Beer is a Conversation: Mark Haysman

And thanks to our malt mates at Crymoult, this is Beer is a Conversation. I'm Matt Kirkygaard. This week I meet Mark Haysman, CEO of Kraft Business Accelerator, Founders First.

The craft beer industry has been evolving rapidly over the past decade with a flood of new entrants. As craft beer grows, many breweries have had to grapple with the issues of growth and how to fund their expanding businesses and capital requirements. Traditional bank finance, private equity investments, and crowdsource funding are some of the ways that breweries have funded their growth, and Founders First has now stepped in with what they say is a new approach.

Founders First says it aims to disrupt the craft beer and spirits industry with a unique model of business acceleration that enables businesses to remain proudly independent while assisting craft liquor entrepreneurs by striving to solve two of the biggest challenges they have. Access to capital and expert support to grow sales, distribution, and marketing of their brands.

Founders first grabbed headlines in the past fortnight when it announced that it had invested in Newcastle's Foghorn Brewhouse, taking up the share that majority stakeholder James Garvey was selling. The accelerator has also funded the rapid growth of Victoria's Jetty Road Brewery.

With a lengthy background at both Line and CUB, as well as a stint as CEO of the Port Adelaide Football Club and seven years at Deloitte, Mark has an extensive business background and in this conversation we learn about the Founders First model and what it means for the evolving craft and independent beer sector. Enjoy the conversation.

Mark Hazman, welcome to Beer as a Conversation. Thanks, Matt. Good to good to be here. Matt I I guess before we get into Founders First, which is the business that uh you are the CEO and managing director of. Um maybe you can tell us a little bit about who is Mark Hazman? Sure. Yeah. So uh look I've worked uh worked in the beer industry for uh just over twenty years. So I did a did a stint with lime.

uh in Adelaide, then Sydney back to Adelaide and uh then I actually went and worked in AFL footy for three years where I ran one of the AFL clubs, uh the Port Adelaide football club in Adelaide.

Uh, and then after that I jumped back into beer and worked with C U B and saw the the change from uh Foster's through to SAB Miller through to AB MBEV and Um yeah, really enjoyed my time in the industry and uh also have a passion for the on premise and uh uh with a share in a couple of pubs as well, which uh takes a not not much of my time but a lot of my passion and

So when the opportunity uh came up to get involved with the founder's first crew, I guess it was an opportunity to put some time back into a space that I really enjoy, which is particularly the growth of craft and uh and and also venues as well where we have the chance to bring the brands to life. So Um, yeah, look I'd I'd really enjoyed the involvement. It's a fast moving space and I think a lot of growth to come as well. So

Uh great to be involved. It's a fairly um broad range of experience that you've got. You you weren't tempted when A B and Bev came in and uh took over C U B to stay there. We've seen some of the senior staff uh get some fairly exciting opportunities overseas. Yeah, look, I I mean I was there for a couple of just uh under two years after ABI took over C U B and uh

A lot of great friends here and it's it's a great business. Um But you know, probably an opportunity for me to uh go and do some things that I'm passionate about that uh require a bit more entrepreneurialism than uh what you can get within the the big engine of ABI. So uh yeah for me, yeah, definitely um could have stayed and uh would have enjoyed um you know continuing my career there. But uh look this opportunity is a great one to be involved with so very much enjoying it early days.

So tell us a little bit about Founders First. We have seen uh just to set the scene, we've seen the uh Did the craft beer industry go from, you know, ten, fifteen years ago very much a garage band um sort of approach? Um where we we've seen it expand, we've seen it grow, um, we've seen some bigger players come in and now we've started to see private equity firms looking at how they can get involved and uh you know sort of help out some of the the the growing breweries.

