Why Craft Beer Needs to Grow Up to Survive

When Hallway decided to change direction and focus on serving an industry that we loved, we were astounded by the lack of resources available to beer business owners, and made it our mission to help the beer industry grow. That’s what got us starting this podcast, and producing the content that we do. One of the few resources that was around, was Beer Means Business by Csaba Babak, an incredibly in-depth analysis of the craft beer market which, as the title suggests, focuses on the business side of running a brewery. I met Csaba at  2017’s GBBF, and immediately got chatting about the intricacies of the beer market, and so naturally I invited him on the podcast. Csaba joins me on this episode for an incredibly insightful chat, we discuss everything from his time as an EU tobacco lobbyist, to his analysis of exit strategies and the inaction of craft beer versus big beer. It’s a long one, but it’s really insightful all the way through.

Key Insights 

• The time to take action is now. Big beer is moving, and quickly. While they’re acquiring breweries and evolving distribution, craft is still stuck in the same conversations that we were having 4 years ago.

• There is a lot to consider when taking on funding, whether it’s through the crowd or private investors- you’ll need to think about how you’re going to provide value to your shareholders.

• The beer business is so much more than just producing excellent beer. While product quality is paramount, if you’re not giving enough thought to finance, profit margins and marketing, your business is likely to suffer.

Show notes

03:05 -Beer Means Business
04:25 -Alcohol is on the horizon of regulation.
6:07 “This is why I really appreciate your work because there is very little being written or said about the less sexy part of the industry”

08:57 - Lessons on Building a business in the UK Craft Beer Industry

18:50 - I can see clear opportunities for innovative companies in the beer industry
20:00 - The lack of dividends to shareholders leads to a compromise and the expectation that there will be some big payout at the end. And assumption based on a successful exit
22:15 - Competition is fierce and is ever changing.
26:45 - If you don’t manage your cashflow, you then become a liability for people outside of your business.
28:00 -Innis & Gunn Barrel Aging debate
32:00 - It’s time to professionalise
37:30 - ZX Ventures
38:10 - As an industry, the actions at large [to adapt to a changing market] are lacking

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