Ballistic Beer enters administration
Brisbane’s Ballistic Beer Company has appointed external administrators with the aim to restructure and continue trading.
ASIC records show the company yesterday appointed Jason Stone from accounting and advisory firm PKF to handle the administration.
Founder and Director David Kitchen confirmed the appointment.
“The aim of that VA is just to reorganise and restore the balance sheet,” he said.
“And we expect to be out of it in five weeks time, and onwards and upwards.”
The move follows fellow Brisbane brewery Easy Times’ successful exit from administration last month.
“What we expect is in five weeks’ time, the company will be in a much better shape and, in the meantime, Ballistic will continue trading and our product is still available in venues and in bottle shops, national chains, and for wholesale. So that doesn’t change,” he said.
Kitchen said the future of the business’ staff is still to be determined.
“We have to now go through this process of the reorganisation and that will determine ultimately where we finish up. So it’s a process now that really the administrator is spending a lot of time with our GM and coming up with a plan that he believes is a viable option for us to proceed and that he can recommend to close out the VA.”
Ballistic operates a number of breweries and venues in Queensland. ASIC documents show that the administration relates to Ballistic Beer Company Pty Ltd and Ballistic Springfield Pty Ltd, but other related companies including Ballistic Whitsundays, Ballistic Hospitality and Ballistic Bargara are not affected.
Mighty Craft acquired a 10 per cent share in the brewery in 2019 with founder David Kitchen saying at the time the investment would enable the brewery to continue its expansion nationally.
Following the Mighty Craft investment, the brewery set out to create a national footprint, including making its flagship Hawaiian Haze ‘the biggest craft beer’ of the 2020 summer.
Last year, the ASX-listed accelerator said it had planned to divest “non-core assets” and noted its 100 per cent-owned Jetty Road and Mismatch Breweries were “focus brands”, while not mentioning Ballistic.
Brews News understands that Ballistic had been in negotiations with a potential partner to buy Mighty Craft’s share. Kitchen said Mighty Craft was still a shareholder.
“At the moment Mighty Craft remains a shareholder of our business and is not exiting at this time,” he said.
“Like most breweries, we have been on a search for other partners over the last year for further funding to fund growth.”
The administrators have issued a notice for a creditors meeting to take place on 6 February 2023.
Lack of acceleration for Mighty Craft brands
Mighty Craft, then Founders First, trumpeted the partnership in its 2019 announcement, saying it had the capacity to take the brand national.
“As part of the partnership, Founder First’s Indie Craft Collective will take Ballistic products to customers across Australia, helping the brand expand out of its home market of Queensland, initially into Victoria and New South Wales,” the release noted.
“The partnership also provides an opportunity to joint venture for further expansion of Ballistic’s successful brewpub concept outside of Queensland.”
“Backed by the Indie Craft Collective’s growing national sales team, we are confident sales will grow as we take it to a much bigger audience of customers across Australia,” Mighty Craft Managing Director Mark Haysman was quoted as saying.
In a podcast with Brews News last year, Haysman acknowledged that his company was learning to ‘fail fast’ and discussed the challenges facing the craft brewing business.
“It’s really hard to build craft brands, and really hard to build craft brands of scale,” he said.
“But what that does mean is that we’ve had to make some choices…we can’t feed all of the hungry mouths to the same extent.
“So we’re clearly prioritising, within beer, Better Beer with Mismatch, Jetty Road and Hills Cider.”
Haysman acknowledged that despite the company’s confidence, scaling craft breweries has always been difficult but that since Mighty Craft launched it had become increasingly difficult to take brands national because of resistance from the major retailers.
“A lot of national retailers are pushing the craft brands back to their local state markets, it’s really hard to cross borders now and scale them,” he said.
“And we’ve seen that happen, whether that’s with Ballistic or Jetty Road, where initially we launched in the local market, and then we got to a bit more of a national footprint, and then we sort of got pushed back.
“So I think that that support of ‘local’, both from a consumer perspective, but then also from our customers has meant they pushed most of these brands back to their home state.”
Another Mighty Craft partner, also identified as ‘non-core’ to the business, Sauce Brewing has recently announced it was scaling back its plans to brew in Cairns.
Mighty Craft declined to comment for the story.
Mighty Craft has made an announcement to the ASX. The company noted “Ballistic is a minority investment for Mighty Craft, which owns 10% of the company”.
It said the carrying value of the investment on the company’s balance sheet is $2.4 million.
You can listen to our conversation with Mighty Craft’s Mark Haysman below.