As rumours about the sale of Balter have swirled around the beer world with growing intensity over the past fortnight, a phrase we’ve heard frequently is: “There’s no smoke without fire.”
And, while experience over the past ten years has taught us there frequently is smoke without fire, this time around the rumours were based in reality: today CUB have confirmed they've bought the Gold Coast-based brewery.
While Balter was always talked about as the likeliest of targets for any big brewer seeking to add another craft brand to their armoury, the news still represents another major shift in the tectonic plates of the Australian beer world. In many ways, however, it feels like the only way we could have closed out a decade of seismic change, one in which the final weeks seem to be fighting to outdo each other: GABS sold to a new owner; Founders First investing in a craft booze producer pretty much every week; Phil Sexton returning to Matilda Bay.
The acquisition of Balter sees the Gold Coast crew join 4 Pines and Pirate Life – plus the aforementioned Matilda Bay and Yak Ales spin-off – within CUB. Should the proposed sale of CUB to Asahi from AB InBev be approved in the new year, the Japanese giant (which has approved today’s sale) will be bringing Mountain Goat and Green Beacon under the same umbrella too.
It also represents another major milestone for the Gold Coast brewers, who only released their first batch of XPA in March 2016. Since then, they’ve expanded rapidly – they currently employ more than 60 staff – while collecting major trophies year in, year out.
And it’s this rapid expansion that two of the brewery’s founders, head brewer Scotty Hargrave and brand director Stirling Howland, told The Crafty Pint lies at the heart of their decision.
“We had to think beyond ourselves – the five or six of us running this thing – and think about the shareholders, our employees and our families,” Scotty says, describing the sale as a chance to “de-stress” the brewery.
“It got to the point where we needed to de-risk the business and protect what we’ve already got. We don’t want to take the fun out of what we do but the responsibility grows.
“When we sold our first 54 kegs in March 2016, if keg sales had dropped ten percent the next week, it’s five or six kegs; you shrug your shoulders. Now, if we have a week where we’re one or two percent off, that’s a lot of money that’s not in the kitty to make sure bills are paid and employees are paid properly.”
Later, he adds: “If we came apart, it would do more harm than us leaving the IBA [Independent Brewers Association].”
As with similar acquisitions in recent years, the team leading Balter will remain in place for the next five years. Scotty says the contracts they’ve signed ensure his recipes and the ingredients he uses in their beers will remain untouched. Furthermore, he says, no Balter beers will be brewed elsewhere in the CUB network without his approval; at this point, he says the only beer likely to be considered for that would be the Lager introduced earlier this year, which was already targeting a more mainstream market.
On the Gold Coast, their focus for 2020 is on installing a new, larger brewhouse and more tanks. Their intention in 2021 is to develop the hospitality side of their business in Currumbin Waters.
“Over the next few years, it’s making sure we’ve got things right here,” Scotty says, claiming expansion overseas isn’t part of their immediate plans. “There’s so much room here to fulfil.”
In the here and now, there will no doubt be much heated debate as to what today means, both within the industry and among the country’s beer lovers, for whom the same feelings stirred by past sales will rise again.
“We understand there might be some disappointment, for sure,” Stirling says of the likely reaction among fans of their beers. “For us, we’ve built this business around good beers for everybody.
“All we can really say is that tomorrow we will come to work again – the same people, the same values, and the same sense of purpose – and we will deliver what we’ve delivered in the past. Just judge us by our work. We don’t intend anytime soon to start letting down our community that’s believed in us to this point. It’s not in our DNA; we’re dead set on delivering that Balter experience.”
Scotty adds: “I’m sure we will get shit-canned here and there. It’s almost like there’s been fatigue about us. Sometimes when we do well and get a trophy we get a slow hand clap, which is one level above ‘Meh’.
“It means the next contender, in purely philosophical terms, to take our spot as number one indie brewery – there’s room for them to step up and have that role.”
