Matilda Bay brewery was launched when the Australian beer market was fractured and for all intents and purposes, isolated. Since the early 1980s the brewery has broken the mould and set new trends for the market, Adam McCleery writes.
The origin of the Matilda Bay brewery in South Australia can be traced back to the early 1980s when the beer market in Australia was a world apart from what we are used to seeing today.
Phil Sexton, Matilda Bay CEO and founder, was working for a prominent brewer in Western Australia during those early 1980s and described how different the landscape was at the time.
“Back in those days’ breweries controlled the territories they were in, so within Western Australia you could only buy that one beer and any pub within the state was either loaned or leased off to an operator by the brewery. The same thing was going on in Queensland and Victoria,” he said.
“For a long time, there was an unofficial agreement not to cross interstate borders with a different beer brand. Of course, that meant that anyone in WA only had certain types of beers and that was it. Similarly, it was the same in other states, which always struck me as strange.”
Sexton had studies to be a brewer and took his post graduate learning to the European market where he saw first-hand the stark difference between that market and Australia’s, which only highlighted his confusion as to the makeup of the Australian system.
“I worked in the European breweries to get a better understanding of how things worked over there and to try and understand why Australia was so different at the time,” he said.
“It seemed so impossible to ever head towards the way Europe had always been.”
Shortly after Sexton returned to Western Australia, Australian investor Alan Bond bought the brewery, which quickly became the ‘cash cow’ for his operations.
“I was watching all this happening and realised I didn’t want to be a part of it so I started formulating a plan to start my own brewery,” he said. “Me and some ex-university friends planned on making a small brewery where we could make the types of beers I fell in love with in Europe, we could also experiment with beers.”
The team of brewers had to learn some hard lessons about business when they first launched their brewery, Sexton said, but through trial and error the company found success.
A massive hurdle that the team had to overcome early on was getting its beer stocked anywhere, bottle shops or pubs, with many turning them down. And the same problem existed when it came to sourcing the brewing equipment needed to launch the business.
“Some breweries made it hard to source the equipment and the ingredients for our beers, so we had to look overseas,” said Sexton.
“Thankfully my experience in working with the European market meant I had some connections I could tap into, and we were then able to source everything we needed.”
Sexton said the specialised bottling equipment needed for beer proved the most difficult to source during the early days of the brewery.
“As well as other brewhouse equipment such as brew kettles and mash tonnes. We had to have them made overseas.
Then, a pub in Fremantle was about to go under and Sexton, with his business partners, made the bold choice of purchasing the pub so they could stock their own product. After finding an investor, the team and the investor put up the $340,000 to buy the run-down establishment.
They also spent their own time and money to renovate the pub, living on site to save money, while also looking to break the unspoken and unofficial rule of not tapping beers in multiple states. All of this was still in the 1980s.
“We started importing beers into the country and by 1990 we had pubs owned or operated by us with a range of craft beers we had imported,” said Sexton.
“We have worked very hard to make our pubs female friendly too. We did a lot of work on reformulating the Australian-style pub to merge with what we knew about European-style pubs, and we found success in filling that vacuum.
“We also went and sourced Carlton Draught. We wanted to make sure we had something on offer for all beer drinking tastes. Or as many as we could. People came from all over the place because at the time they could only get it in Victoria.”
Sexton and his team learned early on, through customer feedback and sales, that the consumer was starved of beer choices at the bar, and they were filling that hole.
“From there we were able to turn it into what we wanted and then we started having our first successes. The place quickly filled with English expats who were keen on beers they hadn’t been able to find before then,” said Sexton.
Then in an interesting twist of fate, Australia, and Alan Bond’s iconic win at the America’s Cup in 1983, led to a great advantage for Matilda Bay and its new pub.
“After Alan Bond announced he would be taking the America’s Cup to Fremantle in 1987 to defend it, it really turned our fortunes around because suddenly investors were flocking to the town in anticipation of the event,” said Sexton.
After the growth created by the added investment, including in restaurants and pubs, Carlton United Breweries (CUB) came knocking and changed the entire future of the brewery.
It was when Matilda Bay started to provide other beers to the West Australian market, such as Carlton Draught, that put them on the CUB radar. People from the large brewer visited the Matilda Bay brewery and pub to look into their business model.
“That sparked their interest and that is where our partnership started. What we didn’t see was what might happen down the road. The interest in different beers was needed because it was starved of interesting brands,” said Sexton.
The business deal was made official in 1990.
“They had taken us onboard after the failure of a different craft beer they had purchased and through those contacts we launched discussions and agreed for us to reinvigorate their craft beer offering while also getting to use their distribution power,” said Sexton.
“We also rebuilt a brewery and started reconfiguring our beers and have since created new beers. We wouldn’t have been able to stay in this thing for much longer if that hadn’t of happened.”
“We eventually did the same thing in Melbourne and Sydney, and both were flooded with consumers who were starved with choice.”
Matilda Bay was finally spreading its message across the country. For the team at the brewery, beer was about enjoyment and flavour and not just basic beer on tap.
“Our message was better to have two pints and enjoy it than sit and drink six basic beers,” said Sexton.
“We started to wonder how we could achieve that. In many cases our beers were heavier and slightly higher in alcohol than most beer on the market at the time. Our intention was to supplement the market with a new choice.”
Matilda Bay continues to try and look ahead at emerging trends and consumer desire in the beer market and eventually Phil’s son, Harry Sexton, joined the company’s brewing team.
“I find a big challenge in the market today is the balance between drinkability and sessionability, where the difference is often how heavy it is in residual sugar or carbohydrates. I know that in general, our beers now are a bit fuller and more approachable from a sweetness point of view than mainstream lagers, which makes them very approachable,” said Harry.
“And that plays into Phil’s point about sitting and enjoying two pints of something tasty and interesting instead of just drinking the same lager they always did.”
In the years since its inception, Matilda Bay beers have won several awards including Alpha Pale Ale being named ‘Brewer’s Choice Best Champion Australian Beer since 2012’ by the International Beer Awards while its Dogbolter Winter Ale won Grand Champion Amber Dark-Ale at the RQFWS this year.
“We have really worked on balance and flavour rather than how many you can fit in during a session. We spent years working on and perfecting our brews, which has been recognised with awards,” said Harry.
“We spent the first lockdown looking at our Original Ale, Owl and trying to formulate the best beer we could but when you can’t sell your beer, we ended up pouring it down the drain.”
Matilda Bay has also formed a strong sustainability plan moving forward and is already offsetting carbon and using renewable energy, after installing 248 solar panels on the roof of its brewery. As a result, in 2021, it was officially certified carbon neutral.
“Last year, we became climate neutral and that involved an audit of every single piece of equipment and also packaging and ingredients, looking at what we use, and the process involved, and the amount of carbon used and produced,” said Harry.
The breweries used grain is also repurposed as cattle feed for local farmers.
“As a brewery, it can be a challenge because you want to be as sustainable as possible. We set sustainability KPIs and holistically we have good direction on a way forward,” said Harry.