The Future Of Black Hops

June 11, 2024, by Will Ziebell

The Future Of Black Hops

The last couple of years have been a whirlwind for craft beer as breweries have closed, merged, entered administration, and been reborn with new – and often familiar – faces at the helm. 

Among the recent spate of voluntary administrations, few have captured the drama of this period quite like Black Hops. After going into administration in March, the future of the Gold Coast-based business looked deeply uncertain, not least when a report from Deloitte showed the brewery to be millions in debt and indicated the business may have been trading while insolvent since late 2022.

Just days before the brewing company was set to be wound up last month, it was bought from administrators by a new entity – Black Hops Craft Pty Ltd – created by a consortium of new and existing shareholders who, last week, announced the appointment of a new CEO well versed in the beer industry.

Nick Boots, or Bootsy as he’s known to many in the industry, has led both Kegstar and Stone & Wood and, more recently, he started a consultancy business for craft breweries. Speaking to The Crafty Pint in the days after taking on the new role, he says the appeal stems from Black Hops having the fundamentals right: “I think the Black Hops business has got so much equity and quality about it,” he says.

So, while plenty went wrong for the brewery – particularly over the last six months prior to administration – he feels there’s a lot right about the core business.  

“Fundamentally, the beers are great, the brand and venues are fantastic, and they have a super team,” he says.

“The right bones are there and, if you look at other craft businesses out there, they lack a lot of key pillars and they are hard to build.”

 

Nick Boots, formerly of Kegstar and Stone & Wood, toasting his new role at Black Hops.

 

In the immediate future, the new team's focus will be on their Gold Coast backyard. The Brisbane venue, which Black Hops bought from Semi-Pro in 2020, will not reopen, however, as they look to increase the presence and sales support for their beers locally.  

“We’ll certainly be doubling down on the Gold Coast and making sure we have better penetration here than we do at the moment,” the new CEO says.

While they don’t plan on ignoring other markets, and already have a national presence courtesy of their G.O.A.T IPA’s ranging across the country, he sees a pathway to growth – for Black Hops and other craft breweries – by finding more customers nearer to home.

“I look at the penetration of independent craft in certain states and it's still so low,” he says. “There’s nothing stopping us from selling three or four million litres just in Queensland, which is a nice business.”

As for the brewing company of today, while it shares a similar name and some shareholders with the original operation, Black Hops Craft Pty Ltd is a new entity from the one Deloitte's administrators stated might warrant further investigation regarding potential insolvent trading. 

The new owners have purchased Black Hops' equipment and brand from the administrators and, from a staffing side, much looks the same too: a few staff have left of their own accord during the transition while Eddie Oldfield, who founded the original Black Hops alongside Dan Norris and Michael McGovern, is part of the senior management group although no longer a director.

“[Eddie] brings an amazing legacy as founder of the business and he's really excited about the next chapter,” Bootsy says.

“The loyalty to the business is amazing. I certainly feel great responsibility too, to return their loyalty and help pave a path for future success.”

Confidence in the brewery’s future has also been shown by existing shareholders who have reinvested to buy the brewery, brand and assets with eyes on the future. 

“They’ve done that because they absolutely believe in it and now they’re going to be far more hands-on,” he says, highlighting what he believes is the new board's capacity to help the brewery move forward.

“It’s a new chapter. There are new owners and, other than Eddie’s continued involvement, there’s really no similarity to the ownership structure and the previous ownership structure.

“[The members of the consortium] come from outside beer and liquor, so they bring some amazing corporate skills and a fresh set of eyes to the business and the industry in general.”

 

 

One ownership group from the original Black Hops that has lost out, however, is the brewery's crowdfunders: the business raised more than $2 million over two crowdfunding campaigns through Birchal.

“A lot of those crowdfunders were investing in very, very small levels,” Bootsy says.

“But, interestingly, we've surveyed them and a lot of them – more than half and probably closer to three-quarters – still want to stay in contact with us and still do want to engage with the brand.

“I certainly feel the pain for the larger investors and that’s something we can’t fix. From an anger and outrage point of view, it was certainly there when the business originally collapsed. But, pleasingly, that’s really died down and we’re putting a lot of work in to stay engaged with that really important group of drinkers.”

According to Deloitte's report to creditors during the period of voluntary administration, the original Black Hops had close to 200 creditors. Judo Bank and the ATO were among the largest but, as with other voluntary administrations in the brewing industry, another group that has lost out is industry suppliers, with the new owners still working through what impact the original Black Hops business going into VA had on those suppliers.

“To be honest, I don’t even fully understand the full quantum of what those suppliers were short paid by the previous owners,” Bootsy says, while adding that meeting and working closely with suppliers was a key priority for him after taking over.  

“I am empathetic to it and I’ve had time on the supply side running Kegstar and do feel the pain. Where possible, we want to continue to work with all those suppliers for many more years and to rebuild those relationships.

“We certainly feel like we've got, if not a legal obligation, we've got a moral obligation to do our best to continue to work with them and rebuild that trust.”

They'll also be looking to reconnect with drinkers too, upping the event schedule at their two remaining venues, and hosting events elsewhere.

“Back to basics is probably a pretty good summary of what the plan is over the next six to nine months.”

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