Phil Sexton - Matilda Bay

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 KirkyGuard, and that's just what we're here to do: talk about beer. With the big news last week, I really felt that I wanted a I wanted to go back to the well to where my interest and enthusiasm for beer began thirty odd years ago with Matilda Bay. So I reached out to Phil Sexton, who kindly agreed to

I wasn't after hot takes. I was interested in the considered thoughts on the industry from someone who has not only seen it all before, he's pretty much done it all before as well. And that's just what I got.

It's a great chat. We discuss Phil's view on craft, independence, the inherent demand for businesses to grow, and the inevitability that they'll also Also, his undisguised admiration for what the stone and wood Along the way we also hear how he nearly brought Starbucks to Australia, but decided to create little creatures in. And as ever, there are many, many rabbit holes we fall down to as we do. It's a great chat, and I hope you enjoy it just as much as I did.

Phil Sexton, welcome to Beer is a Conversation. Thanks, Matt. Mate, this has been a very, very long delayed uh we we've exchanged a few texts since we last spoke about the some of the conversations that I've wanted to have with you and uh I I I I delayed it um for for some time initially because I wanted to get down to uh the Matilda Bay Brewery and have it with you over a beer which seemed the most apt place to do it, but COVID

uh put paid to that, but then recent news has m sort of made it ever more germane. So unfortunately we're not g getting to uh share a beer with this one. That's all right. I've done my fair share of beer sharing online through Zoom and I find it it it just doesn't seem to work very well. It's you know, beers together face to face. I think it's the way The way it was always meant to be. But um why don't we just have a chat and we'll have the beers some other time.

take that as red, but uh uh but but you make a really interesting point and uh it it's probably a question that I couldn't ask too many people in the brewing industry, but you've had interests in beer and interests in wine. From a purely philosophical point of view, is there a difference between the two in terms of their ability to be, you know, social beverages? Um, I don't think there's a

is the difference that most people would would l either like to think or most people think. Um You know, we just before you s we started this chat, you and I were talking about um you know, the transition of a of a craft brewery from, you know, I guess the the kernel of an idea. that then becomes real and gets interest and you know can start to make and and distribute beer. My experience with it has been that it goes through stages.

And you know, the stages become dominated by you know the the the the normal business um issues that most businesses have to confront, and that is requirement for capital. As you grow, you need more capital. And, you know, the more beer you make, the more capital you need to fund it and to to to put equipment in place to make it.

um to set up distributions and the rest of it. But so capital becomes a a a really big issue. And um, you know, I don't think in my experience, whether it's been in the US market with people I know there or in Australia. Um, that it's any different. Um, you know, uh capital Europe, you've either incredibly wealthy and you can keep on drawing upon your reserves or you've got to go looking for capital. Um, and you know, debt never really solves the problem for you.

Yeah, well w we've jumped right into the t I I was gonna sneak up on and sort of ask how things were going in Matilda Bay, but we we we might have to uh back end that now. So uh o obviously we're referencing the big news um fr from last week with the uh Stone and Wood sale.

You you you did say off Mike that it didn't come as a huge surprise to you. It didn't. And that's not because I had any inside information or had even had um discussions with the with the guys and I I know them all quite well. Um, I mean most people listening would know Jamie and I worked together for a long time in um in Matilda Bay in the eighties.

Um, and and Brad and I go go well back back back to the when Brad was in the wine industry. I you know, I think As as, you know, a craft brewing company sort of goes through the transition, you know, and we we might even get into a discussion about what's a craft brewer compared to what's a commercial brewer. I like to think they're the same. But I was gonna say, does that matter anymore?

What is uh is a postcraft world t shirt, is it? Yeah, we we've got t shirts with uh postcraft world on them, um because I I I I don't know that craft is even a thing anymore, is it? It i i i i i is that a discussion that we still need to have? Well it's a discussion for over beer, I think. Um and You know, I think I've I've been on the record many times when p people or someone asks me what I think the best beer in the world is. And my answer's pretty quick um and simple, Budweiser. Um and

you know, from a technical and craft perspective, um, it's a it's a beautifully, precisely made beer. And and therefore, you know, could we call it a craft beer? Well I think uh I'm not gonna I'm not gonna do that here today because I'll get shot down, but um You know, I I'm not sure that a small craft off business or craft brewery business really owns the title craft.

when you compare it to much bigger breweries producing beautifully crafted beer as well. But um let's go back to the Stone and Wood transaction. You know, I'm sure that Stone and Wood were at a place where

Um, you know, distribution was becoming more difficult. Um, the logistics behind distribution becomes more difficult. keeping share of mind with retailers becomes more difficult because there's so many other new, interesting products being thrust at them all the time. Um and and the final piece of the puzzle I you know, and again I I I haven't spoken to the guys, but um, you know, I I have read that there was a fifty million dollar brewery on the on the cards coming along and um

I know how hard it is to fund fifty million dollars, um, no matter how big your brewery is. And um so you know, these issues of capital um would have been very front of mind for them, I'm sure. And, you know, do we want to go into more debt? to keep growing? Do we want to bring in more partners to keep growing? Do we want to stop growing? But of course, stopping growing is never an answer. Um

in business. I know I know we like to think we can, but it's it y the momentum behind you overtakes you if you stop. And uh so, you know, I I recognize the moment that they have probably found themselves in because I've been in that situation with Matilda Bay and with Little Creatures.

uh and certainly colleagues and friends of mine in the US, particularly in the Pacific Northwest, where their businesses found themselves in exactly the same position as well. So no, it wasn't really a surprise. Um I think the surprise was that they went so long for me.

