The new year has started much as 2023 ended with another brewery entering voluntary administration. Wayward Brewing and the Local Drinks Collective formed with Batch Brewing Co in October 2022 have appointed administrators with the intention of restructuring the business and retaining ownership.
Wayward was launched by Peter Philip in 2012, going on to build a brewery and accompanying venue in 2015. They have won a number of awards for their beers over the years before forming the Local Drinks Collective (LDC) with their fellow inner-west brewers. Batch Brewing Co are not involved in the administration process.
Peter told The Crafty Pint the decision had been taken to return Wayward and the LDC to a cash flow positive state, and that it represented the last stage of restructuring the business. The intention is to put a DOCA proposal to creditors in the coming weeks that would see the founders retain ownership.
"It's not ideal but it is what it is," he said. "We've got to get the business back on the right sort of footing moving forward."
The appointment of administrators comes after the retrenchment of between 25 and 30 percent of the brewing company's workforce last month, with the aim, Peter says, being to "move forward confidently and with a clean balance sheet. To try to get the shit couple of years behind us."
He said the "perfect storm" of inflationary pressures on the one hand that we explored in The Exploding Cost Of Brewing Beer, combined with a cutback in consumer spending and confidence had led the business to this point.
"Everybody I speak to, whether it's venues or another brewery or in hospo, is really suffering at the moment," he said. "What I'm hearing out there is that people are still going out, but they're buying schooners instead of pints, or having one pint instead of two or three; everyone is tightening their belts."
Peter remains hopeful for the future, provided the country doesn't enter a recession in 2024, stating in a media release (which you can read in full below) that he was "confident the financial restructuring will result in a stronger and more resilient business emerging from administration."
"I've got no doubt that beer will bounce back, but it will take a couple of interest rate cuts and a rise in consumer confidence," he added.
"We don't think there's anything fundamentally broken with the model, and I'm still glad we did the Local Drinks Collective – Batch is still very much part of the business.
"We just have to continue to trade as usual for our staff, just continue to tighten our belts, which should see us through to the other side."
Media Release: Wayward Brewing Co. and Local Drinks Collective enter voluntary administration to facilitate financial restructuring
Wayward Brewing Company Pty Ltd (Wayward) and Local Drinks Collective Pty Ltd (LDC), have announced their decision to appoint an administrator to help facilitate a financial restructuring of the business. Wayward operates a craft brewery and taproom in Camperdown, in the inner west of Sydney. LDC is the distribution business formed in 2022 by Wayward Brewing Co and Batch Brewing Co (Batch). Batch is not involved the voluntary administration process and continues to operate as normal.
DBA Reconstruction & Advisory as Administrator is supporting the continued operation of the combined business of Wayward and LDC, so employees and customers should consider it business as usual. There will be no impact to ongoing production, distribution and taproom operations as a result of this appointment.
Peter Philip, as sole director of Wayward and LDC, has taken this step to deal with financial losses the business has accrued in the face of declining consumer demand across the craft beer market combined with significant increases in production costs. Peter and his team are working with the Administrator on a Deed of Company Arrangement (DOCA) proposal, which will provide a framework for the restructuring of the combined business.
They are confident the financial restructuring will result in a stronger and more resilient business emerging from administration.
Peter said: “The last few years have been an extremely challenging time across our industry and for the wider economy. However, we are confident that the restructuring will ensure the business is on firm footing and we can look ahead with confidence.”
Wayward remains committed to maintaining a high standard of service and open communication with all stakeholders during this restructuring process.