A much-loved local craft beer company in the U.K. has left die-hard fans disappointed with the news that it's being bought by the world's second largest brewer, but it's also added to a wider debate over whether the trend for small-time breweries could be reaching a peak.
SABMiller announced it was buying London-based Greenwich Meantime for an undisclosed fee and with the deal expected to be complete by June. While it's not the the first small brewer to be snapped up by global firm, it does mark one of the more high-profile tie-ups between two sectors that are vying for market share.
"Yes, craft beer will undoubtedly peak," Jeremy Cunnington, a senior alcoholic drinks analyst at Euromonitor International, told CNBC via telephone on Friday.
"When? it's difficult to say, and is dependent on how both the large and small brewers handle the current trend."
Craft beer is defined by the U.S. Brewers Association as being of a small production capacity, independently owned and using traditional techniques. It's a essentially "premiumization" of the beer market, according to Cunnington who is not surprised that big brewers are now looking to snap up these small microbreweries.
The craze is often associated with bearded hipsters in fashionable neighborhoods like Dalston in London or Brooklyn in New York. The beer itself is usually a hop-based offering such as an IPA (Indian Pale Ale) and more often than not features a strong taste compared to mainstream lagers beers like Budweiser or Heineken.
Multinational beverage firm Anheuser-Busch InBev has dipped their toe into this nascent industry and Molson Coors bought U.K.-based Sharp's Brewery in 2011 for a reported £20 million ($31 million). It's flagship brand called Doom Bar has now become the leading cask ale in the country with an almost doubling of sales volumes, according to Cunnington.
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Some market-watchers have predicted this merger and acquisition spree would happen with the rising price of hops making it inevitable that smaller breweries couldn't operate alone forever. Others, like Boston Beer founder and brewer Jim Koch, say there's plenty more room to grow for craft brewers and told CNBC this month that the industry was booming.
Overall, craft brewed beers are still only a fraction of the beer industry but it's the growth in sales that's attracting the big players. Volumes of beer sales at Meantime grew by 58 percent in 2014, outpacing the U.K. beer market's 1 percent growth during the same period, according to the official press release by SABMiller on Friday.
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Disgruntled locals and beer aficionados took to the social media site Twitter on Friday to voice their frustration at the news. Meanwhile, Sue Clark, the managing director at SABMiller Europe said in Friday's press release that the acquisition would boost the company's strategy to develop beers that "appeal to more people, including women, and which can be attractive alternatives to wine and spirits."
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