Feral has become the latest Australian craft brewing success to sell to Big Beer with Coca Cola Amatil to takeover the WA operation next month.
In a bombshell announcement, Feral boss and founder Brendan Varis said he had decided to sell to ensure the company continued to thrive in an ever-crowded beer market.
However, the move will rock the Australian craft brewing industry.
Feral opened in WA’s Swan Valley in 2002 and steadily grew into a prime driver of the second wave of Australian micro breweries during the previous decade.
The brewery’s Hop Hog has been a perennial favourite in micro beer across the country. Feral has been viewed as an industry leader.
But the announcement of Coca Cola’s purchase follows quickly on heels of the decision of top NSW craft brewery 4 Pines to sell to CUB.
That deal continued to put heat on the Independent Brewers Association, which shuns beer operations linked to the major enterprises like CUB, Lion, Asahi and Coca Cola, which also has a significant stake in NSW craft operation, Yenda.
Varis said after months of negotiation he was comfortable the sale of Feral for Coca Cola was a good result for the brewery.
"Making innovative premium quality beers that are well executed and have high drinkability is what the team here loves to do and what consumers admire most about us. But a growing business is a hungry one. We have a lot of future plans for the business which, if Feral needed to rely on my personal balance sheet to fund, would take years to execute," Varis said
After a lot of in depth conversation, the management team within Amatil’s alcohol business have me totally comfortable that the following three key outcomes would be embraced and delivered by their team as well as few other things further down on our wish list for good measure.
"They are - that great people that had joined our team would be able to continue what they love to do and have their futures preserved. Our mission of making beer that we love to drink and that we have personal respect for remains the primary goal of the brewery. If I continue to be involved with the brewery it is because I want not because I have or am obligated to for any reason.
"This is not a decision that I have taken lightly and not one that I expect to regret one little bit. I have no doubt whatsoever that both our loyal craft beer consumers and the amazing team that we have within Feral brewing will look back in a few years’ time and realize this was the best thing for all.
"The beer business at Amatil is still relatively young. Due to that, their focus is very much about building brands, which is exactly what Feral needs currently. After lots of conversations I became comfortable that they understood exactly what they would be buying when it came to the Feral business.
"With the bigger team behind us we will be able to expand our innovation program and have access to a distribution network that will put our beers in front of thousands more craft beer consumers.
This has been an amazing 15-year journey for us but I feel I have taken the business as far as I can on my own. Having the support of Amatil will allows us to fulfil some of our future goals and ambitions of Feral far sooner than we could have otherwise contemplated."
Nail Brewing, which shares a brewing facility with Feral, will continue to operate from the Bayswater premises.
All current Feral staff, including Varis, will be retained by Coca Cola.
Brendan Varis answers some questions ….
Why did you sell?
We had a lot of future plans for the business which, if Feral needed to rely on my personal balance sheet to fund, would have taken years to execute. The initial conversations were around taking on an equity partner to clean up some debt within the business to allow us to commence on a few new initiatives. As discussions progressed it became clear that full a sale would deliver the best outcome for all.
The beer business at Amatil is still relatively young. Due to that, their focus is very much about building brands, which is exactly what Feral needs currently. After lots of conversations I became comfortable that Amatil understood exactly what they would be buying when it came to the Feral business. They realize that our values of innovation, beer quality and community are fundamental to who we are and our future success, and they’re as invested in that as we are.
What’s in it for Amatil?
We saw a great opportunity to add this world-class high end Australian craft beer range into our portfolio, along with the people behind them. It’s a space we don’t currently play in but is in strong growth, which plays perfectly into our long-term beer strategy to build our business to scale through credible beers that really resonate with today’s consumers.
What will happen to all Feral staff?
They’ll keep doing exactly what they do now but their paycheck will be picked up by someone else.
What does this mean for Feral, will you continue to be part of the IBA?
Having the support and strength of Amatil behind us means we’ll be able to continue doing more of what we’re good at – brewing great beers – and less of the stuff we’re not. Feral will continue to be an independent craft brewery as defined by the IBA and that we look forward to continuing our association as active members and supporters as well as promoting the craft beer industry more broadly
Will the beer be the same?
Yes, there will be no change or our existing beers or the brewers behind them and we look forward to being more prolific than ever before when it comes to new releases
Will Brendan Varis still be involved?
Yes and by choice not because I have been compelled to because a future earnout is what is keeping me coming to work
What does that mean for Feral customers?
Nothing, it’s business as usual, deliveries as usual and invoicing as usual, all still from Feral. Wherever a customer has an existing relationship with Feral, that relationship will remain.
What does that mean for Amatil customers?
It just means access to an even better craft beer portfolio in the future and the support of an upweighted specialist craft beer team.
Will you keep the Feral sales team?
Yes, there’s no change there.
Will there be any changes to the Feral beers or brewery?
No, it’s business as usual.
Will you keep your cold chain delivery?
Yes, cold chain delivery will continue as usual.
Will Feral beers be available in more states?
Feral beers are already available in all states (some with limited distribution), that won’t change. We’ll be looking to upweight distribution in 2018.
Any changes to Feral’s marketing?
As far as our message goes no, we are clear on what that is and it hasn’t changed. Support from Amatil will help us share our story with more people more effectively
What about moving forward?
Ultimately, we’ll look to gain a better understanding of each other’s businesses and customers, work together on the best way to operate going forward, whether that’s introducing a Feral specialist in every state, extending availability in states like QLD, etc, all that’s for the future.