Innis & Gunn roll the dice. Or do they?
So, this week one of the biggest pieces of news in the Scottish beer world was of an innovative, PR-savvy beermaker launching a unique crowd-funding scheme to raise capital for the construction of a new brewery.
Yes, a week after BrewDog announced Equity for Punks IV, Innis & Gunn have revealed that they are implementing a BeerBond™ for fans of their beer, and are hoping to raise £3m to create a new state-of-the-art brewery and an additional 35 jobs over the next four years. The location of the brewery is still to be confirmed to the public, so far the teaser of ‘somewhere in SE Scotland’ is all we have to go on.
Having been making beer for thirteen years, I&G have finally decided to take the plunge and open their own facility (up to this point, of course, their beer has been brewed at the Wellpark site in Glasgow, home of Tennent’s Lager). I’m sure I’m not the only one who has wondered for some time if something like this was going to happen. Back in January 2014 I suggested that might be the year when Innis & Gunn break the umbilical – but it has finally happened this year. And good on them for taking the risk.
But just how much of a risk is it?
In a word? Zero. It’s a cleverly-balanced offer with an enormous safety net attached. Building a new brewery is never easy (just ask the guys at Magic Rock), but this is the modern way to go about it. Ask your fans for the investment, and build something together. The one proviso to make it a success if fairly obvious – you need to have people who are willing to pony up when you send out that Press Release. One thing Innis & Gunn have, is a loyal fanbase. Whilst I can’t count myself amongst them, their beers are hugely popular – and with 30% average growth over the last two years, they are certainly moving in the right direction.
But if that direction is, say, somewhere near Dunbar (I genuinely don’t know, that’s a total guess), what do they gain from that? Well, the plans don’t give any indication of the size of the facility – so once that detail is released, that will be the marker of how confident I&G are in this new brewery, and what they hope to achieve with it. Anything around the 10-20BBL mark, and it could be along the path of a fantastic tourist attraction – the first thing I thought when I looked at the artist’s impression was Tebay services (which I mean as a compliment).
Anything around or north of 40BBL and the new Innis & Gunn brewery is a statement of intent. Their business is built on massively successful export numbers, I&G Original is the biggest-selling imported beer in Canada. If it has space inside in which to expand, then the immediate future could be less important than that down the line. Also, the barrel store. Plans for the new site include a bottling line and barrel room. Clearly, they aren’t going to move away from their Oakerators® any time soon, but the bigger the barrel store, the larger the indication will be that they are significantly upping their cask-ageing programme.
But back to the risks, and that safety net.
The I&G announcement on their blog contains the following sentence – “The time is right for us to bring brewing, barrel maturation and bottling under one roof in a home of our own where we can install the special equipment we need to craft beers with even greater depth of flavour.” However, as I understand it, their site at the Wellpark in Glasgow will be maintained and continued to be used – for large-batch runs of their core beers. The new site in SE Scotland is for additional, experimental and small-batch beers.
So there’s the first reason why this almost can’t fail for I&G – it’s not an all-in move, by any means. Build a beautiful visitors centre, shop and brewery with ample parking and signposts off the A1, but also keep the hulking, steaming tanks working away quietly in the East End of Glasgow. It’s the best of both worlds – and, to be honest, I wouldn’t have expected anything less. Innis & Gunn absolutely know what they are doing – why move everything to an industrial estate in (say) Cumbernauld, when they can have the frontage piece and the behind the scenes?
The second reason why I don’t see this as anything other than a huge success is the financials. A 7.25% (gross) interest minibond, tied for four years, with a £500 minimum investment – as Dougal Sharp said in a radio interview I heard the other day – it’s clear and simple for prospective investors. “They know what they are going to get, and when they are going to get it”. Aimed at beer fans who have money in accounts paying lower rates than that, it’s a ‘well, why not?’ investment.
Back in that 2014 preview of the year ahead, when I wrote that Innis & Gunn could take the next step and open their own brewery, I said that ‘surely now is the time for them to stand up and actually become the brewery they, and others, think they should be’. With the announcement this week, that has certainly come true. Visually impressive, appealing to casual beer drinkers, yet still with the workhorse brewery quietly in another city…
UPDATE
Dougal cleared up the size question with this tweet:-
@TheBeerCast thank you Rich, much appreciated review of our plans. The brewery will have 80K HL capacity with room for 800 maturing barrels
— Dougal Sharp (@IandGDougal) May 1, 2015
So clearly, the new brewery is going to be a much bigger space than I or anyone else had anticipated…
