In this episode we chat with our Mate Craig (Brownie) from Malt Shovel Breweries. We discuss how the liquor industry has been affected due to COVID-19, how hospitality business have adapted to the restrictions imposed on them as well as trends that are appearing in the Liquor industry including craft beer and Alcoholic Seltzer.

We chat with Brownie about Malt Shovel’s “Freedom to Fly” philosophy and how this gives them a competitive edge.

You can find out more about Malt Shovel as well as enquire about corporate sales at www.maltshovel.com.au. We recommend the Furphy, James Squire 150 Lashes or White Rabbit Dark Ale.

You can learn more about Mate internet and mobile plans at www.LetsBeMates.com.au

Subscribe to hear the latest episode each week on Youtube, Apple Podcasts, Spotify, Google Podcasts or your favourite podcast player.

 

 

 

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Transcript:

Faz: Welcome Australia. It’s that time again for another podcast from the Mate team where we try and get into your head with stuff that makes us sound smart, sit back and relax. It’s time for us to be mates.

Welcome to another edition of the let’s be mates podcast here again with your team from my Bosco Dom. How are you boys?

Dom:  I had some good feedback on last week.

Faz:  Yeah, that was good though. They had a lot of people listen in and ask us a bunch of questions, which is only going to drive new shows moving forward, so look out for that.

but one of the pod, this podcast today, is the first time we’re talking to one of our mates and we call this podcast drinking with our mates. And we’re not literally going to be drinking, but, the purposes is that we’ve got a special guests on board. we’re a corporate customer of this business as well.

But, this business is also, you know, had a unique experience in, during this COVID time. And. And they have a unique business in general. And, the business we’re talking today to is a business called malt shovel who would use a beverage business. And I won’t get into their details. I’ll let our guests talk about that.

So let’s get straight into it. Let me introduce, Craig Brown, AKA brownie as he’s known to the industry, and, and a good mate of the team at made as well. brownie. Are you there? Hi, welcome to the show. Welcome to the let’s be mates podcast. Thanks for, for your time and for joining us. And, look, we’ve got you for the next 20 or so minutes, which is great.

And, first of all, let’s start with who you are. your, your role in the business and about a bit about the malt shovel business as well.

Brownie: I’ll start about the business and I’ll get into, well, I guess what I do there, but, malt shovel is a, we’re actually a subsidiary of lion, so lion people know them as lion Nathan.

They’re the second largest brewer in Australia, but we do operate independently. we sell a wide range of, of beverages in both pack and draft formats. and we specifically cater to the, what we call the RECA channel. Oh, restaurants, cafes, small bars, and as you know, corporate accounts, with a focus on craft Beer.

my role is a business development executive at Malt shovel. And I guess it’s a twofold role in that I manage and grow revenue in existing customers. And, onboard, sorry. And I onboard new business across the channels I mentioned. So now on top of that, it’s to grow that distribution revenue and market share of our and brains such as that Malt Shovel XPA,

So Craig, obviously.

Dom: you know, you guys don’t just sell Malt Shovel

what are some of the brands that listeners wouldn’t know that you guys sell.

Brownie: So, yeah, we’ve got a wide range of beer, as I mentioned before, in pack and tap, the whole line portfolio. But we also have our beer the malt shovel XPA. outside of Beer, though, we sell a wide selection of only wines, a selection of Vanguards spirits, which include four pillars.

Gin, which was, recently voted the best in the world. We, we sell remedy kombucha. We, sell Schibello coffee. and there’s also been some, our new product innovation with alcoholic seltzer and ginger beer. So there’s this pretty wide gamut of products in the beverage section

Dom: and alcoholic seltzer

or what do we call it in Australia?

Cause it’s

quite American term, but it’s, it’s huge. It’s one of the biggest category

growing over there on.

Brownie: Yeah. That’s where, obviously that’s why it’s here, we steal a lot of trends from the U S and they figure if it’s big in the US it’s going to be big here. It’s just known as alcoholic seltzer.

Dom: It’s like soda water.

Brownie: Yeah, pretty much.

Faz: Is it soda water

Brownie: flavored soda? but its alcoholic

Faz: is it supposed to be healthy drinking. Is that what the purpose is?

