Broo brews getting rough end of beer stick

February 2, 2017

The jokes and the sniggers behind the brewhouses might have to stop.

 

For the past seven years Broo has been treated by the industry like a fly at a barbecue. Was it really a serious beer maker? It isn’t crafty enough to be craft! Where are they from?

 

Even when it announced plans to list on the Australian Stock Exchange last year there were raised eyebrows around kettles across the country. Only the top level of beer producers go all IPO on the market.

 

And what is Broo selling? Its beers were harder to find than Where’s Wally. It was operating as a gypsy out of a Sydney brewery and its flagship drop was a lager.

 

Yet in spite of shaking heads Broo has forged on with a blazing six months in the beer business. The buy-out of the high capacity Mildura Brewery today gives Broo a base.

 

After all, it already had an identity. That is what it was selling in the first place.

 

The kangaroo. The road sign. The outback. The jingoistic slogan on the Draught. As Dennis Denuto would famously say in The Castle, .. “it’s the vibe”. All the labelling needs is a meat pie and a Commodore to be 100% Australiana.

 

And beer. They have Australia Draught and Premium Lager to go inside the branding. It all adds up to picture book beer marketing for the emerging Chinese middle class.

 

It stunned many seasoned brewers when Broo successfully launched on the ASX at 20c. It was 35c today. 

 

In between there has been a major distribution deal with a Chinese brewer, Jinxing Beer Group late last year.

 

Now Broo, led by businessman Ken Grogan, has somewhere to brew. And bottle. And base the physical side of the operation. Mildura Brewery, which went for $1 million, can deliver 4000 litres a day.

Broo raised $10 million from its listing. So it has already used funds wisely. Buying Mildura Brewery immediately extends Broo’s range of beers and a stronger national distribution system.

 

Some financial investors haven’t been impressed by Broo’s stock market rise.

 

James Mackleboro from the Motley Fool financial website wrote in late October, “I would recommend avoiding an investment in Broo at this stage. Even the company has labelled itself a “speculative investment” in its prospectus and I would have to agree.”

 

Yet Broo can’t be brushed aside anymore like that pesky cousin at Christmas. The Brew Roo is here in a big way now.

 

And from Grogan’s message to the market on the purchase of Mildura Brewery, Broo is already looking at other sites for its growing empire.

 

“Broo is thrilled for this upcoming venture, which represents yet another exciting stage in the growth and development of the Company’s operations within Australia,” he said

 

“The acquisition of the Mildura Brewery pub venue also provides Broo with an exciting extension of our existing business by providing a micro-brewery hospitality venue for Broo to showcase and realise retail margins for its beer products.

 

“This model is in line with the Company’s domestic growth strategy with additional sites currently being evaluated for further expansion.”

 

Stay tuned.

 

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