While this acquisition strengthens CUB / Asahi’s hand, such moves by the world’s biggest drinks companies aren’t the only way in which ownership structures are changing in the local beer world.
A couple of months ago we wrote about the rise of “indie families” in the local beer world: Gage Roads forming the Good Drinks group of their own brands and Matso’s; Stone & Wood’s Fermentum collective; Tribe’s mix of homegrown and acquired brewing companies. Since then, “craft accelerator” Founders First have expanded their investments in the beer world to include stakes in Jetty Road, FogHorn, Sauce, Ballistic, Slipstream and Sparkke.
“It’s interesting, with Tribe and Founders First there’s a whole bunch off breweries that are circling the wagons or pulling together. What the hell does independent mean? That definition is getting quite blurred,’ Scotty says, adding: “You’ll never see me shit-can any independent beer. [The indie brewers] have just got to keep marching forward.”
Whatever your take on today’s news, the rise of Balter remains a modern phenomenon. Sure, they had a handy start thanks to the involvement of Mick Fanning, Joel Parkinson, Bede Durbridge and Josh Kerr at the outset, back when the foursome teased they were launching Oceans Mist cologne. But it’s no accident this is the first mention of the surfers in this article as, for most people in the beer community, the story very quickly became about the beer and the brand more than any celebrity connection.
For Stirling, who came to Balter from a career that included time with Billabong, he’s taken the opportunity to work with a beer brand – “the greatest gig you can work on” for a brand director, is how he puts it – and grabbed it with both hands.
“I’m just living the dream,” he says.
And for Scotty, well, it’s only eleven years since he got in his car and left a job as a concreter in Canberra to start his first brewing job at Sunshine Coast Brewery. Since then, he’s made a habit of amassing trophies throughout a career that’s taken in Stone & Wood and Byron Bay Brewery before Balter.
“I was very good at concreting but no one gave me a trophy or put me in a hotel room,” he says, laughing.
At the same time, in an interview on this site, he once described the thought of selling Balter to one of the multinational operations as “like bringing a virus into the industry I love”.
Just shy of two years on, he says: “We’ve got to a point where we’ve had to make some pretty grown up decisions that go beyond one person’s ideological view. We had to be more mum and dad about it … make decisions that go above and beyond a stance that was relevant at the time.
“Very occasionally, I’ll sit on a milk crate in the JL and look back and it’s like looking down and, holy shit, we’re a long way from the ground. Once you realise you’re that far up, you realise you don’t have boots on or a rope. We had to take care of that.”
The 2010s have been a momentous time for beer in Australia in many ways, with big brewery acquisitions of smaller brands one element that's sparked as much discussion as any. Here are the key takeovers of the decade to date.
- June 23, 2011 – SABMiller buy the Foster's Group (CUB)
- June 19, 2012 – Lion buy Little World Beverages (Little Creatures and White Rabbit)
- April 24, 2013 – Asahi buy Cricketers Arms
- September 28, 2015 – Asahi buy Mountain Goat
- April 26, 2016 – Lion buy Byron Bay Brewery
- May 5, 2016 – AB InBev merger with SABMiller approved, meaning CUB becomes part of the former
- February 1, 2017 – Dixon Hospitality (since acquired by Aus Venue Co) buy Hawthorn Brewing
- September 22, 2017 – AB InBev (CUB) buy 4 Pines
- October 12, 2017 – Coca-Cola Amatil buy Feral
- October 12, 2017 – Bickford's buy Vale Brewing and Fox Hat
- November 30, 2017 – AB InBev buy Pirate Life
- June 8, 2018 – Gage Roads buy Matso's
- August 14, 2018 – Tribe Breweries Buy Mornington Peninsula Brewery
- August 23, 2018 – Grand Ridge Buy West City Brewing
- July 19, 2019 – Asahi buy CUB
- August 21, 2019 – Asahi buy Green Beacon
- December 5, 2019 – CUB buy Balter
Read an analysis of the sale and its ramifications for the industry here.