Rye River Brewing Company’s parent firm booked significant losses over the past two years after moving to a much-larger facility in Celbridge, County Kildare.
The company reported a loss of €3.5 million in 2016, pushing accumulated losses to more than €7 million after it plunged €4.3 million into the red in 2015.
According to the directors’ report, investment in the new brewery had a “significant impact” on the firm’s cost base. It also experienced cashflow problems stemming from contractual issues with Bavaria’s distribution of its beers in Ireland.
The company’s own beer brands also experienced “disappointing” returns on its investment in North America and Asia. It has shelved plans to hire hundreds of workers and develop a fully fledged visitor attraction.
Despite the hurdles, Rye River Brewing’s co-founder and new boss Tom Cronin told Fora that 2017 is already looking different – with its core earnings back in positive territory.
“Considering the (performance) for 2015 and 2016, it’s a transformational turnaround in a short space of time. The past I can’t change, the future I can,” he said.
“Everyone sets out with an initial business plan to rule the world. In hindsight, it was over-ambitious. There’s no mistaking that.”
A number of company directors resigned in recent months, including co-founders Niall Phelan and Alan Wolfe.
Cronin said the company has undergone “a substantial rationalisation” since October last year.
The company is focused entirely on producing its own brands – rather than contract brewing for other drinks firms. Its core offering is McGargles, but it also produces exclusive beers for Lidl and Dunnes Stores.
“We’re really just focusing on producing quality beer that’s award-winning,” he said.
While Cronin wouldn’t disclose complete figures, he said Rye River is “growing 55% on our produced-brand volume versus last year”.
He said the company is doing well domestically and in Europe, with exports up about 65% on last year.
“We are one of the largest craft producing facilities in Ireland at the moment after less than four years. If we continue to grow at the rate we’re growing, we’ll definitely be challenging the top spot quite soon.”
Nevertheless, the company has pulled the plug on its foray into the American market – which Cronin described as “extremely competitive”.
“There’s a lot of headaches in going to the States. You’re shipping craft beer produced in Celbridge into a warehouse in New Jersey, and you’re trying to ship it to Chicago, Florida and maintain tap.”
“I wish the best of luck to anybody going into the States, but it is extremely difficult.”
The company had announced in 2015 that it would hire 250 peopleand invest heavily in a visitor centre at its Kildare brewery, but those plans have also been put on the long finger as the company looks to remain “fit-for-purpose” for its 38 full-time staff.
The visitor experience is “not a core focus at the moment”, Cronin said, although the company still hosts eight to 10 tours each week.
He said “the potential is absolutely still there” to deliver big employment numbers in line with a visitor centre, but the company is not focused on its hospitality plans for now.
State-backed lender BlueBay last year wrote down the value of a loan to Rye River, which Cronin said had helped the brewer invest €250,000 into its facilities this year.
“It’s not that we’ve stopped and just focused on cost-cutting,we’ve actually been continuing to improve process, quality and fermentation space,” he said.
“More funds like (BlueBay) in Ireland helping out small- and medium-sized businesses is required,” he said. “Without their support and patience, this could have been a very sad story.”