Panhead founder Mike Neilson and his wife Anna are set to be the new owners of Boneface Brewing.

The couple will formally take over on or about July 1, depending on licensing other compliance issues.

However, until then they are managing the business on behalf of the liquidators, BDO.

Mike and Anna started Panhead in 2013 with Mike in the brewery and Anna in the office. They sold their house to fund the brewery and had support from Mike’s parents who sold investment property to help raise capital.

They settled on Upper Hutt as a site for the brewery — in the old Dunlop Tyres factory, where Neilson’s father once worked.

Three years later Lion paid $15.1 million for Panhead with another $10 million to come based on future performance.

After seven years under Lion, Mike left Panhead at the end of last year.

At that stage he had no idea what he’d be doing next, and even when Boneface was listed on TradeMe in December for $1.75 million it didn’t initially grab his attention.

“After leaving Panhead that want and desire came back again — being out of Panhead I missed the whole beer industry.”

He has a long-standing friendship with Boneface founder Matt Dainty and after meeting up with him in April, the Neilsons decided to pursue the purchase.

A few days after the deal was agreed, they learned the brewery had gone into liquidation.

“We intended to purchase the brewery outright on July 1, but then we got a phone call from the liquidator who asked: ‘Can you come in and manage it for this period to keep the continuity?’.

“We went in on Tuesday last week for a meeting and were effectively running it immediately,” Anna said.

She said the July 1 sale date was dependent on other factors. “There’s a whole line of licensing and compliance issues we have to take care of first.”

Mike Neilson

I asked Mike if he had any doubts about re-entering the brewing industry given the current economic conditions.

“There’s no doubt about it, it’s tough. When the industry was booming there were a lot of players in the market, and there still are. You just have to keep your level of exposure, and overheads, under control.

“The industry is fatigued and we know we’re going to have to bring a bit more excitement into the industry.”

What the couple are clear about is this: it won’t be Panhead Version 2.

“We’re not making any bones about it: we don’t want to be another Panhead, that ship’s sailed. Beer is our passion; we just want to be us and do what inspires us and what we love.

“And do it well,” Anna adds.

As someone who grew up in the Upper Hutt area, and helped in the creation of Brewtown, Mike admits that was a drawcard.

“Brewtown is another dynamic. Being in Brewtown is exciting. I did help develop it, and I do feel sentimental about that area.”

The brewery will continue as Boneface.

“We want to build on the effort Matt’s put into it. There’s something in the name for sure and it’s respected. I do like the name, Boneface.”

And unlike Panhead, which was a strong supermarket brand from the get-go, Mike believes Boneface will be more an on-premise experience.

“We haven’t figured out that balance yet between on- and off-premise. It’s such a tough six-pack market right now that doesn’t really appeal to me. The margins are so slim, you have to rely on COGS [cost of goods] and high volume to make that work and I’m not sure I’m down for that to be fair.”

Mike and Anna realise they will have a tough couple of years ahead of them especially as they have no direct hospitality experience and Boneface comes with a restaurant as well as a brewery.

“We’re still two or three years away from the market being a bit more reliable,” Mike says, “and for the current economic situation to iron itself out. So, we’ll have to do two or three years hard, hunker down and survive.”

Mike said he left Panhead after seven years under Lion, and 10 years in total, because he could see his role changing as the business grew.

“Lion are fantastic to work for they are very good to their staff. It was business as usual in Upper Hutt for a long time, it was still us running the business, but the way things were changing I couldn’t say that we were going to be running the company anymore.

“I like making the beer, the brand, the whole business side of things and I could see that in six months I would have had less control of all that.

“But it’s still our baby and we’re happy where it’s going and that the staff are happy and well looked after.”