Brownie: no comment. I think it’s supposed to be healthier, but obviously there’s still sugar involved.

Faz: And what would you say the unique differences between malt shovel and lion.

With your business.

Brownie: So, most troubles, with line as, as you know, from previous, work in multinational companies, you’re very restricted and there’s a lot of process to go through. We had one of our, kind of our overarching core principles is freedom to fly at Malt shovel. So we’ve, we’ve got the freedom to do almost anything we want.

If it’s going to, provide a good outcome for the business. so I guess that’s probably the main difference in where working for line versus working for malt shovel.

Faz: And, you know, I think that’s the reason, why I think we resonate so well with Craig in his business. I think, I think that the point there, he says, freedom to fly.

I think, with mate, that’s literally what we’ve done, right? By having the opportunity to. So run our own business and come up with our own strategies and go to market the way we want to go to market. You know, based on the previous roles we’ve had, has enabled us to fly in and deliver what we thought was the right way to do it and to actually see it.

See it happening and actually working is been a sort of a, you know, like a, a big motivation for us. And I think that’s why I feel like we resonate. And that’s probably one of the reasons why we’ve, we’re doing this with Craig today, which is great.

Dom: I think it also allows you to adapt and change very quickly.

Agile, agile to, to market changes or you know, you can throw something out there

and give it a try. And if

it doesn’t work, you know, you learn from that or if it works, you build on that too. Yeah. p

And

Faz: you’re not, Craig, if I talk about your role specifically and you know, what do you see as some of the, I guess the, the advantages that your business offers compared to your competitors?

Brownie: So I guess, we’re really empowered, to improve our knowledge of, of B, as well as the draft quality systems that provide tap beer. So I guess one of the big advantages is we’re on hand to help. With the service side of tap beer, as well as selling just, you know, we’re not just an outlet to Sell beer and move on to the next customer.

We’re trying to help them, have the best quality draft, draft Beer, we troubleshoot any problems they’ve got. and we can kind of do things quickly. Like it’s a quick turnaround. a lot of the businesses, we look after a small businesses. Now, cafes and restaurants aren’t multinational companies.

They’re not rich pubs and clubs with poker machines to kind of fund their food and beverage, or they really rely on, on alcohol as a main contributor to driving margin. So, being on hand to help them out when a little issues arise, is, is a benefit from that. We provide that not many other customers do.

Bosco: Yeah, Craig. So I guess that leads us into a good point regarding the current situation with, with COVID19 or Corona viruses, as

they call it.

So, I’m sure your business has had some challenges. So, you know, what are some of the challenges or opportunities you’ve seen in the last three months or so, during covert and how has your business adapted to those?

Faz: And maybe talk about the, like the experience in the industry today. Like maybe even if it’s not. With you directly, but what have you seen as some of the trends in the industry during COVID? Obviously, apart from people closing down. All right. Because you know, we can’t do that, but what are the, is it trends around opportunities?

Is it, I know one of your competitors that you, you love to hate young Henrys well, I switched, I saw a story that I’m switching to hand sanitizing. And I know malt shovel hasn’t done that, but I mean, I guess that’s a unique story out of a bad situation, whether that was successful or not. And I know young Henry’s is a swear word to you boys at malt shovel, but don’t worry, we were Furphy drinkers, so we’re all right.

yeah, so I mean, I guess the touch on that as well, apart from what Ross asked as well.

Brownie: Yeah. So I guess with the COVID, obviously many businesses lost their entire revenue stream overnight. not having on-premise diners or on-premise patrons in bars, they basically went from a hundred percent to 0%, and it happened quickly, as we all know.

So, some of them, but not all of them adapted to be takeaway food options. So even if food wasn’t their primary kind of. business purpose. So you can, you know, small bars aren’t primarily food outlets, but many of them, switched to takeaway food options. but also many closed up once job keeper was announced because it was more financially viable for them to close rather than to open as a takeaway and pay staff, overheads with food, et cetera.

So, one of the good things that came out of the COVID situation was. An on premise. Legal license does not allow a venue to sell, takeaway liquor where, credit to an, organization called Olga. So it’s Office of liquor gaming Australia that will quick to, change the laws and adapt. So on-premise venues could sell, take away liquor.