Um, you know, I think they a few years ago they were really doing so well that there was a lot of momentum there and I'm sure the momentum's still there now. But, you know, it would have been pretty easy and pretty um um tempting. to um to do it back then. So, you know, I I take my hat off to them. I think they've done it very, very well. Um and, you know, they've got a good partner there who, you know, I think they've done, you know, Lion's done great with um little creatures.

And um I'm sure they've got their strategies worked out and we're gonna see a lot more of Stone and Wood. Well, certainly the way that uh the Little Creatures sale has progressed. Um you can believe that not a lot is going to change with the the beer quality. Um because Whilst people wanna say online that it's been dumbed down, it's it's as good a beer um as ever. And it

as a beer that shaped my palate around that style. It's still the beer that I go to when I want a good quality of the uh uh American Pale Ale. Mm. Well it was one week to the day um before I heard um about this transaction. So it was not last Friday, Friday before. And uh I was, you know, little uh lovely shop. I'm gonna I'm gonna give'em a plug actually. Um it's called it's called Barique and it's uh it's a a wine and beer shop in um the main street of Healsville that I

tend to drop by and buy a bottle of wine on my way home quite regularly from there and I know the owner really well. And I was in there chatting with him and um Steve Flamstead, who is the head winemaker of Giant Steps. um, had texted me saying, Hey, uh, um, can we have a chat? And he wanted to chat about some things. So I texted back saying, I'm just at Barique at the moment and I'll

Um, I'll give you a call when I get back in the car. So he texted straight back and he said, if you're in Barik, go over to the beer fridge and grab a couple of cans of Stonewoods Pacific Ale. It's uh fairly recent recent I was gonna say bottling, uh recent canning. But uh And you're saying I I had some last night, it was amazing. So I I bought a six pack of it and took it home.

and uh sat at home just marvelling how how damn good that beer was and uh there's no dumbed down there for not at all. No, beautiful. We talked briefly off air and we we we might sort of talk a little bit about the history of Matilda Bay i in in this chat as well. But you'd said that it was a challenge that you'd faced at Matilda Bay with um you know investors or partners wanting to go separate ways.

To me, as somebody who's a relatively unsophisticated business mind cum by comparison, it was always the most likely challenge that any group of investors You know, founders fatigue, partners wanting to move on, would have to fa Do you think, given the inevitability of this situation then, that perhaps the rhetoric should have been a little bit different al along the way? I don't know if I've been guilty of doing that. Um

I I've I've always avoided conversations about um, you know, what are your plans for the future? Um and and my my answer. And I was taught this answer by one of my first partners when we started Mentorbake back in nineteen eighty three, who was the only person that had any business experience at the time. And, you know, he used to remind us that uh when people in business

um start saying the business is not for sale, that that become a movement or an organization, they're not a business. And so you can flip that around a bit. And that is that, you know, any any serious business is always for sale. And So, you know, I guess making statements that people are gonna hold you to. um where you are denying that, um, are probably gonna come back and bite you. But for me, those sort of statements are are probably

fairly accurate in that, you know, it there may be a potential sale in the future in the back of their minds. But um at at that time it's not for sale. It's not happening. And so, you know, it sounds like a Sounds like a lawyer's answer, doesn't it? No, no not not at all. It's a it's a nuanced topic. So th there's always gonna be the nuance. Yeah, and and you know, I'll give you a a a good analogy and that is my giant steps business.

It was qu really set in my head that it was it was I loved the business, it was going well and why would I want to sell it? Because I didn't want to. But, you know, as I got old and You know, I found it more and more demanding to you know, at the same issues, capital, how do you fund the barrels? How do you fund increases of production in in in wine? um more challenging, uh managing debt more challenging. Um and

you change your mind. Um and so I th I you know, I I I'll be charitable and I you know, I think um stone and wood guys Likely changed their minds. But um at the same time, you know, if you know, when you've got multiple shareholders, you know, who have all got a considerable say i uh as to what's going on with the business. Um, in my experience, y you never get everyone aligned on things like this. Some wanna stay, um, some want to go.

And usually if there's enough saying go, then you know you're gonna go. What does this mean then for for the notion of independence, because the IBA only changed its sort of vision from craft beer to independence. You know, should it just change its name to the Small Brewing Association? That's a bit like, you know, COVID zero is where we're going, you know, and uh and all of a sudden everyone's had to eat their words and go, Well, that's that's a nonsense, it's not gonna happen.

