THE GIST
Beavertown Brewery has pledged to continue with its Extravaganza beer festival in September, with essentially half of the original 90 breweries still attending. Forty-six have withdrawn from the event after the London-based brewery sold an undisclosed minority stake in June to Heineken for a reported £40M ($53M).
[Disclosure: Good Beer Hunting is partnered with Beavertown on a series of talks, panels, and seminars at the Extravaganza.]
Most remaining breweries who are—or may not be—attending have chosen to remain silent. However, some have voiced their support for Beavertown, including Newcastle’s Wylam Brewery, along with customers who have already purchased tickets, travel, and accommodation for the event.
A handful of those that withdrew—including Cloudwater and Jester King—were outspoken when it came to their own reasons for pulling out. Numerous unethical practices employed by Heineken—such as being fined €31.5M ($36.9M) for non-competitive practices within the Greek market—were cited in blog posts on their respective websites.
“If we had known early this year that Beavertown was working on a minority sale to Heineken, the world’s second biggest beer company behind AB InBev, we’d have pulled out months ago,” Paul Jones, founder of Manchester’s Cloudwater Brewery posted on the brewery’s blog. “It is a source of deep frustration that leaves us feeling a little used that around the time tickets were released for sale, a deal was likely already being drawn up with Heineken.”
The deal with the Dutch brewing giant emerged following weeks of industry speculation that Beavertown’s owners Logan (son of Led Zeppelin frontman Robert) and his wife Bridget Plant had agreed to sell a portion of their stake in the business. The investment will be used to construct a brand new brewery and “visitor experience” dubbed Beaverworld, which will have a total capacity of 450,000hl (383,000 BBLs) and is expected to open in Autumn 2019.
Previously, Logan Plant had been vehemently against selling to “Big Beer,” including in his keynote speech given at 2017’s Extravaganza, in which he stated “the puppet master that is Big Beer is stirring and starting to swipe its tentacles far and wide across this beer industry.” The brewery’s social media staff had also refuted talk of investment via its Twitter account.
News of the deal has created something of a rift within the UK beer industry, with the decision on whether to attend the Extravaganza acting as a the schism that started it all. Consumers were also divided, with Beavertown offering refunds or discounted rates, with tickets reduced from £65 ($86) to £45 ($60).
WHY IT MATTERS
Beavertown’s decision to sell a still as-yet-undisclosed stake to Heineken will likely be remembered as one of the defining moments for the modern UK beer industry. It’s perhaps the most significant point in its timeline since Camden Town Brewery sold to Anheuser Busch InBev for a reported £85 million ($113m) in December 2015. And it’s unlikely that it’ll be looked back upon with great fondness by many of those involved. Lines drawn by breweries in the wake of the deal could have far reaching consequences, in both the short and longer term, with industry pros and consumers split in opinion over the investment.
The immediate aftermath of the news created chaos within the niche consumer space, triggering a large amount of volatile debate via social media. At its boiling point, Beavertown’s social media manager, Kamilla Hannibal, sought to defend her coworkers over comments made within Facebook’s UK Craft Beer Forum. Cries of “fuck Heineken,” were often repeated on the brewery’s own Facebook page following the announcement of the deal, with one user stating: “Fuck you guys, fuck anyone who'll choose to embark with you in this venture and flank big beer in the destruction of a craft community we have worked hardly [sic] to establish in the course of over three decades.”
BrewDog’s James Watt was one of the first to condemn the Beavertown deal. Tweeting while on location in the U.S. filming the fourth season of his Brew Dogs TV show, Watt pledged to both withdraw from the Extravaganza as well as no longer stock Beavertown’s beer in his international chain of 56 bars. Watt’s statement wasn’t without a hint of irony, either. It was reported that the Georgia-based firm Arlington Capital Advisors, which brokered the Beavertown/Heineken deal, is the same that advised Watt on the sale of a 22% stake in his business to San Francisco private equity firm TSG partners in April 2017.
