Have a clear idea of what you’re trying to achieve.London brewery Anspach and Hobday has enjoyed a successful few years, buoyed by the impressive success of their nitro porter, London Black.The beer’s expansion in terms of production came off the back of a crowdfunding campaign in 2021, the second carried out by the brewery, the results of which were invested in increased production capacity and improved efficiency.For co-owner Jack Hobday, the fact that the crowdfunding and subsequent investment was focused so clearly on one thing – London Black – made it a much more satisfactory experience. “We had a very clear idea of where we wanted to grow, and what we wanted to invest in, and we achieved that,” he says. London Black is now sold in around 250 pubs, compared to 24 when the crowdfunding was launched.Breweries might focus on growth, efficiency, or quality; all are reasonable motivations. For Gadd, recent equipment purchases – most notably a Dalum CO2 capture unit for £55,000 in August 2022 – have been about making his brewery more sustainable. “Do I want to be wealthy, or do I want to do the right thing,” he asks. “I know about energy, how it gets lost, the cost [environmentally] of its production … I don’t get a kick out of money, I get a kick out of engineering and doing the right thing.”
Go As Big As You CanA reverse osmosis machine, to remove minerals from water, was a key part of the plans for Brew York’s new brewery in 2020. York water is extremely hard, making it less than ideal for brewing pale lager (which is traditionally made with soft water like that found in České Budějovice, home of Budvar lager). They spent £18,000 or $23,000 on the machine, but now believe they could have spent more.“I think we under-specced it,” says co-owner Wayne Smith. “My advice would be to go bigger than you need – having a bottleneck in your production process is not a good thing. We had to put in some more holding tanks to have water going through [the reverse osmosis machine] out of hours, so we’d have enough to brew with.”Gadd’s CO2 machine is big enough for a brewery five times his size (5000 hectolitres a year), he says. “I think it’ll take us five years to pay off the initial investment, but for a bigger brewery that uses a lot of CO2, it could be much quicker,” he says.
You Don’t Need Every Piece Of Shiny EquipmentAs part of their new brewery, Brew York invested in a lot of equipment, most of which has proven very useful – but not all. They bought a top-of-the-range cask racking machine, for example, but it didn’t prove popular with their brewing team. “All the sales literature convinced us it was the right thing to do to make their lives easier, but they didn’t want to use it,” says Smith. They ended up selling it.A similar story took place when Anspach and Hobday moved into their new brewery on London’s southern fringes. At the time, they were planning to focus more on lager, but the burgeoning success of London Black – now 70 percent of their output – meant that they didn’t have the capacity to do it justice. Horizontal tanks purchased to condition lager were sold.“We’ve had to take a very pragmatic approach, and lager was the first to go because it takes more time to condition,” says Hobday. “We sold the tanks because it’s sad having them sitting there not being used.”
Make Yourself as Independent as PossibleThere has been no more effective example of the value of brewery capital investment than the Pandemic, when breweries with an effective small-pack operation – particularly those who were canning – could better navigate periods when pubs were closed. “We managed to pull out all the stops and get our canning line running just as Covid hit – I’d love to pretend that was a masterstroke, but it was just luck,” says Hobday, who adds that Anspach & Hobday’s canning project had been a few years in the planning.It’s a great example of how capital expenditure can help breweries insulate themselves against economic and supply issues. It was one of the reasons why Gadd believes breweries should invest in a CO2 recovery system: “It’s about ensuring your independence from a supply chain that is notoriously unreliable,” he says.
Don’t sacrifice cash flowAs thrilling and transformative as brewery capital investments can be, they’re of no use if you don’t have the cash to keep the company moving forward at the same time. “When it comes to fundraising, almost all breweries focus on equipment,” says Hobday. “But a huge amount goes on around that, for which you need cash flow.”There are ways of getting your hands on new equipment without buying it, of course. According to Lee Grabham, the other owner of Brew York, that has other advantages too. “When we got our first steam boiler, we leased it, so we got engineering support,” he says. “That would have been £150k or $190k if we’d bought it, but we got a plug-and-play solution. I think it was a wise decision.”
