Mark Haysman - Mighty Craft

It was always part of the plan to put a brew in, but for many years it it was just a plan. It's a hundred percent acquisition of Green Beacon. No, we had a chat with everybody. Anyone would have seen this coming a mile away. Super simple and direct question. Hi, I'm Bruce News Editor Matt Kirkygaard and that's just what we're here to do, talk about beer. And this week we have our now annual chat with Mighty Craft Chief Executive Officer and Managing Director Mark Hazman.

As industry observers, we do a lot of gazing at private businesses from the outside. Trying to divine how they and in turn the industry is going. But one of the trade-offs for publicly listed companies and those that also take on equity crowdfunding is the requirement to regularly disclose information about the business.

It's a trade-off because it gives us an insight into the operations of the business and how it's faring. And this ability to scrutinize also allows some insight into how the broader beer industry is going. That's why I thank Mark for his willingness to engage in this annual chat with me and my deeper dive into Mighty Craft's numbers and its strategy. I'm sure it's a little different to most of the interviews he has to face each year, and I appreciate his willingness to front up.

I think it's important because businesses such as Minecraft have to constantly sell themselves to potential investors and the stock market as much as they do their products to consumers. And that creates a powerful narrative about the state of the industry that I think requires a little bit of a study.

In this conversation, we look at Mighty Craft's unicorn brand Better Beer, something that we have done quite a bit of looking at this year. And also look at whether any meaningful scale is possible for its smaller craft brands, including its focus brand. We ask what the future is for the non focus or deprioritized brand.

And why they have struggled to get scale and whether this has forced a change of strategy for the craft incubator. We also get some insight into what may happen to them. Finally, we look at Mighty Craft's spirit businesses. And what the future direction is for them, but also what makes them different from beer and how the focus on spirits will impact Midecraft's beer business. As always, it's a very good chat and it's a very interesting insight into the state of the market. I hope you enjoy.

Mark Hazman, welcome to Beer is a Conversation. Good morning Matt. How you doing? Good, good. And now annual uh catch up on all things uh founders first and then Mighty Craft. Yes, very good. So uh it's nice to chat to you. Let let's um kick off with uh you know how are things going uh at the end of twenty twenty two for for Mighty Craft?

Yeah, uh thanks, Matt. Yeah, look, uh great, great to be on. Uh it's been obviously a very challenging couple of years for the industry, hasn't it? Uh with with so much going on and Uh, you know, we're feeling feeling good about where we're at, uh and you know, we've had a

uh a really good couple of months actually. So September, October, November been been really strong for us as a as a total business. And Obviously we've got the the real focus on simplifying our business going forward, which I think we'll get into a little bit as we discussed today.

um and uh really focusing on I guess the the brands that we think are gonna move the needle uh for for Mighty Craft um into the future and Uh yeah, so look uh we're we're we're tracking well and uh good to see the industry uh up and going again, the on premise opening up uh and starting to feel like uh you know there's a lot of positivity out there and and people keen to socialise and

Despite the bizarre weather we've had, particularly on the eastern seaboard, uh good to see people out in the bell.

Mm. Absolutely. And uh look th th there's a lot in that that we can unpack. Um but let's first of all, I I guess one of the huge highlights has been the runaway success of the the the the better beer franchise. Yeah, look it's been uh you know, it's just over twelve months now since uh since we launched the business. Uh obviously

enjoying working with Nick and and Matt and Jack, the inspired unemployed, um, who are are certainly putting their shoulder to the wheel and working hard to to help build this brand. Uh so Yeah, I think to to build a brand of of scale as we have um so quickly is a Uh really it's a it's uh

Uh uh m m once in a generation might be too strong, but certainly I haven't seen a beer um have this uh sort of impact in the last ten years in Australia and uh It's been a a big effort by um all all parties involved and and certainly the

the drinkers out there uh seem to be really engaging strongly with the brand and enjoying uh, you know, um what what is a great beer but also the the irre irreverent and disruptive way in which it's been launched. It and look I I I don't think anyone can disagree with the biggest beer launch in, you know, ten years, but you know, when when you look at the scale that it's achieved in and w what literage is it currently? Did it is it tracking at ten million liters annually?

Based on the the current volume. Yeah, it would be on track for ten ten million annualites, that's right. So uh and had its biggest ever month. in November on the back of its biggest previous month, the month before. So yeah, it just keeps hitting new highs. Uh and, you know, the one of the highlights for us obviously was uh if you're happy for me to sort of talk about it now is the uh that but the the guys did their

the inaugural launch of uh, you know, the the Day for It Day, uh on the first Saturday of summer. Uh and it was just incredibly successful. Uh and, you know, they they endeavoured, you know, we sort of tried to get the prices back in the on premise back to

you know, the the prices of uh midis and schooners and pints back to the seventies, you know, and uh and obviously in the in the off premise um you know, uh they they ran a a bunch of promotions as well and yeah, the brand did did extremely well um on that particular day and

you know, I I think uh w we w w we we think it sold, you know, nearly three hundred thousand litres um of better beer on that particular day, which was um a huge result and uh, you know, I guess it's uh ensured that our trajectory of that brand is continuing to uh trend up and and looking like we're gonna have a really strong summer uh with really high engagement and supporting the boys, which is great. Now having a day like that where you know discounting

can be a double edged sword for a brand where it can drive purchase but then it can also devalue the brand. Is w was that a strategic decision to just do a day to encourage trial, but One that doesn't actually get people used to a low price? Absolutely. I think, you know, w we certainly want to continue to premiumise um, you know, the category and help trade trade people up out of mainstream into more premium products and

uh, you know, bet better beer certainly uh has been achieving a price point sort of in the mid fifties. Um so It was really a just a one day only, um, to to get more people into the brand and and almost to reward those that love the brand and say thank you to kick summer off so

Yeah, certainly don't expect it to stay down there um again anytime soon. But yeah, it's just as a a one off for one day. Uh I think these things can prove effective to get more people to try it as well as reward your loyals and then hopefully that takes the the underlying level of demand up um up to the next level again uh going forward.

I I'm never quite sure how these things get out into, you know, the rumour territory, but I've heard even you know, f for for a uh period better beer was the biggest selling uh skew in the the the Endeavour group um w which is the first time that one of the uh a bear that's not from the big two has has lost that mantle. Is that uh something you can comment on? Oh look I can't I I haven't seen the final numbers to comment on that, but um it it certainly did exceptionally well on the day. Uh and

you know, I don't think we could have uh couldn't have been happier with with how it performed so uh but certainly showing great signs of um you know being able to scale um a as it becomes more broadly available and the awareness uh increases uh for There's a lot of drinkers that don't know about it yet, so I think it was a great way to sort of get more people into it.

that you know, the biggest beer in the country, Great Northern, has been discounting apparently uh, you know, a a i as a direct target to to you. Yeah, I think the th there's no doubt that the source of volume for better beer uh i is not only attracting younger drinkers into back into beer, which I think is fantastic for the category and creating a lot of interest and not just um young adult males but females as well, which I think is really good to bring more females into the category.

