Little Bang Brewing has been sold to Duxton Pubs Group, in a move that will see the Adelaide craft brewery ‘become more widely available and its independence fiercely protected’.
The purchase by Duxton Pubs Group is the latest addition to the rapidly expanding pub group’s business that includes more than a dozen hotels in South Australia.
Duxton Pubs Group Co-Founder Ed Peter says the deal brings together two great South Australian companies doing what they do best – serving up great beers in great venues.
“It means the Little Bang team can grow through our reach in the hospitality space while continuing to brew the amazing beers they are known for.”
“We’re super excited to work with them on growing the Little Bang brand – which will still continue to be available in existing hotels and bottle shops, as well as a host of new ones both within South Australia and nationally.”
Little Bang co-founder Ryan Davidson said the sale came after a process lasting more than a year.
“We’ve been talking to different parties, more or less serious ones and Duxton Pub Group were always high on my list of people to approach because there are quite a new pub group in South Australia with a very progressive kind of attitude that I really liked and really liked dealing with them,” he said.
But they’re also connected to really well-respected publicans Brett Matthews, Martin Palmer and Ed Peter, who’ve done fantastic stuff with hotels, in SA for decades.”
“It’s a really good fit that we’re really happy with. Because it’s, you know, we’re not selling out to a multinational, as so many people seem to think is the only trajectory for these things.
“It’s really, really nice for us to keep it within South Australia. They’re just another great South Australian business, and we have a lot of respect for them as people.
The sale price was not disclosed for the brewery, currently making approximately 400,000 litres per annum.
Hard decision to sell
Davidson said the decision to sell was a challenge and came after the founders had to decide what to do with the business when co-founder Fil Kemp’s family decided to move to Perth where the families were. He said they considered a variety of options including opening a Perth arm of the business and one partner buying the other out.
“In the end, it was impossible to value the business between the parties,” Davidson said.
“It didn’t take long for us to recognise the fact that it was just not possible for us to really value one person’s contribution against another.
“There were several years in the beginning where we took no salary at all and we just gave every spare minute we had to it, and yeah, it just felt right for us to end one chapter nice and cleanly. Sell the whole thing together.”
Davidson said both founders would continue to be involved in the business.
“And now we can each set how we interact with Little Bang from here on.
“So for Fil, he’s going to be over there in Perth. So he’s going to be sort of a contractor that can work with Duxton pubs. For the time being, I’m remaining in South Australia and I’m going to continue as co-CEO, along with Oscar Matthews.”
‘Wacky side project’
Little Bang Brewing was founded in 2014 when the founders, former software engineers and avid homebrewers, growing the brewery from a shed to a small warehouse and then to its current location in Stepney.
“Fil and I never intended it to be a fully functional business that we’d live on,” Davidson said. Anyway, it was a wacky side project for us.”
He said the one thing they hadn’t accounted for was good timing.
“We launched with three styles that no brewery in South Australia had made before with an American barleywine, a steam ale and a Saison.
“Fil was a refrigeration mechanic working in every other pub in town, and I was a beer sales guy, working for an importer, talking to every other pub in town. And we just liked the fact that we were showing off to our mates and being really silly.
“And what we didn’t account for was that, totally by accident, we happen to be in the right place at the right time in SA for that sort of thing to be met with open arms.
“And we’ve been chasing that snowball as it’s grown ever since. And fortunately for us, we’ve surrounded ourselves with people who are much smarter than us on every part of the business as it’s grown.”
Duxton Pubs Group
The Duxton Pubs Group was formed in 2020 with the purchase of historic North Adelaide hotel The Lion. The group announced at the time it intended to create the “most dynamic hospitality group in South Australia,” Adelaide independent newspaper In Daily reported.
It subsequently added hotels across South Australia to the portfolio taking its holding to over 12 properties. Hotel industry newsletter Pubtic reports Duxton’s longer-term ambition is to be a Top 3 pub owner in Australia, behind the pub groups ALH and AVC.
“This is ahead of a possible IPO on the ASX as a potential exit option, within four years,” the site noted.
Breweries have increasingly become a focus for hotel groups, especially since the Federal government extended the excise refund to an annual cap of $350,000.
“It makes a lot of sense for a pub group to have a beer manufacturer as part of the portfolio,” Davidson said.
“That’s why it was such a good fit for them. And for us, because there’s, we’ve got sort of mutual incentive there to work together.
“And this particular pub group, we are really, really fond off because they’re all South Australian. And they’re very progressive, and creative, as opposed to some who have a more cookie-cutter approach.”