He had asked the Minister of the Economy, Bruno Le Maire, to obtain an exemption from the licence for on-site consumption, and had requested an envelope of 20 million euros to support the cash flow of companies. “Companies need to have short-term financing facilities”supports Magali Filhue, the general delegate of the professional union Brasseurs de France, which represents 98% of production. According to the specialized site Projet Amertume, in France, in 2023, there were 84 openings of breweries against 97 closures.
At BapBap, Covid, inflation, drop in sales and recovery
“We were in the middle of an investment phase until 2019 with one brewery per day, and significant developments in many companies”continues Magalie Filhue. Taken over in mid-July 2024 by Appie & Cie, an SME from the Paris region with around thirty employees specializing in the production of cider, beer and non-alcoholic beverages, the BapBap brewery illustrates these adventures through its journey. Also made up of around thirty people, the company, which produced around 10,000 hectoliters of beer per year, entered receivership in September 2023.
At the end of 2019, BapBap made an investment “quite massive” in a second production site, in Sucy-en-Brie (Val-de-Marne). A large building designed like a factory, far from the old textile factory in the 11th arrondissement of Paris where the brewery had started in 2014. It was not until the end of 2021 that the state-of-the-art equipment was put into operation, due to the Covid crisis. “The site was ready to go before. We followed this with the second lockdown, depriving ourselves of the café-hotel-restaurant circuit and events, which represented more than half of the turnover.”recalls Clément Ruet, the brewery’s marketing manager.
The company tried to increase its reference in mass distribution and developed a range of cans. Costly initiatives that were not enough to compensate for the loss of volumes. Subsequently, the war in Ukraine followed, with an increase in purchasing prices on raw materials and energy. “It was difficult to increase sales prices on the consumer side. The debt increased. This significantly eroded the margin. Beer, and especially craft beer, is a pleasure purchase, and consumers made trade-offs.”continues Clément Ruet. To rationalize its expenses, BapBap had subsequently concentrated its production on a single site, did not replace the departures, and also sold equipment.
Estimated margin rates down
“With my brewery, I spent 65,000 euros more for my bottle purchases alone in 2023, for 1 million euros in turnover. We are financially strong, but that is not the case for everyone.”illustrates for his part Jean-François Drouin, who directs Les Brasseurs de Lorraine, in Pont-à-Mousson (Meurthe-et-Moselle). “On energy, there are government measures, but they have not necessarily been enough”adds Magali Filhue.
According to a survey conducted by Brasseurs de France among its members in January 2024, nearly two-thirds of breweries reported that their margin rate had fallen compared to 2019. In May 2024, following a survey conducted among 90% of its 850 members (out of a total of approximately 2,600 breweries in France), the SNBI indicated that 60% to 70% of companies said they were worried about their cash flow, and that one in ten was considering the possibility of closing by the end of the year.
Faced with this situation, the models are evolving: “Many openings are in the form of brewpubs, with production and marketing on site”notes Magali Filhue. Some players, such as Newbeers (which brings together three regional breweries), have pooled their sales force. Mergers can also take place. Brasseries Kronenbourg has just acquired a stake in the Brasserie du Pays flamandin the North, to develop its production and its presence on a national scale.
Source: www.usinenouvelle.com
