FogHorn Founder Takes Full Control Of Brewery As Mighty Craft Exit Craft

June 4, 2024, by James Smith

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FogHorn Founder Takes Full Control Of Brewery As Mighty Craft Exit Craft

One of the brewers who helped drive the rise of craft beer in Australia has taken full ownership of the brewing company he co-founded almost a decade ago. Shawn Sherlock, who built a reputation as one of the country's finest brewers during his time at Murray's, has acquired the remaining 45 percent of shares in FogHorn Brewery from Mighty Craft, the "craft drinks accelerator" formerly known as Founders First.

While acknowledging the purchase came during a difficult time for the industry, Shawn (pictured above) told The Crafty Pint: “The opportunity to take full control was too good.

“There’s no guarantees with this, just as with any hospitality business right now. But we’ve survived the best part of ten years now – nine of those trading – and in hospitality terms that’s a substantial length of time.

“I’m pretty proud of being able to survive through some pretty tough times.”

Shawn first came to prominence when head brewer at Murray's at a time when craft beer was starting to force its way from the fringes to become the established part of Australian drinking culture it is today. During his period at the helm, the brewery released a phenomenal number of eye-catching beers, from the perfectly-named Icon 2IPA – one of the country's first double IPAs – to an array of sought-after imperial stouts, some of the best Belgian-style beers produced on these shores, and a number of pioneering barrel-aged beers.

After leaving Murray's, he founded FogHorn with James Garvey in October 2014, first opening to the public in April the following year. Operating predominantly as a brewpub close to the heart of Newcastle, it was the first new brewery to open in a city that now has well over half a dozen, pouring beers that saw Shawn continue to pick up trophies at the country's major awards. 

 

Shawn Sherlock, with wife Karen, collecting another AIBA trophy in 2021.

 

In March 2019, his founding partner’s share in the business was acquired by Founders First, before that business transitioned to become Mighty Craft. The move saw FogHorn release a range of beers in cans before, in February 2020, Founders First bought Hunter Valley’s original craft brewery, Potters Brewery and Brasserie. They turned the venue into The Mighty Hunter, with FogHorn taking on the sub-lease for the onsite brewery, Hunter Beer Co. The plan was to expand this second FogHorn brewery in a way that wasn’t viable at the brewery’s downtown city site. Unfortunately, the pandemic had other plans.

“COVID and the two years of intense lockdowns really impacted the whole Mighty Craft business model," Shawn says. "They weren’t on their own [in being impacted] but it certainly impacted their relationships with partners like myself.

“In a lot of ways, we had 12 really good months, and I still don’t have a bad relationship with the Mighty Craft people that have been there from the start.”

When the impacts of the pandemic began to recede, only to be replaced by rising interest rates and other economic challenges, Shawn says the two parties “realised we would be better apart than together”, adding: “But neither of us wanted to do the wrong thing by the other.” Hence the lengthy process to reach this point.

 

Shawn with then Founders First CEO Mark Haysman as they launch FogHorn's first cans in 2019.

 

Mighty Craft first revealed plans to sell its stake in FogHorn midway through last year as part of a divestment strategy to pay down debt. Now the sale has gone through, it means the "craft beer accelerator" has relinquished its final stake in the craft beer industry. 

At one point, the ASX-listed business owned or held stakes in Mismatch Brewing, Jetty Road, Slipstream, Sauce Brewing, Ballistic Beer Co and Sparkke Beverages, as well as FogHorn and a number of local spirits companies. Now, after a series of sales and share buybacks, their only involvement in beer is with Better Beer, the brand they co-founded with The Inspired Unemployed and Torquay entrepreneur Nick Cogger.

In late April, Mighty Craft posted an ASX announcement stating the business was in preliminary discussion to buy the shares in Better Beer it didn't already own. Failure to do so, Mighty Craft noted, would likely make it difficult for the business to continue operating.


The Future Of FogHorn Brewery

 

While Shawn expects to start canning beer again at some point in the future, FogHorn stopped putting beer into pack at the end of last year to instead train their focus on what Shawn calls “a classic brewpub”, tightening the operation in keeping with tougher trading conditions.

Or, as he puts it in suitably nautical terms: “We’ve really tightened our ship and it’s a matter of setting a course to navigate the storm.”

In what’s a common refrain from venue owners around the country, they’re still getting plenty of bums on seats, it’s just that people are typically spending less per head.

“I’ve always believed in the quality of our beer and the quality of our offering,” Shawn says. “The support from the local community in terms of coming out to spend their hard-earned with us is still strong.

“Like everybody in the industry, we’re hoping interest rates come down and people’s discretionary spend rises, and we get back to how it was before COVID."

While he fully expects the current downturn to continue for at least another six months, he believes there's a bright future ahead for FogHorn and the independent beer sector as a whole.

“I’ve always been optimistic about the role of the craft sector in the Australian beer world – it’s not going to go away," he says. "People don’t want to go back to the way it was in the 80s and early 90s before the current wave that we’ve been part of began.

“But I think that seemingly unlimited growth phase was never sustainable; that’s well and truly gone.

“I’m a lot wiser than I was ten years ago. I came out of Murray’s with a strong reputation in the era of ‘Build it and they will come’. It was really exciting. I’ve learned a lot of lessons along the way and am quietly confident for the future.”

The Crafty Pint has contacted Mighty Craft for comment but was yet to receive a response at the time of publication.

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