Dixon Buys Hawthorn Brewing Company

February 1, 2017, by Crafty Pint

Dixon Buys Hawthorn Brewing Company

Nobody who pays attention to such things had any doubt that there would be more brewery sales in 2017. But, when we published our New Year's Day article on what we expected to see in the coming year, we imagined any purchase would be akin to that announced in New Zealand yesterday when one of the country's two dominant brewing companies, DB, bought Tuatara

In other words, it would be Lion (Kirin), CUB (AB InBev), Asahi or Australian Beer Co (Coca-Cola Amatil and Casella Wines) – maybe even one of the major retailers – picking up a craft brand. Instead, the first move of 2017 comes from left field with Dixon Hospitality Group buying Hawthorn Brewing Company, the brand originally launched in 2009.

Dixon has been in the news regularly in recent years after embarking on a major spending spree in the hospitality world. Purchases include the Beer DeLuxe business, the Open Door Pub Co (owner of venues including The Crafty Squire and the Great Britain) and the Keystone Group (which owned six Sydney venues including Bungalow 8 and Cargo Bar). And now it has set up a brewing side to the business under the Salt Brewing banner where, from today, Hawthorn will run separately from the hospitality operation, with its three founding members remaining with the company.

"It's really exciting times for us," says Dixon Hospitality's GM Sales and Marketing Marcia English, who was keen to emphasise the distinction between the the hospitality and brewing operations. 

"We have got our commitments with Lion and we need to and want to bring our customers interesting craft beers from other suppliers. This opportunity is about getting involved with something that we think really has a future and bringing that to the market. If the two worlds [hospitality and brewing] can collide, then how fabulous. 

"We love what Hawthorn has done and want it to keep growing in the direction it was heading."

She says the business is "always looking at trends" so looking to enter the craft beer market "makes sense". 

"It's a fun, exciting and sexy part of the industry," she says.

Dixon purchased the Beer DeLuxe business for just shy of $31m last year.

Hawthorn was founded by three mates from Melbourne and has operated as a contract business. Its beers, designed by Hamish Reed, over whose not-so-hot early homebrews the trio that also includes Peter Willis and Darren Milo originally conceived their plan, have won medals here and overseas. In 2014, Hawthorn was named Supreme Champion Brewery at the International Beer Challenge in the UK, a title won last year by Melbourne's Hawkers, and its beers are available nationally as well as in some overseas markets.

Now it is set to benefit from investment from the new owners, as well as additional resources in areas such as sales and marketing. It is likely that Hawthorn beers will appear in all 45 Dixon venues (they are currently in six), while the longterm aim of opening a brewery is "a little bit closer to reality", even if it's not a high priority.

"It's business as usual for our customers," says Hawthorn CEO Peter Willis (pictured top left with brewer Hamish at the Fed Square Microbreweries Showcase in Hawthorn's early days). "It's the same people, the same products and the same management. 

"We were still keen to have skin in the game. Becoming part of a bigger engine means we've got a smaller stake. But certainly in terms of what it means for us, it's an exciting opportunity that will allow us to pursue these additional initiatives that we have been investigating and putting back on the shelf then reopening.

"This hopefully allows me to take off some of those hats you have to wear when running a small business to focus on the key business and getting our beer brands out there to as many people as possible."

He and his business partners were originally approached by Dixon, an approach that Peter says "came out of left field". 

"They saw an opportunity, realised that craft beer is booming and is the key sector in the industry. They've got venues that have craft beer featured very heavily in them. It was seen as a natural extension of their business."

So does the creation of Salt Brewing indicate a desire to build a stable of beer brands in a similar manner to the Dixon Hospitality Group?

"The important thing for us was to find a craft beer that we liked and hold it separately," says Marcia. "That's where Salt came from more than 'Let's see how much we can get under that portfolio'. [Salt has] different management and so forth.

"Who knows what the future will bring? If people embrace what we do we always want to be part of the trends that are expanding. But right now our focus is Hawthorn. We don't want to take on a brand and think how many we can bolt on. Craft beer is about doing it properly and telling the story. If on that journey other things come along or there's opportunities, we're the type of people who will look at it."

What the future is likely to bring in the wider industry will be more purchases or buy-ins – as well as brands disappearing from the market. And, as this demonstrates, there are evermore shades of grey in the industry, with breweries opening venues, venues opening breweries and now a hospitality group buying a brewing company. What Marcia says of the new direction for Dixon is true of the beer industry itself: it is a fun and exciting time.

That said, Peter is playing a very straight bat.

"To be honest, I've not had time to stop and think about it," he says. "You don't just sit on your hands. The business is still running. 

"I'm pretty relaxed about it – it's just another part of business and moving forward."


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