Boost after buyouts of SA businesses

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By David Sly

The recent sale of several high-profile South Australian food and beverage manufacturing companies has presented new growth opportunities due to significant capital injection, without sacrificing the input of local talent and leadership.

Udder Delights Cheese, Pirate Life Brewery and MOJO Kombucha are all now owned by international corporations, but the local entrepreneurs who formed these companies have remained at their helm.

They say new ownership has strengthened these SA-based operations and increased the SA workforce, rather than having enforced changes applied to existing operations.

Udder Delights founder Sheree Sullivan says the Lobethal-based cheese producer has continued to prosper since giant Japanese dairy company Snow Brand purchased a majority shareholding in November 2017.

She underlines that foreign investment has provided an essential platform for growth that most local people don’t realise, while Sheree and her husband Saul have remained in the roles of chief executive and managing director respectively.

Udder Delights is led by Sheree and Saul Sullivan.

“Many people just think we’re sold out, and there has been negative social media messages posted, but these people don’t understand how important it is for SA to have international business investment such as this,” explains Sheree.

“This has ensured that Udder Delights can continue to grow stronger as a SA manufacturer, far beyond what we could invest in the company.”

In the year since the change of ownership, Udder Delights has recorded 35% growth in sales, while $1 million infrastructure improvements have been made at the Lobethal factory in the Adelaide Hills, with another $1 million earmarked for further development in the next few years, based on the Sullivans’ suggestions.

“We continue to put together the vision of what we want the business to look like,” says Sheree.

“We still have ambitions for the company to grow, and Saul is now more focused on product development. Before the sale, he was under too much pressure and had too little free time to think creatively and innovate. Now he has the headspace and motivation to start testing new cheeses again.”

The Udder Delights factory in Lobethal.

The Sullivans say this positive sign emphasises that the new company ownership structure has quickly settled into a productive rhythm and is playing to Udder Delights’ enduring strengths.

“Our investors have seen the value in keeping the entrepreneurs who started this company, because they couldn’t do the same things themselves. They respect our ingenuity and vision,” says Sheree.

“They also understand that we bring experience and knowledge to the new company structure, while they’ve lifted the company’s performance in areas where we didn’t do so well. With the sum of all this, we can see that the company is thriving.”

In September 2018, Willunga husband and wife team Anthony and Sarah Crabb sold their company MOJO Kombucha to Coca-Cola. What started a decade earlier with experimental blobs of bacteria and yeast in their back shed to create an innovative drink that was initially sold at farmers’ markets and health food shops, made the transition to supermarkets.

This saw annual turnover rise to $7 million a year, making it the market leader in kombucha drinks and attracting the attention of Coke.

MOJO CEO and co-founder Anthony Crabb with some of the kombucha products.

While MOJO grew quickly through its initial decade without significant external funding, additional capital was needed for it to remain market leader in this rapidly-expanding drinks sector, and the purchase offer from Coke suited the Crabbs’ purposes perfectly.

“While other investment options had been considered, the proposition by Coke was the most attractive and beneficial,” explains MOJO director of sales and marketing Andrew Buttery.

“It allowed Anthony to continue in his role and run the business from its Willunga base as an independent operation, with the benefit of plugging into Coke’s sales and marketing network. This was the best option to take the business to another level, both nationally and internationally.”

Mojo expects to double its sales volume in 2019 as a consequence of Coke’s reach beyond grocery stores into petrol and convenience stores, and on-premise hospitality venues – all happening from a SA production base.

“The ownership transition has been smooth, albeit going through a steep learning curve,” says Andrew. “The support Anthony is getting from the Coke team has been first class, and we expect a big future.”

From left to right: Co-founder Jack Cameron – Hon. David Ridgway MLC, Minister for Trade, Tourism and Investment – Pirate Life CEO John Phinney – Senior Project Manager Josh Smith from Promanage Australia.

Pirate Life has immediately benefitted since being purchased in November 2018 by Carlton & United Breweries, a subsidiary of Belgium-based international drinks company Anheuser-Busch InBev.

A new $10 million Pirate Life brewery and canning facility is being constructed at Port Adelaide, due to be completed in March. It will enable the popular craft brewer to escalate annual production from about three million litres to about eight million litres, to meet growing national demand.

It also means the company is able to operate two facilities, with its original Hindmarsh brewery now dedicated to creating new beers, including innovative sours and barrel-aged brews.

Pirate Life is expecting continued growth following on from its takeover by Carlton & United Breweries.

Pirate Life co-founder and chief brewer Jared Proudfoot says the sale will enable continued growth for the company that has enjoyed immediate popularity since releasing its first beers in March 2015.

“The reality is we have run out of capacity at Hindmarsh. With this partnership we’re in a fortunate position to upgrade to a new, bigger brewery while dedicating Hindmarsh to innovate and craft a whole range of new styles to make sure we keep pushing the boundaries and evolving.

“Our whole team is sticking around and it’s invaluable for all of us to be able to benefit from the knowledge and skills of some of the best brewers in the world.”

Industry in focus: Trade and Investment

Throughout the months of January and February, the state’s trade and investment industry will be explored as part of I Choose SA.

South Australia is in a prime position for trade and investment opportunities as we have a 24-hour connection to international markets and a prime reputation for our premium products and services.  Read more trade and investment stories here.

Visit I Choose SA to meet the people building business and industry in SA, and to find out how your choices make a difference to our state.

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