Um, well, you know, the notion of independence and an independent organization, um is, you know, I I get it. I and it's nice. But, you know, how how many people really are independent? How many sort of how many craft brewers around Australia that have that are producing any significant volume are truly independent? Um, you know. you're dependent upon retailers.

You're particularly dependent upon the big retailers. You're dependent upon distributors. You're dependent upon whatever relationships you may have in the background, um, which could include copacking. um or co-brewing. And, you know, so the the notion of you know absolutely pure independence is um something that seems to me a bit like COVID zero. Um, nice to talk about, but um pretty hard to deliver.

Also, you know, independent one day, but circumstances, I mean we're talking about circumstances change. So, you know, suddenly, you know, that that that um independent t-shirt you're wearing, um, you're gonna have to take it off. Um you're a dead man walking. Yeah, yeah, as soon as you start drawing. And and but look, you know, there also, you know, we're talking about independence and you know, I I think for me the most

um admirable job in in brewing in Australia has has to be the the the most independent brewer there is, and that's Cookbus. And You know, I've I've known the Coopers f ever since I started brewing back in the seventies and um you know, they they spoke um independently, thought independently then and um, you know, I I haven't been in contact with them for a long time, but everything I see and hear

all the things they do with their beer, um, just sort of do show that independence can happen. And and actually, you know Uh back on this notion of, you know, does it does a w what causes a a brewery to sell or a craft brewery to sell? Um, one thing I think that they have problem I'm speaking about situations I don't really know. So, you know, you take it with a grain of salt, you just these are my opinions.

Um, but you know, the strength of family um probably is heck of a lot stronger, awful lot stronger than just shareholders who've come together to own a business. And um, you know, they they've proven that it can be done. And uh more power to them. We've been through the craft beer years. So craft beer as as we touched on, probably not a thing anymore, independent not a a binding thing.

w we we do need a association to represent the interests, the the lobbying and advocacy interests of small brewers. And ironically, before the Craft Beer Association ever formed, you know, uh that was Jamie's uh view it certainly is is expressed to me that we need a body that brings brewers together and is an advocacy body for brewers, but not a marketing body. They need to take care of their own marketing and then at some stage

uh suddenly a and um under Jamie's guidance became a marketing body for um independence. Wha what are your views on um an industry association that represents the interests of small uh brewers? How do they I think volume caps or production caps have have been one of the criteria. Um for whether someone can be a member of one of those associations and I'm sure whether it's stone and wood or little creatures, um, they would have crashed through those volume caps and found themselves

um being invited to leave, um, which isn't very helpful. Um I you know, I think that's a r a really difficult question because um, you know, I have worked in the in the large scale brewing industry. You know, Swan Brewery, when I was there in the late 1970s, was brewing over two million hectoliters of beer a year. And But the way w we we brewers that were working in that business thought and spoke was was as if we were craft brewers.

And you can ask me again, what's a Kraft Brewer? But uh, you know, m our conversations, our interest was around um all the things that I hear Kraft Brewers talking about today. And so I you know, I I I I guess I'm not in favour of exclusive organizations because, you know, w we are working in the same craft. We we make year differently, but you know, who says

one way of making beer is any better or worse than another way. And and I guess that gets to the nub of the question because uh as an industry association they're designed to advocate the interests. Um and and one of the challenges, for example, in a multi disciplinary, you know, wine spirits beer Around the excise issue. You're never gonna get those three interests to align in an advocacy uh

element. Yeah, yeah. Well that that comes back to your your comment about um you know are they are these marketing organizations or are they um or are they um an organization of of the actual practitioners of of of brewing. And You know, I I mean, with Matilda Bay at the moment, um, you know, I I have access to the um the CUB Brewing technical people. And I think that's fantastic because, you know, the information resources that are there, um Uh a very helpful.

Um, I can find that information and those resources going elsewhere. Um, but you know, it's all in one place. Um there's a huge amount of experience there. You know, why as craft brewers, you know, using that term, why wouldn't we want to be in the same association? Hm um where you know they can enjoy listening to our stories.

of small-scale brewing and all the sort of things that go on there. And at the same time, we can listen to their stories and tap on their experience as to how they deal with these things and how they deal with those things. I was due to speak at the um conference that was going to be held in Perth last year.

Um and I think I think we missed out by a week or so as all the lockdown. That was the I B D conference for this. Yeah. But you know, for me that's a very um you know, very um valuable important organization because it it doesn't put any restrictions on um or um any you know, no one's looked at it in a different light, you know, with whether you're making a tiny little bit of beer in a in a small um industrial s place out the back of Melbourne, or whether you're

with C U B or Lion, um, everyone's the same in that environment. And, you know, I found that very um very supportive, friendly. place to be. I don't really understand why

S some brewers would want to have a different organisation. Just jumping back to the conversation you had with a colleague or your one of your first uh business mentors, that it's if you're not for sale, you're a movement, not a business. In in some ways that's where this idea of the conscious business that Stonewood has been selling. There there there has been that sort of cultish quality you know, it it it has presented itself a bit as a movement, you know, d w we're about all of these

things that um, you know, are are beyond the business that we're in. So th th there was that little bit of element of uh Yeah, no, that's true. It's true. And uh some of those is that was really impressive. Um um a lot of that. Um and but that's they're still doing it. But I guess at some stage, if you put it in your terms, um they realized that in fact they were a business and not a movement.

