Big brewery ownership a two-sided coin for craft brewers looking to sell

BUSINESS NEWS/RNZ

DB Breweries has bought the Wellington craft beer maker Tuatara Brewing for an undisclosed sum, and plans to introduce the brand to a global market.

OPINION: "About bloody time."

Those were the first three words out of my mouth when I saw craft brewer Tuatara had been sold to Heineken-owned DB.

The Paraparaumu company has been linked to all three of New Zealand's big brewing companies - Lion, DB and Independent Liquor - for years, and was always going to be an attractive buy after winning champion New Zealand brewery in 2016.

DB Breweries managing director Andy Routley, left, and Tuatara founder and master brewer Carl Vasta at Tuatara's brewery ...
SUPPLIED

DB Breweries managing director Andy Routley, left, and Tuatara founder and master brewer Carl Vasta at Tuatara's brewery in Paraparaumu.

Rangatira Investments valued its 36 per cent share in Tuatara at $3.6 million in September, suggesting the company is worth $10m - a bargain for one of the biggest craft breweries in New Zealand, but peanuts compared to the money thrown the way of some craft beer companies worldwide recently.

American company Ballast Point sold to Corona owner Constellation Brands for US$1b (NZ$1.4b), while Heineken took a 50 per cent stake in Lagunitas (which is about to start sending beer to New Zealand) in 2015.

READ MORE:
Wellington craft brewer Tuatara says its sale to beer giant DB Breweries is no sell-out
Lion buys Emerson's craft brewery
Tuatara toasts being named New Zealand's best brewery for the second time
Beerhive Blog: Don't worry Panhead beer fans - the sky isn't falling
Founders eyes wider market

Former prime minister John Key checks outs the brew 'Double Trouble' at the opening of the Tuatara Brewery in Paraparaumu.
PHIL REID/FAIRFAX NZ

Former prime minister John Key checks outs the brew 'Double Trouble' at the opening of the Tuatara Brewery in Paraparaumu.

The volume of beer drunk is falling across the world, but craft beer sales continue to experience double-digit growth. It makes sense for big businesses to want a slice of the pie.

While it was about time Tuatara's owners made a deal to sell, the same could be said of DB finally buying a New Zealand craft brewery.

The company has been extremely slow at making inroads into the craft beer market. It is better known for producing Tui than a proper India pale ale.

Panhead Custom Ales founder Mike Neilson stayed on with the company after it sold to Lion, just like Carl Vasta is doing ...
CRAIG SIMCOX/FAIRFAX NZ

Panhead Custom Ales founder Mike Neilson stayed on with the company after it sold to Lion, just like Carl Vasta is doing with Tuatara.

DB does have Monteiths - a brand it resurrected when it needed a new line - but those products filled the space between budget brands and what many consider proper craft beers.

Ad Feedback

DB also created Black Dog. While the beers created at Black Dog's small Wellington brewery are up there with anything else coming out of the city's brewing scene, the core range, which is brewed at DB's larger breweries and sold across the country, leaves something to be desired.

Meanwhile, Lion has been extremely aggressive in the craft beer game. While most of the attention has been on it buying Dunedin-based Emerson's in 2012 and Upper Hutt's Panhead Custom Ales in 2016, it is the revamp of the Mac's brand that is most encouraging.

Matt Duncan, left and John Duncan of Founders Brewery, which sold its brand to Independent Liquor - a move which has ...
MARTIN DE RUYTER/FAIRFAX NZ

Matt Duncan, left and John Duncan of Founders Brewery, which sold its brand to Independent Liquor - a move which has appeared to not go well.

While Monteiths has been stuck in a rut, with any attempts to make a good craft beer product largely failing, Lion has kept Mac's in step with modern beer trends by adding very drinkable hop-foward beers to the range.

While Lion is the template to follow, DB also have one to avoid in Independent Liquor.

While Independent's Boundary Road craft beer range does well in supermarkets, it's deal with Nelson-based Founders Brewery saw a well-respected craft beer brand chewed up and spat out as a depressingly sad product.

That is the danger for craft brewers wanting to cash in. Will you end up like Panhead and see your business continue its exponential growth while retaining credibility with the beer nerds? Or will you become a Founders?

DB have kept Tuatara founder Carl Vasta​ on as an executive brewer and pledged to continue producing Tuatara at the Paraparaumu site, mirroring what Lion did when it snapped up Emerson's and Panhead.

No one has complained about the beer coming out of Emerson's or Panhead since they changed hands, and drinkers ultimately vote with their tastebuds.

So while the loss of a few boycotting drinkers expressing their dismay on social media may hurt in the short term, they should be outweighed by the gains Tuatara can make through added investment and a bigger distribution network.

Unless, of course, DB create another Founders.

Jono Galuszka was the Brewers' Guild of New Zealand's beer writer of the year in 2015.

 - Stuff

Comments

Ad Feedback
special offers
Ad Feedback