Could we finally have reached Peak Ale?
I’m not talking about a new brand of craft brew from the Peak District, but the idea that the craze for microbrew-style beers — or more specifically the valuations put on them by investors — is approaching its nadir.
In the Wild West saloon bars of the crowdfunding world, BrewDog recently launched a £25 million fundraiser that values the company at £300 million — 116 times its annual profit.
Camden Town Brewery’s valued it at £75 million. More froth than you get on a pint of Camden Hells.
Now compare the prices Joe Public is paying to what the professionals are stumping up.
SABMiller is today buying Meantime for what sources suggested was considerably less than 30 times the microbrewer’s annual profit — little over £10 million. Still a big return for its 83 investors, but not quite BrewDog levels.
When Molson Coors bought Doom Bar maker Sharp’s in 2011 it paid around 15 times the previous year’s profit.
By those measures only mugs buy into crowdfunding offers. But that’s not comparing like with like. As Meantime boss Nick Miller knows from his years at SAB, big breweries are interested in one thing: profit.
Crowdfunding investors are like football fans — ruled by their hearts. They want to back their favourite brew and own a piece of every gulp sold.
A profitable return would be nice, but nothing compared to bar-room bragging rights. For the price of a few rounds, they’ll keep investing for a while yet.
