Two Birds have been acquired by Fermentum, the parent company of Stone & Wood, Fixation, and Forest For The Trees, among others. It comes ten years after founders Jayne Lewis and Danielle Allen decided to form Australia's first female-owned brewing company, with the sale including the Two Birds brewery, tap room and brands.
Jayne (above left) told The Crafty Pint their decision to join the Fermentum family gives Two Birds an injection of the expertise and knowledge at one of Australia's largest independent drinks companies.
“We’ve been chatting to them about the way forwards for Two Birds and effectively we’re joining the family," she says. "Obviously, these guys have got an amazing background in building brands while focusing on passion and quality.”
Jayne says both her and Danielle are remaining focused on the brewery: she'll be the brewery’s production leader while Danielle becomes business development leader.
“It puts us both in a situation where we have a single hat to wear and a singular focus on what we’re doing there," Jayne adds, "and allows me personally to focus on brewing and new product development, and Dani to focus on the sales and marketing of the brand.”
She says they're "super excited for the future", adding: “We didn’t want to give away our baby and we didn’t want it to be part of something that we didn’t trust. We believe so wholeheartedly in Fermentum and the team behind it so, for us, we’re just super excited for the opportunities that we come along and the resources these guys have got.”
Jayne says conversations had been going on between her and Danielle for some time, while Fermentum co-founder Jamie Cook has acted as a mentor of theirs.
“There’s probably been about two years where we’ve been looking at how we take things to the next level and where we take things from there," Jayne says, "but in terms of discussions with Fermentum it’s been very fast.”
In a statement to media, the team at Fermentum said they were impressed by Two Birds' "unique origin story", adding that "by blazing a trail for diversity they have provided an inspiration for everyone in our industry as it strives to develop and embrace diversity and inclusion at a level which is a true reflection of our society."
Jamie Cook, who co-founded Stone & Wood with Brad Rogers and Ross Jurisich, says the Fermentum team have long been fans of Two Birds, not just for their trailblazing story but also their cut-through in a busy marketplace.
“We’ve really loved what Jayne and Danielle have been able to create over a ten year period,” Jamie told The Crafty Pint. “The key piece is not just their beers, but the way they’ve taken that brand to market has been pretty exceptional.”
Two Birds started out as a contract brewing operation before opening their own brewery and venue – the Two Birds Nest – in Spotswood, in Melbourne's west. They've enjoyed major success over the years, picking up a collection of trophies, including Champion Medium Brewery at the 2016 Australian International Beer Awards, on the same night their new stablemates Stone & Wood won Champion Large Brewery.
For Fermentum, which has focused on creating its own brands rather than purchasing other businesses until now, buying the well-established Two Birds with a scalable brewery in Melbourne gives them new opportunities, including the ability to brew Fixation's beers closer to the brewing company's Collingwood HQ.
“It provides us with a very good brand with a unique origin story and a good footprint and geography,” he says. “Particularly from a production footprint; we have Fixation doing quite well in Melbourne, but its home market is quite a way from our key production facility. So being able to brew that beer closer to its market is a big advantage for us.”
Jamie adds that, while they’ve spent more than five years creating new brands at Fermentum, given the way the local beer market has developed, they felt the time was right to look for established brands.
“When we decided to go down the road of diversifying and started building things apart from Stone & Wood, we knew we had the intellectual capacity to be able to develop things from scratch ourselves and we weren’t in the position then to go looking at acquiring things," he says.
“Yes, we’ve taken the natural birth approach to building our family, but now we maybe need to look to adopting a family member or two.”
In a statement posted on their social accounts today, Jayne and Danielle said: "It’s been a long journey and we are so proud to have built The Two Birds Nest from the ground up. A huge thank you to everyone that has believed in us, enjoyed a few of our beers or more and for sharing with us over the last decade.
"We have not only had the chance to work with some amazing, inspirational people, we’ve got to meet so many kind, supportive and encouraging people along the way.
"This is a new chapter for Two Birds and we can’t wait to continue to share our story, embrace diversity and believe in our dreams. Xo"
Major brewery expansion ahead for Fermentum
The Fermentum Group took the opportunity of today's news to announce other new plans of their own by releasing a media statement announcing major expansion plans at their brewery in the Northern Rivers region. Jamie told The Crafty Pint that while it’s still some time away, the new brewery will allow them to make as much as 40 million litres of beer a year as a baseline; up form the 15 million litres of beer they expect to brew this year.
“We're getting close to pushing the button ... we’ve just got to work through our funding options but that’s something we’re going to need to have in place as we continue to grow,” Jamie tells The Crafty Pint.
From the media statement:
We continue to be constrained by our production capacity at our Murwillumbah brewery (pictured) as once again we didn’t get through the Christmas peak without having to allocate stock.
Whilst COVID-19 had an impact on our rate of growth through the first period of lockdowns we have been blown away by our resilience and the traction we have gained as we have grown out of the shutdown period.
Transferring the production of Fixation beers to Spotswood will help us deal with the on-going growth in the short term.
However, looking ahead we know we have to take the next step in building production capacity as brewing in our current location may be unsustainable in the long term.
For some years now we have been working up a long-term solution to our capacity challenges.
Four years ago, we purchased a 34,000 sq mtr block of land just down the road from our existing brewery in Murwillumbah.
Two years ago, we completed a scope and design project which provided us with a shovel ready project plan to build a large-scale brewery capable of producing an annual volume of 40 million litres but expandable over time to around 80 million litres.
Developing the larger brewery will require a major investment and we're currently working through the funding process and are exploring all options – cash reserves, debt, capital raise or a potential IPO.
Given this would be a major investment in the region and would provide employment opportunities and drive much needed local manufacturing growth we believe there is also a role for all levels of government to play in supporting and funding the project.
The initial stage of the brewery build would be around $50M and would involve building out the site and infrastructure, installing a new 200hl brewhouse and packaging lines, plus relocating existing equipment from our current site. Further investment over time would be required to expand capacity in line with growth.
To wrap up
Whilst we were impacted last financial year by COVID-19, we have started this year with real momentum as all of our key brands continue to grow. Our largest brand, Stone & Wood Original Pacific Ale, has continued on with its sustained growth despite the arrival of other brands in the summer ale segment and the demand is showing no sign of easing.
The exciting addition of the Two Birds business which has been funded from cash reserves will provide further potential growth in volume, earnings and opportunities for the team.
We have a strong balance sheet and are well placed to look at other opportunities that fit with our strategy, however the brewery expansion project is now a major focus for us.
Whilst we aren't under immediate pressure, there is a ticking clock there so the work around that investment and funding structure is underway.
This story was updated multiple times on 11/01/21 as we contacted the people involved, with the final update being made at approximately 6:00 pm. Additional reporting by James Smith.