Learn how one entrepreneur turned his passion for craft beer into an award-winning business using asset finance and crowdfunding.
After selling his IT business in 2011, Darron Anley decided to take a break. Being a business owner on-and-off since he was 19, he wanted to focus on himself and pursue his interests outside of work.
One of those interests was beer and, after enrolling on a brewing course, Darron soon realised his career break wouldn’t last long. Within two years, he was brewing the first batch of Siren Craft Brew. “I was supposed to be taking time out, but I just kept on being drawn back into setting up my own business. It’s partly where the name comes from – siren mythology is about drawing people in and that’s what it was about for me.”
“I think the reason I became so interested in the craft beer industry was because there was an element of creativity that I hadn’t yet been involved with in my previous business ventures. This was a great opportunity to do something completely different.”
Learning the trade
Once the brewing course was finished, Darron spent two years researching, brewing and putting together a potential business plan. Everything finally clicked into place after gaining significant industry insights after a research trip to an international trade show in the US. Darron was finally able to set up his very own brewery in 2013.
Financing the dream
Like many others who have sold a business, Darron was able to use his own cash to start his brewing company. But Darron wanted to scale his company eventually and understood the limitations of personal finance, particularly given the cost of brewing equipment. As a result, Darron looked into asset finance to buy new kegs and equipment:
“We mostly survived through asset financing being the main backbone of the business, with a few bank loans helping out along the way,” said Darron.
That asset finance allowed Siren Craft Brew to start with a bottling line, which cost around £200,000, before it expanded again due to an increase in demand, securing four additional tanks for a combined £400,000.
But with the popularity of canned beer on the rise – 72% of all craft beer is now in a can, compared to 16% in 2016 – Siren Craft Brew didn’t stop there, and the team decided to put a canning line in too.
To put in a canning line that was able to produce the same level of quality as their bottling line and to match the expansion plans of the business, they needed to invest over £1.8m in new equipment.
To raise the finance required, the team ran a crowdfunding campaign, going out to family, friends and customers for help. This involved presenting the business’ plans for expansion and reasons for the canning line through various platforms.
“We’re really happy with the success of the campaign and how many people got involved. We managed to raise about £1.1m for the business after all the fees.”
Challenges of a crowded market
When Siren Craft Brew launched in 2013, they were one of 1,200 brewers. Now, there are more than 2,500, so competition has got much tougher. Darron has also faced more challenges as the business continues to grow in size.
“When we started out, we received a 50% duty relief from HMRC, so the biggest cost for the brewery was the duty we paid on the alcohol. However, when we grew to a certain size the duty relief stopped and the business suffered a sudden jump in duty tax. We are now paying more than double in the amount of duty that we used to pay, so that along with the competition makes it harder.”
Despite these challenges, the business has grown from turning over £300,000 in its first year, to looking to generate sales to the value of £5 million this year.
Staying at the top of the hops
Since launching in 2013, Siren Craft Brew has received a number of prestigious awards – Champion Beer of Britain and silver at The World Beer Cup, and Best Brewer in England’ to name a few.
“Winning these accolades has been brilliant, but what I’m most proud of is how our team came together to build the crowdfunding campaign. Everything we did around that was all internal. We did our own video, put together the information pack and all the campaign planning.”
Another highlight for Siren Craft Brew was the launch of The Rainbow Project – where brewers across the world come together to create a new beer. Each brewer picks a colour of the rainbow and is tasked with creating a beer that reflects that colour. The campaign is now in its seventh year and will see seven UK breweries collaborate with seven breweries from Europe to New Zealand.
“It’s been a project that has been great fun and really exciting to be part of – seeing brewers from all over the world unite in one project. The first year our chosen colour was red. We discussed at length what red meant from lust to sin to the devil etc. We ended up brewing a beer with 50% apple juice, going back to the very first sin by Adam, brewed with duvel yeast – named after the devil, to symbolise it further.”
The future of Siren
Looking ahead, Darron wants to keep growing the business, expanding into other markets and creating new beers.
Whilst pitching the crowdfunding campaign, they set a second target should they raise over £1.5m – to build a ‘Siren Bar’. Whilst they didn’t reach this goal during the crowdfunding, now that the canning line is in place and the business is doing well, the bar is very much in the future plans.
“The bar was a concept that the whole team was quite excited about. So even though we didn’t raise enough during the crowdfunding campaign, it’s definitely an important part of our next journey. The dream would be to take what we do now and add a solid hospitality business as part of the mix.”
For the immediate future however, Darron’s aim is to focus on what the business is currently doing to ensure they are able to grow it in a positive way.
“I want to be able to give back to the people I employ. Ensure they get the training they need to do the job and whilst doing that, just have fun brewing the beer that got us to where we are now.
What is crowdfunding?
Crowdfunding consists of raising money directly from a large pool of investors who can contribute relatively small amounts. It’s most commonly used by start-ups and small businesses looking for backing for a business plan and the marketing exposure that listing on a crowdfunding platform brings.
Considering crowdfunding? Read The Business Finance Guide’s 8 top tips on creating a successful crowdfunding campaign.
Finance at every stage
Business financing is not a one-off decision, but an ongoing and evolving situation. No decision can be made in isolation to the businesses journey. Find out more about what options are suitable now and what might work at another stage.
More support to your inbox
ICAEW publishes daily, weekly and monthly emails offering viewpoints, interviews and features that make the connection between global economic issues, chartered accountancy, individual members and business.