Back to the future for Matilda Bay and the return of its original founder

Phil Sexton, one of the co-founders of Australia's first modern microbrewery in the Eighties, will join hands with Carlton & United Breweries, the brewery major which fully acquired Matilda Bay in 1990 for A$23m (US$15.5m). Under the terms of the agreement, a new small-batch brewery in country Victoria will be built by Sexton and his team will run it.

The brewery, with a 3,000hL annual capacity, will be in Healesville in the Yarra Valley, an hour east of Melbourne, and will have a pub attached. Construction is due to start in the coming weeks and the brewery is expected to be operational by the end of the year. More than 20 new jobs will be created.

“Restoring Matilda Bay to its rightful place as Australia​’s leading craft beer is unfinished business for me​,” Sexton said. “I want to grow craft beer by showing people how special good small batch beer can be​.”

Australia's first craft brewery

He founded Matilda Bay in 1983 for it to become Australia’s first craft brewery. And as such, it still has a special place in the hearts of Aussie beer lovers.

“It​’s the right label to finish what I started and re-affirm what artisanal brewing should stand for: sessionable, flavourful beers that stand the test of time​,” he added.

It was a tough start in craft brewing for Sexton, who formerly worked for the Swan Brewery, the dominant beer maker in his native Western Australia. When he and his partners were shut out of every licensed premises in Western Australia by the power of the local brewery, they opened up their own pub in Fremantle.

Eventually named the Matilda Bay Brewing Company, the partners sold a 20% shareholding to Carlton & United Breweries 1988; the remaining shares were acquired two years later in a deal that valued the brewery at more than A$50m (US$33.7m).

In 2005, after the departed original brewers had opened the Little Creatures microbrewery in Fremantle, Matilda Bay beers began being brewed in Victoria. This was in an effort to brew small batches of more experimental beers, such as Alpha Pale Ale and Dogbolter, Crema, Barking Duck and Rooftop Red Lager.

The Little Creatures venture had Sexton as its master brewer, and since 2000 it has gone on to become a well-known name in Australian craft beer making around the world. It came about after the CUB takeover and some differences of opinion the former Matilda Bay team had with the new owners.

Yarra Valley: From beer to wine

Sexton has also been involved in wines since 1996 in the Yarra Valley, and launched Giant Steps and then Innocent Bystander wineries, which he sold in 2016 to concentrate fully on Giant Steps. By then his reputation for having a Midas touch for beer and wine had been cemented.

He said sustainability is a critical part of the new project, with solar panels supplying power and all waste to be recycled. The brewery will use pristine Healesville water to make its beers.

“This is also about creating a beautiful new attraction in the town I love and live in​,” he said. “There is something special about drinking great small-batch beer where it​’s brewed​.”

From there he will oversee all aspects of the brewery’s construction, followed by brewing and marketing when the project is complete.

“He is a craft beer visionary who revolutionised Australia​’s beer landscape. There is no one in the world more suited to delivering this venture than him​,” lauded CUB Chief Executive Peter Filipovic.

“We​’re meeting the changing needs of consumers by creating beautiful new beers in pristine surroundings that live up to Matilda Bay and Phil​’s original vision. We couldn​’t be more excited about this opportunity and we know beer drinkers will love it​.”

The Matilda Bay brewery and pub will be built on the site currently occupied by the Giant Steps winery and restaurant, which Sexton continues to own. Plans for the project came about when he looked to move the location of the winery, and was considering putting a brewery into the existing premises.

This led to a conversation with CUB, to find out what the brewery’s plans were for Matilda Bay, 18 months ago. By all accounts, the major quickly became interested in Sexton’s idea, which he saw as a way to become reinvested in an unresolved project.

A craft beer visionary

It can be said that Australia’s original craft beer brand has lost its way over the years and is destined for a reset.

Matilda Bay struggled after it was bought and transported across the country from Western Australia. Its beers were even brewed in Tasmania, at the Cascade Brewery in Hobart. Operations were finally switched into Port Melbourne in 2012.

Both CUB and its major rival, Lion, have both been fighting a decline in mainstream beer sales in Australia, and in turn are putting more emphasis on the faster-growing craft beer segment.

CUB’s most recent craft beer brands, Sydney-based 4 Pines and Adelaide’s Pirate Life, were acquired in late 2017, as the brew major immersed itself deeper into the segment.

In the wider beer category, Asahi-owned CUB (at least provided the Australian Competition and Consumer Commission upholds the recent deal) makes Victoria Bitter, Carlton Draught, Great Northern and Pure Blonde, and already holds a 48.8% market share of the Australian beer industry.

While under CUB Matilda Bay’s classic beers, including Redback, Dogbolter and Alpha, have declined, Fat Yak, launched as a Matilda Bay beer in 2008, was spun off into its own line. CUB recently changed Yak Ales to Yak Brewing.

The new venture will not be brewing Yak Ales or the Frothy brand, which was also recently launched under the Matilda Bay name. Instead, it will exclusively develop and brew a new range, along with some classics like Redback and Dogbolter.

While it does so, the the “craft beer visionary​”, who is credited with revolutionising the Australian beer industry more than three decades ago, is bound to bring back some of the old magic back.