Earlier this year I spoke to Brian Thiel at Renaissance when I was researching the second edition of Beer Nation. I got the sense that things weren’t quite right … just something in the tone of Brian’s voice and the words he used. Now with the news the business is in voluntary administration and up for sale, the conversation makes more sense.
What follows is the extract from the book about Renaissance.

San Diego natives and ex-brothers-in-law Andy Deuchars and Brian Thiel are the driving force behind Renaissance.

They’ve been in business together for 12 years and remain best friends, despite the fact Thiel is now divorced from Deuchars’ sister. “It’s OK because we shared similar views about Andy’s sister. I divorced her and I’m very happily remarried,” Thiel says with a laugh.

Deuchars worked in both the beer and wine industry in San Diego and was lured to New Zealand to work in wine, while Thiel came from an automotive background as a mechanic for Mercedes.

The pair are a perfect team, with the grounded and practical Thiel a good foil for the eccentric Deuchars, who – with his extravagant moustache, kilts and quick-witted one-liners – has been lovingly described as “mad professor”, even though his brewing style is well-grounded in classic British styles, exemplified by the Tribute Barley Wine and Stonecutter Scotch Ale.

“When people say that we are part of this new wave of New Zealand craft breweries, I have to chuckle a little.” Deuchars once said. “There was no wave when we started, it was like a mill pond, really.”

Andy Deuchars and Brian Thiel at the start of their journey.

The name of the brewery says everything about its philosophy, with the aim being to drag Kiwi beer out of the dark ages.

There are plenty of reasons Renaissance has a firm footing in New Zealand brewing history – first, they’ve kept brewing alive at the historic Marlborough Brewing Company site in Grove Mill; they gave 8 Wired’s Soren Eriksen his start in the brewing world by letting their then assistant brewer moonlight his with own brand on their equipment; they’ve twice won the champion small brewery trophy at the Australian International Beer Awards; they were the champion New Zealand brewery in 2013; their unusual squat bottles with distinctive labels that look like a stain-glassed window . . . but above all, perhaps, they were the first company in New Zealand to successfully raise equity through crowdfunding.

Not just the first brewery, but the first Kiwi company.

And they pulled in a remarkable $700,000 on Snowball Effect by selling 12.28% of the company. Each of the 350,000 shares was valued at $2 – well higher than Moa’s NZX list price of $1.25 and valuing the relatively small Blenheim outfit at $5.7m.

Thiel says the brewery went down the crowdfunding path as there were limited options for bringing in capital. “Other equity partners didn’t exist at that time and listing through NZX with a prospectus is a very expensive process to go through – into the hundreds of thousands of dollars – which makes it prohibitive for small companies to access the capital to grow.”

And crowdfunding gives the brewery around 300 “brand ambassadors”.

“There’s a raft of reasons people invested,” Thiel says. “Maybe they knew me and Andy and liked us, or liked the beer . . . but there’s a bunch of shareholders who like beer and they go, ‘Yeah, I own a little piece of Renaissance.’ And they go to their local store and say, ‘Why don’t you have Renaissance?’ It’s great having all those brand ambassadors out there flying the flag, who like what you do, support it and put their money where their mouth is.”

The capital raised gave the brewery a chance to revitalise a somewhat rickety old plant that had that cobbled together Kiwiness to it. “It’s taken nine years of blood, sweat and beers and finally we have outgrown our original equipment and are ready to grow,” Deuchars said in the prospectus. The equipment purchased included extra fermenters, more conditioning tanks, kegs, a keg-washer and a new bottling line. It was a multi-pronged attempt to increase capacity and remove potential bottlenecks in production.

“People talk about bottlenecks – but you fix one bottleneck and it moves somewhere else. So, we addressed our capacity in four different areas but addressed them simultaneously.”

Money also went into sales and marketing, with a goal to grow sales in Auckland and in export – particularly Japan and Britain, where they are part of the New Zealand Beer Collective alongside Yeastie Boys, 8 Wired, Tuatara and Three Boys.

But Thiel’s observations about moving bottlenecks proved only too accurate and the Renaissance story shows that while there’s good growth in New Zealand beer, it’s not always in a straight line ever pointing up. The biggest problem was that the new bottling line performed poorly.

