The Bar Towel

sprague11 wrote: Crazy prediction for 2017: Two of the big Ontario craft brewers sell out to the big guys.

Interesting. Who are your guesses? If there were to be 2, I guess I would pick Beau's and Muskoka, but I'd be curious to hear if you have a different two in mind....
Ren

jrenihan wrote:

sprague11 wrote: Crazy prediction for 2017: Two of the big Ontario craft brewers sell out to the big guys.

Interesting. Who are your guesses? If there were to be 2, I guess I would pick Beau's and Muskoka, but I'd be curious to hear if you have a different two in mind....
Ren

Beau's has been pretty adamant about remaining independent and put some employee stakeholder measures in place to do that, even though they probably would actually benefit from a buy out. It might up their game.

Muskoka is an interesting choice. They are very business like, so could probably be suited to making an unemotional decision (see big bag of money), but I also get the notion that they are happy with their autonomy and prefer to focus on making great product. It could be having a rural location puts less pressure on enterprise costs?

If I were betting on candidates, I think I would start with Amsterdam. They are already pretty much to scale, have brand pedigree and with the utility grade side of their catalogue have a huge hospitality footprint. Much like Mill Street was, I can see them as a target. Great Lakes are sort of in the same situation, but they probably have more room to build brand value before accepting a low ball offer. At the rate they are putting out great beers that aren't too plain goofy, they could be a good score for a bigger player in a few years and get even more out of their investment.

I'm also thinking Flying Monkeys could be open to a suitor, but they seem to have lost brand building steam by a lot of product overreach. I can't see them being a 'portfolio score' for someone.

Let's not forget Steamwhistle. Easy to plug into any portfolio and has brand recognition in a lot of Canada now. Would be a simple accountant to accountant conversation.

Somehow, I get the feeling Henderson is all about building a farm team to sell too, but I don't know enough about them to verify that.

The thing people forget about is the temporal dimension.

What we noticed last year going around is that quality is, on average, improving. While it's easy to say "oh well, the smalltown brewers are mediocre" it's not necessarily going to continue to be accurate. I think that they probably are sustainable even if mediocre, but for the most part they're striving to get better and they're willing to accept constructive criticism. Quality isn't a constant, at least in the sense that if it has been one way it always will be that way. When you think about the number of breweries that exist in the province, it's important to remember that a lot of them started in the last four years. One of the constant themes we've been seeing this year is expansion into larger, newer, better equipment and a push in volume. The push in volume means that the beer is selling.

Certainly there is a point at which consumption is finite and the market won't be able to absorb any more, but I don't think that the new, scattered small town brewers who are moving under 2,000 HL a year out their front door are the ones that need to worry about that. If you take care in your product and you don't get foolhardy and ambitious, you can definitely make a living doing that.

I think the people that need to worry are the ones that are not striving to increase their quality. Newness is fixable through experience. Reticence to change or adapt in a market that requires those traits is a real problem. Consider it an ecological problem of evolution.

Tapsucker wrote:

jrenihan wrote:

sprague11 wrote: Crazy prediction for 2017: Two of the big Ontario craft brewers sell out to the big guys.

Interesting. Who are your guesses? If there were to be 2, I guess I would pick Beau's and Muskoka, but I'd be curious to hear if you have a different two in mind....
Ren

Great Lakes are sort of in the same situation, but they probably have more room to build brand value before accepting a low ball offer. At the rate they are putting out great beers that aren't too plain goofy, they could be a good score for a bigger player in a few years and get even more out of their investment.

Not for sale... period.

Pub Style wrote:Not for sale... period.

Glad to hear that's your current intention, but ... every business (asset) has a price

portwood wrote:

Pub Style wrote:Not for sale... period.

Glad to hear that's your current intention, but ... every business (asset) has a price

My first thought too. I've never heard of anyone turning away a dump truck full of money (should that theoretically happen) .

CoolB wrote:

portwood wrote:

Pub Style wrote:Not for sale... period.

Glad to hear that's your current intention, but ... every business (asset) has a price

My first thought too. I've never heard of anyone turning away a dump truck full of money (should that theoretically happen) .

Business owners will (may) tell you they've turned away dump trucks full of money because they are committed to the business, blah, blah.

What they actually mean is: the dump truck wasn't big enough

saints_gambit wrote:
I think the people that need to worry are the ones that are not striving to increase their quality. Newness is fixable through experience. Reticence to change or adapt in a market that requires those traits is a real problem. Consider it an ecological problem of evolution.

Does Old Credit Brewery fit that description?

portwood wrote:

Pub Style wrote:Not for sale... period.

Glad to hear that's your current intention, but ... every business (asset) has a price

Or a VALUE, which is more in line with my original intention. I was considering they would be of value to a buyer, not that I had any idea of whether they would sell.

That's why I didn't even touch on the smaller breweries. Without a big enough existing customer base and brand recognition, I doubt the majors would even take a look. On the other hand, some of the smaller guys may find themselves interested in merging among themselves. That could be interesting. I could see one of the neighborhood brewpubs outgrowing their system and bottle shop and hooking up with say Black Oak or Cameron's. Could be a win-win. Expanded distribution for one and a bigger portfolio for the other.

GtownRandy wrote:
Does Old Credit Brewery fit that description?

I went to visit Old Credit at approximately 5:30 on a Saturday last year for the book, popping off the go train and figuring, "well, this shouldn't be a problem." That's 5:30 on a halloween Saturday night. Open, but didn't even have anyone manning the store.

So... yes. It does.

Belgian wrote:MacKinnon Brothers opened in '14 or '15 near Kingston, but tried them last week and I definitely see a trend toward brewing mediocrity that depends on local sentiment to flourish. Not outright horrid the way Glenora or Trafalgar could be, but not interesting beyond trying one time.

I personally thought Upper Canada beers in the 1990's could be better, it seems retrogressive. My cousins buy MacKinnon because it's made locally so bully for them.

I've been rooting for the Mackinnon Bros., as I had high hopes for the 100% farmed onsite beer, but the quality just isn't there. They are ok, but I won't be buying anymore.

King's Town Beer Co. that just opened is awful. There stout is the only thing I'd drink again, and only then if the tap list was pretty dismal.

Neitherr Beaus or Great Lakes would be my picks for selling out.

Whenever I think that the never-ending string of new breweries can't be sustained, I remind myself of the aforementioned Old Credit, Trafalgar, etc. Hell that Red Falcon contract brewer is going on 4 years in business!! Unless many of these are really large scale hobbies, i presume you could bottle piss and sell it as craft beer and have a viable enterprise!

Who is the market for Old Credit? Who is the market for Red Falcon? I'e never seen anyone buy or drink these beers, yet they have regular shelf space across the city.

Again though, what do I know?

Coronaeus wrote:Who is the market for Old Credit?

Port Credit & surrounding Peel region for one. I know folks who go by the brewery or support it at the LCBO out of local sentiment, they are proud to have a bomber of honey-something ale made in the region while they relax in their suburban pool backyards.
It's not edgy craft beer but it has a market - the IDEA of it being a premium beer is there at least!

Lots and lots of people prefer beers like those from Port Credit to most everything Bellwoods have ever made. Not me, at all, but my parents probably fall in that camp.