Breal, Beer & Brands
Venture capitalists Breal have announced the closure of the London operations of Brew By Numbers. Brewing will now take place at Black Sheep Brewery in Masham, North Yorkshire. The same will also apply to Brick Brewery which Breal also own.
According to media reports @drinksmaven some brewing may also take place at Purity another brewery owned by Breal
Breal own four breweries- Black Sheep, Brick, Brew By Numbers and now Purity.
They are a venture capital group, and appear to have related operations elsewhere in the world. They have no obvious experience in brewing and bars. Previous deals have included steel and textiles.
A reading of Marx’s Capital can explain this. Capitalism renews itself by a cycle of boom and bust. The bust phase allows the re-composition of capital to promote future growth.
Breal then are getting in at the bottom of the market, (in craft beer in this case) but see growth and return on their capital to come.
As beer writer James Beeson has noted on social media Neil Gostelow has advised Breal on the brewery acquisitions (Times 26th August 2023). Gostelow previously worked for KPMG and in that period dealt with the administration of several beer and pub groups including, as Beeson notes, Hopstuff. He joined Breal as an investment advisor in 2022. He does not have a beard.
His view as reported by the Times is that strong craft beer brands have a good future. No doubt he has noted that the economy in respect of brewing and beer is probably at or near the bottom of the market. Getting in now promises later profit. Breal as a private equity group have the capital to think beyond the short term whether or not they have read Capital Volume One
The latest move by Breal will see redundancies in London operations, bad news as recession looms. It also underlines how the private equity group understand craft beer. That is as brands, rather than as something with a local and community focus.
No doubt the beer produced at Masham will be drinkable enough. Will it be identifiable as that previously brewed by Brew By Numbers and Brick? It seems unlikely and Breal are not so far claiming that it will be
Update
James Beeson for the Grocer has spoken to Mark Williams who is the public face of Breal’s brewing operations. Perhaps the key take away is that Breal are still looking to buy other breweries and clearly have a list of potentials. Its not surprising given the state of the economy and hospitality specifically
Jessica Mason has underlined in a comment piece that when it comes to Breal its not brewing or beer that matters its brands and business. Its not really a surprise again but it underlines that a campaign to save what has been gained from craft beer over the last 15 years or so is very much needed, along with the wider issues facing all breweries and pubs, Big Beer aside
Craft beer…. as brands, rather than as something with a local and community focus. Here in Nottingham we have Castle Rock Brewery and its pubs, please (non-existent) god they won’t go the same way 🤞🤞