Um and obviously it's not just the lager but the this uh the uh ginger beer as well is proving very popular. So I I think the source of volume uh for better beer uh Clearly uh a lot of it is coming from the mainstream offerings. So whether that's Great Northern Original um or Supercrisp, Hahn Super Dry, Pure Blonde, um even Corona and Carlton Dry.

It's definitely having an impact on those brands. So, you know, for example on Dayfrit Day, uh very clearly Great Northern um were were very sharp on price. I'm not sure how they did it, whether they sort of targeted coals. So Dan's and PWS would match. Um, but you know, we were still sitting just above them on price and and uh performed very, very well. Um so yeah, I I think certainly that the big guys are um taking notice of better beer and and kind of intrigued.

uh by not only this highly disruptive and novel way of launching a brand, but Clearly the beer itself is um o of um the right quality that is meaning that the drinkers are continuing to come back to it. So yeah, it'll be an interesting space to watch over summer. Going back to the idea that it's you know one of the fastest growing, you know, for for it to achieve the scale that it's got.

Um, you know, even Stone and Wood was I think, you know, around about the eighteen to twenty million litre mark total um when they sold after twelve years. um to to be, you know, around the uh ten million litre mark after one year, that would even strike me as being faster than Great Northern, which has s subsequently become a juggernaut. It it it would almost seem that if a beer doesn't fire immediately a new beer doesn't fire immediately, the odds are it's not going to get

To that sort of significant scale. Is that a reasonable, you know, uh takeaway from this? Yeah, I I think that's right, Matt. And uh you certainly know within the first two to three months whether a brand is going to be something, you know, and

I I think we'd better be the sort of obviously we've watched the scan sales quite carefully and you wanna see I guess that continue to to to rise over time. And obviously seasonally you expect that it might drop over winter. Um But those key occasions around, you know, whether it's Australia Day, whether it's Easter, um footy finals, uh whatever that's uh

you know, it should be should be peaking in those weeks and driving strong growth. So yeah, look, it's not only have we not seen a brand um hit the market like this for for a long, long time, I think that the pattern of um scan sales is It's a really nice pattern that any any beer company or consumer goods company would like to see because um sometimes you'll see a a strong spike early and then it comes off and and then it it just struggles to get back there. So

you know, I think to retain that sort of premium price to mainstream uh beer uh and so it is trading drinkers up, good for the category and clearly it's maintaining those volumes. So Yeah, I think if you haven't, you know, i i if your first two or three months, um you you're languishing, it's very, very hard. So I think you know very quickly whether brand's gonna work or not, which is part of our incubator model, to be honest, with with Nick Congo and

you know, Torque EBEV um Torque Beverage Company initially was to launch brands in that would, you know, hopefully scale up and don't be afraid to to to have a crack and then fail fast. Um so You know that that's part of what you have to be prepared to do. Probably a bit easier for us to do that at Mighty Craft with that incubator business set up with NIC. And uh, you know, we have put a couple of products into market that we've taken out, but this one better beer.

is uh is clearly doing a great job and and i is I think set for a really strong trajectory for uh for a number of years to come. We're jumping a little bit forward but we can come back to the other things, but I guess that brings us to the the the the idea of failing fast.

When last year when we talked, you know, we had a fairly uh you know, circuitous discussion around

small breweries, cost base and what scale meant for them. Um and and this year as we've uh looked at the the the reports, we've seen a number of focus brands and then some things I I guess could be put as business speak or euphemism, sort of looking at simplifying the business structure, um and uh having non core uh breweries, which I I I guess is some of the businesses that you initially invested in. the realisation has been that they're not going to scale and

you you're going to focus uh on on what is. Is that t talk us uh is that a reasonable observation or you know talk talk us through the strategy. Yeah, uh certainly I think uh you know the It has been a very difficult couple of years, so we've had to, you know, remain pretty agile and and probably prioritise uh m more so than what we've ever done and and every business I would say would would be doing that.

I kind of reflect back as well to You know, eighteen months ago we we did the transaction where we acquired the Adelaide Hills businesses, which included, you know, wonderful brands like Mismatch. um brewing, um, hillsider, uh 78 degrees and lot 100, um, all four good businesses in their own right.

when we bought those businesses, that kind of doubled the size of Mighty Craft. Um And so, you know, we we obviously we're gonna really prioritize um those brands to t continue to to grow those businesses um as well as building uh the the other uh brands that we have within a B portfolio and S Spirits portfolio.

I think what's happened since then is not just COVID, uh but obviously we've had uh a better beer launch as well, which has um helped us see again the benefits of of scale um and the importance of focus. So Look, I I think going back a step, it it's really hard to build craft brands and really hard to build craft brands of scale. And, you know, we I I guess just wanted to make sure that uh we we remain really focused going forward so that we are

building those brands that we're really prioritizing um as we sort of go and hit that overall target that we put out there for, you know, our beer, you know, beer cider ambition. Um But what that does mean is that we've had to make some choices, uh to long winded way of answering your question, Matt, but we've had to make some choices around we we can't feed all of the hungry mouths to the same extent. So we, you know, clearly prioritizing within beer, uh better beer with mismatch.

uh Jetty Road and Hills Cider and some of the other brands, you know, we we obviously continue to support and work with. Um we want them to be really strong in their local market um and and do well but we just can't invest behind all of them the same way. So

Uh, you know, we've had to do that uh in collaboration with those partners and and the brands we've invested in. Uh but yes, we are definitely dialing up our focus on sort of three or four main brands in in beer and cider and and um you know obviously keen for the the the smaller beer brands if you like to to still coexist and do their job in their market in and with their brew hub. Um but you know, we're not gonna be able to take them all to the sort of scale that

um you know potentially even that we've been able to achieve with mismatch. Um so, you know, that's I think part of the challenge of the craft industry and uh the the other piece that's made it difficult for us uh clearly has been the ATO rulings around excise emissions, which means that, you know, where we own over fifty percent of a particular business.

um that excise remission um now we can't claim for any more than one. So that that's also been uh a challenge for us to sort of stare into and work out how we deal with that and how we you know do that in a way that is, you know, the best result for

the partners and the the brands that we've invested in as well. There there's a couple of things in that and I'll I'll come back to them individually, but you know, uh picking up on what we said it's hard to scale craft brewery. You know, I I I look at the you know, ha having been a very close observer since the founders' first days, talking about they were exactly the sort of businesses that you wanted to invest in and scale and

the quality of the experience of the you know the the the you know fairly extensive management of Mighty Craft. I I I I guess my very first question is Wasn't that true before you went into this and shouldn't you have known that there was challenges in scaling small craft breweries? So yes, we we did know that going into it. Um but there's been a bit that's changed in the meantime, Matt, and I think

Uh the the two main things are that on the back of COVID I think what you're finding is uh a lot of the national retailers are pushing the craft brands back more so to their local state markets. It's really hard to cross border now and and scale them. Uh and we've seen that happen, whether that's with ballistic or jetty road, where initially we you know, launched in the the local market and and and then we got a bit a bit more of a national footprint and then we sort of get pushed back.

