Stone & Wood have announced today that they will buy back the 20 per cent of the company that they sold to Little World Beverages, owner of Little Creatures, in 2009.
The brewery’s partners opted to exercise the Change of Control provisions of their agreement with Little World Beverages following its recent takeover by multinational brewery, Lion.
We caught up with one of the founders, head brewer Brad Rogers, on Radio Brews News last week who indicated that at that point the partners still had not reached a decision as to how they would respond to the takeover by Lion. Co-founder Jamie Cook yesterday said there had been plenty of thinking done in reaching their decision.
“It’s been a hard decision,” Jamie said.
“But we had made the decision when we (Brad Rogers, Jamie Cook and Ross Jurisich) worked with Fosters that we didn’t want to work for a big company, which is why we started our own brewery.”
“It was the right decision at the time to sell a share to Little World, and I think we’re making the right decision now.”
It’s a big decision for a small brewery. In many ways it would have been easier to proceed with the Lion stake. Stone & Wood has been battling to keep up with demand for their highly regarded beers and the Byron Bay-based brewery has seen regular expansion since opening in 2008. Working capital is a huge issue for any brewery and, while Jamie wouldn’t discuss dollars, it is believed to be significantly more than Little World Beverages invested three years ago.
Jamie stressed that despite the challenges that come with their approach, they are on the right path for Stone & Wood.
“We made the decision to make all of the beer that we sell,” Jamie advised. “That may not have been the right option for everyone.”
Of course this decision, while valuable to the brand, comes at the cost of ready scalability. Such is the business of brewing.
The announcement from the three founders is below. Peter and I will be speaking with Jamie Cook next week on Radio Brews News to catch up and discuss the news more fully and to get his insights into the state of the Australian beer market. [MK]
*Stone & Wood are a sponsor of Australian Brews News
30th October 2012
From the Founders
As most people would be aware, Little World Beverages Ltd has been a 20% shareholder in Stone & Wood since 2009. Although a public company, Little World was a relatively small and well-respected craft brewer, and also a supportive partner in our business.
Following the recent acquisition of Little World Beverages by Lion (a subsidiary of Kirin) we, the founding shareholders of Stone & Wood, have taken the decision to buy back the Stone & Wood shares that are held by Little World Beverages Ltd / Lion.
Whilst we believe Lion has displayed a thorough understanding of the craft beer market, and are currently better placed to participate in it than any other large brewer in the world, we feel we have made the right decision for our business.
We are very proud of the company we have built since establishing it here in Byron Bay in 2008. It would not have been possible without the support of our shareholders, customers, drinkers, suppliers and the strong team of people working beside us each day, who are all contributing to create the Stone & Wood community.
It’s an exciting time at Stone & Wood at the moment, and 2012 has been filled with many milestones:
- Doubled our production capacity to produce upward of one million litres
- Pacific Ale voted No 1 beer in the Local Taphouse Hottest 100 beers
- Pacific Ale awarded a Silver Medal at the World Beer Cup
- Launched our third beer, Jasper Ale, in our permanent line up
- Conducted a successful seasonal release of Pacific Ale in the UK market
We are only four years into our journey and we have a lot of hard work and good times in front of us. We love playing an active role in developing craft beer in Australia and are looking forward to what lies ahead as we continue to write the Stone & Wood Brewing Company story.
Jamie, Ross, and Brad