Uh they just didn't tell us about it. You know, I I just have I I have the highest admiration for for the guys there at Sunwood. I really do. Not only d have they made fantastic beers, but they've done Beautiful work with brands. And also establishing, you know, it's the movement or if you like, the culture around what they're doing, I think has been very, very um well done and has helped achieve

their business ends really at the end of it all. Um but back on the the the um the for sale thing, you know, if really if if you run a business

and, you know, you're not for sale, um, I think it's worth having a a bit more of a think about why you're running a business. And See, I think that leads me into something that I think's really important, whether you're in craft brewing or whether you've been wine or I don't know if you know, but I I was involved with coffee for quite a while back in the eighties as well. And for me, coffee's not that dissimilar to to wine or beer.

And in in in in that it's manufactured, but then you take it to market yourself, and you're also very closely linked in the retailing end of it. So it's that vertical integration that I've always enjoyed. But um For me, if if you can't make your business financially sustainable, everyone talks about environmental sustainability and all those other things.

U and those are terribly important. But the most important thing for me in a business is that it's financially sustainable. It's not just drawing money, cash, capital in from wealthy people who aren't seeking We don't need it to be working. So, you know, uh it's I think it's a really important measure um with b with any business, and that is Is it making enough money to sustain itself and grow? And if it isn't doing that, then you've got to do something about it. And and one thing maybe to sell.

And and that may determine the the point that you decide you're gonna sell. Um, you know, you recognise that. You you don't want to raise more debt or bring in more capital to get to the next level, to get back into f so you get into this sort of almost stepwise approach to business where you you go from one step to the next.

And I think I guess as you arrive on those steps are when you really do consider your options and, you know, are we gonna go, this has been great. Um, but you know, somebody else needs to take this to the next level now. I actually s saw some I think it was in the Finn Review, they were just quoting some numbers on revenues at Stone and Wood.

Um, and I'm not sure if they captured all their revenues there, probably only one only some of them. But anyway, you know, their revenues looked great. Um and So, you know, I guess They may have been at one of those stages where they're going, Well, what are we going to do now? We you know, we if we're going to build a fifty million dollar brewery.

which is what was quoted, um, you'd be thinking very hard about that in the boardroom because, you know, the next step, in other words, to get to the stage where that fifty million dollar brewery was it was working and you're you know you're looking for your next step from there could be 15 years time or 10 years time and so the conversation amongst the partners in the boardroom would probably turn to do we want do we really want to do this?

Do we you know we've got a ten or fifteen year um plan that we've got to now execute before we can address what we're gonna do with this company.

Hm. I'm reflecting on the the point you made that you have to grow. Um you know, the this idea, you know,'cause I've I've looked at a lot of the small breweries um that that are springing up around the country and I I've come to equate a lot of them as being like buying a news agency, except a much more expensive news agency where you're buying yourself a job.

But you know, that you might keep yourself, you know, if you stay at a level, you might keep yourself employed and then when you tire, hopefully sell it. Yeah. You know, a and and and and hopefully sell the business to someone else who wants to just sort of sit and sell papers and uh lotto tickets um during the day'cause but a at a scale that

Anytime that you're not in the business, you're paying someone else to be there, which puts stress on the business. Is there a medium between those two? Yeah. Um, you know I think I've told you this story, um, and that is um, you know, when I came back from the from the US in ninety-five, ninety-six, um um the guys that we I started little creatures with. We'd we'd been in conversations for quite a while before I came back and um

And I felt like I'd had enough. Um, I've been working with sort of fairly big company or big brewing operation over in Portland and, you know, I still still getting over the little creatures experience. So, you know, I was adamant with them that if they if I was going to be involved, we were going to do

We weren't going to grow. We were just going to build we were going to build a small craft brewery um that sold all its beer over its bar. I remember no bottling, no, no bottling um at all. And You know, we'd modeled that, you know, if if we could be selling fifty or sixty kegs a week across our bars with a a a brewing facility sp so small that that's all it needed to do, that we'd actually have a a nice circular business that

We're just, you know, pay us pay us good wages, make us a bit of profit and we could just keep going doing that. Well you know, they I lost that argument. And um so I ended up going along with them with a much bigger thing. But I've I've often reminded them that, you know, we could have done it that way and we'd probably still be running it, having a great time. But You know, I think the other side of business is that there's business and you know, crap brewing is business. Um

But business is that you've always got to keep improving yourself. You've always got to be competing with everybody else. It's competition. And, you know, to compete, how do you measure your success? Well, you measure your success by growth. Um, and so

It you know, it for me it always becomes a a a a growth model. And when you start to look at your business plan, um next year's business plan isn't uh you know, has to be more than this year's business plan because it's the only way you're gonna catch up um, catch up financially if you like, because you know, you're invest whether you're investing in raw materials, whether you're investing in in a better piece of plant equipment that can do the job better, make the beer better.

um better people, you're always having to find that money just after you've made those decisions. And so it just becomes this kind of growing wheel that in my experience then becomes step

as well. It doesn't just keep going. You you do get to these points where you've got to reconsider where you're going. Are we going to double the size of this brewery or, you know, are we going to go into these markets and therefore we're going to have to fund them? So My experience is that, you know, that everybody in business is seeking growth. I I I think when you were telling the story about ninety six you were just getting over I think you said little creatures.