So I think, you know, that that support of local, both from a consumer perspective, but then also from the the customers has has meant to sort of push most of these brands back to their home state. And then secondly the the cost, um, you know, whether it's difficulty in getting staff at the hospitality level, whether it's the cost of, you know, your your staff in the breweries, the cost of um not just so the raw materials and the inflationary impacts of that.

um and the abil inability to keep taking price in terms of um through the key customers as well, along with the ATO excise piece, has just really squeezed the pie down. So yes, we knew it would be difficult. Um we we definitely believe we've built a a great platform in terms of our team to to drive and scale brands. Um but it's just, you know, it it's it is really difficult. And

you know, I think I would, you know, being being less than honest with you if I said that it wasn't difficult and it's become more difficult in the last couple of years. So um, you know, I I think that for a bunch of reasons uh that that's occurred and

you know, I guess good businesses need to to stay agile. Um so we are, you know, have evolved that strategy a little bit to really focus on on the winners and um and and uh you know I guess have to face reality around how much we can scale some of the the smaller state based brands.

So yeah, look, it's been a tricky dance, um and you know, again proud of what the teams delivered um and what they're doing and I think that experience in a in a in a brew pub, whether it's at up at Slipstream, whether it's at Foghorn, whether it's at Jetty Road at Dramana, those experiences are still fantastic and really important.

um a center, a matter of how far you can push the brands um outside of that um that local market and do so in a way, you know, where now of course um doing that profitably is is more important than ever.

And for us being a listed company, Matt, being a growth story and a growth stock is not enough anymore. we need to get to that um that that profitability piece which, you know, as I just touched on, it is is harder and harder without that scaling craft. Mm. And and and I look I I I I uh completely take your point about things like the the major retailers who are the key to any brand growing

going back to local, but that makes it sound like, you know, just about every craft brand has a glass ceiling these days. Um it's it's going to be very hard to get a national scale for any brewery. I I think it is possible. It's just a matter of um being able to to get to that scale where you can invest appropriately into that brand and I think there's still, you know, some s obviously some really good brands out there and I think

for us as well, when you think about where we came from, Matt, where we set an ambition for the sort of volumes we wanted to do. Um, and then we revised that ambition upwards, obviously on the back of better beer, but for us you know, if we hadn't created the platform we could bolt better beer onto um and better beer didn't come along, um, then we would have um either more aggressively grown the brand we have or we would have had to find other brands to bolt on to meet that ambition as well.

Um but I think you know it's a good thing. I don't think there is necessarily a glass ceiling if if you get the the brand proposition right. Uh I mean Bolter proved that, Stone and Wood proved that. Uh but you know, will there be many more of those? Uh, you know, I d I don't know. It is is getting increasingly difficult. Um, but I hope there is because it's a good thing for the category and the drinkers out there wanna try these new and interesting products and

Uh, but you know, it it's just getting harder and harder to do that. So I guess time will tell and maybe this time next year we can have a chat about, you know, whether any anyone else has been able to break through that glass ceiling and and and create those brands of scale. Um and if they have, I dare say their local market uh would have been uh really important to them to establish a good home base first.

Uh okay, uh yeah, it it is very difficult, but negotiating exactly those challenges, the promise that Mighty Craft or Founders first had that you you had the capital to invest in these brands, you had the n the the marketing now s the ability to negotiate r um you know relationships with the the the retailers that the small breweries didn't have and yet uh none of the and and I'll sort of say this is a blank blanket statement, including um mismatch at this stage

None of those brands have, you know, gone anywhere near achieving a, you know, what what you would regard as a scale as as scale. Yeah, I think, you know, the the the two things to that. One is uh, you know, the we walked straight into COVID, uh we had, you know, a huge proportion of our our uh business in the initial stages you might recall being venues. So we had about 50% of our revenue in the early days being venue.

when they close and you've got capital tied up in those, that becomes very problematic. Um, so that you know, that that really made it difficult'cause we couldn't invest the way we wanted to. Um that said, you know, you look at uh where we are with brands like you know, Mismatch and Jetty Road, et cetera, um, that we're really focusing in on.

you know, growing in the order of thirty to forty percent on last year on a year to date basis uh is is really strong and um you know, I would say that that would be in the top tier of growth brands and, you know, you're not going to be able to to grow at the multiples that something like better beer has grown out.

Um so I I think, you know, thirty to forty percent is still really strong and if they continue to grow in that way then they they will eventually get to a decent level of scale um and and you know, mismatch itself will you know, certainly do um well over a million litres for the year. Um and and and Jetty Road in a few years' time would get to that as well. So

um and even hillside are growing at sort of twenty percent on a year to date basis and and we'll we'll do well over a million litres for the year. So uh you know obviously not talking about spirits either at this stage but You know, that that uh capability we do have to uh you know engage with the retailers the right way to get the right outcomes so we all do well out of it.

um I think we've delivered on. Um it's just been a lot of headwinds around, you know, uh eighteen months of COVID that really made it very, very difficult. And

you know, restricts your ability to um, you know, it deploy your capital as you would like, um, or even go out there and raise capital for that matter. So Yeah, look, there's a bunch of things that have conspired against us, but um, you know, I still feel like uh the only reason that a brand like Better Beer has been able to come to market is

because we've created the the capability that we have and the team we have and and we've been able to uh you know been prepared to invest in innovators uh you know like Nick Cogger to to enable these sorts of brands to come to market. So Yeah, there's um yeah, I I I think that's the way I look at it. Uh again, I mean Nick is very um effusive in his praise for the the Mighty Craft model and what it's uh allowed him to do, I guess, you know