Cause until then, obviously. No one was selling any liquor. We weren’t selling any beer. So, it’s been a way that they’ve adapted quite quickly to be relevant. selling pizza and birra moretti, for instance, or, you know, selling burgers and beers. So that was probably a good takeaway, for our customers and was a good opportunity for our customers, on how they adapted to kind of remain relevant.

I guess for us, a lot of opportunities come about in the eCommerce space. so we launched a internal marketplace for staff members, which allowed us to deliver, beer straight to your place of residence previously. one of the perks of being, an employee of lion or malt shovel is that we have, the ability to go to our bottle shop.

internally and buy beer at either a reduced rate and you can use your points towards purchasing Beer, obviously all our sites are closed at the moment, unless you’re a brewer to kind of maintain health standards. So yeah, we come about with the marketplace, so all of our staff members can order beer to their home using their points or paying by credit card.

So that never been done before. New South Wales and Victoria at the moment, they’re looking to expand that nationally and that may eventually go out to family and friends as well. So that’s kind of one e-commerce thing that’s coming out of, opportunity that’s coming out of the COVID situation.

Faz: You know, a couple things that Craig mentioned there, which I think are relevant to our, to our industry and our business as well, is that, You know, when, obviously internet and mobile is probably being classified as an essential service. I don’t think it officially was, but it definitely is. Right.

Especially in this day and age with everybody working from home. And. And so on and so forth. But, you know, the, with the increased capacity with people working from home, we saw the NBN come out. with, you know, 40% increase in the CVC. which is important. and so I think that that sort of resonates to the, is it the OLGA, you said, the OLGA situation that, that, that licensed body or, that, that, that part of the business, you know, adapted to make sure that businesses still had some sort of a revenue stream in a time where there.

Pure revenue or their, the way they do it every day went offline. Right. Or, or didn’t stop working. And, and the other thing is, well, you mentioned Craig, one thing that we’re, we’re working on at the moment is a loyalty program with MATE, right? And so, and we, we talk about this whole concept of head, heart, hands.

When we deal with our customers and, you know, get into their head with the right information, which means we’re getting to their heart. For them to buy into our business. And then we get them to do something with their hands, which is buy our product. Right. And I think, a loyalty program is something that we’ve been developing for a while because we don’t want to just Chuck any type of loyalty product in the market.

We’re not try, we’re not Chuck something out there that’s meaningful. And you spoke about the, the perks, process that your business had, which. Which is really neat. I think loyalty and those type of perks things really go a long way and probably even worth more value in times of crisis, especially during the COVID period.

And I think that’s really good that that your business and your industry did that, which is awesome

Dom: as an industry that I cried. Did

you know, you’re obviously taking away pubs and clubs and and

Brownie: in restaurants to a degree, but

Dom: overall consumption wise and purchasing wise, was there a big drop off

overall.

Brownie: mate, the in March, we as a total business. So total lion business was up in March, and that was mainly, it was all down to the, panic buying in that the kind of the panic flying with, people lining up the door at Dan Murphy’s to stock up on Beer. But obviously that was short lived, like any kind of panic buying and the decline in.

Tap has a, so I’ll put the other way. The increasing package B through retail hasn’t made up for the declining tap, which until last Friday was zero liters

Faz: and another point that Craig made be for around panic buying and things like that. I think, yeah. You know, everybody spoke that the thing that hits the news is about toilet paper, panic buying.

Right. And I think for two months we probably saw panic buying with internet as well. Right.

Bosco: And it wasn’t just, it wasn’t just toilet paper. Exactly. In any essential service. So yeah, we saw, I mean, pre-lockdown, probably same as Craig. We saw there was a huge increase in. People panicking saying, Oh, you know what, if I’m stuck at home for two months or three months, I need internet.

we had customers come to us who’d, who’d only never had NBN before, or fixed line broadband service. They only ever had mobile broadband or their, their phone hotspot, and then they’re coming in, signing up just in case they do need it. so yeah, so that probably resonates with us as well.

Faz: Absolutely. I think it was, it was sort of funny to see.

I mean, obviously it was. It was delivered by default because of the current situation, but it was, I know all we heard about was toilet paper, but I think in most industries there was some sort of panic buy, you know, I definitely went in and panic bottle and beer. That was the one thing that you do, right?

