A series of untimely events over the space of about four years culminated in the voluntary administration of craft brewery Big Shed earlier this year.

The business brought in restructuring firm Heard Phillips Lieberenz in February to tackle issues with debts and to reset operations following the global pandemic and the myriad economic problems it wrought.

COVID-19 and the associated restrictions imposed by the state and federal governments were problematic for most businesses but Big Shed felt it keenly.

Right before the first case of COVID was declared in Australia, Big Shed was on a high. The company – founded by Jason Harris and Craig Basford – had just moved into a huge 1400sqm warehouse on Old Port Road and things were looking up.

The idea behind the move into the literal big shed was to give the popular craft beer brand plenty of room to scale up its brewing operations and to host punters in a large hospitality area out the front.

But gathering restrictions threw a wet blanket on plans for the latter element of the business’s expansion.

“We wanted to look for a bigger space – one that would future-proof us to a degree,” Basford told InDaily over a beer at the Royal Park venue and functional brewery.

“We moved into the space in December 2019 and then we were all good till around March 2020. As you know, a little thing called the pandemic happened.

“You couldn’t have picked that.”

Basford and his team, like most businesses in Australia, pivoted. They started delivering pizzas six times a week to try and keep the cash coming in.

“We’d gone into more debt than we’d ever known to build this thing,” Basford said.

“You just almost laugh at the ridiculousness of the situation. Of all the things we looked at before we built, a pandemic that shuts down society was not on the list.

“You can’t plan for that.”

Since then, Big Shed and fellow craft beer producers have been walloped by economic problems: wars overseas preceded out-of-control inflation growth, leading to rising interest rates and soft consumer spending.

“People started getting nervous, so they stopped spending money,” Basford said.

These unexpected economic shocks ultimately led to Big Shed falling into voluntary administration.

It wasn’t alone though – over the past 12 months several craft breweries faced the same fate and many haven’t been as lucky as Big Shed.

Gold Coast-based Black Hops Brewing appointed administrators earlier this year and is now hoping a consortium of shareholders will buy out the business so it can keep making beer. Melbourne’s Hawkers landed in voluntary administration in February too.

Last year, Ballistic Beer Co was placed into administration, and a recent member survey from the Independent Brewers Association – the peak body for craft brewers representing 420 brewery members – found 91 per cent of respondents said they were somewhat, highly or extremely impacted by the current economic downturn.

“It’s called ‘voluntary’ but no one wants to do it,” Basford said of the administration process.

“For all the keyboard heroes who say it’s tax dodging or that we’re screwing people over – nobody who is going through it is having a good time. No one’s enjoying it.

“There’s the build up to it, where you can see things starting to happen, where you’re trying to work your way through it, but you reach a point where it’s going to go one of two ways: you can either keep trading through and hope for the best, or you make the call.”

L-R: Craig Basford and Jason Harris. Photo: CityMag.

Basford said the weeks leading up to the voluntary administration were stressful, as was breaking the news to staff.

“We spent the Tuesday before the announcement with staff – we didn’t put anything out on socials,” he said.

“HPL – the administrators – they were great insofar as they understood the human aspect of it, which I really appreciate because we can talk dollars and cents and creditors, but it’s the humans that actually matter.

“Mark [Lieberenz] from HPL said to us from the outset that we called it early enough to be able to get through it. A lot of companies don’t do that. A lot come to him when they can’t pay wages. Once you get to that point, it’s far too late.”

Despite doing the right thing and calling in some help before it was too late, the process was deeply emotional for the co-founders.

“No one wants to do it; you feel like a failure, there’s a lot of self-imposed judgement,” Basford said.

“But people aren’t judging – or the vast majority aren’t – but you still feel that intense sense of shame that you’re in this situation.”

Those feelings were quelled in large part due to an outpouring of support from the local community in the western suburbs and other independent brewers, Basford said.

Competitors started buying kegs off Big Shed, the Adelady team swooped in to arrange a ‘Save Our Shed’ night at the venue, and creditors even donated food to the company “to make sure that every cent we made” would assist in the reorganisation of the company.

“It was amazing,” Basford said.

“That’s the beauty of the community and I think it’s a uniquely South Australian thing.

“It makes you remember that you’ve actually got something that people value. Other craft breweries didn’t get the same level of public affection and response that we did by any stretch. It’s something we need to be proud of and protect.”

Ultimately, Big Shed restructured its debts and is now afloat after coming to an agreement with its suppliers who unanimously endorsed the way forward for the brewery.

It’s led to improved processes at Big Shed, Basford said, and renewed momentum for the company too.

“I know that sounds opportunistic or whatever, but I think when things like this happen people learn that you can’t just take things for granted,” he said.

“We’ve got to make sure that we’re there to deliver on that promise and that we become advocates for local businesses.

“If you said to me five years ago that that brewery down the road wouldn’t be there I would have said you were mental, and yet here we are. West End Brewery doesn’t exist, and if West End can stop existing there’s nothing stopping any breweries in Australia from going through a similar thing.”

That’s not to say that Big Shed is not without problems – craft breweries nationwide are still going head-to-head with multinational beverage giants that are increasingly trying to gobble up what little market share the independents have.

There’s also the ongoing problem of constantly rising excise taxes on alcohol, which slug boutique brands on the same level as multinational giants that undercut the independents on price and have far greater scale.

Basford called on the Adelaide community to keep backing local craft beer. He knows there’s still demand for the segment: “That’s why 900 people came through here for Save the Shed.”

“It’s a crowded market – there’s a lot of craft breweries around and that’s not necessarily a bad thing. But when you look at the total beer sales it’s a shrinking market in terms of total volume,” he said.

“But let’s not all compete for a slice of that 5 per cent of the total market – let’s try and work together to get a larger slice.”

As for the future, Basford said he was looking forward to the Beer & BBQ Festival in July (“the best festival in the country”) and Sydney Beer Week in October.

“There’s reasons to be optimistic. We’ve started Christmas bookings earlier this year, and we’re getting some good numbers,” he said.

“We do have those annoying days or those shitty days where things go wrong, and they will happen to everyone no matter what – you could be a fluffer on a porn set and you’re still going to have a shit day every now and then.

“But it is worth it because tomorrow will be better. And at the end of the day, there’ll be a beer regardless.”