I don't r don't want to get into a what is craft beer debate. But you know, it's certainly not mainstream, um and it and it does fit within the voting for the the hottest one hundred craft beers, but it I I I think if you reached out to the mainstream beer drinker, that contemporary better for you beer is probably a whole different set of marketing and brand cues than any of the

craft brands that found us first uh really uh targeted at the beginning. Yeah, I think I think that's right. I mean we we look at obviously better beer is top end of mainstream. Um

which is a a good spot to be. Uh, you know, I do joke with Nick that it's entry level craft, but obviously it's it's not. Um and uh it it's done exceptionally well. I think uh when you even look at our spirits portfolio, Matt, um a brand like seventy eight degrees, you know, is is kind of at that entry level in terms of premium, um, which is important at the moment as in terms of how we're seeing, you know, pressures on households and

uh and the economy that, you know, it it is making it harder to one realise price on on craft brands, but to to really uh get them going, um, you need to keep the price down a little bit, which is tricky. Uh so for better beer to be in that space kind of sitting between mainstream and

and uh the the bottom of venture level craft I think is a good spot for it to be. And, you know, we you know, we have evolved our strategy to say, yep, we we wanna incubate and build these these these brands and craft brands but in this case we've got something like Better Beer that is definitely

easy drinking, uh top end of mainstream, um and clearly leveraging off those better for you and moderation trends that um that are out there. Um So yeah, look it's it's been a great addition to the portfolio and and for us, uh, you know, we we uh

w it gives us a bit of protection in terms of us having a portfolio of brands at different price points um and offerings, uh which I think is been really important in the last little while and and I think will be as well, Matt, over the next sort of um year or two. For a a craft brand, whether it's mismatch or any of the uh the other beers in your portfolio, what volume do you think is starting to achieve scale at at that end of the market?

Yeah, I think uh, you know, the g getting over a million litres, um I I think sort of twelve, eighteen months ago you would feel like you're sort of getting to that scale. Um, I think with the cost pressures I alluded to earlier. Yeah, I think you really need to be pushing to, you know, one and a half to two million litres to start to get to that scale that delivers you the the the free cash flow and profit that you can really pump back into the brand.

So I think really you wanna be trying to push north of two million, uh, to say it's sort of a scale craft brand and Uh there's a few I think that are playing in that in that space um and and doing pretty well. So uh yeah, but that's that I think that's the way that I think about that now in terms of the economics of of craft. How do you get to that?

Size is the is the only problem because Kraft beer i is one of the for amongst consumers, they tend to think of it as, you know, small and local and you know, once beer's start appearing everywhere and they start selling uh outside of their own, you know, region, they start losing that they need something else to the brand beyond just the the the the craft cues seemingly for most con consumers. But From what you were saying, the major retailers that are the

way that you can get that um at scale without needing sales reps in every market delivering those uh individual relationships. So how how do you take um a brand like mismatch against those headwinds beyond that one and a half million litres volume. Well I I think the key is to

to not spread too thinly. So really focus on your home market. Uh do do a good job in your home market to, you know, build the awareness and and build the engagement with the brand. Uh I think that's where a venue can come into it. So if you think about in in Adelaide, um and we haven't been there yet, Matt, together, but the uh the mismatch of taking over um the the old brew pub at Whitmore Square, which used to be Spark.

Um and um, you know, Ollie and and Lee and the team there in South Australia with Mark Hoover. who was one of the original founders of Mismatch, you know, they've created a a great little um group hub um there which has, you know, only been uh under Mismatch for you know just under two months, I think.

uh i is doing really well and creating, I guess, a home for mismatch in the city of the state that it emanated from. So those are the sort of things I think that can create great engagement in in the brand and and with the people um that that are behind the brand. um and that that can help the brand grow in that local market. And I think that that that is a good strategy to to do that and maybe you can have multiple venues that help build that footprint.

I do think you need to be strong in your local market and and connect with uh the the consumers and engage um, you know, well with the consumers um and and bring them into your into your family if you like in the in the mismatch um p uh from a mismatch perspective. So

I I think that's really important. Um, then you need to be able to to brew at scale, to be able to get accessible price points and I guess you need a w at least one or two key lines that can do a good job for you and in mismatch you've got the

the benefit of not just having a good pale ale, but the session ale uh and then the lager are both, you know, two really strong products. Um so I think you know to to get above that sort of one and a half to two million litres going forward, you need that, I think a a local home to enable the punters to engage with the brand and the people behind it.

um and have that experience and then you know you need to have a couple of offerings I think that could could scale up over time uh and and then that potentially gives you an opportunity to take it out of your home state. Uh but I I think if you do that too quickly without being strong in your home market.

Um it me it makes it a lot tougher. But I mean, even i if you're selling beer over your own bar, that's not really scale, you know, w when i if you're talking about it side by side with a brand like uh Betterbeer, which, you know, ten million litres in a year.

that's where you're starting to get n you know, genuine scale. You know, a a a brand like um mismatch that, you know, as you said, I think is growing thirty percent a year and is around the one point two million litre mark. Um That thirty percent tapers very quickly after that first million litres and if it New sales that are coming from your own bar, that's not I mean, that that's a a very expensive way to market the beer and build brand offering, isn't it?

Uh yes and no. I think I I think it's a combination of all those factors, you know. Uh and I I would say that, you know, mismatch is is growing at an increasing rate. Um a as each month goes by at the moment, which is um, you know, a credit to the team and also does reflect that, you know, having a a a br a home for that brand in each state and

Yeah, there there's a lot of businesses that have proven that that's a good way to build a a brand, whether it's going back in time to the likes of little creatures, uh, you know, Pirate Life, Thor Pines, etcetera. Just before we move on from that, I was I was gonna ask which ones have done it well, because you know, I I I would uh question whether Little Creatures has actually done that well. Um, you know, th d as a as a brand Little Creatures Parallel has

plateaued and not grown, I would argue, for almost a decade. Um and they've tried venues and they've pulled back from venues'cause that didn't work. I I think that that's right. I think at the time when they were acquired they were doing really well and they they grew for a period of time. Um So, you know, as to t whether they went too far, spread themselves too thin, not sure. Um, maybe they didn't innovate and and bring product to market as they should have, but

I think those other two in Four Pines Pirate Life um have done quite a good job. And then you look at the likes of uh Balter to your earlier point, who didn't really have a brand home, um and you know, able to get to to great scale on more the appeal of the the the product and the offering. Uh so You know, I think that's where better beers obviously hit the mark where

you know, it doesn't necessarily have a brand home. It's it's kind of everywhere around the country in terms of um through Dan's and BWS and obviously increasingly available in the on-premise now. Um the the the the again the way that's been launched very different, highly disruptive.

um is breaking a lot of those old rules. Um and as as you point out, got to got to a level of scale that some of these other craft brands, whether they're within Mighty Craft or outside of Mighty Craft would take normally, you know, five to ten years to build to.

You know, and uh so, you know, it's again just probably goes to the fact that a brand like Better Beer is really hitting the mark and it's not it's not normal for a for a brand to get to that scale that quickly. So, um you know in in years to come I'm sure people will look back at it and say well how how how did how did the team together create a brand like that and uh what were the different elements and try and learn from it.