Where does uh Founders First you know, what what's the background of Founders First and uh where do they fit into the, you know, evolving market? Yeah, so I guess uh we're a slightly different proposition to probably what you've seen before in Australia. So Um our business is is very much around craft beer and spirits. Um

and, you know, an accelerator. So what we what we're keen to do I suppose is to really support the growth of the craft category in Australia and in particular the growth of independent craft Um so you know, we will invest and back the founders um of businesses to help them grow and

I guess the way we're a little different is that we we provide capital and growth capital, but we also add some value to that investment by providing and bringing expertise in a bunch of different areas depending on what that business is needing. I guess our vision is to build up a nice little network of businesses.

that we have a stake in and we can really help help them grow and and bring some different expertise to add to the passion of these brewers or distillers and and help them grow their business. I I guess that's where your background working for Lion and C U B and then also uh uh you you've recently had uh Cameron Buckland come on as sales director who's uh worked as the head of merchandise at Dan Murphy's. So I I I guess you'd have a fairly broad range of

um skills yourselves and also contacts to to to bring to the breweries that you invest in. Yeah, I think you know, Cam and I worked together at C U B for for a bunch of years and uh and obviously Cam then got coached by um poached by Dan Murphy's to go and work

for them and um yeah he knows the the category very well and uh culturally he's a great fit for us. So uh Cam started uh last week actually, so just recently and starting to get his head around it and he will sort of initially help uh with setting up the sales collective under founders first.

uh which um our first cap off the rank there will be to bring the Jetty Road um sales team in underneath Cameron and provide a a bit of structure and guidance and leadership and um you know a I guess a really disciplined approach to

getting the brand out there in the market and and then Foghorn, uh which we'll talk about a bit later, uh, that we pick up from the beginning of March as we as we get that business set to grow, then uh, you know, we'll build out a sales team that can help them out as well. So yeah, Cam's uniquely positioned I think given his time at Dan Murphy's to come in and really make a big difference with us and uh, you know, the boys at Jetty Road, Grant and Blake, you know, delighted to have

the likes of Cameron on board to to help them grow and help them achieve their their vision and their dreams, which, you know, if they were just doing it themselves, you know, it would be a lot harder to um to get access to some of the retailers and customers that uh perhaps through Cameron and myself.

um we can get them access to. So tell us a little bit about the background to Founders First. It's only a fairly new accelerator you call it, um but it's it's it's it's an an investor firstly with the the the the skills that I've mentioned. Um it it only I I think it only went to market looking to raise capital um to to get it funded uh in late twenty seventeen. Yeah, so it's been uh so the AGM actually for Founders First was

um just a few weeks after I started uh at the back end of November, early December. Um and so the business has been going for just one year, Founders First and um sort of uh yeah, one of the co founders, Stuart Morton um had the had the idea to to kick the business off um while he was over in the US. He was on a on a trip with Steve Baxter um having a look at high technology developments in the US and um Stuart being Stuart was uh more enamoured with what was happening in craft.

and he saw the opportunity to come back to Australia and set up this business where you could provide leadership and and help accelerate uh the the growth of some of the the craft players within the market. So He he did a lot of the uh the background work and initiated the investment in Jetty Road. Um and uh given he spent a lot of time down at Mornington Peninsula himself, Stuart, so

He saw their need, got involved and um yeah, I guess was working his way through how the business could expand and grow and and then um, you know, late last year had a conversation with me so that I could get involved and and help them grow it. So Yeah, it's been fairly new to the market, uh founders first and we raised some money middle of last year before I was on board and and then we're just going through a capital raise now which we're nearly done on to um

to help bring in uh the funding that enables us to um allocate the uh our funds out to help um these different businesses grow and and invest in in their growth um over the next little while. And and Steve Baxter of course is known to uh listeners as he's an entrepreneur, an investor and uh uh probably best known as being one of the sharks on Shark Tank.

Exactly right, exactly right. So, um yeah, that trip went in a different direction to perhaps what Stuart was expecting, but it was uh very worthwhile and um Yeah, so now here we are working together, which is tremendous. Well, uh I mean Steve's got quite an interest in uh beer himself. He's you know, both uh you know, personally, I'm not sure what his investment level is. Is he an investor in Founders First?

