Good Drinks, the drinks company that includes beer brands such as Gage Roads, Atomic and Matso's, has acquired Melbourne-based brewery Stomping Ground. The 100 percent acquisition sees the ASX-listed company – the largest independent beer producer in WA – expand its portfolio of drinks brands as well as establishing a foothold in the Victorian market.
It also bolsters Good Drinks' (GDA) position as a major player in the Australian drinks industry, with total production now in excess of 20 million litres pert annum. The intention is to help Stomping Ground move towards their goal of becoming the leading craft beer brand in Melbourne and Victoria.
Stomping Ground founders Steve Jeffares, Justin Joiner and Guy Greenstone (pictured above, left to right, with GDA's COO and chief strategy officer Aaron Heary second from right) are staying on to run the brewing company as well as becoming significant shareholders within GDA. It represents a second major sale for Steve and Guy too, after they sold GABS and the Hottest 100 Craft Beers poll to new owners in late 2019. The Local Taphouse in St Kilda also forms part of the sale.*
UPDATE (22/08): Since publishing the above article, further updates have been released via the ASX, summarised here:
- Good Drinks are set to pay Stomping Ground's founders $7m in cash plus 4.5 million in GDA ordinary shares and a trailing five-year performance component that could net Stomping Ground's founders an additional 3.5 million ordinary shares, up to $8m in cash based upon volume sales, and further payments based on venue performance.
- The goal is to increase Stomping Ground volume sales from 1.5m litres per annum to 4 million by FY27.
- A fifth hospitality venue is set to open in addition to the three existing Stomping Ground venues and The Local Taphouse in St Kilda.
Conversations between the two parties started around 18 months ago, initially around the potential for GDA to become a minority shareholder in Stomping Ground.
"Before COVID, we started looking to raise some capital as we were growing faster than we expected," Steve told The Crafty Pint. "We needed more capital to expand production as well as sales and marketing, but COVID changed everything for us."
This included major delays in the build of their now-open brewpub venue in Moorabbin, as well as leaving their joint venture with Delaware North at Melbourne Airport shuttered for extended periods of time. As the industry restarted following Melbourne's lockdowns, they were approached by GDA, who have been working to build their profile on the East Coast. With Atomic established in Redfern and a new Matso's on the way in Eumundi, Victoria was a key area of interest, and over time the discussions moved towards the two businesses becoming one.
"The fact that they were an independent brand was also a bonus," Steve says. "That was a nice cherry on the cake and feels really good for us now. We're really confident we can help them and they can help us."
For the foreseeable future, the main focus will be on investing in Stomping Ground's existing setup across Melbourne and building the brand's presence in Victoria. All existing staff will be able to stay on, and there's a possibility another couple of Stomping Ground venues will open in the state too. Gage Roads are also looking at opportunities to establish a base for their brand on the east coast following the hugely successful opening of Gage Roads Freo, a 1500-capacity brewery venue on the port city's waterfront.
"We've got a lot of things planned at Stomping Ground – we haven't scratched the surface yet," Steve adds, highlighting their desire to "win the hearts and minds of Melbourne beer drinkers".
"We haven't been out of COVID that long and there's so much more we want to do.
"It feels really comfortable for Guy, Justin and I; we want to get to work on Monday with them powering us."
Aaron confessed to "being the biggest fan of the Stomping Ground guys", citing not just their success in building the brewing company but also the pioneering role The Local Taphouse in St Kilda has played over the years and the manner in which they took the Hottest 100 from a poll within that venue to one of real influence within the Australian beer market.
"Watching their brand evolve over the years has been so enjoyable," he says. "I've drank their beers a lot – they're award-winning beers.
"When you look around and go, 'Who would we partner with?', they've got fantastic beer and great people and a great brand. They're local to Victoria, where we weren't."
As the conversation developed over the 18 months, Aaron says they both came to the conclusion they would be better together as one, rather than with GDA as investors. More details around the acquisition and the new structure will be released to the ASX early next week. With GDA also partnering with mainstream drinks brands Molson Coors, San Miguel and Magners in Australia, taking on Stomping Ground strengthens their craft credentials too.