Um so yeah, it's uh again just probably goes more to the strength of what better beer's done really well um and how well it's resonated um rather than criticising others um which I'm not suggesting you are but others in the the the category that are more traditional craft styles of brands if you like that are building the old way.

Well I I I guess yeah, I'm certainly not criticizing'cause uh it's it it's it's a great brewery making great beer, you know, award winning beer. None of that is uh, you know, up for discussion. But I guess You know, Mighty Craft is a publicly listed company that has you know, I I don't know the total figure, but tens of millions is a reasonable amount of, you know, um funds that have uh that that that have come in. There's a significant management

structure that's, you know, expensive to service uh year in, year out. And that and that's why I you know I I for the last two or three conversations have zeroed in on scale. When you look at the size of the business

Scale means a very, very different thing than me and my mate who started our beer in a garage and grew our business to a million litres. And uh, you know y you can point to uh Four Pines and you can point to Pirate Life um and say, Well, they've got venues around the country and they've scaled.

But that sort of misses the point that they also have the network the national network of contracted taps that they're pushing the beer out because the those venues have to take that beer and the venues aren't Uh th the the venues are to legitimise those brands as craft brands as opposed to Scaling those brands. There's a very, very different underpinning strategy that those two have used, and they've got the benefit they're

Mighty Craft just doesn't have of uh you know, you can build venues hoping that people will take it on. It's a d I d I just don't see that that's a reasonable comparison between the two businesses.

Yes, I think it's a good point you make. I think you need to differentiate uh between the role that the venue plays

in building consumer franchise and getting the punters to to love your beer brand. Um and uh, you know, and I've I I know you've referred to it previously in in in your other podcasts and and discussions and so on, is that um d it scale is one thing, distribution is another and access to distribution uh is another and those brands that are, you know, owned by the big guys, you know, they've got immediately

got access into that distribution and and that's something that we um you know we're particularly strong on in in the package side of things uh within Mighty Craft and the access to the big organised retailers, whether it's, you know, IBA um, you know, the and the big independence or Coles or or dance. You know, we I think we do have that muscle um

in in the off premise, uh, which is which is good because we're bringing and trading consumers up to to ideally more profitable products and and more interesting products um without offending any of the other players. But the on premise is a lot harder, Matt, to your point. to get the distribution in your premise is very difficult. Yeah, but uh you you also said earlier in the interview that those national retailers aren't taking local brands national.

Um by and large. And, you know, uh unless you've got a strategy to do that with the uh your paired back or focus brands, that doesn't seem to be the you know you you you're not going to get scale with a brand that is exclusively Confined to a state.

Yeah, this I mean you you can th I think they're taking brands national less and less. So it's not that they won't take brands national. You've just gotta work really hard to get it to that point. And you need to build that trust that you're gonna be able to to meet their requirements. Um So I so I wouldn't say that you know brands won't um cross border um and you know even into the next market.

Um it's just getting more difficult and particularly in the last twelve months it it it has scaled back has been our observation. you know, w which is why y you look at someone like Good Drinks and they're sort of saying, well How do we crack Victoria? You know, like maybe we we take um take on a brand like Stomping Ground where the the the guys there have done a really good job, but again

had some real ch challenges, um, you know, with their venue strategy, uh, you know, with Covid and the impacts there. So Yeah, yeah, I mean it's th there's no silver bullet to these things, there's no one play book but Uh, you know, I I I do think that it is uh that your observation around scale and production to drive efficiency is important, but if you have that without the distribution

or if you have the distribution without the scale and production, it's a very difficult business. Um so yeah, which is why we again have had to really you know, take a long hard look at where we're at and what we need to do going forward. And for us going forward, given we do have those shareholders and we have raised that capital that you've referred to, um, we hit we do need to make clearer choices and and be sharper.

on our focus um going forward um and and really drive the brands and invest in the brands that are going to get to that scale quicker than the others. um w which it has not been an easy process to work through, but that's I guess what we need to focus on going forward, simplify and and drive um the the brands that are going to really deliver that scale into the future.

Just just to bring this part of the the the the chat to a close, do you think a brand like Mismatch or Jetty Road, as good as they are and as good as the beer is will ever get to the scale to justify a business the size of Mighty Craft taking investment in or will they always be a nice little sideline while you hope that, you know, a second or third bit of better beer come along?

I think, you know, for us we always started out with a portfolio um approach and we I I firmly believe that's the right thing to do. So have a portfolio of of of brands and offerings at different price points. Uh so you know, we we're gonna continue to drive hard. I think I think mismatch, um, you know, it's got a good head of steam uh and and can get to scale. Um

And you know, Jetty Road will take a bit longer, but then it's a a slightly newer brand as well. So and you know, we've just launched a lager actually under Jetty Road, um, which Matt Maddie Grant and the the team down at Jetty Road Sean have um brewed up a ripper down there. So We think that lager going alongside the pale layer, which is exceptional, uh, will help go to the next take that um business to the next level as well. So

You know, we're not sitting on our hands thinking, oh, better beer's gonna be the answer to uh you know, everything we're looking for within the the beer and cider part of our business. You know, we're we've rebranded Hill Cider, that's doing well, certainly outperforming the category by quite a lot. um and and Jetty Road, we're investing in innovation and and and M P D there mismatch we've uh you know doubled down by, you know, getting the venue in Adelaide to drive that. So

We're continuing to execute those plans, Matt, to to build those brands. Um they remain important to us um and at the same time obviously have better beer uh sitting alongside them uh doing some amazing work. So You know, that we're we're gonna continue to push hard um down that track and uh w we think that will give us a nice portfolio to work from and we're doing the same thing on spirits that we haven't really talked about, but that is

that's doing um very well and growing strongly and and obviously there's uh you know good margin in spirits at smaller scale than beer so

uh we kind of like that aspect of the the spirits business as well. And we we I promise you we'll we'll we'll come to spirits. Um d this part's gone a little bit longer. But I will say so we we've got our focus brands. What's gonna happen to the you know the the the four or five other you've you've already uh moved Spark on or, you know, sort of a discontinued relationship with Spark, what's gonna happen with the other non-focus brands?