“It didn’t live up to expectations – it was a double-whammy because it cost us money to keep it running and cost us through a lack of product to sell,” Thiel says. “We made the decision to replace bottling line but in the meantime had to suffer along with the old one, which had significant financial impact.”

A decision to swap distributors to attack the Auckland market also led to a minor dip in performance. “Our sales performance north of Wellington hadn’t been poor but we wanted it to improve so we moved to change our distribution to Euro Vintage. We expected a dip as we transitioned from one to other but dip was low for period of time longer than anticipated.

“Those two things in combination – the bottling line and the distribution – have prevented us achieving the goals we set out in the prospectus. That’s not to say we’re not   trending in the right direction, it’s just our circumstances. Potentially we set the bar a bit high; maybe we were overly ambitious with goals we set.

“The upshot is that the company’s growth has been chaotic.”

The other major change that flowed indirectly from the crowdfunding and resulting expansion was a realisation they needed a professional chief executive and management structure to run the business and smooth out that chaotic growth. Thiel had been doing the job as chief executive but was smart enough to understand his skills around operations and logistics; while they made him a great person to keep production running, it didn’t necessarily make him the best person to run the business. It’s a discovery he’s not alone in making as the brewing industry as whole moves from backyard hobby to big business.

“I have lots of skills to offer the company but it got to the point where I didn’t think I was giving my best – it was just a lack of professional training. I’m a great mechanic but I wasn’t formally trained as a CEO or a finance officer.”

In 2016, the company hired Sam Hobson as chief executive, who comes to beer from a background in the fishing industry and aquaculture.

The realities of the fast-moving industry have also seen the brewery add a new range, known as “Boonies”, as in out in the boondocks or semi-rural Marlborough. Those beers are designed to grab a slice of the six-pack market where price point is so critical.

Initially, Renaissance was determined to stay high-end, avoiding the fierce competition in what they called the “commercial craft”, where Mac’s, Monteith’s and Moa fight it out. “This is not where Renaissance sits, rather it has good distribution in the more specialised craft outlets. There is slow growth in these more specialised craft venues, that are moving away from commercial craft and towards more flavourful and expensive craft beers from smaller independent craft breweries – this is the customer base that Renaissance will focus on,” they said in the prospectus. But since then the six-pack market has exploded and they’ve made sure they have a toehold in that space.

Their prospectus also offered an interesting take on the craft hierarchy in New Zealand, with Renaissance labelling three tiers:

Commercial craft: Macs, Monteiths, Boundary Road, Founder’s, Stoke, Hancock and Son, Moa

Established craft: Emerson’s, Tuatara, Epic

Hip craft: 8 Wired, Liberty, Garage Project, Yeastie Boys

The interesting question to Thiel is that the prospectus for the crowdfunding showed the business was doing reasonably well on its small volumes back in 2014 – the company was profitable and ticking along nicely, albeit with equipment from the “dark ages”.

“There was a point before equity crowdfunding when we had money in the bank and we thought, This was pretty cool, and it was less stressful and less chaotic,” Thiel says. “We’ve been around for a long time and done the hard yards and to still be in that struggle-to-grow phase . . . it would be nice if we were a bit further along.

“But don’t get me wrong, I’m not unhappy. What would make me unhappy is not to have a brewery to go to – I love the guys, I love the process, I like the scene in New Zealand – all the fans of good beer.

“Everyone in business wants to make some money at the end of the day but having fun, being respected, making something that other people enjoy – there are all sorts of emotions associated with it that make it so much fun.”

Sadly, the fun went out of it for Deuchars early in 2017. He’d been living in Christchurch with his family and commuting to Blenheim to brew beer. But after the Kaikoura earthquake in November 2016 and the subsequent closures of State Highway 1, Deuchars found the travel to demanding.

“He’s been living in Christchurch for nearly two years and coming back and forth to Blenheim. And now [after the Kaikoura earthquake] that’s become very difficult. Initially he was taking the bus, but as the roads deteriorated with the heavy traffic, now the bus has turned from a six-hour to an eight-hour because of all the road works. The train’s not running. We even looked at flying but that’s expensive, and there just wasn’t an easy solution to that problem”,  Thiel says.

“It’s really disappointing. He’s a great brewer and a great friend. He’s still a director, still a shareholder, still involved in new products and quality control, he’s just not here day-to-day.”

If you want to read more from Beer Nation – Another Round, you can buy it edify.co.nz/beernation

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