Mergers within the brewing industry are not unknown but often they are more of a takeover than a true merger. I was therefore interested to hear that, without fuss or fanfare, a merger had taken place between the Signal and Coalition breweries.
The two breweries have both similarities and differences. Signal was set up in 2015 by South African Murray Roos as the Carriage Brewery, so called because he was then brewing in an old carriage house in his garden. A year later, Charlie Luckin joined and they formed the Signal Brewery, initially only brewing lager. With the beers being lagered properly (they still lager for five weeks), the length of time between production and sales created cash flow issues. As a consequence, they started to brew cask beer, although, at the moment, cask beer isn’t being produced. “We have not abandoned cask beer,” said Charlie, “It’s just that even with our minimum brew length (30 hectolitres) we can’t sell it in time.” Signal have also been brewing for other people for a while, including, at one point, Volden, so working with others is in their DNA. The merger with Coalition is just an extension of that. Signal had been working with Coalition since November and merged with them at the end of March. Charlie explained, “They had clients and no capacity and we had clients and capacity.”
Coalition was set up in 2015 by three friends: Ross, Will and Abhi. Ross had been working in the leisure industry since 2005 but decided that there was a market for independent, quality beer in premium restaurants. Ross said, “Like most good ideas, this started down the pub. Most restaurants I visited just had the usual international lagers. I felt there was a gap. I met Andy Hepworth and we decided to give it a go and see what happens. Andy helped develop some test brews, which enabled me to get some traction. Through my contacts, I questioned the beer list in premium restaurants, explaining food and beer matching.”
With this approach, Coalition started to have some success such as with Zen, a green tea beer, which does well in Japanese restaurants. They then began to get listings in hotels and restaurants, feeding on the key accounts that Ross used to manage. Abhi, who was behind the upmarket Ralph Lauren brand, took charge of the marketing and lives in Paris while the third person, Will, is an independent book publisher. Will commented, “We concentrate on niche markets, such as for soccer fans. I was a home brewer and I like drinking beer so thought, let’s give it a go.”
Until the merger with Signal, Coalition had mainly been brewing at Hepworth’s in Sussex but the merger gave them a permanent home, which was what they were looking for. Although Signal has produced cans for a while, a bottling line was purchased and installed in the unit next door. This was essential for Coalition, whose business is primarily bottles. Ross explained, “Our clients expect premium beer to be in bottles rather than cans.” Their clients include the Ivy restaurant chain and big hotels and restaurants across South East England.
Beer is also produced for Selection. Stirling Mitchell, Signal’s head brewer, explained, “These are a group of SAS veterans. They entered a beer in a competition to get listings in Young’s pubs and won with a 3.4% ABV beer. A donation goes towards a service charity for each beer sold.” They also brew for Noa Bakehouse, “This is a brew bakery on the Isle of Man. They have a small kit on site and use left over bread in their brew. The local Tescos on the island stock it as well as their shop, so it has a bit of a presence.”
With Coalition being around 70% bottles and Signal almost the reverse, there is a symbiotic fit. Signal’s sales are predominantly keg in sports clubs (Queens is one of their customers) and a few pubs. The merger has made the brewery busier; they are double brewing every day, Monday to Friday. This growth has given them the opportunity for more investment. The brewing staff has increased to six and they now own their own HGV. The brewing kit has also increased over the years. They now have twenty fermenting tanks, eight of which are 75 hectolitres. This is a long way from the seven tanks and a brew length of just twelve hectolitres in 2018.
Not all mergers work but this one seems to have all the hallmarks of a bright future at a time when many London breweries are struggling.
Christine Cryne