Australia & UK: Australia’s Lion acquires London-based craft brewery Fourpure Brewing Co
Australian headquartered beverage and food company Lion has acquired London-based craft brewery Fourpure Brewing Co for an undisclosed sum, the Morning Advertiser reported on July 9.
The deal will see Fourpure Brewing Co become 100% owned by Lion, while the company, which is in turn owned by Kirin Holdings Company Limited, has plans to use Fourpure’s sales and distribution channels to expand the reach of its Australian and New Zealand beers in the UK.
Lion has stated its intent to invest in continuing to grow the Fourpure brand. The brewery will remain at its current location in Bermondsey, while Daniel Lowe remains CEO with co-founder and brother Tom Lowe also remaining with the company.
Explaining the decision to sell the business to Lion, Daniel Lowe highlighted the “technical skills and experience” of Lion and its stewardship of Australian brewery Little Creatures.
“We’ve always been quite open about the fact that to continue with the growth we have had and to continue to invest in quality and infrastructure we couldn’t make that journey alone,” he said. “In terms of the resources and capital but also technical skills and experience which we just don’t have and would like access to.”
“We spent a long time listening to offers and looked at more traditional methods of funding, but around three months ago we met with the Lion team and very quickly it became something that was very exciting to both of us.
Lowe added: “These guys have got a huge focus on people and culture, and we’ve been hugely impressed by their stewardship of brands like Little Creatures. When you look at that brand and its growth and strength through the time they have been involved, that made us realise very quickly that these were the kinds of people we wanted to be involved with further.”
Lion global market’s managing director Matt Tapper pointed to Fourpure’s commitment to people and brewing as key factors in the decision to invest in the brand.
He said: “The first time I met Dan and Tom and the team at the site a couple of things stood out: the passion and the quality of the people and the focus and investment in the brewing equipment and sensory lab, which is pretty unique for a brewery of that size. These are guys who are serious and committed to making great beer.
“We thought about what we could bring and what value we could add, and we think that there is a great opportunity to continue to invest in quality and in capacity. We’ll also be investing heavily in people in all areas across the board. More people on the ground will help us introduce the brand to more customers and make us really easy to do business with.”
Lion will also invest heavily in Fourpure’s Bermondsey brewing facility and taproom. Lowe refused to put a figure on any future investment, but stated it would be “considerably more” than the Ł2 mln investment it saw last year.
Another week, another stake of an independent London brewery is snapped up by a multi-national, further demonstrating the strength of the capital’s brewing scene. However, this acquisition, which sees Fourpure become a wholly owned subsidiary of Lion, could prove to be extremely beneficial to both parties.
From Lion’s perspective, the addition of Fourpure not only sees the company purchase a multi-award winning and rapidly growing brewery, but also a team of 70 employees and a network with which to bring some of its Australian and New Zealand beer brands to the UK. Lowe and Tapper both admitted that Fourpure will eventually be helping to promote and distribute Lion brands, something that Lowe believes is a “natural next stage” in the relationship. For a company with a very limited presence in the UK, this acquisition could prove to be a very shrewd one indeed.
For Fourpure, the benefits of this deal are primarily in the experience and technical expertise that Lion has in growing beer brands both in local and global markets. Lowe has stated that Fourpure’s focus will remain in the UK (less than 10% of the company’s overall business is currently in export) but there will certainly be opportunities for overseas growth, particularly in the Australian and New Zealand markets where Lion is so dominant. Lion’s longstanding commitment to sustainability and reducing its manufacturing footprint will also have been appealing to Fourpure when weighing up the deal.
While UK consumers may not be overly familiar with Lion or its portfolio of products, they shouldn’t be fooled into thinking that the company is any less influential than the more well-known multi-national drinks companies. Lion employs more than 6,500 people acoss the globe and has a global revenue of more than A$5 bln. It owns 34 production sites globally including large breweries, wineries, dairy farms and juice factories, and is in turn owned by Kirin, which also owns 48% of San Miguel Brewery, among others. Small and independent it is not.
Lowe insists he is “not particularly” worried about the potential backlash to this deal from the UK craft beer scene, but it will be interesting to see if the outcry is as loud or as ferocious as it was when the Beavertown-Heineken deal was announced last month.
The acquisition also takes the number of Lion employees based in the UK from four to 74, and Tapper hinted that the company would seek to use Fourpure’s sales and distribution network to promote other brands in its portfolio.
“We’re great believers in craft and one of our beliefs is that craft is quite inherently local,” he said. “We want to over time to set up Little Creatures and (New Zealand brewery) Panhead to flank Fourpure in the UK. In the short term, however, we are just looking forward to helping the Fourpure team grow.”
The commercial terms of the transaction have not been disclosed by either party. However, Tapper stated that the fee paid by Lion “reflects the great job that Dan and Tom have done to date” and its “confidence in the journey that we are going to continue to go on”.
On the subject of how he felt UK drinkers might react to the sale, Lowe said: “My concern is with our customers and with our beer quality. I think we have been pretty clear and authentic with what we have done and our message. Am I worried? Not particularly. Haters will hate and people will say what they want to say, but ultimately the people drinking the beer will have the final word.
“It is a 100% deal, but we are not walking away. I remain as passionate and enthusiastic as ever about doing this. We are constantly pushing the boundaries and will continue to do so with exciting and innovative beers. I'll have a look at what people are saying but I won't take it too personally.”
09 July, 2018