Yeah, so I think, you know, we will uh continue to to focus on those in their own market. Uh you take a a brand like Sibstream up there near you got got a wonderful venue there that uh dealer and Elisa do really well with um good local footprint so continue to focus on that in in uh in Queensland uh and you know that's profitable and doing well so Just I guess I kind of think about those brands, just keep them going in their home market.

uh while we focus on those priority brands. Um you know, we have spoken of a couple of venues that we're looking to divest of. So, you know, in time we we might further simplify the portfolio by divesting of you know, some of the s the smaller brands that become non core. Um, but there are a bunch that sit between non core and um and focused brands that are important to can continue to to to to milk or drive the growth of and you know for example Slipstream would be

um, you know, in that category. So, you know, I think that's the next piece of work for us to just keep working through. But we will skinny down the portfolio I think over time and um continue to drive that focus. But Rydyn ni'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd you know, we're we're getting the best possible outcome with them as well, uh, particularly with regard to the changes around X IC.

which is, you know, potentially leaving up to three hundred and fifty K of profit on the table if if we're over fifty percent of those businesses. in terms of our ownership stake. You've referred to the excise a couple of times. Of course you your stake in all of those venues predated that excise change. Yeah, there was still there was still a a hundred K um there for each of those businesses back then, which, you know, say if you had, you know

call it yet, you know, ten an interest in ten breweries, um, you know, there's a million bucks a year which is is uh important. Um so that became more valuable obviously as it went higher. Um but of course you also to your earlier point need to scale to access that full of full remission. Um so uh of course. So um but look it is a it's a it's a difficult business uh to be in. There's a a lot of great brands that have been built out there, but to do that profitably

Um, i i is difficult and you know that better than anyone given how hard you look at the industry. And I think that's been your point over the last couple of years, that you know, it's harder to build these brands in this space and what people think. Um

and you need to be realistic around what you need uh to be successful in the craft space. Um so uh and that's getting harder, not easier. So um look, so hence the the slight change in our strategy is it's evolved to focus on scale. Um And, you know, uh I think that will ensure we're around around for years to come to to talk about some of these stories and what's worked and what hasn't worked and um

you know, uh I guess the way we started is is not going to be the way we finished. So, um We look forward to, you know, continuing to talk about that with you. And and unless you think I'm having uh uh giving a hard time to Mighty Craft, uh I've had exactly the same conversation with the guys from Batch who

again, you know, uh, have have talked a lot about growth and scale and uh w we had a a a big chat about what the realities of of that mean. So uh it it's a conversation that i is having I'm having across the industry at the moment as uh You know, I I again I I think um Uh I I said to them, you know, when you read their equity crowdfunding um pitch deck um or you know any of the pitch decks, there's a very rosy uh future um painted to w w when investment is sought, but

it it it it's a much harder business as you just said. Yeah. And I think, you know, those equity crowdfunding models are, you know, probably next level in terms of risk as well. Um,'cause you you know, the numbers you have to put out for those things uh, you know, um

Wouldn't like to have to deliver those. So I think you know, it's uh it is difficult and uh I understand, you know, we we're just having a conversation about the industry and the sector here, so it's all good, it's healthy and I think it's important for the listeners out there to understand that it is challenging and

Um and and some of these uh craft brands that are growing strongly, you know, we should tip our hat to them. Um and and say well done to those who are involved in those businesses and

then equally when you look at something like Betterbeer that's sort of broken all the rules, um, you know, you you should really have a think about, wow, that is um that that is a significant achievement. So uh which gives us lots of reasons to be excited about the the future as well because it shows you can bring brands to market if you're authentic and you're disruptive in how you do it and you you focus on the consumer trends and what

the shoppers are looking for, not just what you know, the the big retailers looking for. You you can bring a market uh brand to market quickly and and have an impact. So

Uh, you know, uh yeah, obviously looking forward to a big summary of that one and uh uh and more news to to come on that as well. You you must look at the uh valuations that equity crowdfunding uh is is is putting up and you know, thinking, gee, I wouldn't mind Getting our share offloading our share in some of these uh ones that you're looking at uh simplifying through uh a at that sort of multiple.

Uh no, maybe we should look at it. Um there's some there's some nice nice valuations out there, uh, for sure. And uh, you know, look I think Uh that that's again, you know, good good for those guys that are and girls that are able to achieve that. Um But uh yeah, maybe something we should look at'cause uh there's some uh some good results coming out there. Well I'm I'm uh again looking at today's market cap for uh Mighty Craft again, that's just today's snapshot.

But uh fifty two point five million um for a business that has better beer in. I've seen uh Crowdfunding valuations o of that for businesses that aren't selling a million litres through, you know, one business. I know. It's a there's a big arbitrage. I think uh there's

Yeah, there used to be, you know, when you were private business and then you became public, you know, the the the valuation would increase at the moment. It looks like it's the other way around, which is just doesn't make any sense. And I think

you know that what what the market's not really appreciating without speaking out of school is uh you know when you look at the some of the parts of uh of mighty craft and you think about to your point Matt you know, the businesses that we're building, you know, when you think about a

you know, uh for example a ten million uh litre brand in in Betterbeer where, you know, we've got the sales and distribution rights for seven or eight years, possibly own just under forty percent and you apply some sort of multiple that might have attached to bolt or or or stone and wood, you know, there there's a business that's worth, you know, in the hundreds of millions and we've got just under forty percent of it.

which would you think it would e exceed our market cap overall, you know. So it it doesn't really make a lot of sense at the moment. But It's a funny old stock market out there at the moment. I think the other side of Christmas uh as people get a bit more confidence in um interest rates uh being being steadier and not going up um and in the inflationary environment coming under control but

I think, you know, investors will start to look at um you know some of the small small caps, et cetera, and and and start to come back in. Uh but all we can do is really focus on delivering on our side of the equation and and uh executing our plans. But yeah, it is frustrating back to your earlier question, when you look at the valuations around Mighty Craft in totality, um, versus what what some of the the equity crowdfunding is um

i i is promising. It doesn't uh doesn't seem to line up. Are you open to people uh approaching you and saying, uh you know, y you've done the hard work on this business, I'll take it off your hands from here?

Oh look, I think uh, you know, we still feel like there's a there there's a lot of work um uh to be done and and a lot of upside uh to the business that we're we're really at that inflection point now where we you know we start to to turn a profit. Um uh and that the the platform that we've built that as you say is is is not cheap to build a platform like we have to enable the growth in a listed environment we also have to have that compliance and governance.

uh, you know, I I think we'd be uh leaving a lot of money on the table if we were to um look at that now. But um, you know, down the track, uh, you know, there'll be some brands that really fly and I guess we'll just wait and see what the future holds for them um and MCL. But yeah, there's a lot a lot to look forward to, I think, for us over the coming summer and uh the coming summers. Um so you know, we've done the hard yards. We we really want to I guess really

reap the benefits of that in the in the years to come. Just stepping back to better beer, um, briefly, um, before we talk about spirits. Yeah. Obviously tear away a bit of a um unicorn a a as we've said. But you've also, you know, explained that your um craft strategy was a little bit torpedoed by a change in focus from the major retailers, that they had decided that they were going to pull back from national um craft brands.

