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Beer but no skittles: the hard grind of a boutique brewery
Inside Business (07-22-2007)
By Kate Tozer
Sunday, July 22, 2007
KATE TOZER: Australia's billion dollar beer market is dominated by just two players, cornering 95 per cent of sales, leaving all the other breweries to battle for what the big guys would call spillage.
And while the boutique end of trade is booming, the lesson from one small brewer is that moderation is the best policy if you want to avoid a nasty headache.
SIMON WALKENHORST: We started with our little 400-litre brewery. We found that we could cope with the administration of that beer, including the marketing, the manufacturing, the shipping and the running of that amount of beer. For us it seemed to be a fairly good way for us to cut our teeth as brewers.
KATE TOZER: Hargreaves Hill is a small enterprise located in Victoria's Yarra Valley wine region. It's the result of Simon Walkenhorst's experimentation with home brews. He, and wife Beth Williams, are producing four batches a week to meet demand.
SIMON WALKENHORST: We're currently brewing around 40,000 litres annually, that was for last financial year. This year we're anticipating to maybe increase that from between 50 to 100 per cent. We produce beers in cartons of 24 bottles and 50 litre kegs. We're finding the keg side of the business is quite burgeoning at the moment. It's a nice way to sell beer. It's a little less profitable than selling bottles, but it's a lot easier from a labour input perspective, and obviously there's no packaging costs so it's a little bit more cash-flow friendly as well.
KATE TOZER: Hargreaves Hill pale ale, porter and Hefeweizen brews are sold in 150 outlets along the eastern seaboard. But an offer from one of the big discount liquor chains to stock the brand is creating a fresh challenge for the production line.
SIMON WALKENHORST: Where we are we've got a fairly limited supply of electricity, we're on tank water and on bottled gas so we do have fairly limited resources when it comes to refrigeration and heating, which are the two principle energy uses in brewing.
All of our beer is hand packed, hand bottled, hand capped, hand labelled, and delivered. We could benefit greatly from higher levels of automation and equipment that would make the job a bit quicker and easier.
KATE TOZER: After studying music at the highest level, Simon Walkenhorst had a career performing as a classical pianist and teacher. Now the piano is an extravagant escape from the daily grind of the brewery. To minimise the chance of a serious financial hangover, the start-up budget has been tight - about $200,000.
SIMON WALKENHORST: We stopped counting when it got to six figures and I don't think we'd even started counting at that stage, and we still, I think, are establishing ourselves and still spending money. We'll hopefully be profitable in a few years. At the moment we draw a small wage from the business.
(Reading off a list to wife, Beth Walkenhorst) Seven pale, three porter and one hefer [sic] to Rathdown Cellars.
BETH WALKENHORST: OK.
SIMON WALKENHORST: We've managed to job share a little bit, so if Beth gets sick of being at home with the kids she can come over to the brewery, and she's fully trained as a brewer now too, so we can switch roles fairly easily.
KATE TOZER: For many Australians, too much beer is never enough, but this year's extra volume means Hargreaves Hill is no longer classed as a micro-brewery, making it ineligible for excise rebates.
Small brewers are campaigning for the Federal Government to shout them a round of tax cuts similar to the wine industry's wet equity tax.
SIMON WALKENHORST: Excise is a limiting factor as to the growth of the industry. We find that if we had some tax relief it could be a faster growing sector. We aim to produce beers that are full of flavour, and economic considerations of producing those flavours are secondary in boutique products like ours.
We produce beers that have received awards at the Australian International Beer awards and our beers stack up against the best in the world, so that's quite rewarding to know that.
Inside Business (07-22-2007)
By Kate Tozer
Sunday, July 22, 2007
KATE TOZER: Australia's billion dollar beer market is dominated by just two players, cornering 95 per cent of sales, leaving all the other breweries to battle for what the big guys would call spillage.
And while the boutique end of trade is booming, the lesson from one small brewer is that moderation is the best policy if you want to avoid a nasty headache.
SIMON WALKENHORST: We started with our little 400-litre brewery. We found that we could cope with the administration of that beer, including the marketing, the manufacturing, the shipping and the running of that amount of beer. For us it seemed to be a fairly good way for us to cut our teeth as brewers.
KATE TOZER: Hargreaves Hill is a small enterprise located in Victoria's Yarra Valley wine region. It's the result of Simon Walkenhorst's experimentation with home brews. He, and wife Beth Williams, are producing four batches a week to meet demand.
SIMON WALKENHORST: We're currently brewing around 40,000 litres annually, that was for last financial year. This year we're anticipating to maybe increase that from between 50 to 100 per cent. We produce beers in cartons of 24 bottles and 50 litre kegs. We're finding the keg side of the business is quite burgeoning at the moment. It's a nice way to sell beer. It's a little less profitable than selling bottles, but it's a lot easier from a labour input perspective, and obviously there's no packaging costs so it's a little bit more cash-flow friendly as well.
KATE TOZER: Hargreaves Hill pale ale, porter and Hefeweizen brews are sold in 150 outlets along the eastern seaboard. But an offer from one of the big discount liquor chains to stock the brand is creating a fresh challenge for the production line.
SIMON WALKENHORST: Where we are we've got a fairly limited supply of electricity, we're on tank water and on bottled gas so we do have fairly limited resources when it comes to refrigeration and heating, which are the two principle energy uses in brewing.
All of our beer is hand packed, hand bottled, hand capped, hand labelled, and delivered. We could benefit greatly from higher levels of automation and equipment that would make the job a bit quicker and easier.
KATE TOZER: After studying music at the highest level, Simon Walkenhorst had a career performing as a classical pianist and teacher. Now the piano is an extravagant escape from the daily grind of the brewery. To minimise the chance of a serious financial hangover, the start-up budget has been tight - about $200,000.
SIMON WALKENHORST: We stopped counting when it got to six figures and I don't think we'd even started counting at that stage, and we still, I think, are establishing ourselves and still spending money. We'll hopefully be profitable in a few years. At the moment we draw a small wage from the business.
(Reading off a list to wife, Beth Walkenhorst) Seven pale, three porter and one hefer [sic] to Rathdown Cellars.
BETH WALKENHORST: OK.
SIMON WALKENHORST: We've managed to job share a little bit, so if Beth gets sick of being at home with the kids she can come over to the brewery, and she's fully trained as a brewer now too, so we can switch roles fairly easily.
KATE TOZER: For many Australians, too much beer is never enough, but this year's extra volume means Hargreaves Hill is no longer classed as a micro-brewery, making it ineligible for excise rebates.
Small brewers are campaigning for the Federal Government to shout them a round of tax cuts similar to the wine industry's wet equity tax.
SIMON WALKENHORST: Excise is a limiting factor as to the growth of the industry. We find that if we had some tax relief it could be a faster growing sector. We aim to produce beers that are full of flavour, and economic considerations of producing those flavours are secondary in boutique products like ours.
We produce beers that have received awards at the Australian International Beer awards and our beers stack up against the best in the world, so that's quite rewarding to know that.
