After hitting the market at the end of 2021, rapidly growing craft beer brand Better Beer is targeting a $20 million capital raising that it says will help drive a five-year target of producing a mammoth 50 million litres of beer annually.
The startup, which has captured the imagination of beer drinkers through clever marketing featuring Instagram comedians and co-founders Jack Steele and Matt Ford, is already on track to produce 10 million litres of beer and hit $45 million in revenue this financial year.
Fellow co-founder and Better Beer CEO Nick Cogger tells Business News Australia that the current half is off to a flying start with weekly February sales stronger than the non-public-holiday weeks of December and January.
“That’s been incredible considering everyone is back at work,” Cogger says. “There’s a lot of room for us to grow in Australia. We’re about 15 months old, and month on month we keep growing.”
Led by advisory group Jarden, the planned capital raise is being supported by one of Better Beer’s biggest shareholders, Mighty Craft (ASX: MCL).
Mighty Craft, which holds about 34 per cent of Better Beer’s capital, clarified to the ASX today that the capital raise is being undertaken independently by Better Beer.
“This capital raise will allow Better Beer to take on the big national beer brands and continue to establish itself as a company in its own right,” says Mighty Craft’s CEO Mark Haysman.
Like Mighty Craft, Better Beer is a ‘capital light’ company that leverages off John Casella’s Australian Beer Co brewery near Griffith to drive its growth plans. The Casella family is renowned for the success of the Yellowtail wine brand, another Australian export success story.
“We’re extremely lucky that we have partnered with Australian Beer Co and John Casella,” Cogger says. “He’s seen our brand go from nothing to one of Australia’s biggest export stories, so he and his team are fully supportive of us and happy to invest to help us grow.”
Cogger describes Australian Beer Co as a ‘significant brewery’ with the ‘capacity and scalability’ needed to drive Better Beer’s growth ambitions. Better Beer, which also produces alcoholic ginger beer, is currently preparing to launch a mid-strength beer in a bid to capture a share of Australia’s biggest beer category.
Better Beer plans to use the $20 million in fresh capital to build on its successful marketing campaign which has been led by The Inspired Unemployed duo who have made the company’s range of alcoholic and non-alcoholic low-carb beers a household name among a younger market.
“We plan to use the capital raised essentially to be more ‘in your face’ with our marketing through winter and into summer and for the next couple of years,” Cogger says.
“We think we’ve nailed it for the sub-40 age group. The 45-plus are harder to convert. They need a lot more trust and they need to see the product a few more times before they make the switch.”
Better Beer’s target of 50 million litres annual production is seen as achievable in just the Australian and New Zealand, where it launched in October last year. However, Cogger says the company may look at other international markets in the next couple of years if it finds the right partnerships.
“We’re going to double down in New Zealand where the early signs have been great. We’re going to local manufacturing there with Heineken and we want to support our partner over there in terms of the marketing spend,” Cogger says.
Better Beer is also taking an ‘aggressive approach’ to tap accounts in Australia which are have been dominated by the two major breweries for decades. Cogger is confident of picking up a ‘few taps’ across the country.
“We have a product that resonates with consumers – a product they want,” he says.
“There is so much potential to grow and expand our foothold in Australia and we plan to invest heavily in more traditional, above-the-line marketing such as TV, radio and outdoor to get more people enjoying Better Beer in bars, pubs and clubs.”
“We’ve consistently highlighted the key attributes of Better Beer as a truly unique asset, capable of competing with the leading beer brands both domestically and in New Zealand,” says Haysman.
“Already one of Australia’s fastest-growing beer brands in almost a decade, we’re optimistic around the outcome of this fundraising round, particularly as Better Beer continues to accelerate and scale, which we expect will be reflected in our future earnings profile.”
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