Uh look he he's um he he's one of the people that uh is in our network. So um yeah, but we've got a a really good bunch of uh investors involved and um Yeah, there's uh a a good network for us to leverage off going forward. Founders first came together, you sort of had a a bunch of people with backgrounds in equity and capital and management, um, and they brought you on uh

w for your expertise in the the the beer industry. Um what is the idea? You know, w what's the idea behind it apart from investing and accelerating uh craft breweries, why spirits in in in craft beer as opposed to other elements of the uh Sure.

you know, craft I mean there'd be a market in Australia, it's obviously a big market. Um and craft within that is is growing significantly, as we we saw, I guess, through the Cooper's result announced um in November last year, sort of Tim talking about the the growth of craft at around fifteen to twenty percent per annum.

Um, you know, craft itself is, you know, quite fragmented and um you know, some are organized within that market and and some need some help. So um but what these players are, both in beer and spirits, are you know, they're fiercely independent and they're really trying to grow their business and

um, generally speaking, you know, they they need some help, whether it be capital or expertise. So we figured we we can get access to capital through sort of generating a a fund, if you like, through our sort of um network of investors um and keep that independent and bring the expertise through our backgrounds particularly

uh myself and and Cameron uh from a sort of sales and marketing perspective and and then Stuart actually from a sort of property perspective where we can sort of help provide some solutions around the property side of things and asset finance going forward. uh we think it's quite a a good mixture and and something that a lot of these businesses are looking for.

I guess the other background is we've seen in the US just how big craft has got us a percentage of the market. And we think, you know, uh the development of craft within Australia is lagging behind that maybe three to five years and so there's still a lot of headroom for growth. So Um, you know, in in both uh aspects we think there's a big opportunity to get involved and add value to the category.

obviously um there there's a lot of ways that uh start up breweries can go to to get the capital they need. They start they they need to grow, they go looking for capital. Um, you know, there's the traditional Go cap and hand to the bank.

um you know or put your own money in if you've got any left after starting. More recently we've seen uh crowdsourced um funding and and an equity model and we've also seen uh groups such as uh founders first um partnership come in and uh you know a as a form of private equity I guess. In economics there's the law of uh you know, opportunity cost, any decision you make

um has a cost. When uh breweries come to you guys and, you know, get the um capital and also the the skills and expertise and the contacts that you bring. What do they give up or what are they giving up over? What advantages do they get? And also what do they give up over other forms of equity and capital raising?

Yeah, I guess what um I guess what they get access to is um people that understand the space and understand the challenges and unique challenges that they're going through as as often the founders and operators of these businesses and um So, you know, coming to us they they know that uh we will get those pressures um and will we'll probably be able to understand pretty quickly what it is that they're after.

And sometimes they they need more than uh just the money they actually need. Um, you know, they they need some some help and support and sometimes it just in the form of a sounding board actually because running your own business and being a founder of a craft business can be quite a uh a lonely place. So um, you know, I think, you know, w we we can bring bring all of that in terms of what they give up. Um well

I think they're probably looking at it more as to what what value they can get um from their investor and uh obviously there is a a shift these days towards um investors looking to add value to the money that they put in and uh we're certainly not private equity or venture capital. we're playing the long game and really keen to build a a strong portfolio of

um, you know, independent craft brands that we can and we can stand behind the founders and help them grow and build really strong businesses over time. Um

So, you know, we don't have a turn rate that we're worried about in terms of three two, three, five years, whatever. We're gonna build a strong portfolio and um a really strong group of partners within the Founders First Network where founders can help founders and help them grow. So I think a lot of them understand um, you know, we're we'll bring in new new money, um and that money gets put in to help them grow whether that's to

to help fund um, you know, a a venue or to fund a brewery uh or fund the expansion of of their brand out into the market or the expansion of their their sales force in in terms of working capital. So that I guess that's the way we look at it. And yes, we would normally take an equity position, uh, but we also have an asset financing arm within our business as well. When you say you you you don't have a set investment horizon and you're you're looking for the long term

