AB-InBev acquires stake in Munich craft brewer Crew Republic

Germany | AB-InBev has bought a 20 percent stake in Munich craft brewer Crew Republic, which, at 9,000 hl in annual beer sales, is among Germany’s largest. But over the past few years it has seen its spare capital shrink while it has struggled to hike sales.   

In the official announcement, Crew Republic and AB-InBev said on 30 August 2019 that the agreement is primarily about distribution. As of September 2019, AB-InBev’s German unit will take on the national distribution of Crew Republic’s beers.

Crew Republic was founded in 2011 by friends Mario Hanel and Timm Schnigula in their Munich flat. For a few years, they had their beers contract-brewed before they finally decided on a site in a Northern Munich suburb, where they opened their brewery with a capacity of 12,000 hl beer in 2016. Previously, the hop firm Barth had acquired a 30 percent in Crew Republic, which provided the founders with necessary cash to build their EUR 2.5 million brewery.

As the two admitted in the press release, they have found the complex German market a challenge. They hope that by partnering with AB-InBev their beers will become available to more consumers.

Although Crew Republic beers are well liked among German craft beer aficionados, they will have a hard time finding them outside Munich, let alone outside Germany. An earlier partnership with the distributor Bierkultur came to naught when Crew Republic struck an agreement with the distributor GDP in April 2018. GDP is strong in the German on-premise and also serves as Fever Tree’s local distributor. This contract expired on 1 September 2019. 

From what we hear, AB-InBev has been on the prowl among German craft brewers, but so far only Crew Republic has shown welcoming. But the decision to sell a stake would have been triggered by Crew Republic’s diminishing cash reserves. Also, it owes EUR 2 million in debt to Noris Hopfenverwertungsgesellschaft, a firm owned by the Barth family.

Insiders say that a decision to hike ex-brewery prices to EUR 25 from EUR 20 per crate last year must have dented Crew Republic’s sales. In the off-premise, Crew Republic’s beers retail for around EUR 40 per crate (24 x 330 ml bottles). This is way above the average price for a crate of German pils beer (20x500 ml bottles), which stood at EUR 13 in 2018, but apparently was not enough to improve Crew Republic’s total profits.

The transaction price was not disclosed. The commercial register shows that AB-InBev took out a 20 percent stake in Crew Republic, with Noris still controlling 24 percent, and the two founders 28 percent each.

It remains to be seen if AB-InBev can much improve Crew Republic’s sales. Its own craft beers, launched under the Beck’s label, have struggled. AB-InBev’s Goose Island brand is distributed in Germany by the Hamburg Beer Company, an independent, privately-owned company. Already, the craft beer commentariat on the web has voiced its disappointment over Crew Republic’s partial sale to AB-InBev.