But I take it you meant Matilda Bay? I said that was a bit Freudian, wasn't it? Yeah. I hadn't I hadn't even got used to little creatures. So I was getting over Matilda Bay and just you know how that that that all eventuated. Um yeah. Yeah. And and In incidentally, uh I mean given that it was Wow, what twenty five, twenty six years ago, your time in Portland, having been there just before COVID hit, um, your name still has incredible currency.

There's a lot of reflected glory in knowing Phil Sexton still. Um yeah, no, some of the people that we met. Um talked about your time there. You're uh you're you're you're well remembered there. Uh well I it's I guess that's nice. Um I I do. I remember when I got there, um there was um there was a lot of quizzical looks about some Australian coming over to show them how to maybe make different styles. And You know, at that stage, um, no one was really bottle conditioning beer.

Um it just wasn't something in fact, you know, not a lot of people bottle conditioning beer in Australia either. Um and for me, it that's one of the great great parts of brewing is is is what you can do. um when you keep it living in the pack. But d no one was doing it. So You know, one of the first things we started doing at Bridgeport was, well, let's actually let let's not just make these English style ales. I'm making English English style ales at the time.

Um, let's not just keep doing that. Let's let's look at um actually not filtering them or centrifuging them or I can't remember. They were filtering, I think. Um it's actually, you know, get the yeast loads right, get some nutrient or get some substrate in there and and finish them off in the bottle. So I that aroused quite a bit of interest, um, around there and it was this kind of Australian guy who uh who wasn't part of the scene there. So

I guess it's kinda nice to h that they haven't forgotten. Um and the other thing the other thing that I was Yeah, I everyone was doing the same thing at the time. I I recall that so well. And I couldn't understand. why they were just making the same styles of beer as each other and

you know, I challenged the the the the people of Bridgeport to, well, let's let's do something different. So, you know, what's the most exciting beer in the in the on the West Coast market at the time? And it and it was easy, it was Sierra Nevada's pale. which is a beer I've always loved and I've still got some in my fridge at home.

Um now. Um, well, you know, let's not copy them. That would be that would be wrong and and wouldn't feel right. Um and also, you know, at some stage I'd have to con I'd be confronted by Ken about that. Um, no, let's um let's let's take it to the next level. And, you know, what is the next level? Well, you know, it's for pale ale, well, you know, it's the it's the very strong pale ale with much higher bitterness. Higher, higher alcohols.

Um and Also, let's also look at English style hops in this as opposed to what everyone else was doing in the Pacific Northwest at that time, which was logical and using Pacific Northwest hops, I know. But let's let's look at using some English style hops in this. So you know we we came out with an IPA that was bottle fermented that went on and um took us to nearly a million cases um over the few years I was there. Sorry.

Yeah, it's good. Um I have been back to Portland a few times on on wine business actually. I I got to know got to know the Ponzies quite well. Um they were the original owners of um what is of Bridgeport. Um, and so I've been back there on wine business a few times, but haven't really had a lot to do with the craft beer. um market or the crappier people in the last few years. Yeah.

And this has nothing to do with nothing, but you mentioned coffee and I I was taken by the story you told when you spoke at the Craft Beer Industry Association conference a couple of years about how you almost You you and your partners almost brought uh Starbucks to Australia, but uh that led to uh little creatures. So j just while I've got the tape running, I'd love to capture that story now. Yeah, back in the um eighties. I actually I started the coffee business in the sort of the in the

late eighties. Um, because at the time within Matula Bay, we were one of the things we were doing with our pubs around the country was we were putting um espresso coffee machines on the bar and you know just continually trying to make the bars less sort of male uh traditional Australian pub focused but you know we always sort of considered success for the pub was when you had more women coming to the pub than men.

And, you know, we knew w we knew that there was a pretty straight formula for that. And the first thing to do was to just get the toilets right. um and get the music right. And but um coffee coffee had been part of this progression. And so all the pubs that we had around the country at the time um had coffee machines

on the bar, the staff were all taught to be brewsters as well as be able to pull beer. And um we were buying coffee from a a small roaster in Perth who um we'd become his major major business. Uh anyway, towards the end of the eighties, um, when CUB bought the company, one of the edicts that came from C U B at the time was, you know, we're in the beer business, not the coffee business. And uh how how things have changed now. But um, you know, basically we want the coffee taken out of the bar.

