Darling Brewery’s major shareholder is looking for an investor

I don’t drink much but when I do my tipple of choice is beer. Some years ago, when we migrated from the Natal Midlands to Darling I was delighted to find a very fine Craft Brewery in town – Darling Brewery and a very tasty Pale Ale / Lager – perfect.

In the Midlands my choice was a craft beer was ‘Whistling Pig pale Ale’, from the Nottingham Road Brewing Company. When we migrated to Darling I was delighted to find Darling Brew’s ‘Slow Beer’, a Lager; the transition was seamless.

Darling Brewery

I was surprised to find this poster showing that Darling brewery is looking for investors. I emailed some questions to the major shareholder and received a gracious reply from the CEO.

Yes, we are looking for an investor for Darling as the business is not sustainable. Ideally a company with a strong distribution network. We are presently only able to sell 20% of the installed capacity.

Dematech had to step in 3 years ago after we built the plant due to dispute between the former investors. Dematech is Holding majority shareholding.

Kevin Wood who is copied in (to this email), has spoken to staff and they know that we are seeking for a new investor.  You can gladly call me or Kevin if you need more info.

This is a very comprehensive article about Craft Beer Statistics in South Africa by Lucy Corne (the ‘Brewmistress’) – Statistics for the South African Craft Beer Industry (2018)

The last paragraph of the article reads –

“So where are we heading?

With the announcement this week that a large player in the South African beer industry is looking for an  investor, it seems unlikely that our craft beer industry is going to have an easy time as we head into 2019. Expect to see further sales, closures and consolidations. Is craft beer dead in South Africa? Certainly not, but I think it’s fair to say that the honeymoon period is over. Fighting for shelf space, tap space and indeed, customers is going to be an ongoing battle. I hope you continue to support breweries that produce consistent, quality, innovative beer. I know I will.”

The Brewmistress highlights the problems with distribution at the macro and micro level.

She provides some surprising statistics – that 50 % of Craft Breweries are in the Western Cape, the home of virtually all of South Africa’s many different styles and price breaks of Wine and the many Cape Brandies. Is the Western Cape the home of so many beer drinkers ?

craft berewerys by province


Ed: I suspect that Nottingham Road Brewery and Darling Brewery have very different production capacities and certainly a different number of product offerings (Nottingham Road Brewery – 8 and Darling Brewery – 17) . Nottingham Road has many outlets (mostly within about 150 kms). But do local outlets solve a big production capacity problem ?

Editor

Ed also makes the coffee...

2 thoughts on “Darling Brewery’s major shareholder is looking for an investor

  • January 3, 2019 at 18:29
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    Not sure why your local craft brewery would have too much trouble finding a suitable investor, given it’s capacity plus current exposure & visibility?

    Likely industry candidates would be Appletiser, AB Inbev, Amstel, Gants, Koo, KWV, Remgro or Tiger Brands.

    These all have plenty distribution & logistics facilities, plus retail connectivity.

    Few finance or investment houses also decent potentials, as they or their top folk like a portfolio with a little “difference”.

    Management Buy Out with a wealthy partner, like Whitey Basson, or Simon Sussman of Wollies, Sonnenbergs of Wollies fame also have assetts in the Paarl or Tulbach region.

    Finally could always do a “Crowd Source” with equity provided in product, this only available from brewery, or added cost if shipped to Slaapstad or places further afeild.

    Have a look at an entity with the brand Soweto Gold, originator sold out at a very decent multiple, for a craft very localised brewery.

    Reply
    • January 3, 2019 at 22:37
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      Hi Harry. Thanx very much for your comments. I hope you and Shaaryn are enjoying your piece of heaven in the Caribbean. Quaffing quantities of Carib lager ? You need a good Craft beer there.

      Reply

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