What what is the aim um of the uh of the group? Yes, I guess w the aim of the group is uh to firstly have great people involved with values um that are very similar to ours. um that are really keen to champion the cause of of independent craft in the country um and um that are on board for the long term as well in terms of building a a a really solid um group of highly profitable businesses.

uh that we can help scale up with some fantastic brands that the consumers uh are wanting to to drink and get hold of, uh, you know, such as Jetty Road down in the Mornington Peninsula. Um and then um yeah, I guess underpin that with um a great group of people that can help them grow their business and and uh if we can build a network um over the next uh three to five years of of businesses that fill that uh that fit that.

then we think we can have a a a good profitable business that will generate great returns to to shareholders um and for those founders that we've invested in and we're backing, you know, they're running their businesses um with some some world class expertise in behind them but

they're on the hook for the performance and they're driving and leading their own business and and delivering on their dream as to why they started it in the first place. And if we can achieve that I think we'll all be very satisfied. The margins in brewing are fairly thin and there's a lot of reinvestment back into to businesses.

How do the uh founders first uh investors um you know, how will they receive a return on their investment or sort of uh you know, liquidate their investment uh, you know, uh ultimately? Yeah, great question. I think uh Matt what we what we plan to do is to uh continue to build our business and and uh I guess prove our our worth in terms of delivering against what we say we're going to do and um and I guess build the confidence for the shareholders and

uh what we are uh planning to do later in the year, so within sort of twelve to fifteen months go to go to IPO and list uh founders first on the ASX and that will give some liquidity to um to our shareholders so that they can you know trade in and out of the stock.

Uh but I guess uh w we're keen to have investors on uh in this early stage that are gonna um ride the way with us I suppose and and stay with us over the next two to three to five years as we we build the business out and bring other um uh other partners on board just like we have with Jetty Road and and more recently Foghorn.

So over time they'll get liquidity because we'll be listed. Um, but obviously in the short term it's more about capital growth and dividend returns because we will be reinvesting back into the business to

um to help the businesses grow and get the economy to scale that we can we can build by having a network of um of uh brewers and distillers within uh founders first. So so the equity event um that you're looking at isn't accelerating these businesses, getting them to scale and then hoping that they uh you know, you're able to sell off the individual breweries, the uh y you sort of want to create a business that can list itself on the uh Mm stock market.

That's right. Yeah. So w that's what we uh that's our plan to build founders first out and uh and add businesses along the way. Um, some before we go to IPO and list on the ASX and and I imagine many more afterwards as well, once we've got some uh some cash reserves to to go and invest in in uh more businesses around the country.

So yeah, that's that's our our goal to build a um a a I guess a a real family of businesses underneath Founders First that we can continue to help grow, uh but really uh underpinned by that culture of collaboration and and spirit of independence. It i it's interesting then because one of the you know, i in the early days of craft and I think that's uh it's a legacy of the nineteen eighties where the model seemed to be

start a brewery, survive, um get to scale and be bought out by one of the to the big players. But of course Recently we've seen such an explosion of breweries and there's only so many buyers that that doesn't really seem you know th there there doesn't seem to be appetite for acquisition the way that I think uh people once once thought.

Yeah, I th I think that's possibly right. So um hence we we feel like this model can work really well and get like minded people within the founders first group um and really help. um, help them grow um and enable them uh, you know, an exit strategy over time as well if they want to sort of sell out of um a portion of their stock holding within their individual business and

sell out to um or sell a portion of theirs out to help create liquidity for themselves and pay off some a mortgage or something like that, then uh, you know, we can provide that. But know they're still there running the business and and driving it really hard. So I think we create a fairly flexible model for those that we invest in and ultimately we're there for the benefit of all of the founders within our group.

And over time those founders can actually get a real kick out of helping each other out as well because

I mean you've seen the spirit of collaboration that's alive and well within craft. I mean some of these brewers are um, you know, Sean up at Foghorn, very well known and and has mentored and helped a number of um the emerging brewers within the market and, you know, the expertise that he helped uh he will help bring to our founders group will be uh will be huge and um you know we're looking forward to people like that joining and um and having that um that impact on the broader group.

