What was slightly curious about SABMiller's (SAB) deal to acquire London-based Meantime Brewery Company was the level of press coverage it attracted. The acquisition of Meantime - for an as-yet undisclosed sum - may have ushered SAB into the fastest-growing segment of the UK beer market, but the Greenwich-based 'craft' brewer’s sales only amounted to £17m in 2014, against $22.1bn (£14.1bn) for the beverage giant. A David & Goliath story like this would barely rate a mention normally, but there's more at play here - growth prospects for the beer market, itself, are under the microscope.
Sales volumes for standard beer brands in traditional markets remain flat at best, while growth in frontier markets has begun to slow. But last year, Meantime grew sales volumes by 58 per cent, making it one of the top-performing craft breweries in the UK. Now industry analysts will be anxious to see whether the Meantime brand will lose its allure once it is subsumed within a global brewing giant like SAB.
The integration of the Meantime brands is effectively a test case for the industry. Management will doubtless point to the success of SAB’s premium brands like Peroni Nastro Azzurro and Pilsner Urquell, but these brews don't fall into the category of craft beers. We suspect that no matter how SAB dresses this up, it just won't wash with some beer purists. It's worth remembering that CAMRA - a UK precursor to the 'slow food' movement - was originally established to counter the homogenisation of the British brewing industry. Those who recoil in horror at the bitter memory of Watney's Red Barrel will feel uneasy at the prospect of a highly regarded small-scale brewer going over to a corporate entity that they probably feel has more in common with DuPont. That sounds harsh, but craft brewing can be an emotive topic of conversation, even when you're sober.
At last week's roundtable discussion on the deal, SAB's management were at pains to point out that SAB is focused on nurturing local beer companies. That may sound akin to them suggesting they're keen on fostering competition, but if the Meantime acquisition bears fruit it could trigger further acquisitions centred on craft brewers, both here and abroad. SAB is doubtless keen to nurture these companies in the same way a lion might nurture a springbok.
