The cultural cachet of Byron Bay-founded businesses continues to lure investors as yet another brand from the region changes hands.
Just eight days after Universal Store (ASX: UNI) announced the acquisition of fashion brand THRILLS for $50 million, Japan's Asahi Beverages has acquired premium drinks company StrangeLovefor an undisclosed sum.
The deal is also the second acquisition of an Australian drinks brand in less than a week, after coffee liqueur Mr Black was bought by the UK's Diageo.
The beverage group is now based in Melbourne, although the Byron Bay narrative runs thick through its branding with no mention of the Victorian capital in the latest announcement.
It has been almost a decade since the 'adult' soft drink, premium mixer and mineral water business was founded in Byron Bay by mates James Bruce and Stafford Fox, who set out to shake up the Australian soft drink market with eclectic, sophisticated flavours and local ingredients.
From a product range that began with a ginger beer energy 'elixir' with South American caffeinated herb yerba mate, StrangeLove's portfolio of drinks has grown to include Tonic No. 8, Lo-Cal Yuzu, Double Ginger and a range of premium Sparkling Waters.
"So, with little regard for hifalutin concepts like “profit” and “cash flow”, we packed so much ginger into our first product it clogged up the multi-million dollar production line we borrowed to bottle it," the company states in its tongue-in-cheek 'About Us' page, ostensibly written by an AI robot.
"By creating a Ginger Beer so hot it was almost undrinkable we soon realised that there were a lot of really messed up people out there who like to suffer when consuming a beverage.
"We soon developed a cult following though which was ironic because there were lots of actual cults in Byron Bay, some of whom we had previously suspected of following us."
The company then rode the gin boom from 2016, followed by the start of the non-alc wave two years later.
"They say in a gold rush sell shovels. Well, in a gin boom, if there are no shovels to sell, tonic water is a great substitute," the company states.
"We released our Premium Mixer Range in 2016, just as the Craft Spirits industry was exploding.
"First everyone decides they need 335 gin brands, then they decide they are going to quit drinking. Fortunately, we kept to our roots, releasing our award-winning Lo-Cal Sodas in 2018 to almost no fanfare whatsoever."
Co-founder James Bruce says the deal with Asahi - which owns Carlton & United Breweries (CUB) - represents an amazing opportunity to speed up StrangeLove’s mission to revolutionise the adult soft drink market with more imaginative and high-quality beverages.
"With their FMCG (fast moving consumer goods) expertise and long-standing customer relationships in retail, hospitality and beyond, Asahi Beverages will help grow StrangeLove in a way we couldn’t on our own," Bruce explains.
"They share our absolute commitment to quality and we’ve been impressed by how they’ve supported their other craft partners to retain their unique identity and foster innovation."
Bruce says the StrangeLove management team, including himself, will remain in their roles at the business, and are excited and committed to its long-term growth.
"This means the acquisition won’t affect day-to-day operations and nothing will change for our customers and consumers," he says.
"We’ll continue to challenge the status quo with imaginative, innovative and adult flavours, using real ingredients sourced, where possible, from local farmers and producers."
Asahi Beverages Group CEO Robert Iervasi says it is clear Australians want more sophisticated and lower-sugar soft drinks, which has fuelled demand for StrangeLove’s amazing products in recent years. Premium mixer sales have increased 40 per cent over the past three years in Australia, while 'adult' soft drink sales are up 65 per cent off a small base.
"We are really excited about the impact that StrangeLove is going to have in restaurants, cafes, hotels and pubs," he says.
"We expect StrangeLove to really shake things-up in the on-premise premium mixer and adult soft drink space, with a high-quality, Australian-made brand.
"This deal will also strengthen our offer to retailers, which are dedicating more shelf-space to premium non-alcohol beverages. StrangeLove complements our leading portfolio of beverages and we are absolutely thrilled to add StrangeLove to the Asahi Beverages family."
It has been a busy year for businesses born in Byron Bay, which technically only has a population of less than 10,000 people, and 30,000 if you include Byron Shire. Prior to the buyouts of THRILLS and StrangeLove, battery-powered watercraft maker Fliteboard raised more than $30 million to fund its growth, Qantas (ASX: QAN) bought Byron-headquartered travel agency TripADeal, and local fintech Zepto raised $25 million.
Byron Bay-headquartered Smart Energy, founded by two-time Australian Young Entrepreneur Award - Specialist Services winners Elliot Hayes and Beau Savage, has also been on a roll in recent years, powered by a customer-centric business model focused on helping more people make the switch to solar energy. Following success at home, the group has taken its solar and battery business to the UK and US markets.
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