Post by Wiggers on Dec 3, 2019 15:03:57 GMT 10
There was a very entertaining thread on AHB some time back about Broo beer. A bloke by the name of Kent Grogan started up what's best called a branding campaign in an attempt to sell beer under the guise of competing with the big players. He sold the image of him being a passionate brewer intent on beating the multinationals out with a true-blue, dinky-di Australian thirst quencher that put the character back in Australian beer. You should invest in him because he's on your team, fellow Australian. With enough support you can help him beat out those money-hungy mega swill monsters who have no interest in beer, only in taking your money and giving it to investors overseas. The plan was simple: you become a pre-retainer for the paltry sum of $50k and you get 64 slabs of beer to onsell privately. And only $50 a week for the app licence fee. You'd only need to sell 10 slabs a week to cover the cost of the app. That was the introductory offer, if you weren't lucky enough to get in there early it'd jump up to $80k.
This is not a joke. This was a real offer in 2012.
Then none other than Mr Grogan jumps into the thread for his first and only post on the forum. It was quite amazing. It turned out the negative posters didn't know the intricacies of the deal and were misinformed. Back when I read this thread I had my own reservations about how absurd the scheme was. It reeked of someone with an end game in mind who would pull out all the stops to get there, but lacked simple judgement. Yes a franchise is a good way to raise capital but who in their right mind would think the $50k offer would sell? Beer's everywhere! And most people haven't even tried this beer nor know if it's any good. I thought then that this is never going to be able to compete because the business accumen just isn't there.
Anyway Broo manages to stay afloat, goes public, sells lots of shares, aquires Mildura Brewery, and kind of just exists but with the goal of starting a mega brewery in China. The promise remains but it still revolves around branding and goals of competing with the international animals with no passion for beer. Plans for a $100m brewery in Ballarat. But where is the beer? Who has tried it and, if it's any good, why aren't people talking about it?
Easy. It's not any good. I tried it at a local pub because I've never seen this particular beer on tap, and didn't realise it was from the same mob. I had some and thought "it's not insipid, but it tastes like a beer that wants to be an Aussie lager". There was nothing redeeming about it. If I brewed it at home I'd give it a pass but I'd work on the recipe. I looked up Australian Draught and what do you know... it's Broo. I connected the dots. Then, I noticed a recent article in my search:
The share price is down 95% over 3 years and Kent sells $160k of his shares in November. It's been losing money for years. Check out a few news stories on Google because it's pretty fascinating to think it's been strung along this long.
My take is I think Kent had genuine intentions of competing against big players. I admire his passion for trying to keep the dream alive. However, I think he missed out on the #1 asset: the product. He's selling the brand. His entire image is the underdog, Aussie battler that deserves the support and money of other fellow Aussies, but naively expected the public to tag along and simply fund him through his journey. It he had made a beer with the taste that rattled the other players then the product would sell itself, and people would vote with their wallets. The business world doesn't care about intentions or brands, it cares about what people want to buy. With shares dropping 95% the money has gone somewhere and I think that the share holders were strung along for the long con. Almost every comment he makes is ambiguous or problems are out of his control. I mean look at this:
2012: "In regards to our franchise model, the negative comments are uninformed and made without the benefit of commercially sensitive information that has not been made public and will not due to the competitiveness of the industry players we are up against."
2019: Grogan said his biggest frustration was “the inability in continuity of supply on scalable product”.
“That facility’s capabilities still wouldn’t allow us to enter into any supply contracts with the majors, which is ultimately where we want the product to be,”
Grogan also said that despite the recent annual report indicating he had received a gross salary of $384,764 for 2018 and 2019, he hadn’t drawn a salary for the last 12 months. “No, I haven’t actually taken a wage for the last 12 months,” he said. “The company would be accruing it, as far as the books, but I certainly haven’t personally taken a salary from the company for the last 12 months
I'll call it now - this will get wrought out to bankrupcy, everyone will be out of pocket (save perhaps Kent) and it will be the fault of the distribution outlets, pessimistic keyboard warriors like myself, and fellow Australians not digging into their back pockets to help out a mate just trying to keep the Australian dream alive. Overall because the big players have a stronghold on the industry and put up too many roadblocks for a battler to have a decent go.
It's a wild story, I think I've said enough.