"Steve, Guy and Justin will continue running Stomping Ground as they have been on going," Aaron says. "That business will largely run at arm's length. We've committed to keeping all existing employees in their existing roles – it's hard to find good people and their business is full of good people so we don't want to start messing with that."
It means Stomping Ground's venues will continue to pour nothing but Stomping Ground beer. And that all of their beer will continue to be brewed at their existing facilities in Melbourne, with GDA investing in the breweries to allow for expanded production over time.
The acquisition also brings together two of the most consistently successful brewing companies in Australia over the past few years. Stomping Ground have rarely left a major awards night without at least one trophy in recent years; they're reigning AIBA Champion Medium Australia Brewery and took out Champion Large Brewery among a swag of awards at the 2021 Indies. In 2016, Gage Roads' Little Dove claimed the prestigious AIBA Champion Australian Beer title.
At the same time, as with many of their peers on the east coast, and particularly those based in and around Melbourne, the past two-and-a-half years have brought huge challenges for the Stomping Ground team. Adding to the unexpected threat posed by the pandemic, Steve had a major heart attack while out riding his bike earlier in the year and was incredibly lucky to survive, with a doctor walking past and able to keep him alive until paramedics arrived.
He's since made a full recovery – and started riding again – and told The Crafty Pint: "I'm as healthy and passionate as I've ever been."
He described the mood among his co-founders as "super-excited", adding: "The response from the team has been overwhelmingly exciting. The fact we are retaining Stomping Ground as an independent brand – we're super proud of the culture we've built over six or seven years so it's great they are on board with us."
Media Release announcing the sale
Good Drinks Australia (GDA), home to popular West Australian brewery Gage Roads Brew Co, has joined forces with Melbourne’s award-winning Stomping Ground Brewing Co with a mission to keep independent beer strong across the country.
The partnership will allow both Good Drinks and Stomping Ground to tap into each other’s skills, experience, and resources, assisting Stomping Ground’s goal to become Victoria’s leading independent craft brewery.
“Independence is a core value for both Good Drinks and Stomping Ground, and we want to keep that alive. Stomping Ground and Good Drinks are stronger together than apart, and that’s why we’ve come together,” says Good Drinks Chief Operating Officer Aaron Heary. “We love what Stomping Ground is all about and the track record of founders Steve (Jeffares), Guy (Greenstone) and Justin (Joiner) speaks for itself. They created the pioneering Local Taphouse craft beer bars, along with the GABS Hottest 100 and GABS Festival, the largest craft beer festival in the southern hemisphere. Their Beer Halls are best in class and Stomping Ground is currently the Champion Australian Brewery in their category at both the Australian International Beer Awards and Independent Beer Awards, so their beers are obviously outstanding too.
“To put it simply, we’re teaming up with great people. Going forward, we can’t wait to work side-by-side and learn from each other, ” continues Heary.
Stomping Ground will largely operate independently within the GDA family with the three founders remaining involved day-to-day and, as part of the deal, become significant shareholders. Stomping Ground’s long-time head brewer, Ashur Hall will continue to run its Collingwood-based brewing operations, while Gage Roads head brewer Ross Brown will maintain his role leading the WA-based brewery.
“There has been a long courtship as we got to know each other, and Guy, Justin and I are excited and confident that, working within the GDA business, will help us both become stronger”, explains Jeffares, who will also sit on GDA’s Executive Group. “There’s a shared ambition for Stomping Ground to become Victoria’s number one independent beer brand so this really is a win for our customers. With GDA’s help, our beers and brand will be more visible and available than ever before,” adds Greenstone.
“We're proud to be remaining independent and really excited about the next chapter with GDA,” says Joiner.
The acquisition follows Little Bang Brewing's sale to the Duxton Pubs Group in June. You can read about that here.
* The article initially stated that The Local Taphouse in St Kilda was remaining with its founders. This was a misunderstanding on our part - the venue is included in the sale.