Why Gage Roads-Matso's deal is a perfect beer blend
It was the brewery sale that had to happen.
Unless Matso’s injected strong resources into its business the Broome-based brewery would have stagnated, and, at worst, gone backwards as a beer brand.
So, that’s why yesterday’s sale to Gage Roads Brewing made so much sense.
There is always apprehension among Australian craft beer drinkers when a smaller brewer sells to a bigger proprietor. There are cries of a sell-out and an abandonment of the support base that has backed the brand over many years.
This transaction is a big different. Gage Roads isn’t a multi-national like Lion, Ab-InBev or Asahi. And, in effect, Gage Roads, another WA brewery that emerged from the 2000s, has been producing the vast majority of Matso’s beers for 11 years.
That made the $16 million deal to buy Matso’s a logical step for Gage. And it was a must for Matso’s.
Originating from a 200-Litre brewkit delivering four kegs at a time at the back of a Broome café and art gallery in 2000, Matso’s has grown from Australia’s most remote brewery to a production level of about $2 million litres a year, making it the third largest beer maker in the State.
However, for Matso’s to continue to grow and compete in the fast-growing Australian craft brewing industry, owners Martin and Kim Peirson-Jones needed to inject considerable capital into the operation. Considering they didn’t own a brewhouse capable of raising supply the investment was going to be far greater than they wanted to take on.
So, the Peirson-Jones family knocked on the door of their mates at Gage Roads. They didn’t shop the business on the market. There was a feeling that if the business was to go into safe and careful hands, then Gage Roads was the natural successor.
And it gave Gage Roads the fruit brew options, such as Lychee Beer, Ginger Beer and Mango Beer, that were missing from its portfolio. Apart from the exchange of money and shares, it is business as normal for Gage Roads because all of Matso’s packaged products came from the Palmyra brewery any way.
“Matso’s came to us about taking over the brand because they wanted the business to stay in WA,” said Gage Roads Chief Operating Officer Aaron Heary.
“The (Peirson-Jones) family come on as shareholders and they will be running the venue up in Broome for six years.
“But our sales reps on the east coast will now actively sell Matso’s products and that is one of the big benefits of this deal. It will give Matso’s the chance to be stronger in eastern States markets. There will be no change to the Matso’s branding.
“We feel they are a natural fit because both companies have really grown up together but were producing non-competing products.”
The Sip has followed the extraordinary resurgence of Gage Roads over the past nine months.
In that period the brewery has won contracts for Perth’s Optus Stadium, Sydney Rugby 7s, Western Force and WA Rugby matches and venues linked to the Victorian Cricket Association.
The company’s ASX share price has gone from around 3 cents 12 months ago to 9 cents at the close of business on Friday.
The Matso’s arrangement also complements the “Return to Craft” strategy launched two years ago that prompted the buy-back of Woolworths’ near 25 per cent shareholding, a reduction in contract brewing and success at the Australian International Beer Awards in 2016 when Little Dove was judged Champion Beer.
With the Matso’s products coming under the new umbrella, Gage Roads stable now includes:
Already Gage Roads -
Alby Draught Lager (4.2%)
Alby Crisp Lager (3.5%)
Little Dove Pale Ale (6.2%)
Sleeping Giant India Pale Ale (5.4%)
Single Fin Summer Ale (4.5) – 3.5% at Optus Stadium
Narrow Neck Pale Ale (3.5%)
Break Water Australian Pale Ale (4.5%)
Atomic Pale Ale (4.7%) – 3.5% at Optus Stadium
Hello Sunshine Apple Cider (5%)