Investing in a Craft Brewery

BenEadir

Hi all,

I invest a modest amount in shares and have decided to sell one of my current holdings and re-invest the proceeds in the craft beer sector as I strongly believe the world is waking up to the fact that there are fantastic alternatives to the Heinoweiser mass produced beers and smarter (social) marketing coupled with more flexible logistics solutions are making the micro breweries competitive despite their lack of scale Vs the macros.

I'm looking for suggestions for publicly traded micro breweries and other companies (suppliers to micro breweries?) focused on the micro brewing industry in Ireland, the UK, Europe or the US whose shares I could buy.

I'm currently looking at the Nasdaq quoted Craft Brew Alliance, see http://www.nasdaq.com/symbol/brew and http://craftbrew.com but would welcome some other suggestions.

Ben

The Hill Billy

Not relevant to Beers & Wines & Spirits as per the forum charter.
Moved to Investments & Markets.

tHB

Northern Monkey

I honestly haven't a cluse if this is a good or bad investment, but keep seeing this advertised on the side of their bottles.

http://www.brewdog.com/equityforpunks

BenEadir

Northern Monkey wrote: »

I honestly haven't a cluse if this is a good or bad investment, but keep seeing this advertised on the side of their bottles.

http://www.brewdog.com/equityforpunks

Hi NM, I do love their Punk IPA beer so that's a good starting point. I'll look into these guys and do some homework. Thanks.

Ben

irish_goat

I don't think the Brewdog shares are a good means of making money (which I'm assuming it what BenThere wants). They're more for a feel good factor + the odd bit of free merch/discounts.

Perhaps look into investing in hops? The demand for them is going through the roof at the minute (and too are the prices).

wowy

irish_goat wrote: »

I don't think the Brewdog shares are a good means of making money (which I'm assuming it what BenThere wants). They're more for a feel good factor + the odd bit of free merch/discounts.

Perhaps look into investing in hops? The demand for them is going through the roof at the minute (and too are the prices).

Agree with that. I previously looked at the Brewdog prospectus, and it was really pushing discounts at their pubs at the UK and invitations to brewing events, etc. There's no exit for one's investment, and there doesn't seem to be a grey market, if any, so I was out.

BenEadir

irish_goat wrote: »

I don't think the Brewdog shares are a good means of making money (which I'm assuming it what BenThere wants). They're more for a feel good factor + the odd bit of free merch/discounts.

Perhaps look into investing in hops? The demand for them is going through the roof at the minute (and too are the prices).

Just spent a few minutes reviewing the BrewDog prospectus and to say they have built future growth into their valuation is an understatement!! It's not viable (for me) as a financial investment. IMHO it's overvalued for where they are at today, has a lot of downside risk e.g. growing too fast, too many products, running some bars themselves, partnering for others, geographically disperse i.e. Tokyo, the USA etc etc and there's no liquidity in the shares. They will probably make some mistakes and hopefully find a formula which works for them but I fundamentally don't like the idea of them being both a brewer and a publican at the same time. It's hard enough to create, produce and distribute new beers without the added challenge of running a chain of bars. From an investment perspective I'd prefer if they concentrated on being brewers but as a beer drinker who loves their Punk IPA I'd love to see them open a bar here in Dublin.

If they opened a bar in Dublin I'd buy a few shares to get the lifetime discount but other than that I'm going to pass, at least until there is a market for their shares and their business model has settled down a bit.

Ben

Geuze

Note that many brewers in the UK in the past owned thousands of pubs, for good reason.

It's a guaranteed outlet for your beer.

The exception was Guinness.

BenEadir

Geuze wrote: »

Note that many brewers in the UK in the past owned thousands of pubs, for good reason.

That is indeed true Geuze but I think that model isn't sustainable in the long term. Consumers want choice not have their options restricted by a handful of "tied house" chains.

I don't have much of a problem with BrewDog having a few pubs a la the way brewery's used to have a "Brewery Tap" pub on site or nearby almost as a market research tool to test new products etc and get consumer feedback but I personally don't think being both the producer and retailer is a good idea and less so for a start up company. There's also the fact that by having their own bars BrewDog will alienate other local bars who will then refuse to sell BrewDog beers as they can't possibly compete with BrewDog's own bar who may be purchasing the same products at cost or cost plus a nominal margin Vs what all other bars are being charged by BrewDog.

Just my tuppence worth.

Ben

cryptocurrency

BenThere wrote: »

Hi all,

I invest a modest amount in shares and have decided to sell one of my current holdings and re-invest the proceeds in the craft beer sector as I strongly believe the world is waking up to the fact that there are fantastic alternatives to the Heinoweiser mass produced beers and smarter (social) marketing coupled with more flexible logistics solutions are making the micro breweries competitive despite their lack of scale Vs the macros.

I'm looking for suggestions for publicly traded micro breweries and other companies (suppliers to micro breweries?) focused on the micro brewing industry in Ireland, the UK, Europe or the US whose shares I could buy.

I'm currently looking at the Nasdaq quoted Craft Brew Alliance, see http://www.nasdaq.com/symbol/brew and http://craftbrew.com but would welcome some other suggestions.

Ben

Looked at this a few years back, done all the ground work and sourced real cheap Asian brewing equipment suppliers but am worried at the serious amounts of entrants to the small market here in Ireland. Seems everyone is having a go.

BenEadir

cryptocurrency wrote: »

Looked at this a few years back, done all the ground work and sourced real cheap Asian brewing equipment suppliers but am worried at the serious amounts of entrants to the small market here in Ireland. Seems everyone is having a go.

The trick I guess is to identify and invest in the winners. New entrants will help generate demand. When the weaker competitors fail the demand they created should migrate to the remaining players.

Who will the winners be though???

Ben

Johnerr

I would not invest in a craft brewery, alot of competition and small profit margin.

I would invest in whiskey, not beer

Tinkcreative

cryptocurrency wrote: »

Looked at this a few years back, done all the ground work and sourced real cheap Asian brewing equipment suppliers but am worried at the serious amounts of entrants to the small market here in Ireland. Seems everyone is having a go.

I'd love to pick your brains on the suppliers you found. Give me a shout. Thanks