SPECIAL REPORT: One of WA’s oldest craft breweries, John Stallwood’s Nail Brewing recently tasted success on the international stage, winning a prestigious award in the US.
Craft beer was in its infancy in Australia when John Stallwood bought a homebrew kit for a friend in 1994.
That gift had some unintended (positive) consequences, however, with the friend announcing he couldn’t be bothered with the process and suggesting Mr Stallwood create the beverage himself.
Thus was the first version of Nail Ale born, with Mr Stallwood’s inaugural home brew launching what is now one of the state’s oldest craft beer operations.
This year, Nail Brewing was recognised for its two best-selling beers, having won silver for its VPA pale ale at the World Beer Cup hosted in Nashville, while it’s MVP pale ale won gold at the Australian International Beer Awards for the reduced alcohol category.
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Those beer competitions are the world’s two biggest.
Thanks to support from late publican Maurice Brockwell, who owned 23 pubs across the country, Nail Brewing was established in its first premises in 2000 at Bobby Dazzler’s pub on Murray Street.
But Mr Stallwood came to realise brewing as a small independent was no easy task and, hearing a similar story across the craft industry, he founded the WA Brewers Association (WABA) the following year, which has grown from just a few breweries
to 55.
“What I realised was, it’s really hard to make money because excise (tax) is a big killer; we had lots of problems and needed to work together to solve them,” Mr Stallwood told Business News.
In 2004, Mr Stallwood was forced to step down from the directing role at WABA, with an assault in Fremantle leaving him in a coma for 10 days, followed by weeks of intensive care and a year of rehab.
“It really took a good couple of years of my life to recover, but the hard thing besides the health problem was that the economy boomed,” Mr Stallwood said.
“I was looking at a place to get in the Swan Valley that was about $500,000 in 2004, and then after my accident it was double the price, so it became
impossible.”
Mr Stallwood’s equipment was sold to The Monk Brewery during his recovery, setting him back significantly during a period when the awareness and popularity of craft beer was growing.
Across several years of gypsy brewing – using other breweries’ facilities – Nail began gaining some recognition, before launching a production site in partnership with Feral Brewing in 2012, and again moving together in 2016 to expand capacity in preparation for future growth.
“In 2008 and onwards, I started to go really well in beer awards. I wasn’t making money, I’m still not, but the beer awards is motivation that I’m making some of the best beers around, so surely it’s just a matter of time,’ Mr Stallwood said.
“The move cost a lot, half a million, but it meant we have a facility that’s three times bigger.
“We were spending a lot of money in cold storage offsite and everything was adding up, so even though it was so expensive to move and it hurt us, we had to do it.”
Another major move last year was the sale of Feral to Coca-Cola Amatil, a decision Mr Stallwood said came after his friend and Feral founder, Brendan Varis had been offered a rare opportunity within the industry for a decent return.
“Running a brewery is extremely hard … and then moving to a new facility made it even harder; there’s a lot of stress running a brewery with high loans,” he said.
“So with Brendan selling, we only ever had a handshake agreement so he could have destroyed me really, but he made sure I was in a better position.”
The takeover led to the sale by Nail of its 25 per cent stake in the production facilities to CCA, though operations will continue at the location through a contract brewing agreement.
“Basically, I now don’t have a loan, I still have the same equipment and the same setup and brewing team, so it’s given me financial relief and I’m now stable for probably the first time ever,” Mr Stallwood said.
“We’re in a position for the first time to attack growth.
“I’ve made a lot of mistakes along the way and have learned the hard way, but now things are falling into place.”
He said Nail had grown production since 2015 by about 25 per cent year on year to 400,000 litres per annum, with his ultimate goal being 1 million litres.
“You need to make about 750,000 litres (wholesale) for it to add up and new breweries I don’t think realise how hard that is,” Mr Stallwood said.
“But with that you grow passion, and the ones that are in it for the money will probably fail and the ones with passion will keep going and get there.”
