UK: Heineken buys minority stake in London’s Beavertown Brewery

Heineken has gobbled up a slice of London’s Beavertown Brewery in the latest move by a large brewer to tap into rising consumer interest in craft beers, the Financial Times reported on June 21.

The Dutch company’s investment in a minority stake “gives Beavertown the £40m …funding injection” needed to sharply increase its output, the craft brewer said.

A Beavertown spokesperson declined to comment on how large a portion of the group Heineken had purchased, except to say “it is a minority stake, so we retain total control and freedom to do our own thing.”

The investment will help Beavertown fund the building of a new, much larger, brewing facility called Beaverworld. With the new facility, Beavertown said it will have “enough capacity to get our beer on to every street corner in the UK and beyond.”

Beavertown said Beaverworld will create 150 new jobs.

Heineken forged a similar path with Lagunitas Brewing Company, a Californian brewer. It bought half the company in 2015, and followed up last year by purchasing all remaining shares.

“This partner was chosen as it offers long term stability for Beavertown and Team Beaver so that we can continue to chase our dreams, grow at a fast pace and fulfil our prophecy of getting great beer on to every street corner, constantly innovating and stimulating more drinkers than ever before,” Beavertown said.

Beavertown’s decision to partner with Heineken comes just months after it struck a deal to begin selling several of its brews in Waitrose, the upscale British grocery chain.

Beavertown is well known in the UK beer scene for its hoppy ales, with names like Gamma Ray, Lupuloid and Neck Oil that are reminiscent of the punchy IPAs famous in America.

Such unions have become popular over the past few years, with the world’s largest breweries looking to get a foothold in the market for craft beers amid bubbling consumer interest in brews produced on a smaller scale.

While the tie-ups provide the smaller firms with fresh capital, they are sometimes met with queasiness from drinkers who worry brands will lose the traits that make them unique as they align more closely with ‘macro brewers’.

“We would only align ourselves with a minority investor who were clear they would not be involved with the management of the brewery. It was also critical that any partner understood and respected our family ethos and culture,” Beavertown said.

At the same time, such deals frequently broaden the distribution of craft brews. Anheuser-Busch InBev, the Budweiser brewer, has for instance dramatically expanded sales of Goose Island, a well-regarded Chicago craft brewer it bought in 2011 in a move that is still the subject of heated discussions among beer drinkers.

In the UK market, AB InBev purchased Camden Town Brewery, a popular London drinkmaker, in late 2015.

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