Craft brewer Renaissance up for sale
Renaissance Brewing, the first local company to receive equity crowdfunding, has gone into voluntary administration after cash flow problems and product management issues, it was reported on 10 October 2017.
This should serve as a warning to keen and eager beer lovers that putting their money where their palates are can be a risky undertaking.
The Blenheim craft brewer became a poster boy for crowdfunding when it raised NZD 700,000 (USD 500,000) from 300 investors in just a week in August 2014.
Equity crowdfunding was designed to make it easier for small businesses to raise money from the public, by allowing them to raise up to NZD two million (USD 1.4 million) from retail investors without filing a formal prospectus.
It has since been used by dozens of firms to raise tens of millions of dollars of capital.
Renaissance’s administrator is confident that the brewer will be sold as a going concern.
In a note to investors, the administrator said the firm had struggled to generate sufficient margins on sales and that, coupled with reduced turnover, had placed a “significant strain on cash flow”. The director had sought additional funding from the bank and others, however this was not forthcoming.
Renaissance was established in 2005 when brewers Andy Deuchars and Brian Thiel, both from southern California, purchased the lease on the historic Grove Mill in Blenheim, a town on the northern tip of New Zealand’s southern island. The two had one goal in mind – to produce stunning beers in a region more renowned for the excellence of its wines. Mr Thiel is still listed as a director of the company.
In recent years the NZ craft beer market has grown at a faster pace than the broader industry, accounting for ten percent of value and 5.7 percent of industry volume. There are over 190 craft breweries, of which 130 are deemed to be very small operations.
The growing demand for craft beer has seen the country’s Big Brewers, Lion and Heineken-owned DB, raid their boutique rivals, most recently with DB’s purchase of Tuatara brewery and Lion’s acquisition of Panhead.
