When hop contracts go bad

When hop contracts go bad

Hop contracts can run years ahead, but in a world of uncertainty, not everything goes according to plan. It’s good to talk, says John Willetts of Simply Hops

Hop contracts can run years ahead, but in a world of uncertainty, not everything goes according to plan. It’s good to talk, says John Willetts of Simply Hops

Even with the very best will in the world, it is not always easy for a brewery to accurately forecast what’s going to happen in the next 12, 24 or 36 months. This means that while contracts with hop suppliers are always entered into with the best intentions, things don’t always go as planned. The IPA you were in love with and were expecting to dominate your sales just doesn’t perform, and the wit you did as a seasonal suddenly takes on a life of its own until suddenly everyone wants some! Anything can happen, good or bad, which means that the contract you signed may no longer fit your needs. What happens then?

Well, I can’t speak for all hop merchants, but I  can speak for Simply Hops. First: never sit on an issue.  The sooner you inform us of a problem, the more likely we are able to do something about it. If you wait until 2018 crop is being picked before you tell us about a problem with your 2016 crop, then the potential for us to re-use those hops, and therefore release you of your unwanted obligation, is severely diminished.
We write to all our contracted customers to update them on the state of their contracts and ask to help formulate a plan together in order to ensure that there are no major problems at a later date. Invariably, the only big issues arise when those letters are ignored. Once a certain amount of time has passed, it becomes difficult, or indeed in some cases impossible to be as flexible as we would like to be, so responding at the first available opportunity is vital.

Rebalancing is the easiest way to proceed with your hop contracts in a healthy way. Regular meetings with your merchants to discuss what’s working and what’s not can often allow them to release some volumes of hops in preference for others. This ensures your brewery has what it needs when it needs it, rather than building up issues for future headaches. Also, remember that although some years you may feel your contracted price is higher than the current market price, there will also be years where you are buying at lower than the current price. Considering this, buying from alternative sources whilst tempting, is not always the best strategy in the long term, as it may not aid you in future negotiations with the contracted supplier.

When is comes to renegotiating, it is important for both parties to consider all options. Longer-term storage, rebalancing into future years, maybe extended payment terms to avoid a big hit to cash flow, or even in extreme cases an agreed settlement figure to ensure costs and losses are kept to a minimum.

As a company, we see flexibility and communication as the key to a successful partnership between ourselves and the excellent breweries we supply. While we cannot always help in every situation, and sadly we have had to pursue legal channels in the past to get a contract settled, we will always try our best to find a mutually beneficial solution first. After all, as lovers of good beer in this wonderful industry we share, it is vital to keep the pumps flowing.


People and purpose

People and purpose

Christian Barden, Europe’s Kegstarter & Global Brand Builder, argues that a successful sustainable business needs two things: good people and a clear purpose for everyone to get behind. Here’s why:

Christian Barden, Europe’s Kegstarter & Global Brand Builder, argues that a successful sustainable business needs two things: good people and a clear purpose for everyone to get behind. Here’s why:

“We are stuffed in life without good people around us and a clear purpose. Behind every personal or team success story, no matter how big or small, there’s always a bunch of people who indirectly or directly created the environment for it all to happen. It might be a word of wisdom, a random act of kindness, a moment of inspiration, an atmosphere of support and safety, or perhaps a true one-off ‘sliding doors’ situation (for those that remember the film). Whatever it may be, we never achieve anything in total isolation. Nearly all the environments that help us achieve something involve good people.

We’ll never really know who all those people are, where they are and what they’re truly capable of until we stop, breathe, think, build and live that environment that attracts these good people to do what they’re great at every day for themselves, for each other and for your partners.

TRIBES AND VIBES
I only heard the phrase ‘your vibe leads your tribe’ for the first time a few months ago from the owner of our local chippy as we dropped in for our counterproductive post-sport Friday evening dinner. She’s right, if you, your family, your friends, your team, your colleagues, your investors and your business bring the right vibe, and that’s the energy that good people tend to bring to any situation, then you and your tribe will consistently have the best foundation to achieve most things that you put your mind to. “Yeah, but I’m not a people person, and I don’t know where to find these people” I hear very often. It’s actually pretty cool to be anxious about it; in fact, it’d be good to be. You don’t need to be whatever a ‘people person’ is; you just need to risk it a little, trust and make sure that to truly lead you need to serve first. Putting the effort ‘in’ and being clear, honest and trusting will undoubtedly get something back ‘out’ for everyone. As I said, none of us knows where these good people really are, they could be mashing in right now, or on the bus with you, or just walked past you before you sat down to read this. Being prepared to stick our neck out will help find them. After all, the turtle only ever makes progress when he sticks his neck out!

BELIEF AND PURPOSE
And it’s the same with having a clear purpose. Purpose drives a belief, belief drives a focus of energy and enthusiasm and that, backed up with the right leadership and the proper process and the right results, will get people and tribes where they’d like to be with a beaming grin. It’s important not to get purpose mixed up with achieving something at a specific time, that’s more about goals, objectives and key results, which are crucial, but a purpose drives you way beyond them.

