Innis & Gunn - Commercial due diligence
About the brand
Innis & Gunn is a craft beer brand founded in Edinburgh in 2003. The business offers a variety of different styles of beer (including ale, lager and IPA).
It is the #2 craft brewer in the UK off-trade, #1 imported craft beer in Canada and #2 in Sweden. Innis & Gunn exports to c. 30 countries
In 2017, Innis & Gunn reported a revenue of £14.3m and a pre-tax profit of £0.3m.
Pragma was commissioned by L Catterton to undertake a programme of commercial due diligence of the Innis & Gunn business.
WHAT WE DID
To provide L Catterton with comfort they required in their assessment of the business, we focused our work on three key areas:
The strength and future outlook of the UK craft beer market
The extent to which Innis & Gunn’s proposition was differentiated
How Innis & Gunn could best go about developing its proposition commercially
To answer these, we undertook:
A detailed market sizing exercise to estimate and triangulate the size of the under-researched craft beer market
A programme of consumer research: speaking to the brand’s own customers and those of its key competitors in the market (market representative consumer survey and focus groups)
In-depth interviews with industry experts to assess Innis & Gunn’s potential to expand into underpenetrated regions of the UK
Based on our work, L Catterton made a £15m investment in the business in September 2017.
The transaction valued the business at around £55m and the deal facilitated the company’s growth plans in the UK and internationally, including the roll out of its ‘Beer Kitchen’ gastropub /microbrewery F&B concept.