The owners of South Australia’s Beer Garden Brewing have put the brewery up for sale.
Co-owner Mark Butterworth is selling the brewery, including its freehold site at Port Lincoln, as well as the brewery brand, equipment and IP as he separates from his partner and co-owner.
“The business is 100 per cent sustainable and is set for growth,” Butterworth explained.
“The hard work has been done. The brewery is brewing great beer, the venue highly-regarded and set for growth, distribution is an untapped opportunity as well as expanding the offering of the kitchen.
“Beer Garden Brewing is a local business of relevance to Port Lincoln and the lower Eyre Peninsula, and if not for the divorce, it would be a business I would have loved to own and operate to my last breath.”
Selling Beer Garden
Beer Garden’s case is a sad one, but not unusual in the industry where smaller businesses are often owned with family or friends, putting pressure on existing relationships.
In the case of Beer Garden, running the business put added pressure on the relationship of the founders.
“The sale has come about due to divorce, as my ex-wife is my sole business partner. It’s been a really tough time personally and is something that we tried to work through but were unable,” Butterworth explained.
“The sale is in no way linked to business performance, the business is performing really well.
“It’s been on a steady growth trajectory pre-COVID and after the initial COVID tough-times has rebounded better than expected. Regional tourism is growing significantly due to bans on international travel and this won’t change for some time,” he said.
Financially extricating themselves from the Beer Garden also proved to be difficult, highlighting the need for new and existing breweries to have clear legal and financial recourse to separate from the business in times of crisis.
“To fund the brewery we utilised personal funds, a family trust, self-managed superannuation and the going concern of a business” Butterworth explained.
“This proved to be a relatively complicated structure when looking to sell out to the other business partner.
“This was all set up without a view of ever selling the business. The structure made it hard to consider one owner buying the other out, but I don’t anticipate any issues with selling the whole business.”
What’s for sale at Beer Garden?
Based in Port Lincoln, Beer Garden Brewing was founded in 2015, and has become an established venue in the region.
“Our main customers are a fantastic combination of Port Lincoln and indeed Eyre Peninsula locals, SA and national tourists, and formerly international tourists,” Butterworth explained.
“A typical week would see over 500 or so customers, with a big week over 1,500.”
With a commercial kitchen and pizza oven at the 3,500 m2 site, as well as parking and a large beer garden, the brewery is a strong hospitality asset too, he said.
Seventy-two solar panels, a Tesla charger and 40,000 litres of rain storage add to its sustainable credentials.
In addition to a cool room for draught or packaged beer in its 960 m2 building, the brewkit is a combination of equipment, including a 12hL gas-fired kettle, 12hL lauter, 12hL whirlpool, three DME fermenters and another three from A&G, a brite tank. It also includes a 25hL hot liquor tank, and a glycol chiller.
Butterworth suggested that a brewer or a non-brewer could take over.
“Take full control and work day in, day out or step back and have staff take that on. The choice is the new owner’s to make” he said.
“A new owner could expect a business that is fully sustainable commercially, with growth opportunities in distribution expansion, events, collaboration opportunities.
“The brew team is established and a new owner would need not be a brewer, just someone passionate about owning a brewery.”
Founding the brewery
Butterworth, a former chemical engineer, relocated with his former partner Janie to Port Lincoln in 2015.
Not an area with a lot of work for chemical engineers, Butterworth committed himself to identifying a business that would allow him to spend time with his kids, rather than FIFO work.
“This is where the concept of the brewery came from. Initially, the concept seemed too good to be true, I mean how many people dream about opening a brewery one day?”
However, the place they had relocated to had a wealth of tourism and no breweries.
“The more I dug into it, realising that in 2015 there wasn’t a brewery between Esperance and the Clare Valley and that there were no plans for one, presented me with an opportunity that I couldn’t pass up,” Butterworth explained.
“I thought I needed to move quickly; to be successful Beer Garden Brewing had to be a first-mover in the market and do so in a way that made it hard to replicate, or silly to do so with such high barriers to entry such as capital cost. Getting the brewery going was hard work. There were multiple hurdles that we faced.”
As other brewers will know, finding a venue is tricky, and multiple sites were viewed and discounted.
“We got it done however and successfully opened on 2nd December 2016, with much help from Stephen Nelsen. I did the Regency Park TAFE course with Stephen and my IBD graduate certificate, which helped immensely.”
Finance proved to be the other issue.
“Finding finance was harder than I thought. Our nominated bank manager was receptive to the concept and spoke of what the bank needed to provide approval. There was no hint of trouble.
“We even summoned up the courage to talk to the local newspaper declaring that Port Lincoln was to have its own independent craft brewery. [Then] we found out on the Monday before it that our bank would not fund the brewery. You’ve got to be kidding me. There was nothing they could do.”
A run-around the banks proved fruitful, and allowed them to complete the project.
“Obtaining development approval was a tougher ask than I thought. We were seen as a venture to be feared, something that must comply with regulations that didn’t at the time accommodate a business such as ours.”
Issues were raised around amenities and constrictions on opening hours and the area on which alcohol could be consumed, but despite this they pushed through and opened, with restrictions.
“This all came to a head after opening our doors, having to close during daylight hours in peak tourist season on a Thursday night when the then-Mayor asked for a beer at 6pm.
“I couldn’t serve him, explained why and with support from councillors the opening hours of the brewery were successfully renegotiated in March 2017. Too late for summer but the battle was won.”
Circumstances quickly improved for Beer Garden.
“Times since have been great. We have achieved what I think is a lot. We opened the first craft brewery on the Eyre Peninsula, and within 18 months of opening, we won Champion IPA for our Cage Diver IPA and Champion Wheat Beer for our Section 49 Wheat Beer at the Adelaide Beer and Cider Awards, edging out some big hitters in the craft beer scene.”
Despite the upcoming sale and the challenges that came with their split, Butterworth said it was worth it.
“We’ve established the Beer Garden as a place of relevance and indeed a leader in the community of Port Lincoln hosting live music, art exhibitions, book launches, our own interactive brewery experiences, fundraising events. And [it’s] a place for locals to call home.”
Interested parties should email Mark Butterworth at [email protected].