And that will flow I guess in years to come as well. Is there a like a an analogue business in the US that you can point to that's sort of doing similar work or is this'cause it's the first time we've really seen this sort of model uh land in Australia? Yeah, I think there are um a a couple over there um that are doing something similar. So um again they're a few years ahead of us. Um

But uh I guess we're really focused on, you know, what's what's important to us and what we think can work here rather than looking too much at at what others are doing elsewhere. Um and we you know, as long as we can really foster that spirit of collaboration and independence and

um and be agile in terms of what we can deliver back to help um those we invest in, then we're pr we're pretty confident that um we'll be able to certainly add value and and help build a strong craft category over time.

I'm talking to Mark Hazman, uh who's the chief executive of uh Founders First. Um Mark, the First investment that you made in the the the brewing industry was Jetty Road. Um and you you made that fairly early on in the founders' first you know, investment life. Um Jetty Road was a very small brewery, um, in a regional part of Victoria.

didn't really have an established track record. What was the attraction uh or or what did founders first see um that that brought Jetty Road to your a attention? Yeah, well I suppose uh as I mentioned to uh one of the co founders of the business Uh Stewart uh spends a lot of time down the Mornington Peninsula and um he was pretty aware of Jetty Road and the boys um uh particularly um Blake and Grant um and the fact that they were trying to build their business from

being a uh a backyard brewer if you like in terms of Jetty Road, um, into a more established business and

Uh, I guess uh w back then um, you know, Stuart really liked the the positioning of Jetty Road and um and he liked the the guys and he saw that they really had their skin in the game and that they were keen to keen to grow and they needed some help. So Um, I guess uh we backed him as uh first cab off the rank in the founder's first family in Um, you know, I think uh, you know, what we've been able to do to help them over time

um has been significant in terms of the the wonderful brew pub they've now got down at Dramana on the way down to Port St. Sorrento and um I guess the the way that that's now embedded itself into the local community of Dramana is just fantastic and um

a a great group of people that are really driving that business hard and, you know, we're sitting in the background helping them and um, you know, really proud that we're associated with them and firsthand we saw, you know, to have two brands in the top eighty of the gap.

hot one hundred just the other week and particularly with the Pale L getting into the top thirty, uh, you know, they were surprised by it but I guess we weren't because we just uh we really rape what the uh what Blake's brewing and the way they're going about it. So

Um yeah, that was our first cab off the rank and um you know, we're really pleased with the pro progress so far. But what was it about Jetty Road? I mean I th there there are literally hundreds of breweries that would have uh liked to have had

um some support and even sort of uh you know quite a few down on the Mornington Peninsula. Um was there any did W was there anything about the opportunity that you saw for that or that you thought that these guys need you know, th that these guys are undercapitalized and could really benefit from having uh our help? I think uh you know, quickly understanding the positioning of Jetty Road um in terms of the brand itself.

Um, you know, w we felt that uh it really had the opportunities to travel. So really their their focus on, you know, the life down on the Mornington Peninsula and that real coastal vibe. sense of independence and the good life. The guy our guys at Founders really liked their positioning and and thought that uh it was a brand that we could certainly help um grow, not not just within Mornington and the Greater Melbourne region, but potentially nationally as well. So

I think really it was a combination of me meeting the guys, really liking the guys and understanding their dream um and the positioning that they come up with the brand and the look and feel. Um there was a a genuine, I guess, attraction to to the brand and a and a feeling that it could could scale uh scale up into a really good business.

And more recently, in fact, uh in the last fortnight, um you've uh taken an investment or you you've partnered up with um Sean Sherlock down in Newcastle. Um seeing a brewer with his uh pedigree and you know, a a brand that's that strong locally come up last year looking for an investment must have seemed like manna from heaven for you.