NEVER STOP LEARNING, EXECUTING AND HAVING FUN
Most of the mistakes I’ve made are from losing sight of the purpose that’ll keep me in line to ‘be’ and ‘do’ the right stuff. Having a purpose, perhaps counterintuitively, makes life a little more chilled out. It creates patience (something I’m notoriously poor at having) through a much bigger reason for doing stuff. A great example is what Garret Oliver pointed out at Scottish Beer Matters a few years back. He spoke brilliantly about making a great beer business. He said something along the lines of:
“I know everyone here wants to do all kinds of cool stuff with their beers and everyone will want to make a long term profitable business. You’ll make money by selling more, so in addition to all that cool stuff, remember to make beers that are so moreish that people want another before they finish that first third of a pint.” That worked for him, it makes sense to me, but everyone should have their purpose and be ruthlessly clear about what that purpose is throughout their business. Mine is to help get more great beers to more happy drinkers.

I know it’s tough to keep doing this kind of stuff, and everything else, day after day, month after month, year after year. It’s especially true in highly competitive and sometimes declining industries where everything is so immediate and where time and money is at a premium. But I’m yet to meet a team smashing it every day and hating it over the long run, and I’m yet to meet a team having a blast day in day out but consistently failing miserably.

I’ve been lucky to lead, start, turnaround, accelerate and mentor lots of different business, sports teams and people so far, and at the heart of the recipe for any success we’ve had together has been the focus on doing what it takes for everyone involved to have fun and measure the right stuff every single day, no matter how tough it gets, to deliver against that purpose.

In short, it’s why I bang on about ‘smiling faces and great results’ being my recipe of how to get stuff done with the right balance of the hard work, enjoyment, health and wellness needed to keep doing it for the long run.

/ kegstar.com


Fourpure Brewing Co acquired by Lion

FOURPURE ACQUIRED BY LION

 Australian beer company Lion has acquired 100% of Fourpure Brewing Co

VERBATIM PRESS RELEASE BELOW

Lion has a long history of investing in great businesses and empowering them to keep doing what they do best, while giving them the financial and strategic support to get their products to more people.

Fourpure Co-founder and CEO Daniel Lowe said: “Over the past 12 months we’ve been working hard to find the right investment path for the next phase of the Fourpure story.  While in four short years Fourpure has grown to become one of London’s leading independent modern craft brewers, we knew we couldn’t take the next adventure alone.  We met Lion towards the end of our process after a wide range of funding options had been considered, and quickly realised we had a shared vision and values.”

“It was clear from the very first meeting that Matt and the Lion team understand the needs of a craft brewery and share our aspirations for quality and sustainability. Lion’s past investments in craft breweries in Australia and New Zealand, including Little Creatures, have always respected the beer and the people.”

Lion is already active in the UK and Europe, selling a range of Australian and New Zealand craft beers and fine wines from the US and New Zealand. In time, there will be an opportunity to look at how both businesses’ sales and distribution channels can be used to reach more drinkers, not only in the UK but also in Europe and global markets where both businesses are already growing.   Daniel Lowe remains CEO with co-founder and brother, Tom Lowe also staying on with Fourpure.

Lion Global Markets Managing Director Matt Tapper said: “Lion has a long and proud history in craft beer in Australia and New Zealand and we’re thrilled to have the opportunity to back Dan, Tom and the team to take Fourpure into its next chapter. The guys have done a superb job in getting the business to where it is now and we love how innovative they’ve been in both beer styles and the way they have positioned the brand. We’re making real progress in making our craft beers like Little Creatures available in the UK and Europe and we see some great opportunities to work together to get these and Fourpure’s brews in the hands of more beer lovers.”

Fourpure is known for its approachable styles and flagship beers like its World Beer Cup medal-winning Pils Lager and popular Session IPA. Founded in 2013 by brothers Daniel and Thomas Lowe, Fourpure’s brewery and hospitality venue is part of the renowned ‘Bermondsey Beer Mile’ craft brewing hub in South East London. The modern UK Craft market is one of the world’s largest and fastest growing globally in volume terms. It currently represents around 5% volume share of craft beer.

The commercial details of the transaction are confidential.


Canadian Issue 1 free to read here

CANADIAN ISSUE 1 FREE TO READ HERE

 We’ve just launched our free, independent magazine in Canada. Read it all here. 

Illustration by Adam McNaught-Davis

Finally, Ontario Gets the Beer Publication it Deserves!

If you have seen fit to pick up this inaugural edition of Original Gravity, chances are that you have at least a passing familiarity with what’s been going on in beer in this city and province over the last several years. And if you don’t, or if you’d like to freshen that knowledge, Jordan St. John’s story on Toronto brewery taprooms, found on page 16, will go a long way to updating you.

The point being that beer in these parts has changed almost immeasurably over the past three decades, from just a small handful of breweries and brewpubs – anyone remember Upper Canada Brewing? How about Denison’s? – to 41 operating within the city limits and 250 scattered across the province, according to the latest numbers from the Ontario Beverage Network, which probably became out-of-date the day after we went to print, such is the pace of brewery expansion in 2018.

