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The thirst for a piece of the craft beer industry has seen emerging Gold Coast player Black Hops Brewing set a record for crowdfunding after raising $2.2 million from investors in 24 hours.
The company beat a record for the industry set late last year by Western Australia-based crafty brewery Spinifex which raised $2 million in two days.
Black Hops co-founder Dan Norris says the capital raised will be used to expand production capacity at the company’s Gold Coast operations including upgrading the canning line and fermentation tanks of its main production facility amid solid demand for its products.
“We have a big expansion under way,” says Norris. “We’re doubling the size of everything, and while we already have secured some finance for this, we needed a bit more.”
Norris, who co-founded Black Hops Brewing in 2014 with his friends Michael ‘Govs’ McGovern and Eddie Oldfield (pictured), says he was stunned by the success of the company’s latest capital raising.
“When we first did a crowdfunding to open the original brewery, we raised $18,000 and we were so stoked. It was a lot of money at the time, and we needed it. Now raising $2.2 million in under a day is crazy.
“We thought it would take a while to get there but it all happened within 24 hours.”
Black Hops Brewing, which largely sells packaged craft beer through major channels such as Dan Murphy’s, BWS and Liquorland, has been on a rapid expansion path which Norris says has led to 100 per cent year-on-year growth for the last seven years.
“We just keep outgrowing our equipment and we’re now just stepping up to another level with the new packing line,” says Norris.
Black Hops operates from three locations – two on the Gold Coast including its main brewery operations at Biggera Waters and a taproom in Brisbane following the purchase of Semi-Pro Brewing Co in 2020.
Norris says the expansion program for the Biggera Waters facility, the company’s major production facility, will see capacity grow from 1,500 cartons a day to 7,000.
Black Hops, which last year produced a range of 104 beers, has been making its mark on the craft brewery scene with a number of major industry awards including Champion Large Brewery at the Royal Queensland Food and Wine Show last year.
Black Hops is no stranger to raising capital through both conventional means and crowdsourcing. Its most recent campaign in 2019 set a record at the time after the company raised $400,000 in six days.
“People have been getting behind the brand because we have told our story from the start and we’ve brought everyone on the journey with us,” says Norris.
“People have been following us since we were home brewing in the garage. When we started, Eddie, Govs and I put in $2000 to make our first commercial batch in another brewery.
“Then we put in about $200,000 to get Black Hops in Burleigh going. But we needed investors to make up the difference, so we had two foundation investors at the start and a number of investment rounds since then as we’ve grown.”
While Black Hops has been supported by investors since its early days, Norris says the partners aren’t looking to an IPO for the company any time soon. A trade sale, such as the buyout of Mick Fanning’s Balter Brewing Company by Carlton and United Breweries in 2019, has been ruled out altogether.
“We’re not actively looking at an IPO now, but potentially it could be something down the track,” says Norris.
“We’ve had a lot of people looking to invest in our business. It’s been seven years since our first round and, at some point, they’re probably going to want an outcome (from their investment). But it’s not something that any of our investors really want at the moment.
“Everyone is pretty keen to stay on the journey and watch the business grow.
“I think that would be a better outcome than selling out to the majors. I don’t think that would be the best thing for our brand.”
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