Yeah, well look, um we were delighted uh to have the opportunity to to talk to Sean and and see if we could get something done. Um, the you know Falkhorn business uh itself for the the brew house up there at uh Newcastle. uh is a really good business and uh you know a great venue and and really embedded itself again into that Newcastle local community and yeah to have the opportunity to to work with Sean going forward and support him is gonna be fantastic for us.

um and I think we'll really be able to help him um, you know, to fulfil the potential of of the Foghorn business and and actually put the brand out in the market, um, up there in the Newcastle and Hunter region as well. Um because at this stage uh Sean and the team haven't really focused on that.

Um, you know, they're focused on their award winning venue. Um, and you know, we all know that his uh his caliber of uh you know, what he actually brews um i is well recognised right around the country. So Yeah, we're we're delighted to have the opportunity to work with him and support him and very much looking forward to what we can do together.

I I I guess I mean Sean's worked uh he spent a long time with Murray's craft brewery where, you know, he had a lot of autonomy and a lot of uh credibility that he the that he'd established. Um he's now with Foghorn. and uh running his own show, um, to to some extent. Um he's certainly the face of the brewery. Did you uh envisage that somebody like Sean who has uh you know if not been his own owner, has been his own boss, may struggle having uh

investors come in and uh supervise or you know, is it d uh are are you hands off in terms of the w the way you work with somebody like Sean or great question. I think Matt, we what what uh our vision is for Foghorn is to be in support of Sean? Um so we'll work together with him to support um, you know, the the vision for what Foghorn can look like down the track and and uh we'll sit in behind him and provide him the support that he needs. So

you know, he'll be the man on the ground leading the team and leading the business. We know that he'll brew some uh wonderful beers. Um, but we'll, you know, have the opportunity to perhaps work with him from a sales and marketing perspective to help him

grow um grow the brand and the awareness of the brand out in the market and and then help build the sales team over time. But yeah, we really see Sean as the person, you know, as co-founder of the business to to really drive the business going forward and be the person on the on the ground running it. and um not just the brewer. So and we'll provide him whatever support he needs to do that.

But our w we don't come into this uh looking to we're we're not gonna be running the Folkhorn business. Sean will be running it and we'll be in support of him. And that's the way that we like to operate with our model. So um, you know, the founders of the business they run it and um And we we sit in the background and provide the support they need. On behalf of your investors, um you'd you'd have a fairly keen eye on uh performance and and and measuring those things to make sure that

you're securing their investment and uh you know working towards a return? Of course, yeah, absolutely. So You know, we have our own internal metrics that we need to deliver on for ourselves and for our for our shareholders and yeah we're confident that um with a bit of investment and um you know a bit of uh thought uh thought leadership with Sean that we'll be able to

to uh really get a good return on our investment in foghorn and grow the brand to be one that uh that the people of Newcastle can be r really proud of and and we do know the craft region of Newcastle is growing really strongly so You know, I think if we give uh give Foghorn a bit of a bit of a leash and let it get out into the market it will uh do great things.

One of the things I I've always been told, uh particularly from um you know the the business minds of the the big breweries uh is that beer is a unit cost game. Um, you know, and you see all of these mergers and acquisitions taking place at the big end of the market. talking about synergies and you know efficiencies. Um the the model having a small brewery in Victoria and a small brewery in uh regional um New South Wales.

Um each with their own breweries is a fairly inefficient way of making beer. Will we eventually see, you know, as you get more acquisitions?

uh potentially building a scale uh brew house that these brands can move towards? I think uh, you know, um potentially in time that could happen. I think in the short term our job is to continue to support uh the likes of Jetty Road and Foghorn to build their brand in the local market and you know having that brewing capability um you know through their respective breweries is is really important to do that.

