Consolidation within the local beer world continues apace with the news today that WA breweries Otherside and Nowhereman are to become one.
The announcement comes just a day after we revealed Fox Friday had acquired Carwyn Cellars, with the deal between the Fremantle and Perth-based operations, which is subject to shareholder and regulatory approvals, signed just weeks after the idea was first raised during conversations about the state of the craft beer industry.
It will see Triple-1-Three, which owns Otherside Brewing as well as number of WA venues, acquire Nowhereman’s West Leederville brewpub and associated assets in consideration for shares in the Triple-1-Three.
That brewpub will become an Otherside venue, brewing of Nowhereman beers will move to Otherside’s Myaree production facility, Nowhereman founder Reece Wheadon (above left) and director of operations Pia Poynton (above right) will take on new roles within the business, and their staff are set to be integrated into the new entity too.
“There’s a lot of value alignment and synergy,” Reece says, explaining that a chat about how their respective businesses were travelling led them to realise they would be better off together.
“I didn’t necessarily expect it to be our path, but I’m happy that it is. Partnering with a bigger entity is very appealing to us. We punch well above our weight, but we’re still very small.”
James Legge (above second from left), managing director of Triple-1-Three, which owns Otherside as well as WA venues Freo.Social and Mojos, emphasised the businesses’ common ground too.
“It’s really important when you work to combine businesses that your values and ethics and approach to business are all aligned so that the businesses can come together seamlessly. That’s what Reece and I found over the past few months as we chatted about the potential combination. It made it very easy.”
For those new to both brands, even a cursory glance at their histories offers proof, from their support of the arts and community initiatives to their partnerships with the wider hospitality scene, not to mention a handy knack for picking up awards for their beers both at home and interstate.
What’s more, with Otherside’s brewery and Triple-1-Three’s two live music venues all situated in and around Fremantle, and Nowhereman based in the vibrant Perth suburb of West Leederville, there are advantages to the partnership purely in terms of location.
“Our ambition has always been to partner with a business or businesses north of the [Swan] river or close to Perth CBD,” James says. “When Nowhereman came up and discussions started, that really ticked one of our boxes as a future growth ambition.”
Reece adds: “Our venue is absolutely excellent and, for me, the brand of Otherside is very similar to the brand of Nowhereman.
“This will reinvigorate our venue. They’re not trying to change the vibe or the ethos. It will be a great way of growing up a little bit, get a bit more support, and be able to do a lot of things we’ve wanted to do.”
Of course, while such synergies help, it’s unlikely their conversations would have headed in this direction were it not for the current economic climate and its ongoing impact on the drinks and hospo industries.
“Right at the moment, everyone is assessing where they’re at,” James says. “Post-COVID, it’s a new landscape and obviously consumer trends and spending have come off a bit.
“Everyone is working out where to next, and I think with a contracting sector and heavy competition we will see a number of mergers and acquisitions and exits from the industry.”
Just last week, another WA brewing and distilling company, Running With Thieves, entered voluntary administration, while this week alone both Pioneer Brewery, in regional New South Wales, and Burleigh Barrels, on the Gold Coast, have announced via their socials that they have, respectively, ceased operating and closed their venue.
“My personal view,” James adds, “is that we’ve seen a short-term adjustment and everyone is making adjustments to reflect that. I don’t see it as a long-term downward trend in craft.”
He’s better placed than many in the industry to make such judgement calls. Prior to co-founding music festival company Sunset Events, which ultimately spawned Otherside Brewing, James spent a decade in investment banking – “for all my sins” as he puts it – where he worked in mergers and acquisitions.
“I’ve seen a couple of cycles come and go,” he says. “It’s common in contractions that we see a number of mergers, amalgamations and acquisitions. It would be expected for the industry as a whole to go through this period of consolidation, which is what we are seeing.”
While much of Australia’s brewing industry was dealing with the impact of lockdowns during the early years of the pandemic, in the west the picture was rather different once the national lockdown ended. Not only did the extended border closure keep the state operating relatively normally – if in a bubble – but once their one significant lockdown ended there was a rush among many pubs, bars and bottleshops to rally behind their home state’s independents.
“Definitely we had it better in terms of no long lockdowns,” Reece says, “but what we also had was a crazy boom period. What happened in that boom period was that a lot of people – including Nowhereman – reinvested heavily and didn’t bank the profits. That’s good for the long-term, but as we’ve got this economic downturn and people have invested heavily it’s still having that impact.”
As with their peers on the east coast, the economic impact has mainly been felt in terms of a major slowing in off premise sales, with people still eager to head out and instead make cuts at home. But, with the end of winter looming and footy finals set to kick off, they’re already noticing a “significant upturn” in trade over the past couple of weeks.
Looking ahead, once they’ve integrated Nowhereman into the business, James says Otherside will be looking to expand their portfolio of venues. First up is the opening of their bar at Perth Airport (pictured in an artist's render above), with the intention then to look at more sites not just across Perth and WA but also nationally at some point in the future.
As for how WA’s first craft beer merger since Feral and Nail formed BrewCorp more than a decade ago will be viewed, Reece says some might be surprised, others will understand.
His sidekick at Nowhereman for most of the brewery’s existence, Pia, who becomes the new company’s national sales manager, says: “I hope people will look at it and see it as making sense. It’s hard to find another business with the same set of values.
“It’s obviously very good news. It’s all happened very quickly and it’s just good to be part of something a little bit bigger.”
You may well have noticed a common thread between all three people we spoke to ahead of today’s announcement: the shared values of the two parties. But perhaps this coming together was written in the stars all along.
Nowhereman’s founder isn’t the only Reece involved: Otherside’s head brewer is Rhys Lopez (pictured second from right in photo at top of article). Not only do they share a name (phonetically, at least) but they also share a birthday. And, as of today, a brewhouse too.
You can read about Nowhereman's first half decade to date in this Five Years In Five Beers feature. And we told the story of the other Rhys in a Brew & A early last year after naming Otherside's WA's standout brewery for 2021 in our end-of-year review.
We've also updated the Indie Families section of Who Owns Your Beer? Just as well we got our web developer to make that section editable earlier in the month, eh?