I mean, toilet paper. I say just jump in the shower if you need to Right?. I know. Anyway, that’s my point.

Brownie: I think it all come about when the prime minister kind of first announced that we couldn’t be in this situation for six months. And people, hear six months and go, that’s half the year. So if I can’t go to the shops or I can’t get what I need, I’m going to stock up on stuff that I’m going to need to get through this and beer, it was one thing, toilet paper was another.

And obviously if everyone’s stuck at home instead of office spaces, then I needed to kind of get a better internet connection or speed up their internet, get more data, whatever it might be, is probably why you guys saw such an

uplift.

Faz: You know, one question and it’s something that I asked myself in this business and we talk about there was obviously trends and things happening before COVID.

Then everything went out the window during COVID and people are wondering if it’s going to be the same. Is it going to get back to normal pre before know, pre COVID back when COVID finishes or is it going to, is his COVID going to be the new normal? I mean, I know it’s hard to predict or, or hard to, to know what’s going to happen, but I mean, if you had to have a.

Gut feel for it. Well, what would you think?

Brownie: Yeah, you’re right. So there was, and it has been for quite a few years, a trend towards premium and craft Beer in Australia. the size of. The market share craft beer has in Australia is, is nowhere near what it is in the U S and obviously we still a lot of trends from the U S so, we’re heading towards that number.

There was a big craft movement, with a lockdown in the panic buying it. It all kind of went back out the window and people were buying the brands that have been around for decades and they know Toohey’s new 4X gold, they were the ones that kind of saw the big uplift. Obviously they’re the value proposition.

And, people will kind of pinching every penny, to use a term. So, there’s been a slight downshift in Craft Beer but that’s already started to come back with the on-premise trade, kind of slowly reopening, will return to normal. I think it will, but it might be a little bit longer than we thought.

and I think by 2021 craft beer, we’ll definitely be in growth again.

Faz: It’s

interesting. Right? actually, you know, one thing we didn’t ask Craig before we, we, asked him to come on the show. I mean, is he a Mate customer. Should we really be talking to somebody that’s not a Mate customer? I don’t know. I don’t know.

We should, you need to sort some ah third party, suppliers out. Then I’ll jump. on board

well, that’s a very, sophisticated response. Thanks, Craig.

Dom: Craig. One thing, we, you know. Lifestyle and to come back to normal, to a degree, I guess some places to stay open. You can have sort of 10 people in a

cafe or restaurant.

Now,

we bought pizza from our local Italian restaurant on Saturday night, but obviously some people were quite inventive and, adaptive to the. To the COVID situation. Yeah. Had the pasta shop selling flour and you know, people putting together meal kits to take home and cook at home. Do you think,

do you see any of your customers that are, think did a good job with that and then we’ll potentially continue that as a new revenue stream?

Brownie: Yeah, we obviously had a wide spectrum. Some were great at it, some weren’t so good. But, I guess. I’ll look after the ACT as well. And the customers in the ACT, that are mine were the best to respond. I think because the licensing regulations down there a little bit different to new South Wales, in that they were always allowed to.

sell packaged beer, as a takeaway option. And if they had in house delivery, they could also deliver. packaged liquor. So those guys were pretty proactive with kind of getting in touch with us and, and getting on like, meal deals or just selling six packs straight from their fridge. So just trying to kind of offset the loss of, of what they would sell on premise, as a takeaway.

But those customers are definitely better at it than the rest, I think, just because I’ve had experience in doing so. Yeah.

Bosco: And, what are people drinking these days, Craig? So, you know, what are people buying? What’s, what trends are you seeing in terms of specific products and brands and things like that?

Brownie: So it’s still in Australia, the highest sellers are still the mainstream lager stalls. Like I mentioned before Toohey’s new XXXX gold, VB for one of our competitors. but in the, in the craft section, it changes so rapidly and so frequently. Pale ale I guess it’s still the number one craft style in Australia.

when you think Pale ale, I think like James Squire one 50 lashes. but there’s, there’s new, well, they’re not new, styles, but there’s new, popularity in styles coming up all the time. sour, sour beers are getting really popular. Once again, trends from the U S as I mentioned before with ginger beer.