Is is is that a potential weak point for a brand like Better Beer that it's very strong now? Endeavour must love you to to bits for the strength of of the brand, but you know, you're always subject to, you know

what could be a capriciousness if they decide that, well, m y you're no longer their rosy future? Yeah, uh I I think uh w w we launching that brand in covert, uh, doing that through Danz and BWS has been uh really important to the success, uh then opening it up tradewide in the on premise. uh and obviously the strength of uh Matt and Jack and the work they do to to, you know, present the brand in a

fairly reverent um and engaging way is a a big part of that brand. So I think the key for us going forward is, you know, we we're building scale into this product very quickly. Once you've got the consumers loving the brand and you know, we've got some data suggesting that um

you know, th this is fast becoming one of the most loved brands in the country, um above all mainstream offerings. Uh but uh there's only a a small number of people that know about the brand, but they really engage strongly with it. Uh I think then it it puts better beer in a really strong position that once we can make it broadly available across the Indies.

uh the independent channels as well as coals, not just E D G um, you know, it can go to to the next level. So I think there's a huge amount of growth ahead of it. Um that the key thing that uh Nick, Matt and Jack do really well is making sure that uh they really engage and and the and the drinkers of that brand that love that brand really engage with the brand and are relatable. Um

i is a real strength. So, you know, there's always a risk, um, you know, if you're too strong with a particular retailer, but that I think that's why we we try and share the love across the key retailers, across our portfolio. Um to to make sure that we're not overly reliant on one. Um and, you know, make sure that we the consumers are loving the brand so that they're demanding it regardless of who's selling it.

Hm. Yeah. Um and and I I guess the other um potential I I don't know whether it's a a risk um in the SWOT analysis or in in the threat in the SWOT analysis, but um the better for you beer category that really um in a lot of ways better beer has pioneered, has suddenly become a hot property and you know, we we we've seen

C U B target it very directly with spill, um with uh you know again a social media influencer. Um we we've seen Traveler that directly targets the the the same space with uh whilst also apparently targeting Endeavour. Um Yeah, i i i is there a risk that as as the leader you've got you know everyone gunning for you? Uh look, I think uh I've always had a philosophy that um that the best form of flattery is imitation. Um and that uh, you know, competition brings out the best in people. Um and

I certainly feel like that's the case. Uh that, you know, if if people are wading into this uh better for you category, um, which to some extent was, you know, probably pre uh probably previously pioneered by you know, Great Northern to some extent as well, with Super Crisping better for you in terms of less alcohol, um, slightly less on the on the carbs front. Um, but certainly we've gone next level with with better beer. Um

Yeah, I I think w there will be um people that come after it, um in all different ways. Uh and you know, having a a couple of products uh like Traveller and and and Spield I think it is um come to market. Uh that there'll be more of them, I'm sure. Um, but to your earlier point, I think, you know

some will do really well and and and some will fail. And I think uh we're first to market uh in in really focusing in on this all the better beer uh the better for you attributes that we have with better beer and I think the authenticity of uh Matt and Jack um and the drive of Nick combined with our team and the ability to to execute really well. and manage supply chain really well. Um, you know, but I think

when you get to ten million litres pretty quickly, um, you know, you've got distance uh daylight between the next players. So I think that'll hold us in good stead, but you you know, we're gonna have to keep working hard to to make sure that we we grow it from here. And uh last question before we move on to be we we we let you talk about spirits. I know you're uh very keen to talk about.

Better be a as you said, you you've got, you know, uh what what is it? Oh just over a third. I think you said nearly forty percent, but it's uh pretty much a third of of the brand. Through Mighty Craft. Yep, just under forty percent we own, that's right.

thirty seven at the moment. Oh thirty seven. Okay. So that is so I wasn't sure whether it's thirty three or thirty uh thirty seven here's closer to forty. Yep. But even with you know a a beer that is so successful and is scaling so quickly, um, you know, beer production by its very nature is a Is it unicot cost game? You know, the margins are much thinner than they are in spirits or wine. You know, having uh having, you know

37% of that brand is still in terms of profitability for Mighty Craft itself. Um, you know, fairly thin profit. For a business of your size, isn't it? Not necessarily'cause you have to overlay on top of that the sales and distribution that the agreement that we have to to do that uh within Australia. So that that generates additional um uh revenue back to to Mighty Craft uh for doing that work over and above our equity stake.

And obviously with Nick and the boys, um, we we want to drive scale and profit into better beer um to the benefit of all all shareholders there, but then we overlay that sales and distribution as well. uh means we you know we kinda bank um over fifty percent of the the dollars generated um within the better beer business um within Australia and so I think it is uh you know a good strong profit contributor for us.

Uh and obviously the production as we we do through John Cassella up at um at at Griffith is uh working really well for us. But obviously there would be more margin for us if we were producing it ourselves at a at a brewery of that scale. But we're kind of renting that space if you like from uh John and the team up there who do a great job. So

um, you know, they need to make their margin as well. So there's definitely opportunities to optimise the profitability of better beer into the future. But I think for now this capital light model that we've got uh with better beer seems to be seems to be working well and give us the flexibility to invest behind the brand rather than

potentially in infrastructure and uh production facilities. In in terms of a business like that then, is is the value You know, w when you look at the sale of a bolter or, you know, more particularly a stone and wood, it's not just the revenues the the value doesn't just come from the revenues, but it comes from the value of that business as part of a portfolio to a lion or a C U B that, you know

need to prop up some of their other taps w w w with a hot brand like that. Is you know, it w w when you look at the market um capitalization of Mighty Craft, Is that one of the things that makes it hard for to to to raise the share prices that the the real value of better beer would be in a sale of the business to one of the bigger breweries?

Uh I I think uh I I think it's more so so definitely there's b there would be value in that down the track that would deliver a you know great outcome to to shareholders of Mighty Craft and um and and better beer of course. So th that's definitely uh w one path you can take. Uh I I think for me it's uh a a bunch of other factors that are really

um making it yeah, our our model is complex. We have multiple brands, um, some performing well, some underscale to your early point. So I think as we continue to simplify um and focus on these bigger brands and and make some of these divestments. Um and we we get the other side of um you know the

some of the the global conflicts around Ukraine, Russia and and things that people are concerned about. Um, you know, I think will get more people into the the Mighty Craft stock. Um but I think in terms of an exit of a you know a a business like Betterbeer the it's actually almost um potentially more appealing to an acquirer down the track based on the fact it's not encumbered by a brewery because

if someone came along and and grabbed it and put it into their production then they would grab, you know, ten to fifteen um points of margin um by bringing it back into their production. So Yeah, I don't think that's a downside in in that regard. Um it's really about Yeah, how hard it is. to establish brands in the beer category and when there is a runaway success like better beer, um, you know, people have done the hard work for you to incubate and build that brand.

