Camden Town sitting comfortably with brewery takeovers

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The days of big brewers taking over smaller ones and ruining them are over because there is now too much at stake, argues Jasper Cuppaidge, founder of Camden Town Brewery, which is owned by AB InBev.

Many beer drinkers will disagree with this view but I suspect they will simply have to put up with it because the big brewers are on a buying spree – as most recently seen with Heineken buying a stake in Beavertown.

Consider the recent words of Jorge Paulo Lemann, the investor behind AB InBev, when speaking at the Milken Institute conference in the US. He admitted to being taken by surprise with the rise of craft brewing in America: “We reacted, we bought 20 craft companies. In international markets, if craft appears in Argentina or Brazil, we’ll buy it right away.”

Is this because he feels they can then snuff craft out before it becomes too big and affects his own brands or is it a strategy that would see him develop the acquired craft brands?

When it comes to AB InBev and the UK market then Cuppaidge believes things are in the latter camp. Certainly his experience with Camden Town strongly supports this argument.

“There is always noise when you do great things and also when people are not happy with you [such as when you sell out to a large brewer]. But our strategy has not changed. It is no different today and they [AB InBev] understand that. There has been a fundamental change in the beer market. Fiat would not bring out a Ferrari and Ferrari would not bring out a Fiat even though they have the same parent,” he suggests.

Cuppaidge says AB InBev has done much of the “heavy lifting” – involving the building of a new large brewery in Enfield – and the results are that he believes “Hells has never tasted better”. Many beer writers would agree.

He refers to the beer that now represents 70% of the company’s total sales: “If it was 100% then I’d love it. Every one of our beers is popular but Hells is the priority here in Europe.”

This clearly means that Camden Town has now fully moved away from the days when it was innovating and producing an ongoing array of beers. It has now left this to other newer brewers. “Will we put 10 to 15 beer releases out each year? No. Other breweries will do this and we’ll be the mainstay brand. Two or three beers will take all our brewing capacity,” he says.

The focus with Hells is very much on supplying the major retailers as this part of the market now represents more than 50% of total UK beer sales so “the market is huge”, he points out. In contrast the on-trade represents a mere 4% of Camden Town sales and Cuppaidge appears to have little interest in this part of the beer market.

He regards the major grocers as being prime targets for Camden Town as they move onto stocking more craft products: “The supermarkets were walls of Walkers crisps and now it’s Tyrell’s and where it was Schweppes tonics it is now Fever Tree. There are now also lots of craft beers on the shelves.”

What those beers comprise is certainly going to be fiercely fought over in the future. It will increasingly be the likes of Camden Town [and BrewDog etc…] looking to replace the macro lager brands. Where that leaves the other smaller brewers’ beers is probably in the pub. For many drinkers who have an aversion to brewers growing up that won’t be seen as a problem.

Glynn Davis, editor of Beer Insider