I used to be a kind of an old person’s drink for, for one of a better term, but it’s become really popular again. And James squire just launched ginger Beer. and then also IPA is, are always kind of in and out of popularity. but really it’s any kind of, any craft beer that’s very hop driven or very hazy, is, is quite popular at the moment.

Faz: It

reminds me of, warheads. I mean, I guess you have to be born in the eighties to sort of know what that is, right? But what you mentioned before, sour and all those different brands and as warheads sort of change lollies to be about experience versus what it tasted like, if that makes sense. So interesting.

Bosco: It’s funny because I remember like back when. My dad used to buy beer here. We’ve always just, it was always VB or Toohey’s new or, you know, the little stubbies. But you go to Dan Murphy’s now or a bottle shop and there’s like, how many, how many beers are they? I mean, it’s

Brownie: like, it’s crazy. Thousands. And I mean, craft brew is, you didn’t even have to talk about beers.

Isn’t this new crop brewer every day? Pretty much opening up. there’s probably four to 500 independent craft brewers in Australia right now. and there’s more and more coming on board because they say that, Yeah. There’s a growing trend towards that. Craft beer

are craft

Dom: beer drinkers is more likely to switch then

be loyal  though, like on a tribe, you know, I follow six different brands throughout the year or types throughout the year as opposed to, you know, the Toohey’s new drinker that just bought Toohey’s for 30 or

Brownie: 40 years?

A hundred percent. They’ve got what we call a larger repertoire of beers, and they’re not so much loyal to a brand, but they might be loyal to a style. So IPA, drinkers like the drink IPA, pale ale drinkers like the drink pale ale. I might venture out a little bit, but, they’ll definitely kind of cross brewers cross styles.

Seasonal releases are big for the craft brewers. So, w w we do quite a few few throughout the year in both pack and tap format, and it might be a hundred kegs for the nation, and we brew a hundred kegs and once it’s sold, it sold, and there’s ones that recur every year that can have quite a following.

So recently over Easter, we. under the white rabbit brewery, we released a chocolate stout. and I think that ws the third or fourth year that. We’ve done it and it’s, it’s got that popularity that’s pretty much pre-sold before we even make it, because kind of people are after it because they drank it last year and really enjoyed

it.

Faz: It’s funny, right? I think every industry has the same sort of challenges. We’ve consumer behavior, you know, Craig. or brownie, I should say. at Marsha spoke about, you know, not being loyal to a product new, you know, people who are, craft brewer fans will tend to switch and try and different things.

But I guess you’re always thinking about. How to keep the consumer in your world, right. and buying your product. And I think that relates to every single industry. And I think, just it’s, my opinion is always, it’s always good to look at what other businesses and other industries are doing to keep their customers.

Because I think something unique is what’s gonna set you apart from the rest in the industry that you play in. yeah, that’s my point of view. Take it or leave it, I guess. Boys.

well ma te, Brownie thanks for joining us. Thanks for being on the show. it was great to hear your story as well as the malt shovel, business story as well.

And, look, we’re, we are a corporate customer of malt shovel. We probably should buy a bit more to give Craig a bit more, you know, bonuses on his end. But, but we know we do, we do invest in some way, shape or form, but I’m Craig, if people want to become a corporate customer or a customer of malt shovel, how can they do that?

 

Brownie: you’re going to just Google search Malt shovel brewery or maltshovel.com.au That Is use the website.

Faz: Alright,

awesome. Awesome. And if you’re in the act or Sydney, you will probably get Craig, make sure you say hello and a reference mate as the, as the referring partner. Alright brownie. Thanks for joining us.

Really appreciate it. Thanks for your time. and have a great day.

Brownie: Thanks

guys.

Faz: Alright, boys. I think that was a really good session. I think that office gives us a lot to think about and hopefully our viewers as well. that’s another, it’s an end of another show for us. any more comments from you guys?

Dom: Thirsty now we

might have to grab a couple of beers,

Faz: we do have a few Furphys in the, in the fridge. Ready to go. That’s something that I do in this business to support my staff and the team. they’re all laughing if you can’t hear them or see them. but look, thanks Australia for joining us. alright. Well this will be posted on our channel in Spotify.

You can look it up on iTunes as well, and it’s available at our website. LetsBeMates.com.au.  See you soon, mate. .