Hm. And and d do do you think Yeah, w without forecasting the the the the future too much, you know, are you open to offers um for for better bit while it is in that? Yeah, I I guess no one knows how big it is gonna get and th th you know th the a a gambler, you know, can take his uh win w with with a known outcome as opposed to the the the the risk of uh whether it does keep going or not.

It's a great question, Matt. I think, you know, w when would be the right time to look at things. I mean, we we continually get people coming to us and Uh we haven't even had one full summer yet. So, you know, I I think we we feel like uh there's a a big opportunity for us to really be dominant in Australia uh and the current trajectory is showing that and

Uh New Zealand, uh obviously we've just launched over there, which has started pretty well and uh you know, there's opportunities to potentially even take it to the UK, um, you know, given the popularity of Matt and Jack over there. So Uh, you know, there's a lot of opportunities um and we just need to continue to execute, I guess w we w you know, as I said, we've really only had one summer. I'd like to think, you know, we get two or three summers into us and we can see what the brand can do and

Then maybe we might return the phone calls. Now, um a topic that I I I'm not sure you're ready um for, but spirits. Uh you've got Tell tell me a little bit about uh so it's not just beer, um, in Mighty Craft. Spirits has become a uh uh a bit of a focus as well. Yeah, sure. And uh look I won't I won't spend too much time on spirits given the the um audience that you guys have is primarily about beer, but

You know, we're very proud of the portfolio of spirits, Australian spirits brands that we're building. Uh we we think uh, you know, beautifully differentiated uh with seventy eight degrees coming out of the Adelaide Hills. uh do doing um that's at at most scale um distillery uh and and doing whiskey now as well and and doing you know some some great whiskies uh which is really interesting and uh we we enjoy doing.

Um and then with uh seven seasons, uh obviously our indigenous um partners in that, uh the Motlock family, uh just doing a new campaign at the moment actually to really tell that story about sustainability and how we sustainably harvest the ingredients into that into those products out of the the land of the Larrakey people. Um who have seven seasons in their calendar, which hence the name. Uh it's a it's a beautiful brand and high end with green ant gin and bush apple gin and

Um, you know, again, whiskey coming to market with that in a few years' time. Uh, you know, they're they're both doing super well and Kangoo Island Spirits is uh also had a a really good last few months as we've expanded that footprint. So again we've rebuilt the distillery over there on the island uh which we bought from John and Sarah Lark.

um and you know it's a a a wonderful distillery over there and and now doing whiskey. So look we're really uh I guess excited about uh what we're doing in the spirit space and and trying to innovate and create um some wonderful brands that you know, can do well in Australia and rival the likes of four pillars and and so on. Uh but then also hopefully take them overseas and do some export which we've already started doing. Uh but

do more of that going forward. Um and as we have more whiskey available, I think that will help.

sell more of the white spirits'cause um, you know, there there's a a high demand for Australian whiskey overseas, uh, and uh if you can put that with your wonderful gins and vodkas then uh it creates a nice portfolio to take. So No, look we're we're building scale in that business, Matt, as well and uh really looking forward to, you know, telling the the listeners um more about that into the future uh as we as we build those out uh because

You know, it's um it's a bit of a longer term capital burn in just spirits, particularly whiskey, but Yeah, really excited about the portfolio we're we're building. I I guess Spirits has um you know a couple of advantages over craft beer in that, you know, it doesn't age and you know the the the shelf life issues Um, you know, assuming you can get sales and it it's pulling through uh it's got a better shelf life. But we've also

It it's become where craft beer was probably a decade ago where there's been a flood of capital and openings um and it's becoming an increasingly crowded market as well. How do you navigate that? Yeah, I mean it's a huge market. I mean the spirits category in Australia is over five billion, you know, and it's growing at around fifteen percent.

So it's it's high growth. But um there's only about eight percent of spirits that are consumed in Australia that are actually made here. So there's a huge opportunity for the locals like ourselves and four pillars and archie rose and mammy spirits, you know, to to do their thing. So, you know, I I think again a rising tide can lift all boats and I think there's an opportunity for

for us to champion Australian spirits into a in in into the Australian retailers and, you know, the Australian poor concept even in on premise is starting to get some momentum. So Uh again, um, you know, we we wouldn't want to have too many brands within the spirit space, but three or four brands, including a a whiskey that we're nurturing out of um Tasmania called Hidden Lake.

uh, you know, is I think a a nice portfolio for us and I think we can work hard with our retail partners um both in the independence um and the on trade and and the and the bigger off premise retailers to build the brands. Um and uh, you know, again goes to the strength of of of our calibre of our people, uh, led by Cam Buckland, our sort of sales and marketing director to

to invest behind the brands the right way, but also look after those relationships with um our key customers to to bring those brands and make them available. And then the seller doors as well. Um, you know, Kangrew Island um up at uh lot one hundred, which is a home of seventy eight degrees helps uh reinforce that as well. So no look a a lot to like about it and um more profitable at an earlier stage, um th than what beer is, which is good and uh

you know, despite it's heavily taxed as well in terms of excise, um, you know, it's it's a really ex uh exciting category to be in and and whiskey is really going from strength to strength as well. In hindsight, should Founders First perhaps have targeted the the the spirit industry first to to to be earlier in that business cycle than craft beer, given it was only two or three years ago that you you you restarted the model?

Uh I think uh, you know, beer you can turn into cash quite quickly, particularly with a good venue model attached. So obviously didn't foresee the the challenges of COVID. Um but really, really change that. Um, but I think our strategy was to, you know, start with beer, get that going, generate the free cash flow that would enable us to to sort of then start to push into spirits.

Um, but look, probably fair to look forward rather than back. Um, I think, you know, hi hind hindsight's twenty twenty, isn't it? So uh twenty twenty vision. But look, I think we're we're getting to a good spot now and uh

there's a lot to look forward to over this summer and uh you know that not just the beer portfolio we spent a fair bit of time on but certainly the spirits. Um, you know, I think uh having that that portfolio we have now is is gonna set us up for a for a great summer and uh you know, k get drive those brands to to uh a good level over the next few years.

But I I I take your point that it's always better to look forward than back, but I guess my job as a journalist is always to go back and look and uh just just make sure you're being held to account. Yeah, no, I I appreciate that. I don't think you could ever be accused of not holding anyone to account, Matt.

Mark Hazman, all the best for the year ahead and uh look forward to chatting about that year this time next year. Yeah, look forward to it, Matt. Have a great Christmas, mate, and uh yeah, thanks for all you do for the industry. It's always great to listen to conversations you're generating and uh you know I think it's good for everyone. Um so yeah thank you very much. And that was Mark Hazman. Always a good and very informative champ.

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