18 February 2022

Dutch craft brewer Frontaal raises EUR 5 million for new production site

The Netherlands | This just goes to show that punters are still willing to put their money behind upstart craft brewers. EUR 5 million (USD 5.7 million) seemed like an ambitious target when Brouwerij Frontaal announced its latest crowdfunding campaign, its fourth, in September 2021. Nevertheless, the Breda-based brewery managed to raise as much in four months, Dutch media reported on 15 January 2022.

It was an unprecedented amount for a crowdfunder in the Netherlands. Frontaal’s previous three campaigns had raised more than EUR 1.3 million.

Observers thought it amazing that investors so willingly parted with their cash. Frontaal, in 2021, sold merely 6000 hl beer and made a turnover of EUR 3 million (USD 3.4 million). But then again, Dutch beer geeks regard Frontaal as the flagbearer of independent craft beer in the Netherlands, which in turn made it worthy of their donations.

Whether the crowdfunder was Frontaal’s best choice for funding is open to debate. Crowdfunding platforms are no charities. They tend to take a 5 percent cut, on average, and an additional 3 percent to 5 percent fee for payment processing. All this could have added up to nearly EUR 500,000 in costs in the case of Frontaal’s latest crowdfunder.

In any case, Frontaal plans to invest the proceeds in a new production site and a beer café in Breda-Noord.

Investors put their money where their mouths are

Frontaal was founded by Roel Buckens in 2014, when he was just 22 years old. It brews five all-year round beers – three IPAs, a barley wine and a tripel – plus half a dozen special releases per month, always focusing on IPAs and new styles, while giving other popular styles, like blondes, weizen and wit beers a wide berth.

The new brewery with a capacity of 120000 hl beer eventually, will come on stream later this year. In addition, Mr Buckens is planning to expand Frontaal’s barrel room from 200 to 1000 barrels. By late 2023 he also hopes to have his own distillery.

Frontaal: turnover and volume sales 2015-2021 (Frontaal Prospectus, September 2021)

Joining a club of likeminded aficionados

Mr Buckens was quoted as saying that Frontaal’s investors (4500 of them) will get more for their money than just a thank-you note. They will get a month and a half of free membership of its beer club, a share of the profits (hard to believe but he said so) and they are invited to the annual investor drinks party. Moreover, they may shout everywhere that they are co-owners of brewery Frontaal.

This seems to be part of Frontaal’s success: Investors see Frontaal as a club, with which they want to be connected. “Innovation is of paramount importance to us”, Mr Buckens said, “and community. If 4500 people invest in you, they believe in something. We have relatively few large investors. Twenty percent have invested just EUR 250 (USD 284) each. They may not hold a significant share, but they do it because they like it. Because they want to belong to this club.”

Breweries old and new

Breda, a pleasant historic town south of Rotterdam, sports several craft breweries and is the Dutch headquarter of not just AB-InBev but also of United Dutch Breweries (UDB), a brand house with a portfolio of several heritage brands, including Oranjeboom, which are brewed by others under contract. Per its website, it sells more than 1 million hl of product each year and has been owned by a succession of private equity firms.

The famous Oranjeboom brewery in Breda itself was bought by Interbrew in 1995, shuttered by InBev in 2004, to the loss of more than 300 jobs, and the brands were eventually spun off by AB-InBev in 2008 to UDB.

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