Where is Keystone Brewing going? Private Equity & Craft beer
Earlier this month Steve Cox was appointed CEO of Keystone Brewing. Keystone is the beer etc bit of Private Equity operator Breal.
The business model of Private Equity is to invest in companies, grow the business and having made a profit sell them. Five years is a frequent timescale.
Not a great deal is really known about Keystone although Cox has now said that the aim is £100m revenue by 2028. Whether that is ambitious or not I’ll leave to financial analysts but all the breweries it currently owns were at best (and to put it politely, more so than their workers might)not making a profit.
Keystone tends to talk of brands which include the original one, Black Sheep, Brew By Numbers, Brick, Purity, Magic Rock, Fourpure, Big Drop and as of February North Brewing. It also own Hofmeister lager.
Finding out about Steve Cox’s business background is equally problematic. He was the CEO of In Good Company which had acquired Magic Rock, Fourpure and Big Drop, and of course were in turn (or at least the brands) acquired by Keystone.
If one were to look at it in Marxist terms (as I would) given the economic travails of hospitality its likely that we are somewhere near the bottom of the craft beer market or heading towards it. The way Capital works (when it does) is to shed excess capacity and in doing so that allows new business to develop in that space. Hence Keystone will as they have reported expect at some point the craft beer business to recover and with it their revenues and profit.
We shall see
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