Um and you know, yes, that does present its own sort of economics um or challenges in terms of economics, but it's really about getting into that sweet spot around the volume that helps generate the most efficient um operation you can. Um but I think that sense of connection to the local community and authenticity and for the locals to see their brew uh beer brewed locally is r is really important. So

Uh but you know, the Jetty Road guys can in time uh with investment um you know brew up to one and a half million litres uh a year through the brewery. So, you know, we're we're confident that there's a lot of growth left um within the jetty road business.

just by sort of uh uh plugging more equipment into the existing brewery and and getting Blake a bit of help um on the ground and and uh I guess the same thing with with Foghorn where uh we'll just have a look at how we're going in terms of the demand for the product and We certainly feel like we can brew most of it um through there for for quite a long time.

And I I I think when uh Founders First was first looking at capital raising they'd looked at uh or that they'd projected that Jetty Road could uh scale to a fifteen million dollar um business uh within two years, which uh would put it around about the two million litre mark, I'd imagine. Yeah, yeah. So I think, you know, we have um quite uh bold aspirations um in our support of the the Jedi Road team. So

Um, there's no reason to think over a period of um, you know, three to four years from here that he couldn't be doing that sort of volume. So the key though is the quality of the volume that we're getting and um making sure that we're maintaining that premium price in the market so that we continue to um, you know, gen generate the sort of growth we want rather than

um, you know, pricing the product down and uh and chasing volume for volume's sake. So yeah, we're confident with the combination of uh brood pubs and venues um attached to Jetty Road and and the quality of the the beers that uh Blake and the team are brewing that uh we'll be able to get to that level.

Maintaining the uh the the the value of uh your your product price is a uh i is one of the great challenges, isn't it? Particular so uh w will you be chasing growth through the the national retailers, for example, and uh'cause th that that can have a uh a few pressures on price? Uh it can, I think, you know, it's all a matter of uh you know, all the uh all the national retailers are also looking to grow value of the category and um you know I think if we can work together to

to make sure that we're doing the brands justice in terms of um, you know, the way they're positioned and priced in the market. It's good for the category overall. So, you know, everyone's trying to um grow the category profitably. So we'll be making sure we We partner with um the right customers to enable us to to do that because that is once you um lose sight of that then you start to undo um and dam uh all the good work and damage the category, which is not what we're about.

So what's your read uh just before I let you go, what is your read on the the the national um beer market? And I'll again I'll sort of make a little bit of a statement that you can comment on. Um you know, for a long time beer has been seen as Uh beverage for blokes. you know, V B ads or the Forex Gold ads where you've got a bunch of buffy blokes sitting around a campfire. Um it it's been very price driven. Um and d this craft beer category has has exploded.

Um, you know, do you see that as being able to decouple consumer perceptions away from the mainstream market? Is it gonna have the same pressures as the market has?

Yeah, w w what is your read on the future of beer and the subset of uh craft beer? Yeah, look I think uh you know it's a it's a wonderful category to work in and um some um some great brewers bring some great beers right around the country and um you know, I guess what we're seeing is inst the value, um the value of uh the beer category is still growing and there is a shift away from uh mainstream styles to sort uh I guess the

um premium um craft products and so we're definitely seeing that. I think I think that will continue and I guess what we're seeing is um

some some businesses like Angeti Road would be an example, creating um really easy drinking styles of of craft beers but uh with broad unisex appeals. So you know, overall I think there's more occasions that drinkers are consuming um beer in these days, um and spirits for that matter, and a lot of those are unisex type occasions and I think those that are responding to those um needs within the market are are going to be the winners going forward.

So I think you know there's still a lot of growth left in the category um and uh some really interesting um brews coming out and uh I think people are expanding their repertoire of drinks and they're willing to experiment and try some of these other um other um beers and spirits and and drink better and uh and and enjoy enjoy these products. So

uh and I think they're really respecting the process that the brewers have been through and the distillers have been through to create brands with a point of difference and and new and interesting um liquids and uh and really enjoying that. So Yeah, I think that will continue over the next few years um and uh and into the near future without any doubt. So as we get great um great people into the category to help create um wonderful drinks.

