Black Hops announces new CEO as founder departs

Gold Coast’s Black Hops Brewery has announced the appointment of a new CEO, as the second of the brewery’s three founders departs the business.

In a brief email to investors last week, the company announced the appointment of Nathan Hyde as CEO. Hyde joins the company from Yarra Valley Dairy where he spent three years, leading “the business through a transformational period”.

He has experience in senior management roles, including a period as General Manager, Cider & Alternative Beverages at Little Creatures.

The appointment sees him replace co-founder Dan Norris, who has also stepped down as a director and is leaving the business, the email advised investors.

“Dan has been a significant contributor to the success of Black Hops Brewing since the beginning,” last week’s email advised.

“Dan will remain a shareholder and co-founder within the business and will remain committed as ever for the future success of Black Hops.

“On behalf of the board, we thank Dan for his contribution and wish him all the best in his future endeavours.”

Norris’ departure sees him follow founder and former head brewer Michael McGovern in leaving the business. The company advised shareholders by email last May that McGovern was moving on to work as a brewing consultant.

Co-founder Eddie Oldfield remains in the company as a Director and operations manager.

Norris said he wasn’t sure of what was next for him.

“I love this industry so there’s a huge part of me that wants to stay in the industry but I can’t work for another brewery because I’m Black Hops for life,” he said.

“I like the technology side, and I like content. If I can figure out how to do all of those things in this industry that would be awesome.

“If not I’ll do something unrelated and keep cheering on for Black Hops as the #1 ambassador.”

Challenges of growth

In October last year Norris advised shareholders by email that the company was looking for a CEO, but also that he intended to stay in the business. This week he told Brews News that, in hindsight, Black Hops had outgrown him and staying would create confusion.

“Around 6 months ago the founders and our key investors agreed we wanted some experienced management in the business,” Norris said in an email responding to questions from Brews News.

“Black Hops started as a fun idea at the pub between a few friends, at no point did we think it would get to be what it is today.

“I led the company because we needed someone to do it but I’ve never done anything like this before and to be honest often felt out of my depth,” he said.

He said the initial plan was to bring in a new managing director, assuming there would be a role tailored to his strengths, but he has realised that it could be confusing for the remaining team to stay on.

“Through the process of hiring I spoke to a lot of people who had been through a similar transition including founders bringing someone in to run the company, and people who had come in,” he said.

“The advice was always the same – don’t do it unless you are fully prepared to do it. If you want to bring in new leadership, you can’t hang around in the background, it’s confusing to the team and difficult for the new management.

“You need to give them the space to do what they are experienced in doing.”

Norris said he couldn’t find a role he was comfortable with in the new structure.

“When we worked through it we couldn’t really find a role for me inside Black Hops that made sense,” he said.

“It’s kind of weird for the founder and CEO to stick around and do content or look after the website, it makes more sense for a clear change in management and for me to move on.

“The decision hasn‘t been easy, trust me, but Nathan is great and we think this is the right move given the other discussions we’ve had with people who’ve been through a similar situation.”

Hyde said he felt the business grew surprisingly fast and outgrew the founders.

“With all due respect to the founders, it’s probably just crept up, and then all of a sudden it’s like a lot of founders, ‘now what? I’ve got this quite reasonable size business, and how do we run it?’,” he said.

“And how do we grow? And what do we do from here? And I think that’s probably where the guy’s got to.

“Dan just decided that it was best for the business to move aside and, and resign his position from the company as well as the board.

“So I’ve actually asked for a different structure in terms of board setup because I’m pretty big on governance.”

Hyde said the business would change the configuration of the board, making it bigger with the introduction of skills from outside the business.

Made by 3 mates on the Gold Coast

The departures pose challenges for the brewery that has established itself with the tagline, “Beer, made by 3 Blokes on the Gold Coast” and Hyde told Brews News that this would change in discussions with the remaining Black Hops team.

“One of the things that I’m big on are the guiding principles in terms of values,” he said.

“I think ‘Gold Coast’ is something that’s got to be still within that tagline. I don’t know what the rest of it looks like.

“But I did say to the team, most likely when we do the values of the business, there will be things that drop out of that, that we’ll be looking at for tagline purposes. And I think the company has wanted to change it for quite some time.”

Norris said while the founding story was important, the business was always about the beer.

“But really, for our customers, our story has been about making great beer,” he said.

“The founding story is genuine and awesome but our customers are what continue to make the business thrive and the customers keep drinking the beer because it’s great quality.

“These days Black Hops is a great company and a brand that has grown so far beyond anything we ever expected.

“Genuine brands, that are started by a few mates having a crack, are becoming rarer and rarer in our industry, and I think Black Hops will continue to be a great example of what’s possible if a few mates have a dream and get some help along the way.”

Challenging times for the business

The staff moves come a year after the company closed an equity crowdfunding round that saw it raise $2.2 million on a valuation of more than $67 million.

In a July 2022 update to shareholders, the company projected it faced a loss of $327,000 for the previous year. This represented a turnaround in the six months after the crowdfund, with its crowdfunding prospectus showing the company had made a profit of almost $200,000 for the six months before the raise.

In the October 2022 report to shareholders, the company confirmed it had been a tough year.

It’s been a tough few months though for many reasons, Covid hangover, poor weather, supply chain issues putting prices up, huge marketing spend from our competitors and higher costs getting the production going with the new canning line to name a few,” the report noted.

“We are looking forward to a strong summer to counteract a difficult year so far.”

The October report went on to note that the company was looking at alternative revenue streams.

Still, with growth not hitting the numbers we wanted, we are also in the process of working out some other revenue streams to boost turnover and utilisation of our kit,” it read.

The brewery has subsequently partnered with Coles’ Tinnies home brand to brew Tinnies x Black Hops, released through Liquorland stores, as well as offering contract brewing services.

While providing periodic updates to shareholders, Black Hops has not filed financial reports with ASIC for the 2020/21 and 2021/22 financial years, including for the year prior to its 2022 crowdfunding raise. Crowdfunding legislation requires breweries the raise money prepare annual financial and directors’ reports in accordance with accounting standards within three months of the end of the financial year.

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