Three months, three small breweries sold to Big Beer.
By our estimation that is around 13 million litres of nectar that is now under the umbrella of the world’s major brew producers.
It is incredible that the run started in September when 4 Pines joined CUB. Then Feral was bought by Coca Cola Amatil five weeks later. And now Pirate Life has also followed the path to AB InBev.
After talking to industry heavyweights, putting a wet finger in the air and knowing the beer landscape a figure of around $75-$80 million is likely to have been the cost of acquiring those operations. That doesn’t include Big Beer’s commitment to investing in those businesses’ resources.
And as usual there are the cries about independence. The sales are a blight on the beer landscape. Or moans from punters declaring they won’t drink those beers again because they sold out. Spare us.
However, what it does do is now clearly establish a three-tier brewing industry. Unfortunately, all it might do is confuse the punter at the bottle shop or bar and remember he and she are the most important part of selling beer.
At the top there is Lion and CUB, with a little bit of Asahi, Heineken and Guinness et al thrown in. Their mammoth operations and macro brands VB, Carlton Draught, Tooheys, XXXX Gold, Great Northern etc are everywhere. These are the cheaper, mass distributed brands which control the greater portion of the market.
Then there is the emerging middle class of breweries. These are Malt Shovel, James Squire, Feral, Mountain Goat, Cricketers Arms, Little Creatures, 4 Pines, Byron Bay and now Pirate Life. These are still in the craft beer strike zone even if their ownership by big beer precludes their involvement in the Independent Brewers Association.
Indeed, it is the above beers that are driving the growth in the craft beer segment. They operate as their own brands and identities and the majority of the beer drinking public has little clue about who owns what.
Lastly there is now the minor breweries, albeit including Stone and Wood, whose independence for such a sized operation stands out like a stubborn old master refusing to give in to business demands. And good on them. Stone and Wood is walking the talk and doing it well. But most in this category are battling to get their beers before enough punters. Some truly hope they can be the next Feral, 4 Pines or Pirate Life.
It is doubtful whether too many other micro-breweries will be getting Big Beer cash in the near future. Considering the spate of expenditure over the past 18 months the wallets of the macro breweries might not have any more dollar bills to spare.
But the one aspect about this new Australian beer order is that drinkers have choice. They have more brands, styles, local set-ups and tastes than at any time. 4 Pines, Feral and Pirate Life beers should be getting across more eyeballs because of better distribution channels through the big guys.
And that must be a good result for everyone.
CUB STATEMENT ON CUB BUY OUT OF PIRATE LIFE
Pirate Life is set to continue its unprecedented growth path after being acquired by AB InBev.
Pirate Life co- founder, Jack Cameron, said the partnership would help them share great quality beer with more people and focus on their brand, people and customers by providing team Pirate Life with new facilities and expertise.
“Looking back at what we set out to do when we started in 2015, we aimed ‘to be an exciting and challenging new company brewing internationally recognised beer that excites and challenges the lifestyles and palates of beer drinkers globally.’ Continuing with this philosophy, our new partnership helps us take our dream to a level we could never imagine and push ourselves and our beers further,” Jack Cameron said.
Jan Craps, President of AB InBev’s Asia Pacific South Zone, said Pirate Life’s lifestyle-driven brand complements and contributes to the world’s leading brewers’ existing portfolio.
“With its focus on canned packaging that gives consumers fresh, well-crafted beers and consistent quality, Pirate Life has resonated with Australian beer drinkers who want something different.”
“Pirate Life’s brand is premised on a carefree and relaxed attitude and the ability to create great beers. This approach can only be enhanced with a new brewery, access to ingredients and shared knowledge from other AB InBev brewers in Australia and elsewhere.”
The acquisition will enable further innovation for the brewers through a capital investment in a new brewery, with Pirate Life’s current brewery in Hindmarsh becoming a site dedicated to creating new beers, including sours, seasonal and barrel-aged products.
“We have a lot to offer each other and our joint growth plans will commence immediately with a $10m investment in an exciting new South Australian brewery that will benefit the local economy and see more beer lovers live the Pirate Life,” Mr Craps said.
Pirate Life Co-Founder and Chief Brewer, Jared ‘Red’ Proudfoot, said he looked forward to getting the new brewery built, with better equipment to further drive consistency and quality, and to having the freedom at the Hindmarsh site to get creative.
“The reality is we have run out of capacity at Hindmarsh. With this partnership we’re in a fortunate position to upgrade to a new, bigger brewery while dedicating Hindmarsh to innovate and craft a whole range of new styles to make sure we keep pushing the boundaries and evolving.”
Jack was excited at the opportunity for the Pirate Life team around Australia to be part of a global network of brewers and the benefits it will bring to the team in terms of training, education and career development.
“We’ve always believed in and understood what brewers like AB InBev can contribute to the craft beer world with their experience, knowledge, funding and expertise in every aspect of the industry. Good beer is good beer and we believe that our beers are only going to get better.” Jack said.
“Our whole team are sticking around and it’s invaluable for all of us to be able to benefit from the knowledge and skills of some of the best brewers in the world.”
“We were recently able to visit the 10 Barrel Brewing brewpub in the US which really brought to light the value of global shared learning and their approach to hospitality venues. It’s going to be epic to work with the likes of these brewers and I’m incredibly excited that from next year Pirate Life fans will be able to enjoy our beers at our new venue.”