Australasian brewing firm Lion—a subsidiary of Japan’s Kirin Brewery—announced today it has acquired a 100% stake in Bermondsey, South London's Fourpure Brewing Company. Financial specifics of the deal have not been disclosed.
“We’re not going to say nothing will change,” founder and CEO Dan Lowe tells GBH. “What would be the point of doing it if nothing was changing?”
Lowe, along with his co-founder and brother Tom Lowe, will continue to be active within the business. Dan Lowe will remain in his role as CEO and Tom Lowe will also stay on in his ambassador role as co-founder. The brewery will join Lion’s portfolio of craft brands, which includes Panhead Custom Ales and Emerson’s Brewery in New Zealand, plus Australia’s Little Creatures. Lion’s Parent company, Kirin, also has a 24.5% stake in New York’s Brooklyn Brewery, which allows the latter to remain within the Brewers Association definition of a craft brewery.
Fourpure Brewing Company was founded in 2013, making its home in South London at the end of a brewery-rich stretch of the city referred to as the “Bermondsey Beer Mile.” The area is currently home to nine active breweries, including Fourpure itself, up from just four in 2013.
Last year, the firm invested £2 million ($2.67M) into a German-designed GEA brewhouse, as well as additional fermentation space, bringing its total capacity to 60,000 hl (51,000 BBLs). It currently employs 70 people. Following the investment from Lion, the brewery expects this number to increase to 100 over the next two years.
WHY IT MATTERS
This acquisition by Lion means that Fourpure will become the sixth London-based brewery to have been acquired by—or received significant investment from—a major brewing company within the last three years. Following Meantime Brewing Co.’s acquisition by SABMiller in May 2015 (eventually divested to Asahi in April 2016), Camden Town, London Fields, Brixton, and Beavertown have aligned with multinational brewing partners. The latter came just three weeks ago, when Beavertown sold an undisclosed minority share to Heineken for a reported £40 million ($53M).
Fourpure co-founder and CEO Dan Lowe says that, despite having previously explored expanding into a greenfield site on the outskirts of London, he now intends to continue investing in the brewery's existing Bermondsey site for for up to eight years—though he did not explain the significance of this timeframe. He also says he once thought the popular Bermondsey Beer Mile may “come and go,” but now admits it’s one of the “main centers of brewing within London.” And with other Bermondsey breweries also investing in expansion—including breweries from outside London like Manchester’s Cloudwater, which are looking to tap into the area—it’s easy to see why the location is so important for Fourpure.
“[Lion] is backing us to carry on running the business and to deliver what we’ve been doing for the past five years,” Lowe tells GBH. It's a refrain often heard from growing craft brewers as their ambitions eventually put them at odds with some fans who wish to see them stay small. “We can’t pretend to have the financial collateral or the experience required to get this done alone.”
Lowe also said that the brewery had been exploring investment options for the past year, which involved the exploration of crowdfunding and private equity, as well as investment from larger breweries. However, it was the latter that held the most appeal for Fourpure’s long-term future. Talks with Lion began in earnest this April after what Lowe describes as a “chance meeting.” On a recent trip to its Little Creatures facility in Melbourne, Australia, Lowe was convinced that Lion was the right fit for his own business.
“For reasons surrounding the longevity of the brand and also—echoing other people who are also on this journey—I just don’t think private equity is in the right headspace for craft beer at the moment,” Lowe says. “Doing a deal within the industry gives me a long term view of getting stuck into this project and to carry on taking it where I want it to go.”
With this news coming just a matter of weeks after the news of Heineken’s £40 million ($53m) investment into fellow London brewer Beavertown, speculation will be rife that the UK beer industry is heading for a shakeout due to increased consolidation by larger firms. However, despite London being home to 114 breweries and the UK being home to more than 2,000, craft beer still only accounts for 5.5% of the UK market according to data firm CGA. With so much of the UK market still to play for in terms of craft brands, the moves by Lion, Heineken, and others are perhaps evidence they they expect this share to rise significantly over the next few years.
“We’ve been keeping an eye out for who we might partner with in the UK—that’s how we got to know Dan, Tom, and the team,” Matt Tapper, managing director for Lion’s Global Markets tells GBH. “We’re really excited about Fourpure being our lead brand here in the UK. When it comes to the UK beer scene, it’s not all about London, but we do think it’s the most dynamic part of the market here, and it’s a good place to start.”
Fourpure’s new challenge will be in managing both consumer and industry expectation as it navigates the next part of its journey. One thing that may be of advantage to the Lowe Brothers is that, unlike some industry peers, they have never pushed an anti-multinational rhetoric. In a 2017 GBH podcast, they were complimentary of breweries that have built hugely successful businesses on the back of investment from multinationals like Lagunitas. For many, this will simply feel like a very natural part of Fourpure’s evolution within the brewing industry. For Lion, this could just be the beginning of a larger play within the UK industry.