Konvoy Kegs raises $13m, expects more brewers to go bust

afr.com:

Australia has too many brewers and more beer makers will hit the wall financially, predicts the boss of Konvoy Kegs, which rents kegs to 600 brewers in Australia and Asia and just raised $13 million to fund expansion into the United Kingdom and Ireland.

Konvoy Kegs chief executive and founder Adam Trippe-Smith says there are too many small brewers struggling with uneconomic businesses. AFR

Chief executive and founder Adam Trippe-Smith said while the pubs sector in Australia was generating strong activity and “indexing up” as people looked for value dining options in a tougher economy, many smaller beer producers were feeling the pinch.

Those that are grappling with rising energy bills, inflation from raw materials, steep federal government excise increases and more will hit financial trouble.

“Quite frankly, we’ve got too many breweries,” Mr Trippe-Smith said.

He said while the beer sector would keep expanding, there were too many smaller players with uneconomic businesses.

“The sector will grow, but there’s just too many sharing the pie.”

He predicted that more beer companies would be forced into either administration or choose to close. Craft beer company Tribe Brewing, which went into administration earlier this year, was bought by a group of convertible noteholders including Kathmandu founder Jan Cameron.

“There will be more unfortunately,” Mr Trippe-Smith said.

Konvoy, established in 2019, has a fleet of 280,000 kegs rented out to 600 breweries in Australia and New Zealand. It is preparing to step up operations in the UK and Ireland. Konvoy aims to raise a further $10 million in capital in the UK markets.

The company’s chairman is Zlatko Todorcevski, a former chief executive of building products company Boral.

Konvo