Background to the Role
DB Breweries is New Zealand's second largest brewery. Cranleigh has a long standing relationship with DB Breweries and has assisted the company with a number of transactions and acquisitions.
The Business Problem
With the saturation of the beer market, DB sought assistance to continue to grow its profit over time by diversifying into higher growth markets. DB's management identified
bars and restaurants as a key sector for potential growth but wanted to ensure any investment was backed by the appropriate structures to enable successful growth.
DB had previously been involved in the ownership of a range of pubs and other outlets across New Zealand but had sold off these assets as part of a previous reorganisation. Historically, it had been difficult to achieve the individuality and creativity required for a successful bar/restaurant while ensuring DB's corporate strategy and values were maintained.
The Cranleigh Solution
Cranleigh worked with DB to identify bars and restaurant facilities which were substantial consumers of DB products and with which DB wished to align its products with high-profile bars. Of the potential targets, Jag Hospitality was selected to as an initial acquisition. Jag Hospitality owned eight of the best facilities in New Zealand.
Cranleigh engaged with JAG and implemented a joint venture structure that not only continued to keep owners of bars engaged over the long-term, but also provided for easy entry/exit of managers within individual bars and create a sense of ownership for all involved. Over a period of six months, Cranleigh worked closely with Jag Hospitality which led to the creation of BarWorks, in which DB took a majority shareholding.
This joint venture model has worked extremely well and is proving to be sustainable over the long-term, with the acquisition of more bars. It is now a major contributor to the profitability of DB Breweries.