Mighty Craft Limited has announced it has signed an agreement with New Zealand’s DB Breweries and Better Beer Company to distribute Better Beer in New Zealand.
In a statement to the ASX, Mighty Craft said its partnership with DB Breweries, one of the largest brewers in New Zealand and a wholly-owned subsidiary of Heineken, will initially see Better Beer manufactured in Australia and sold into New Zealand, before brewing locally in New Zealand commences in April next year.
Mighty Craft Managing Director Mark Haysman said in a statement that New Zealand offers an opportunity to grow the Better Beer brand on an international scale.
“DB Breweries has extensive sales, distribution, and brand building capability and owns some of the most iconic beer brands in the country, including Heineken,” the statement to the ASX said.
“We are thrilled to be working with such a talented team that share our excitement about the potential of Better Beer.
We also think this deal reinforces the massive achievement of the Better Beer team in launching its ground-breaking brands into Australia. Matt, Jack, Nick and the entire Better Beer team are to be commended for leveraging this success by launching into the New Zealand market.”
Better Beer not just Inspired marketing
Better Beer’s Nick Cogger said his co-founders Jack Steele and Matt Ford, better known as The Inspired Unemployed, were important to the launch into New Zealand but that the brand also stood strongly alone.
“Look, they’re really strong in New Zealand, like really strong,” he said of the pair.
“We went over there month ago to finalise most of this stuff and we walked into a pub at about 10 o’clock at night. And it was sort of like that old Strongbow ad where the bloke whistled, and the whole pubs stopped and just swarm them.
“It was crazy. So yeah, they’ve got a huge profile.”
He said that the strategy will be using the pair to ‘trojan horse’ the product into new markets initially.
“We will be pulling back on their touch points in Australia, which we currently are doing, and we’ll be using them heavily in New Zealand but then sort of pulling back and then we’ll go back to our brand pillars for marketing.”
He said the brand pillars for the Better Beer portfolio were its ‘better for you promise’ of moderation, zero carb in the beer and lower sugar in its ginger beer.
Cogger said DB was a good partner for the launch as it was motivated in the market.
“DB brewers just make sense as well. In terms of the big two brewers, they’re the underdog,” he said.
“So compared to Lion. they don’t have the market share Lion do.
“I think it [Better Beer] gives them something to go up against Lion with and hopefully try and take back some market share over there.”
Changing strategy for Mighty Craft
The move highlights the changing focus of the one-time ‘craft accelerator’.
Launched in 2018 as Founders First as a business that aimed to “support independent craft to grow, whilst enabling them to retain their independence”, the business took stakes in Jetty Road, Foghorn, Slipstream, Sparkke, Ballistic and Sauce, as well as a number of craft spirits producers.
The company listed on the ASX with a $17.5 million raise in late 2019 at $0.50 per share and a valuation of $63.5 million.
However, the company has struggled to cover its significant administrative cost base through its small brewery acceleration strategy in a market that is growing slowly if at all. The business has increasingly pushed a focus on whisky and its distribution of the rocketing contemporary mainstream Better Beer brand.
In its most recent results, Mighty Craft announced Better Beer sales for the quarter reached $7.8 million, with the brand only launching in November 2021.
Mighty Craft has recently announced a strategy to ‘simplify’ its portfolio by looking to “exit non-core brands over time”.
Mighty Craft shares closed on the ASX today up half a cent at $0.18 per share.