And and we really need to, don't we, is all of the consumption trends whereas once upon a time if you had a beer you'd probably have eight and so y you could uh sort of businesses were based on the scale and, you know, selling l large volumes of small margin product. As people drink less, um brewers really need to try and lock more of a premium into each beer that they sell, don't they, for for the in industry to be profitable. That's right. That's right. I think um

you know, b getting uh encouraging people to drink better, um, to do it responsibly. Um and do it within their means, uh, I think i is really important, but there is definitely a shift to the um I guess the higher end products and um and people are appreciating uh the craftsmanship that's put into those uh those beers and spirits and um you know the retailers are supporting them because there's a lot of growth at that high end of the market and

Um, you know, I guess uh, you know, we'll be continuing to focus on growing growing the category uh from our side um in that space. That's to the benefit of you know, uh more options for the drinkers out there, uh but also uh for the retailers to, you know, be able to bank bank more dollars a along the way. So uh so it's in our mutual best interest.

What do you think the challenges are then for for the category? Um you know, moving forward. We're seeing a lot of players come in, we're seeing a lot of uh choice and diversity, we're seeing a lot of excitement, but what are the challenges um that the craft sector is going to face?

There is a proliferation of brands, so being able to stand out from within that um from with the within a huge number of brands in the market is is gonna be hard to do. Um and, you know, I think you're gonna have to be pretty organised for the bigger retailers to wanna work with you. Um because that they're all time poor and there's more and more people for them to see.

So I think that's a bit of a challenge and um you know, I guess, um, you know, the sense of uh social responsibility and still um making sure that um you know w we're encouraging people to uh consume um you know beer and spirits in a social in a um responsible uh but sociable ways uh is really important so we do need to um look after people that are in the category as well. So we've got a role to play there.

Uh but yeah, I think there's probably the main the main risks at this stage. I mean that the bigger brewers uh within Australia are, you know, very well run and and they've got a great range of products so, you know, it does make it hard for the the craft guys to get in and uh under and get access to the consumer but ultimately the consumer will decide what they want to drink and

if we keep presenting the right products I think um you know there's a there's gonna be continued shifts to sort of that that craft uh craft area. Will competition put pressure on price? Oh, I think it always does, yeah. So I think uh again it's up to up to the the brewers and uh the businesses to build their brand and and build that sense of um local connection within their communities to to make sure the communities are supporting their brands and

Um yeah, price will always be a factor. So um there's only so much you can do about that. Terrific. Well Mark Hazman, I could actually uh keep uh s s sort of digging uh

Yeah, um infinitely into into the business of uh of craft fever. I've kept you for long enough. Thank you very much for for joining us uh on Beer as a Conversation and uh all the best with Founders First and we look forward to uh to watching as the uh the business develops and see uh perhaps who you next Choose to invest in.

Yeah, thanks Matt. Really appreciate the time, mate, and um yeah, been really uh buyed by the the response and support we've had from within the industry and uh yeah, great for us to get involved with businesses like Foghorn to help the likes of Sean.

um and the team up there at Folkhorn really grow their business and fulfill their dreams. And uh we look forward to chatting to you as we uh continue on the journey over the next few years. Terrific, Mark. Thanks very much. Thanks very much Matt. Good on you And that was Mark Heisman. Next week we will bookend today's chat by catching up with Foghorn's Sean Sherlock.

It will be interesting to learn about the other side of the transaction, so stay tuned for that one. We also thank our sponsors CryMalt and also Rallings label. Brewers, if you are looking for an easier, more effective way to do smaller runs of labels, get in touch with Rowings. If you order printed cans, then you must order a minimum quantity of 60,000 plus. Sleeve cans look and feel just like printed cans, but with a smaller minimum order quantitative.

Labels on cans sometimes really miss the mark if you do not get your design right and can look cheap and unappealing, which means the punter can choose another beer over yours. Railings, labels, stickers and packaging supply fully sleeved and palletised cans ready to be filled. They will also print and hold the sleeves and supply and batches as needed for each brew to make cash flow and storage easy. Pay for the printing up front and then pay per can and application as needed.

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