With that, I um I spoke to Phil, the the guy that owned the coffee roasting company, and said, Look, this is happening and he said, Well, that's gonna send me broke. And uh so I actually p partnered up with him and said, look, why don't we actually start I'll I'll help fund this with you, I'll work with you. Um and one of the other key employees in in Matilda Bay, who after the takeover, um had decided that they were going to leave. Um

she came and joined us as well. And so we started this small company called Dome, D O M E, um, where we were roasting and then we started setting up cafe cafe style um retail businesses and selling our coffee through there. And So Dome grew quite quickly and got a lot of attention, particularly on the West Coast.

So I I I'll park that because I'm now gonna go forward to nineteen ninety-five, ninety-six, and I'm in Portland. And um I got a phone call out of the blue from one of the Starbucks founders, um, who sort of introduced himself and said, Look, I um I I was talking about you the other day um and about your dome business in um in Western Australia.

We actually came and had a look at it because we heard what you were doing. And uh we were, you know, we loved it. We loved how you've done it. Um so I I was talking about you the other day and someone said, I think he's running a brewery down in Portland. So hence the phone call. And so I got to I got to know him reasonably well. And when um you know, as I was getting to the to the end of my stint in Portland with the brewery, I was preparing to head back to Australia.

he asked me you know what are you going to do when you get back and i said i haven't really worked it out yet i um Uh, you know, I'd sold my wine business while I was away. That was the devil's their business. And uh so I hadn't quite worked out what I was going to do and uh He asked me if I um might be interested in having a look at the Starbucks business or the Starbucks franchise for Australia. And with that I I was interested, obviously. Um

And uh so I contacted um Nick and Howard, um and Adrian, who we'd had been talking to me about getting a a craftbury going in in in Fremantle. And I said, Hey, um Are you interested in looking at this instead? And um so they were. And uh they actually came across um to Portland uh and spent some time there with me and then we went up to Seattle and

um, spent some time with the Starbucks people working on the model, working on just how the the whole arrangement would work. Um and We we're right at the at the point of signing the the deal off. And um I recall but really well we We were going to I think we're gonna sign it the next day and we'd gone out to dinner in Seattle and um you know towards the end of the dinner when everyone's um sort of congratulating each other and sort of excited about the transaction.

Nick Trimboli started getting quite anxious, and we could see that he wanted to talk to us. So we excused ourselves and went off to a um some late night bath further downtown to have a to to see what Nick wanted to talk to us about. And he he just looked at us all and he said, I don't want to do this. Um I th it I I it feels wrong and uh So, you know, between I I think this was probably about ten o'clock at night and about four AM the next morning, we uh

decided that it w we if one was out, we're all out. So we were going to actually um tell tell them that we couldn't proceed with this Starbucks transaction. um and that um we were now united that we were gonna do a craft brewery in um and uh I you know I reflect on that really well and that is you know Nick Nick's always had terrific judgment and sense.

And again, you know, Nick and I had worked at Matilda Bay together and um you know he was an instrumental part of getting Matilda Bay to where it got to. But uh, you know, if we'd actually gone down that road, um, I think we probably would be still licking our wounds. Um, because, you know, when Starbucks did come to Australia under different arrangements, you know, I feel it came it came too late.

And the other thing it didn't really reflect was, you know, just how sophisticated the Australian coffee industry was or is. Um, so, you know, I think we would have had the same fate. Um if we'd done the the Starbucks um entry into Australia, things had just gone too far, things were being done too well here for it to actually lead the way. It was attempting to f attempting to follow. And of course

But that's a tough call that one. Talk to me about following and w w which brings us back to craft beer. I was interested that your take on Bridgeport was to do something different. Um when you look at the Australian beer industry at the moment for the five hundred Oddcraft breweries there are, there seems to be almost a sameness about the five hundred breweries that

the rebellion was against twenty years ago against the sameness of of lagers is Yeah. Yeah, that's th I I see that. I you know, I I think when we spoke as as a This um Matilda Bay um project was kicking off. Um one of the things I felt I saw in craft in Australia at that time was a s a s a sameness in the you know, the same styles of beer. Everyone had taken what little creatures did with the sort of

the Pacific Northwest style pale ales and and just taking them as far as they could possibly take them. Um And there was also, you know, for me and it still is the case and much as I love it, and that is, you know, just new crazy beers with new crazy labels all the time. There's a sameness in that too. Um, like You just let's make it more crazy rather than, well no stop, take a breath. Um or as my mum's used to say, take a bex. Um

You know, why not stand back a bit and go, wow, there's just so many things we can do with beer. And there's so many things we can do with cereal grain and hot. that, you know, why don't we actually start exploring a bit? And I I I I I think it's fascinating that we're starting to see some lagers coming out in what has been traditionally called the craft. market. Um, some Pilsner style beer.

