Discussion of the sale of Stone & Wood, Fixation, Two Birds and the other businesses in the Fermentum Group to Lion is already in full swing throughout the beer world. Among the issues raised is the impact of the sale on the wider independent beer industry.
Stone & Wood's founders have been outspoken on the issue of independence in the past, on occasion calling out other business owners who've sold to one of the multinationals, while the indie sector has lost its largest player. Stone & Wood, mainly through sales of Pacific Ale, currently account for one percent of the entire beer market in Australia, making their loss another hurdle for the Independent Brewers Association (IBA) to overcome in its stated mission to reach 15 percent market share in the coming years.
As Stone & Wood co-founder has said to this site in the past, "for every brewery that is sold, there are new startups willing to step up and take their place." And it's a point made by IBA chair Peter Philip (pictured below right) in a statement following today's announcement.
"The IBA are obviously saddened by the loss of Stone & Wood from our stable of indie brewers and of course as valued members of our association. Ultimately, the reality is that business owners need to make decisions every day on what is best for them, their shareholders and their staff," he said.
"The Stone & Wood team, including my predecessor Jamie Cook, have given a lot to our organisation and the industry as a whole and we will always be appreciative that they laid the foundation for the independent craft industry to flourish. Personally, I wish Jamie and the team nothing but the best and thank them for being an outstanding example for what indie brewers can achieve.
"Moving forward, this transaction underlines the strength and growing importance of our industry. The growth of indie breweries is testament to the fact that consumer demand is driving growth so although this might appear to be a loss, it simply paves the way for others to grow to fill the void and to take advantage of the trend.
"We know that Australians want greater connections to community, to the people that make their beer and to their local meeting places so the IBA will continue to move forward supporting our members who are delivering great beer and great experiences."
Richard Adamson, co-founder of Young Henrys and an IBA board member, says the sale could represent an opportunity for indie breweries to build their presence.
“The market has changed a lot and, if anything, I think this represents an opportunity for independent brewers, as it should free up some more tap space and clean air now that they’re part of the Lion fold,” he says.
“What it means is that Stone & Wood is no longer the default indie option, so there’s certainly an opportunity for other indie brewers to get in there.”
He points to how far the industry has come since Stone & Wood launched more than a decade ago, expanding from 80 or so brewing companies to closer to 600 today, and highlights the fact most of the industry’s growth is at the small end – something that’s been driven by consumer demand.
“What we do know is that the consumer still wants to connect with their community – whether that's their local brewer or through whatever sphere of interest the breweries are in. That will continue and there will still be a demand for that.”
Hawkers Beer CEO Mazen Hajjar suggests the impact won't be as great as some are suggesting. He feels Stone & Wood have become "quite irrelevant to the craft beer industry for a long time", with craft beer drinkers "moving beyond Pacific Ale and pale ales to IPAs and imperial stouts".
He does feel it's been an opportunity squandered, however.
"They had such a strong early position and could have taken such a lead for the craft beer industry," Mazen says.
Looking ahead, he says: "Every time we lose a member of the craft beer community to the big boys, it's definitely a sad day, but there's a lot of others at the back of the queue, and I'm sure everyone will be wanting to take their taps."
"Sad" is a word used more than once in our chat to Jade Flavell, publican of The Wheaty in Adelaide and benevolent dictator (as opposed to head brewer as we initially wrote) of the Wheaty Brewing Corps.
"The influence that Stone & Wood have had on the Australian independent industry is phenomenal and it wouldn't be where it is without them," she says. "Up until this point, they've conducted themselves impeccably.
"They represented the third way: the alternative to staying really small and flogging yourself or getting big and selling out; they were almost our version of Sierra Nevada. Look at the time they bought back the farm from Lion [after the acquisition of Little World Beverages] – they were heading in the right direction, the last bastion of resistance, so it's very sad."
While Jade is eager to heap praise on the founders and those they work with under the Fermentum banner, she fears the sale "sends a message that it's almost an inevitability that you get to a certain point and you overreach, or overcapitalise, or whatever it is, and this need for perpetual growth gets you unstuck."
She adds: "[Today's sale] represents a kick in the guts for the independent beer industry. I always said they were too independent to sell. They stuck to it and had a lot to say about other sales that I agreed with in terms of the damage to the industry and the brand of independent beer – that independent matters until you get the tap on the shoulder.
"It makes it tougher to tell that story and it just becomes bullshit marketing to build trust and build a market only to cash that in when it's time to sell. It's a shame and every time it happens the hurdles get higher."
At Newcastle’s Grain Store, where they dedicate their taps to Australian independent beer and have poured Pacific Ale since they opened, owner Corey Crooks says it’s a bittersweet day.
“It’s emotional – tap eight has poured its last schooner of Pacific Ale,” he told The Crafty Pint.
“It’s been a big part of what the Grain Store is from day dot. Even pre-Grain Store we were one of their first customers outside Byron.”
Although he won't be ordering Pacific Ale again, Corey says the founders deserve everything they’ve gained and have left a remarkable legacy behind them.
“It was never built to sell and that’s 100 percent genuine and isn’t why they did it,” he says, pointing to the manner in which the beer industry has changed in the last two years, with COVID only adding further stress for business owners.
“You can’t say no forever, and the boys have built a legacy. And, as I’ve said to them, they should be fucking proud. They’ve probably made lesser people better people from the way they’ve acted and dealt with things over their journey.”
For Rich, he says Stone & Wood have made a business call that works for them, taking "the opportunity that presented itself.”
He adds: “It’s their decision to make; it’s the last decision they make as an independent brewer but you aren’t independent unless you are free to make that decision.
“Does it lesson the independent beer story? No, not at all. Look at how many more options there are now.”
He adds that, once lockdown in Sydney ends, he’ll be back in pubs in his own community enjoying the broad mix of options on offer.
“Walking back into a pub and seeing all the independent beer available in [Sydney’s inner west] that wasn’t there when we started is just incredible as a consumer,” he says.
Today's announcement does, however, strengthen Lion's position when it comes to offering venues a diverse lineup of drinks with which to fill their taps. Already they own craft brands including Little Creatures, White Rabbit, Panhead, New Belgium and their Australian brewpub-based operations such as Eumundi, Tiny Mountain and Bevy; to that pool they can now add Stone & Wood, including the Counter Culture range, Fixation, Two Birds and Forest From The Trees plus Fermentum's non-beer offerings.
And the issue of market access and tap contracts is a key area where Mazen believes the IBA needs to focus its efforts, even more so on the back of today's announcement.
"Access to the market is the big fight that we need to be focusing on," he says. "These purchases are another way to block access to the market.
"Equal access for all producers will help the industry grow."