Four Pillars GinBusiness

Why Aussie brewers & winemakers are snapping up distilleries

Spirits have been a highly resilient alcohol category in Australia during COVID-19, driving double-digit growth for drinks giants including Campari, Pernod-Ricard, Brown-Forman and Diageo. So it’s hardly surprising that local companies without a presence in the spirits sector have been eagerly acquiring distilleries or diversifying their line-up.

One of the first companies to jump on the trend was Lion, which took a 50% stake in Four Pillars Gin in 2019. It’s been a canny investment, with data revealing Four Pillars is now the fourth biggest selling gin brand in Australia.

Four Pillars was established by Stuart Gregor, Cameron Mackenzie and Matt Jones in 2013, and has gone on to become an award-winning craft gin brand enjoyed by people around the world.

“We are thrilled to have taken the overall number four spot in overall gin sales in Australia,” said Gregor. “If you’d told us five years ago that Gordon’s, Tanqueray and Bombay would be the only gins selling more than us in our home market, we’d have been pretty groovy with that. And the fact that one in three bottles of Aussie gin sold is now Four Pillars is pretty cool as well.”

At the time of the Lion deal, Gregor noted: “The partnership with Lion really is a ripper for us. It would not be untrue to say that more than a few organisations have shown an interest in us over the past 18 months and Lion just felt the best. We like their focus on craft, we like the fact we will be their first and most important craft spirit brand, and we like the fact that part of the deal is a slab of Furphy every month for the rest of our lives.

“We have a terrific relationship with the senior management at Lion and reckon this is the start of a really exciting new chapter for our business.”

Meanwhile, Lion Managing Director James Brindley (above, with Gregor, Mackenzie and Jones) said: “The partnership with Four Pillars is really exciting for Lion, as we venture into new categories outside our core beer business.”

Rival Asahi may soon follow in Lion’s footsteps. The Australian reported last week: “Japanese beverage giant Asahi has given the blessing for its Australian arm to push the accelerator on growth, whether by acquisition or further investment in its manufacturing capabilities, with local chief executive Robert Iervasi ­enthusiastically taking up the challenge to extend his drinks portfolio across the sector.”

Chief executive for Asahi Beverages Oceania region Robert Iervasi said: “We have a very ambitious agenda,” Iervasi said. “Where we see there is a link to our strategy and where it makes sense for us to continue to invest and grow we will do so.

“We continue to explore where there are gaps in our portfolio and where we see gaps we will explore how we will fill that. That may be via an acquisition or could be by a partnership such as we have with PepsiCo … or through product innovation and there are a number of opportunities to close any portfolio gaps that we might need to address.”

d’Arenberg snares Settlers Spirits

The latest winemaker to get a piece of the craft distilleries action is Mclaren Vale winery d’Arenberg, which purchased Settlers Spirits – located about 2km from the winery’s famous Cube – last week.

Settlers Spirits

Settles has been making gin in McLaren Vale since 2014 and now produces 13 different flavoured gins and a range of whisky, rum, vodka and flavoured liqueurs.

“I couldn’t be happier to see d’Arenberg as custodians of Settlers Spirits and to see ownership remain within the McLaren Vale wine region,” owner Rowland Short told InDaily.

d’Arenberg Chief Winemaker Chester Osborn added: “I’m a fan of the diversity and craftsmanship of Rowland’s gins and spirits. The methodical and detailed blending methods represent a philosophical alignment to what we do here at d’Arenberg.

“Rowland has some exciting ideas around product development, and we are excited to work together to bring those ideas to fruition which can only be a great thing for fans of Settlers Spirits.”

The announcement follows Mighty Craft acquiring three of South Australia’s most celebrated craft beverage brands in a deal worth $47million, including Adelaide Hills Distillery, Mismatch Brewing, and Hills Cider, as well as a 75% stake in the Lot 100 venue in the Adelaide Hills.

Co-founders Sacha La Forgia (Adelaide Hills Distillery), Ewan Brewerton (Mismatch Brewing), Steve Dorman and Toby Kline (Hills Cider ) will be retained to drive further growth for the brands.
“This will see us strengthen our geographic and product footprint, accelerate our spirits strategy and ambition to be a leader in craft whisky, and grow our team of craft industry experts,” the brewer said.

“The combination of the two businesses will mean Mighty Craft’s revenue is forecast to grow by 57% in FY22 with forecast EBITDA in FY22 to be $6 million,” said Mark Haysman, MD at Mighty Craft. 

Winemakers & brewers add spirits to their line-up

Among the major winemakers to diversify into spirits is Treasury Wine Estates, which released two new “hybrid” drinks in 2019/20 as it sought to tap into the “new conversation” about wine.

According to the winemaker, today’s wine consumers are more open-minded than ever before and are waiting for brands to create memories or experiences that drive talkability among friends over a drink.

Following the success of its first hybrid release, Squealing Pig Rosé Gin, TWE decided to add a new Pinot Noir Gin to the range.

Ben Culligan, Treasury Wine Estates Marketing & Category Director ANZ, said: “Squealing Pig is renowned for its approach to demystifying the wine category and crafting products that appeals to both long time loyalists and new consumers.

“Having experienced double-digit growth since launching in 2010, Squealing Pig continues to help drive extensive growth within the wine category and we’re proud to expand our current offering.”

“We know that many younger adult consumers are keen to experiment with different types of beverages, so we began brainstorming new ideas outside of the box to create a hybrid option that would appeal to avid drinkers of both.”

Casella Family Brands announced last month that its famed fortified wine producer Morris had moved into the whisky space.

The launch comes at a time when both the Australian and international markets are experiencing continued growth.  In Australia, sales of local whisky more than doubled from 2019 to 2020, growing at 150% according to the IWSR Drinks Market Analysis (May 2021).

It is launching two premium whiskies in June 2021: Morris Australian Single Malt Signature Whisky and Australian Single Malt Muscat Barrel Whisky.

The initial focus is to establish Morris in the Australian whisky market before exploring opportunities in international markets such the US and the UK, with the aim of raising the profile of premium Australian spirits, in particular Australian whisky. Morris is making a long-term play to develop the Australian single malt whisky category with further innovation in the pipeline leveraging access to an unrivalled collection of fortified wine barrels, some of which are more than 100 years old.

Darren Peck (above, ex-Diageo), who has been appointed as Morris Head Distiller, said: “We are creating a unique Morris Whisky style that speaks to our home in Rutherglen. Made with Australian barley malted at the family brewery and pure, filtered water from the Snowy Mountains, Morris Whisky reflects not only the world-class fortified barrels but also its regional Victorian provenance.”

The Hunter Valley’s famed Brokenwood wines has just collaborated with Tasmania’s Lark Distillery on a single malt that has been finished in a cask that once held Brokenwood’s celebrated Graveyard Shiraz.

The result is described as an incredibly complex web of sweet fruit, intoxicating spice and slightly unexpected dark chocolate, Rare Cask Brokenwood Graveyard Shiraz is a fruity punch of Shiraz and the intoxicating complexity of a freshly opened spice drawer. Oak, tannin and single malt whisky; perfectly combined.

“Brokenwood senior winemaker, Stuart Hordern and I have been watching the emergence of the ultra-premium Australian whisky sector and Lark’s position as a key player in the industry for some time,” Brokenwood general manager Geoff Krieger said. 

“We absolutely jumped at the opportunity to collaborate with the Lark team. Both Stu and I agree that a single malt whisky distillation, using a Graveyard Vineyard Shiraz cask is an exciting addition and complementary to the current Brokenwood range.” 

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