And that's exciting. Um, it's also technically quite demanding, um, particularly, you know, really good pilsner style because it takes a fair bit of work there. Um but there's that if you like that it's moving forward a bit. You know, we used to make quite a lot of pills at Matilda Bay way back. We could never actually get it to stick.

Um, and it was almost like, well, no, that's what the big brewers do. And um so we always found that it was challenging. So, you know, if If the lagers and the Pilsnostalbias we're starting to see now get some cut-through, and I hope they do, I've seen some lovely ones, that's a if you like a slightly new direction for craft. And um, you know, at Matilda Bay, we've been, you know, I said we were going to look at some new styles and um and we are.

Um, not really talk about them yet because we haven't taken them that far. Um, but we've certainly got some interesting, interesting things going on. Um our main job initially has just been to just work around the the um the formulation and just bringing um, you know, redback, dog boulder and and alpha.

back to where we think they should be and and to also uh if you like, get get some some discipline into the way it's branded and labeled because it, you know, it had been sort of nibbled at for a long time.

um without anyone taking any real sort of ownership over it and pulling it all together. So we've been working on that. And of course lockdowns made it really difficult to do much. Um, but we've certainly not stopped brewing the whole time. In fact, James, our marketing guy, is trying to develop this marketing campaign around how mu how much beer we're throwing out. So whatever we're trying to sell you now is gonna be really good, isn't it?

Um, which I think is kinda cool, that's a bit of fun, but we have had to throw a lot of beer out because we had nowhere to sell it. The the the closest my thinking has ever come to being in the industry from a production sense was After years and years and years of frustration of watching C U B just never get Matilda Bay right, and as as I think I've told you, Redback was the beer that

is responsible for all of this. N now it was the beer that made me realise that beer could be different. I I had a very informal conversation saying, Look, if you're not going to use that brand, would you mind if I took it out for a spin? Um and I had the marketing campaign built around I liked it so much I bought the company. Um so why didn't you apply for our marketing job? We we were trying really hard to find someone.

Speaking of businesses being for sale, if anyone wants to buy uh media, I'm I'm happy to uh take on on a job uh work working for a brewery like Matilda Bay. So um hold that thought. But just back on that C U V um mention there. Um you know I I think when C U B bought us, they bought us for a very different reason than to acquire a craft brand.

Um they bought us to acquire a manufacturing facility, um, which was the brewery we just built on the west coast in North Fremantle there that was was a beautiful brewery. Um and you know it had its Three hundred thousand hectolitre capacity. And we were nowhere near that volume. Um, but we were going to grow to it, or we're hoping to grow to it. Um and but There was some imperatives at the time where that manufacturing facility solved quite a few issues around the the production of C UB beers.

Um, they also bought a pub group and you know, that pub group still sort of intact within an AL ALH and you know, some the Perth pubs are still doing very well. Um They they bought they bought um a beer distribution business or a beer uh uh beer importing and distribution business that includes stellar toire. in the mix they bought the craft brands of Matilda Bay, which Um I don't think they were read to address.

or felt that they needed to address at the time. So, you know, they just they ended up in the mix, um, you know, on the fringe of CUB. with you know on various occasions different marketing people came through and went, Oh wow, what can we do with this? And I don't think it was until Little Creatures was they was watched um that it

created some more interest i within C U B as to well what you know, we've actually got this original brand for Australia or one of the one of the original craft brand brands for the world. And um Why don't we why don't we have a closer look at this? And you know, and that's you know that history with Brad Jamie um working on that within C U V but it it you know it it never really uh

got the attention. Um until, you know, I started conversations with with them maybe three years ago now, when, you know, craft had become much more important to CUB. It was clear that it wasn't going to go away. It was clear also that it was taking significant dollar for dollar share from the big brewers. And uh, you know, it it so it wasn't something you could just squash.

um you actually you you actually needed to be involved in it so that you didn't get an erosion of dollar share um for your main brands. And um you know, I I know C U B pretty well now. I work work with them very closely and um it's it's quite exciting. That's um you know, they they clearly um

see, you know, the these the craft portfolio of brands and the breweries that are there as very, very important. And, you know, and part of the importance that that is that's being reflected on them is, you know, in nearly every case the founders are still involved. um and work together and you know I I sit once a month with all the founders where we we talk about how it's going and we talk about how you know how we're working with C B.

Um and it's pretty exciting. You know, so it's an awfully long way away th where where I sit now working with C U B to what it was like in nineteen ninety when You know, to even talk to them about the craft brands was was a difficult conversation. W which brings us back to where I was gonna gently start. Uh the c the conversation is.

COVID aside, um obviously that's the same. put a certain amount of uncertainty um over y over the plans. Is the eventual plan to to to grow Matilda Bay so we will start seeing it on tap in in in in Brisbane or in in in package? um a around the country or is it going to be a uh a a fairly localised brand for the time being?

Well, our initial plan was to um become the local brewer, if you like, um in the Yarra Valley. Um it's where I live. Um it's where the brewery is. Um it's kind of a food bowl for Melbourne, if you like. And You know, that was really put paid by COVID coming in because, you know, and and the main problem was that people couldn't come to the valley anymore with all the lockdowns.