Breweries like BrewDog and Stone have utilized their self-affirmed independence as a powerful marketing tool over the past few years. Choosing to participate or withdraw in the Beavertown Extravaganza has presented several small, young breweries with an opportunity to nail their own colors to their respective masts as BrewDog famously did in 2015, claiming for their brewery and others, it was “#IndependenceOrDeath.” For some breweries, not only is this a chance to lay out their own idea of independence, but also one to further establish an ethos within the mindset of evangelical beer lovers. For breweries like Cloudwater and Jester King, this meant highlighting various unethical practices carried out by Heineken globally.
“We choose to work with brewers who support the values and ideals we hold dear—namely independence, local ownership, producing a craft or artisan product, staying small, and having above-board, upstanding business practices,” Jester King founder Jeffery Stuffing’s posted on the Austin, Texas brewery’s blog. “We don't think it's unfair to assume that [Heineken] view small, independent breweries as pests, which if they can't eliminate, they can either subsume through purchase, or at least suppress to manageable levels.”
Of the 44 breweries that chose to remain committed to the Extravaganza, few were vocal. Those that did speak out highlighted that their commitment was not only to Beavertown, but also to their customer base. For New Zealand’s Garage Project, the opportunity to pour beers to its fans on the other side of the world is a valuable one.
“We believe the most important thing in any of this is the drinkers’ experience, and we want that to be a positive one,” Garage Project co-founder Jos Ruffell tells GBH. “[The Extravaganza] is a significant beer event and a real chance to showcase and convert potentially a healthy number of non-craft drinkers. We feel that is a higher calling and worth honouring a commitment if the end outcome is a positive craft experience for new drinkers.”
Ruffell was also quick to point out his awareness of how reactive the atmosphere is after a brewery is bought out or receives investment, which is why he was quick to announce that his brewery would still attend. He also iterates that it will take a fair amount of time to see what impact Heineken’s investment in Beavertown will really have on the industry, and any change is likely to be felt by UK beer drinkers before its reach is noticed in New Zealand.
Following the news of AB InBev’s acquisition of Wicked Weed in May 2017, the Asheville, North Carolina brewery had to cancel its own Funkatorium Invitational beer festival following a mass drop out of participating breweries. With the Beavertown Extravaganza still set to continue with its reduced offering, this offers participating breweries something of a unique opportunity. The chance to assert independence and its inherent value to beer consumers is something the remaining attendees could potentially use to their advantage. For others, it’ll be a chance to party with people who still remain industry peers.
“We as a group of people may not agree with Beavertown selling to Heineken or whoever else, but that is their choice, not ours,” Mark Tranter, founder of the UK’s Burning Sky brewery tells GBH. His brewery will still be pouring at the Extravaganza. “We have personal friendships with people who work [at Beavertown]—this is not an easy time for them either. We honor our friends.”
At this early stage it’s difficult to make judgement on the path that Beavertown’s big investment will eventually lead it down, but the brewery’s involvement with Heineken will forever mark its destiny. What’s more challenging to divine is how the actions of the breweries who are publically choosing to support or condemn this action—either by using their Extravaganza attendance as leverage or otherwise—will also mark them in the years to come. As successful breweries within the UK market continue to seek expansion, so too will they have to cleverly manage their investment strategy if they wish to avoid being tarred with the same brush as Beavertown. If they too eventually receive investment from either private equity or another brewery, how should we then think of them?
“Our belief is that if we silo ourselves off completely, then big beer has already won,” Garage Project’s Jos Ruffell tells GBH. “Sometimes we need to rise above and take a leadership position to grow the awareness and following of great independent beer.”
As we’ve learned from recent history, whether it’s the likes of Logan Plant or Lagunitas’ Tony Magee condemning big beer before eventually joining its ranks, a brewery will be forever marked by its largest decisions. That includes, of course, the partner with which it chooses to continue its journey. Make no mistake, the last few weeks have been a pivotal moment in British brewing history—especially when also considering Fourpure’s sale to Lion. We’ll be unpacking its impact for years to come.
—Matthew Curtis