👉 Background: Mighty Craft is the ASX-listed craft beer and spirits manufacturer of mostly niche beers. In 2021, the company agreed to manufacture zero-carb Better Beer, which was created by comedians The Inspired Unemployed and has grown to $26 million in annual revenue. Mighty Craft has a frothy 33% stake in the business.

👉 What happened:  There were whispers that Better Beer and Mighty Craft would actually merge but Mighty Craft needed to get their financial-house in order, which meant trying to sell many of their brands to stay afloat.

👉 What else: But it was too little too late for Mighty Craft who has now fallen into administration. And it also means their merger with Better Beer has gone out the window like the last swig of a Guinness beer.

What's the key learning?

💡Managing the cost of raw materials and other operational expenses is crucial to survival for small businesses - especially in industries like craft brewing with tight margins.

💡The broader craft beer market in Australia has been under serious pressure over the past few years due to various factors:

• Raw material costs rose up to 25-30%
• Government excise tax increases on alcohol
  
• Aussie households cut back on alcohol spending

💡As a result, all craft brewers are feeling the pinch. Craft brewers like Sou’West Brewery, Temple Brewing, and Deeds Brewing also suffered similar fate just last May. This is a sobering reminder that in the world of craft beer, it’s not always happy hour.