Independent craft beer brands Hawkers and White Bay have announced they will be merging under the newly formed Social Drinks Group, a self-described “entrepreneurial multi-beverage brewing and distribution company.”
From the start of February, the two breweries will begin to operate “under one umbrella,” combining their separate knowledge, experience, and facilities across both Sydney and Melbourne. Already, the Social Drinks Group has raised $1.5 million of new capital to help fuel growth.
Today’s news comes less than a year after Hawkers was placed into voluntary administration only to emerge under existing management one month later. At the time, Founder and Managing Director Mazen Hajjar said Hawkers economic worries occurred in spite of consistent year-on-growth for both Hawkers and Rover brands.
“Post Covid has been a challenging period with bigger players increasingly restricting access to taps and shelf space, combined with broader economic pressures, including increased input costs and taxes,” he said.
Once launched, Social Drinks Group will provide Hawkers and White Bay with joint sales, marketing, supply chain, and finance teams along with shared brewery assets, which includes Hawkers’ 7-million litre facility in Melbourne and White Bay’s 2-million litre facility in Sydney.
Judd Michel, current Managing Director of Heineken-owned Australian distributor Drinkworks, has been named as the Group's first CEO. In his new role, Michel will help guide Social Drinks Group towards its target of “further growth via additional mergers, acquisitions and brand distribution partnerships.”
The launch of the new brewing and distribution company comes at a time of ongoing difficulty for Australia’s independent brewing sector, with CEO of the Independent Brewers Association Kylie Lethbridge forewarning more voluntary administrations to come.
“I don't have a crystal ball, but I do have good insight … I suspect that it's not the end of the VAs,” Lethbridge told Drinks Trade.
“All the chief economists are saying there's not going to be anything eased in the next 12 months … The cost of living crisis hasn't changed at all. In fact, the looming recession is [coming], and we're talking about it even more now, particularly in states like Victoria where it's just going to get tougher this year.”
When asked which independent breweries are most likely to fall victim to the current economic pressures, Lethbridge flagged larger breweries reliant on major retailers, and smaller, local breweries losing tap space to larger beer producers.
“Businesses that have relied on national ranging through major retailers: that market has changed very much. Not only are those large retailers reducing national distribution, but they're also producing more of their own beer and and that's been a real challenge for us,” she told Drinks Trade.
“[Also] the hyper-local model, where the biggest pain point is… the market dominance of the two Japanese-owned multinationals and the fact that the access to market through taps is very challenging because of the power that they have in that space. In the last 12 or 18 months - because their beer category is doing it tough as well - they've clamped down more in that space and so further reduced the market access for small indie brewery breweries to be on taps.”
For more information about Social Drinks Group, click here.
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