2017 saw a few well known Sydney pubs go onto the market. Pubs will change ownership from time to time but what kind of opportunity does this present for good beer?
While I’m not privy to negotiations behind the scenes, one possibility struck me as an angle for the growth of good beer in Sydney.
One of the deciding factors in the sale of these venues is the intention of the new owners to run them with the ethos and approach to beer that has led to the success of the pubs. Who is better placed to carry on this work than a brewery?
A Brewery-Owned Pub
Had the pub not been sold when it was, imagine visiting the 4 Pines Taphouse in Darlinghurst. Admittedly that’s a bit of a stretch. 4 Pines has recently announced new venues in Newport and Belrose, and expanded their Manly brewpub.
But for an established brewery like 4 Pines, it’s clear to see that hospitality is important to them. It’s a way of diversifying both their revenue streams and their avenues to market. It’s also a brilliant way to increase brand recognition and deliver beer straight to customers at the highest possible margin.
They’re now well placed to combine both a high volume of packaged production and hospitality offerings for a local market.
We probably need to look outside of Sydney for breweries large enough to make a go of hospitality.
Imagine for a moment that there was a larger independent brewery in Western Australia, that distributes nationally, but might want to put down roots on the east coast.
Or perhaps a much-loved brewery from northern New South Wales that would like to cement itself in the minds of Sydney’s populace. Wouldn’t these, with an injection of capital, be well-placed to have their own satellite taprooms or pubs?
I could see them being popular even if they served all their own beers. Of course, that might not attract the hardcore beer geeks but there’s certainly a sufficient customer base to generate a steady stream of income, not least in places like Darlinghurst and Surry Hills.
Pubs with an existing reputation look like a ripe opportunity for a large craft brewery looking to diversify their revenue stream or expand their footprint.Pubs with an existing reputation look like a ripe opportunity for a large craft brewery looking to diversify... Click To Tweet
Balancing Value And Cost
Capital is the obvious requirement that might present problems. Access to a healthy loan (or, whisper it, investment money) might be a way around this though.
The value of hospitality has long been recognised by breweries around the world, from cellar doors to satellite taprooms. The latter stretches back to tied houses in Europe but it’s now happening more in the US as the likes of Lagunitas open venues far away from their California home. BrewDog and Mikkeller have used bars to grow their brand globally.
Owning a venue is a guaranteed way to get your beer to market. In an increasingly competitive landscape, it seems that hospitality offerings, or direct access to customers, is going to be vital for success.
Whether customers will come is another matter. But there are enough experienced hospitality professionals out there who would be in a good position to give it a crack.
The drawbacks are that once you start purchasing venues, you’re in the real estate industry, as well as the beer and hospitality industry. It makes things a lot more complicated and requires a lot of costs outside of simply buying a venue, equipping it and staffing it.
But the potential for growth through increased access to customers, as well as brand equity and goodwill, could be significant ticks in the “pros” column for a brewery looking to expand.
The Elephant In The Room
Getting to this point, it’s hard not to acknowledge the elephant in the room. Or rather, in Alexandria.
International names such as BrewDog and Goose Island have been rumoured. BrewDog has already stated they’re looking to develop a presence in Australia while Goose Island have made a push in recent months.
It looks like it might go into the hands of a brewery which is probably the best place for it to be. But a popular, large international brand is going to put added pressure on local producers in an already competitive market.
Such a move would certainly be exciting for beer drinkers. I have no doubt that whoever takes over the facility will produce some great beer, as long as they iron out some of the kinks that system has experienced in the past.
It’d just be that little bit better if it was an Australian brewery.
One Day, Maybe
Buying a pub would be a fantastic way to take a regional brand to the national stage, or at least across state lines.Buying a pub would be a fantastic way to take a regional brand to the national stage... Click To Tweet
Big beer names like James Squire already own a number of venues across multiple states but I’d prefer to see something more unique and exciting rather than what they currently offer.
While it wouldn’t be a bad thing for “good beer” if it was undertaken by a brewery like Mountain Goat, I’d love to see it happen with a truly independent brewery.
I think, one day, we might.