there’s Heineken’s recent investment in Brixton Brewery. The South London brewery sold a reported 49% stake in its business to Heineken in November 2017. As heard in a recent GBH podcast episode, Brixton is currently undergoing an expansion into a 30,000hl site that’s expected to be commissioned in September 2018. However, with Beavertown having greater market reach and brand awareness, Brixton may have to contend with playing second fiddle, as the construction of Beaverworld potentially commands the majority of Heineken’s investment into the UK beer industry.
“We could see how well [Heineken] were working with Lagunitas in the U.S.,” Brixton Brewery co-founder Jez Galaun told GBH days before receiving its own investment from the Dutch brewer. “They loved our beers, were excited about our brand, and asked if there was a way we could work together. We didn’t really know where that would lead, but as talks went on, we got to know them and we trusted them.”
Heineken’s investment in Beavertown, following a similar move with Brixton, demonstrates not only how eager the Dutch company is to enter the craft beer market, but how vital London and its infrastructure is as a point of entry to the industry. Nowhere else in the world has a multinational beer corporation such as Heineken, Miller, or AB InBev acquired more than one craft brewery in a single city.
This move could bring its plans for Lagunitas—which was acquired by Heineken for a reported $1B—under the spotlight. It had previously been reported that the California brewery is intending to construct a facility in Manchester. With the Dutch brewer now having invested more than £40M ($53M) into constructing two new London breweries, there’s a potential question mark at the end of Lagunitas’ UK business plan.
Still, few can dispute that the acquisition of a stake in Beavertown—one of the UK’s most respected young breweries—is one of the strongest plays a megabrewer like Heineken could make into the international craft beer market. They’re shooting their shot, as is Beavertown. Plant has long maintained that he wants to see “great beer on every street corner in the UK.” He will now have to weather the storm as Beavertown seeks to maintain its respect as it works toward becoming one of the largest breweries in the country and to fulfill Plant’s ambitious vision.
“I can see this special position we’ve got ourselves into within the industry, and it’s got to a point where I don’t want it to stop,” Plant tells GBH. “I don’t want to sit still and not take Beavertown as far as it can go.”
—Matthew Curtis