Kevin and Dan Dainton

Carrum Downs brewery Dainton Beer is expanding capacity in 2021 after a year of growth and investment.

“It’s been a crazy year for everyone,” said co-founder Dan Dainton.

“Once JobKeeper kicked in and other small grants and things we were able to use, we did really well. The bar shutting allowed us to focus on the wholesale and brewing side, that was a month there of treading water when we left our main distribution partner and started building our own sales force.”

The Victorian brewery, founded in 2013 by Dan and dad Kevin Dainton, is bringing in a new 35hL brewkit from Brewtique to replace its older 30hL brew kit, and while the leap doesn’t sound like much on paper, the new efficiencies and greater tank space will allow it to produce far more beer.

“We’re selling that, and will have a different setup for the next one. It’s a 35hL, four-vessel system coming in now, so we should be able to do four to five brews over the same amount of time as the one or two we did last time.

“We’ve already put two 100hL tanks in and we’ve got the other four coming,” Dainton said.

From initial plans to up capacity to 1 million litres, the new brewery – expected for delivery in May – and its existing canning line could produce up to 2.5 million litres of beer annually. A new canning line in the coming years could potentially bring this up to 4 million litres.

“From then, that will do us. It will max out the current site, and we’re right in the middle of looking at the next phase, we don’t have any real solid answers, we haven’t made our mind up on that just yet.”

Funding for growth

Dainton was one of the first cohort of breweries, along with Black Hops, Holgate Brewhouse and Endeavour, to undertake equity crowdfunds.

While it has been successful for some, others have found it more of a challenge. Most recently, Endeavour faced major board changes after making losses of more than $500,000, meanwhile others, like Toowoomba’s 4 Brothers, failed to take off.

Dan admitted that while equity crowdfunding was a useful undertaking, it also required a lot of work.

“I wouldn’t say never again, and we’ve toyed with the idea of it, but I think we probably won’t any time soon,” he said.

“There were definitely benefits of doing it, like raising money, but if you go back on prospectus it wasn’t a lot of money compared to what we put in.

“There wasn’t anything negative about it, the guys at Birchal were extremely professional, and the backup and the support from them was amazing.

“But with the regulatory stuff, it’s a bit of extra legwork and every now and then you get disgruntled shareholders which is part of it. But if you’re starting off and really strapped for cash it’s certainly one way of looking at it – it can really grow, it can be a marketing tool as well.”

There are also additional responsibilities to new shareholders, including regular communications and the release of financial statements.

“I look at shareholders as brand ambassadors. They are part of the family, but you have to treat them as family too.

“As far as future funding goes, we’ll explore our options. We’ve been largely self-funded aside from that but we’re at that stage now where, in three to five years time, it will turn into something a lot bigger if we continue on this trajectory.”

Potential for growth

The question facing Dainton is one that is facing many brewers as they reach maximum capacity at their breweries.

Some, such as Mountain Culture, Cheeky Monkey and Kaiju are investing in bigger equipment and new sites. Others are opening ancillary taprooms, focusing on retailer distribution or developing new brands under their main beer brands, for everything from seltzers to kombucha and non-alcoholic beer.

But, as 2020 has shown, it pays to be careful and cautious about strategic direction.

“There are so many ways for us to go. I’ve been looking at the business and the people involved and what will be sustainable for us moving forward. We want to keep growing and keeping up for demand, not killing ourselves trying to reach the sky.”

One option could be brand extensions, Dainton said.

“A big part of it for me is that I stopped drinking in February last year, I’ve had maybe a couple of glasses of wine over the year.

“So giving people a choice in the way they live and in the way they socialise is important for me.

“[Non-alcoholic beer] is definitely something that, even before it became popular maybe four years ago, I started researching,. But the equipment required to do it properly, fully 0.0% abv not 0.5% [is expensive]. We could get a contract out there if we wanted, but I haven’t had one made in Australia that I’ve loved, and I’d want to do it in house.

“But just because we’ve made some great beer I don’t think that gives us a licence to make something else. We’re better off focusing on building another experience-based place somewhere and concentrate on what we do really well, which is big flavoured crafty beers. We export, we’re in every state and territory.”

But venues come with their own challenges.

“It’s hard to run multiple breweries and make them efficient, if we had satellite bars, like Stomping Ground maybe. Those guys are really clever and what they’re doing is very smart, you see that in Portland, San Francisco – multiple venues, and one main brewery.”

Whatever the outcome of their planning phase, Dainton will be focusing on some key things, Dan said.

“We’re going to keep growing into unknown territory and want to keep forging ahead at this pace, we have to make sure everything is excellent in the systems we put in place.

“We’ve had a big focus on maintaining the best quality beer we can and I’m into that for now.”