Yet beer literature, never much of a thing around Ontario, simply hasn’t kept up with developments. Until now, that is.

What you hold in your hands is a beer publication of a different ilk, one that seeks to challenge as much as it does entertain, to inform as well as to provoke. You will find beer reviews, of course – Greg Clow and I take on a quintet of brews on page 22 – as well as style features and profiles of the people who work hard to bring you great-tasting beer – both starting to the right. But you will also discover within the following pages things that you might not expect to find in a beer magazine, like Robin LeBlanc’s wrenching essay of loss and community on page 19 and our quirky spotlight on The Art of Beer on the page opposite this one.

In short, what we are aiming to bring you with Original Gravity is a magazine thatís as challenging, diverse, surprising, illuminating and captivating as is the Ontario beer market we cover. In other words, the kind of beer publication this province so richly deserves!

Stephen Beaumont, Editor-in-Chief

 

 


Dark Star Brewing bought by Fuller's

Fuller’s buys Dark Star Brewing

Brighton craft brewer Dark Star has been bought by Fuller’s, it was announced this morning

 

Brighton craft brewer Dark Star has been bought by Fuller’s, it was announced this morning.

The full details of the deal have yet to be revealed, but the move came after a period of the two breweries working successfully together. It’s believed that Dark Star has been exploring various sources of financing to fuel continued expansion in an increasingly competitive market and that the acquisition was one of the alternatives being considered.

Many commentators (including us here at Original Gravity) have predicted that 2018 will see a sharp increase in the number of craft breweries acquired by bigger players. While sales of craft beer overall continue to rise sharply, from a brewer’s perspective trading conditions are increasingly tough in a market that some estimates put at over 2,000 UK brewers.

Dark Star was founded in 1994 in the cellar of Brighton’s Evening Star pub and went on to be a pioneer of the UK craft beer movement, with Hophead being an early champion of the US hop-forward pale ale style.

Fuller’s, founded in 1845, has won respect for its stance on the burgeoning craft beer scene, becoming a founder member of the London Brewers’ Alliance, recreating old recipes from its archives and recently launching ‘Fullers & Friends’, a series of collaborations with breweries including Thornbridge, Cloudwater and Fourpure.

QUOTES FROM PRESS RELEASE

Brewing will continue at Dark Star’s Partridge Green site, Managing Director James Cuthbertson will remain at the helm and the brewer will continue to operate as a standalone business.

James Cuthbertson said: “Since our inception in 1994, we have continuously grown from those early days in The Evening Star Pub in Brighton to the current brewery in Partridge Green. The partnership with Fuller’s, another independent brewery with fantastic heritage and great beer at its very core, will allow us to take the brewery to the next level. The deal means we will continue to do what we do, but gives us huge opportunities to brew more one-off small batch beers hand-in-hand with exploring the export market and expanded bottle and can formats.”

He added: “We’ve always described Dark Star as more of a hobby that got out of control than a business, an ethos that will remain at the centre of what we do and what we’re about, after all, beer should be fun and accessible.”

Simon Dodd, Managing Director of The Fuller’s Beer Company, said: “Following on from the success we have had with our acquisition of Cornish Orchards, we have been looking at similar opportunities to invest in and work with young, exciting companies that have a similar ethos and commitment to quality as Fuller’s. Following discussions with James and the team at Dark Star, we could see that we could add real benefit to the Dark Star business and it provides a great new range of delicious cask beers that will enhance the Fuller’s portfolio.

“Both Fuller’s and Dark Star are brewers with quality and taste at their heart. I just can’t wait to see how Dark Star innovates further with the support of Fuller’s and access to our expertise in brewing, retailing and business elements such as finance, purchasing and IT systems.”


Q&A: Bob Pease, Brewers Association

Q&A: Bob Pease

Bob Pease is the President and CEO of the US Brewers Association. Pete Brown caught up with him about what’s next in the US

Pete Brown

So how’s craft beer going in the United States?

We have 5200 breweries that have now opened — the rate of increase has gone up. There are another 2000 breweries in planning. Not all of those will open but a healthy percentage will.

Is there are a particular pattern?

It’s happening all over the country. Every state, every congressional district, has a craft brewery. But there’s a new trend towards taprooms. Some of these brewers aren’t looking to package their beer and sell it anywhere else. We’re seeing that all over the country. Local has always been important, now it’s hyper-local.

Everywhere you go now, people want American beers or American-styles, brewed with American hops. Does that worry you?

American hop growers export a lot of hops and that’s a good thing. Where it becomes a sensitive issue for us is availability. If there’s enough Amarillo and Citra to go round, that’s great. If there’s a shortage, that’s different. But it’s not a bad thing that brewers around the world are trying to make beers that emulate the American style of beers. We’re fine with that. The more people that are drinking things other than lite lager, the better.

Every time I go to the US I feel you’re about two years ahead of us. So what are British craft brewers going to be doing in two years time?

Lagers. People want lower ABV sessionable beers. So you can have two or three and still be in control.

brewersassociation.org