So, you know, we've we had to move our our planning a little bit. But um It's still, you know, once the lockdowns finish and you know, I'm sure they will, we're going to keep on working to establish ourselves as a local brewer. Uh but having said that, we're also starting to move Pac Beer um and draft where we can um into Melbourne, Melbourne businesses.

and um and particularly uh to WA. Um, you know, there's been since we've started, there's been a lot of inquiry uh through to us about particularly with Redback. Um and you know, I think we're probably in about ten pubs over on the West Coast now with draft and and we're increasing that and we're starting to send packed or preparing to send pack red back across there. So yeah, I guess our Just apart from the Melbourne area, um, our first priority and most important priority is is WA because

even though we're brewing in in Victoria, we're still we're still originally a WA brand and uh we get we're getting sort of terrific recall uh from people we talk to about it. Having raised Red back, I I was interested when you brought it and we w we actually queried it a little bit, um, to to find out Whereas it was very much a a a Bavarian style wheat beer when it first came out, you've you've gone a little bit more of a Belgian

twang um to it this time or a Belgian twist. Talk talk to me about I it would have been so easy to just bring out red back. and say this is the original Redback and do all of the marketing around the originality of it. I was intrigued by the thinking around making those little changes to the beer. Yeah, my experience with Redback was that From when we first introduced it, and yeah, it was a absolute Bavarian Hefeweizen style using a Bavarian Hefeweizen yeast. Uh and

Um so you know, I think we nailed it pretty well. And I'd spent quite a bit of time in a couple of um uh Weissenbergers in in um in Bavaria getting to know just how that was being done. So I think we we nailed it pretty well. But m my experience and you know, there's no I don't have any scientific data on this, but

is my experience is that over time after we'd introduced it and everyone was as impressed by it as I was. Because everyone's going, Yeah, but you know, when you go to have that second one or that third one, it feels like you've had a big meal. Um and The other thing is that, you know, increasingly that very sort of powerful, clovesy, um, banana-y sort of character that is very typical of those styles of beer started to offend offend my palate slightly.

And but then talking to other people I I heard the same thing. It was kinda I love it, but it's kinda like you don't feel like having it every day. Um so we started we started morphing, if you like, red back. way back in sort of eighty seven, eighty-eight, where w we went to about fifty percent with the the lager strain yeast that we were using at the time for making our pilsner beers. Um 50% hefabites and use 50% lagos and making, bringing it back together, just toning it down a bit. And

So, you know, progressively it was being toned down. Um and so roll forward to to two years ago, three years ago. My intrigue was to actually not use the Hefeweizen style yeast, but to use a Bavarian um white beer or or wit beer style yeast, which It's quite similar to the Hefe Vites in yeast, but it it it has it has more floral um and definitely less cloves.

less um less banana, you know. One stage we're actually going to call redback banana beer. I don't know if you know that. No, I think that's we did a lot of work on it. And and I think it probably would have worked really well because it was so banana. But uh I just kept saying everyone, look, just stop you know, let's you put put something else in the redback clothes and just call it banana bean.

So, you know, I I think I'm qualified to to judge here. Um, because I worked with with it from day one and lived with it. And and also, did you know that Redback won a gold medal at the um these Australian International Beer Awards this year. I i it it slipped my attention if it did. So uh congratulations. It did. Yeah. Well, yeah, but you see, this was the the the last of the Redback being made um in the C U B system.

And so here I am saying, Well, we're gonna now as everybody take it back into its brewery in Heelsville then we're going to start moving it around and you know, I wanna put my experience to how we can take this to another level.

Um who was like, oh no, it's gonna go well in Australia. But that's so great. So well, you know. So Yeah, I I guess I'm telling you all this because it's it's a it's a slight challenge that I'm tackling here um in starting to move Redback a little bit more towards how I see it. can be, uh, for the future and for the long haul. Um

And you know, if you saw it if you saw the redback we're now making and um and we're serving it in draft, um, I think it looks great. It's um You know, it's still sitting at four point seven percent alcohol. Um but it's you know, it's just it's just moves slightly m more towards that sort of vid style.

Any of those kegs happen to find their way north to Brisbane, uh get your marketing guide let me know'cause I'll certainly go seek it out to uh to to see what it is. As I said, it's a it's a beer that's very, very close to my heart and very important in my life. So or Phil Sexton.

Look I d uh Could go through a few more jugs uh through on this chat, but we'll s we'll save it for another time. So thank you very much for for joining us for this conversation about beer and uh can't wait till we can get down uh we can travel again and get down to uh Hillsville. Okay, Matt. It's great to chat. And that was Phil Sick.

You heard his thoughts on the definition of craft, and he's now the proud owner of a post-craft world t-shirt. At his request I might add, I have to admit, even if it just ends up polishing his car, I won't be too. If you want one as well, and I would be very disappointed if you wash your cars with it. And I would be very disappointed if you wash your car with it. There's a link in the show notes to where you can order one.

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