Six months after announcing the acquisition of craft brewery Stomping Ground, Good Drinks Australia (GDA) and the Victorian brewery have walked away from the deal, citing changed conditions as the cause. The mutual decision comes a week after GDA released its H1 F23, declaring unaudited group revenue of $59.2 million, up 80 per cent.
GDA managing director John Hoedemaker said, “Recent conditions have challenged GDA’s underlying business case for the acquisition and would require more resources than initially anticipated to create meaningful value for GDA shareholders.”
Steve Jeffares, and Justin Joiner
(Image: Stomping Ground)
Stomping Ground founder Steve Jeffares said softer trading conditions in recent months had made the benefits of “joining forces… less compelling”.
“We felt it was a smarter option for us both to focus our efforts and resources on consolidating in the markets we know and understand best, our own,” Jeffares said.
The acquisition was announced in August last year after a “long courtship”, with GDA offering $7 million, 4.5 million shares and a trailing five-year performance condition.
Stomping Ground was founded in 2016 by Steve Jeffares, Guy Greenstone, and Justin Joiner. The Collingwood brewery produces around 1.5 million litres a year with capacity to increase to 2.1 million. It also owns The Local Taphouse in St Kilda and a self-branded brewpub in Moorabbin.
GDA is an alcoholic drinks platform, manufacturing, marketing, and distributing its own and partner alcoholic brands as well as operating hospitality venues. Gage Road Brew Co is its flagship label.
GDA: Strong 1H F23 results
Meanwhile, GDA’s half year results reported EBITDA at $6.1 million, consistent with the prior year, with loss of contract brewing contribution and additional sales and marketing spend offset by partner brands and hospitality earnings, as consumers started going out as Covid lockdowns and restrictions were eased and socialising at venues increased.
GDA’s own brands are the Western Australian Gage Roads Brew Co, Matso’s Broome Brewery, and Alby, and Atomic Beer (and venue in Redfern) in Sydney.
Alcoholic cider and seltzer brand Hello Sunshine is a collaboration with Western Australia’s Fringe World Festival. And the company partners with San Miguel, Magner’s, Coors, and Miller.
GDA said its partner brands gained “significant traction” in Q2, delivering a 98 per cent increase in national distribution growth.
Draught beer sales were up 25 per cent and its own brands outperforming the overall beer market and rising 12 per cent, GDA said.
Executive appointments
GDA has appointed Aaron Heary as executive director responsible for Strategy, Brand, and Hospitality. Heary joined the company 19 years ago, since 2004 and has been chief operating officer and chief strategy officer since 2014.
He has more than 25 years’ experience in the liquor industry, with brewing operation credentials from the Institute of Brewing and Distilling London and an MBA from Curtin Graduate School of Business, Western Australia.
As COO he oversaw the expansion of Gage Road’s Palmyra facility to become Western Australia’s largest brewery as well as developing and driving the company’s hospitality business unit and branded hospitality venues.
In 2016, Heary and MD John Hoedemaker developed GDA’s “Return to Craft Strategy”, which has seen the business grow to one of the country’s largest independent craft brewers. According to GDA, Single Fin and Matso’s Ginger Beer are the #1 and #2 independent craft beers nationally.
The pair also built a sales and distribution platform they say was integral to recent distribution agreements with global brands Millers, Coors, Magner’s, and San Miguel.
Heary said, “John and I make a strong team, and we have worked closely together for a long time. We come from very different backgrounds, which complement each other well and we share common values.”
Hoedemaker said, “Aaron has been intimately involved in brand strategy and product development across the portfolio since inception and is well suited to lead the marketing team. He understands our business, the beer sector, and broader liquor industry inside out.”
GDA chair Ian Olson said Heary had been “integral” to the company’s growth, having previously worked at Southcorp Wines and Little Creatures Brewing.
New COO
With Heary’s move, Phil McClintock has been appointed COO. McClintock has been at GDA since 2013, when he began as financial controller. In 2019, he become head of commercial and was responsible for procurement, inventory management, route to market logistics, production cost centres, and revenue management.
Hoedemaker said, “Phil has driven the improvement of commercial rigour, data-based decision making, and revenue management across the business, and most recently he was central to the negotiation and integration of our partnership brands Millers, Coors, and Magners.”
