From hobby to flourishing business: The story of a beer baron

Posted by Daniel Palmer on 5th November 2008

Barons Brewing Company

For many Australians the idea of running their own successful brewing business is a dream, but for Scott Garnett, Managing Director of Barons Brewing Company, it is a reality.

Together with university mate Richard Adamson they have managed to make a major impact in the intensely competitive Australian and international beer markets. They are now Australia’s largest independent craft brewing company, have major export deals with distributors in the US and Russia and a number of awards to boot. All this in just three years.

The origins of the company can be traced back to the early nineties.

Having joined forces to create a home-brewery in their lounge room, Adamson and Garnett “experimented” with a range of different ingredients and threw backyard beer parties for some of their best mates. 1997 saw their first beer festival, with around 100 gathering to sample a range of home brews. As the years went by the numbers swelled and 2003 marked the true beginning. A few hundred were in attendance to sample five styles out of 20 kegs and, by this stage, praise for their creations had gone beyond mere approval from close friends – it was that good that if available commercially those in attendance would buy it.

Having carved out a name for themselves in their local area they sought to discover if their creations could take them to the rest of Australia. “Initially, it was just seeing what was possible,” Mr Garnett told Australian Food News.  And, after looking into the craft brewing industry and finding “clear room for a Sydney-based craft brewer,” they decided to give it a shot.

Garnett, whose corporate finance and commercial expertise saw him assume the role of Managing Director – or Boss Baron, and Adamson, who, as a graduate from Australia’s only school of brewing, Ballarat University, took on the role of Brewing Baron, launched their first batch in December 2005. They then nominated their first commercial beer, Black Wattle Original Ale, for the prestigious Australian International Beer Awards (in 2006) – the second largest beer competition of its type in the world. Even at that stage they were still testing the waters, but realised that, even if things didn’t go to plan, all was not lost. “Worst case scenario we get left with a truckload of beer we can’t sell,” Mr Garnett mused.

It was not long before the night of the Awards was upon them but, with other pressing engagements, they decided to bypass the event. After all, they “didn’t hold much hope” of a win. The following day they received a call from a friend in the brewing industry. A call which would inform them that their beer, a unique concoction using the native Australian wattle seed, had outshone 207 beers from 31 countries to take ‘Best in Class’. Surprised and a little taken aback they soon realised that their friend was not joking.

It was only after receiving such recognition that they truly believed they would make it. “It was the impetus for what Barons is today,” Mr Garnett explained.

Barons brewing

The road, like any small business, has been bumpy at times, however. The capital-intensive nature of the industry and the strong competition has ensured triumphs haven’t come easily. And, like others in the beer industry, they are at the mercy of the climate when it comes to strong sales in summer.

‘Had there ever been a time when he thought ‘this could be a big mistake’?’ “Daily,” he joked, before continuing, “it has been really hard but it’s the best thing I’ve ever done.”

Staunchly independent, they knocked back a $1million offer for 70% of the company while capital raising in late-2004- this before a single batch had even been sold. Such a decision could have come back to haunt but, despite nearly going broke a couple of times since the venture began, the beer barons have rarely looked back.

A deal would have stifled the business, according to Mr Garnett; with independence, one of the defining features of the brand, granting them freedom that the big brewers are not afforded. Innovative products are a key to the success of Barons, with the company selling two native beers (Black Wattle and Lemon Myrtle Witbier) and three premium craft beers (Pale Ale, Lager and ESB). “(We) wanted to make the most uniquely Australian beer available,” Mr Garnett said. Becoming the first to brew using Australian native spices has helped make that a reality.

And their next marketing campaign – beginning in about two weeks- is set to turn heads. “We can be creative and edgy. (I) don’t think any beer company has done anything like it for a long time,” Mr Garnett noted.

Their business acumen has helped see their passion for a great product turn into great sales. They know their brand, they know their products and they know their markets. In three years they have gone from pipe dream to international success story. A whirlwind ride, no doubt, but it hasn’t been through potluck. Extensive research into their potential markets is carried out to ensure they can thrive and not just survive in any market they choose to enter.

The US export deal they conjured in 2006 is a case in point. There are over 1400 craft brewers in the US and the fiercely competitively market is not something you enter on a whim. Strictly controlled and heavily regulated, Garnett suggested it “is like a jigsaw puzzle”. They travelled the country to boost their understanding of American consumers and the complicated industry. Then they continued to look for the right distribution partner. “You need to put in the leg-work,” Garnett advised.

Their search settled on United States Beverage, a company they believed would “back the brand”. No Australian craft beer company had ever signed a national deal in the US, but Barons discovered that with a strong point of difference – namedly their native Australian beer range – they could find a market.

Their $30 million deal with the US was soon followed by a similar deal in Russia.

They have been well received in both nations; distribution has expanded and demand has exceeded expectations – double in Russia and a massive seven times in the US. And now Denmark and the UK are next on the list. Barons has just been chosen as one of four international brewers to be a part of J D Wetherspoon’s (a popular British pub chain) International Real-Ale Festival. The event, which runs from October 30 – November 16 this year, is the world’s biggest real-ale festival. Notably, Barons is Australia’s first ever representative.

While a great achievement this does not rank as the greatest triumph, nor does the “pretty spectacular” entry into the US, Mr Garnett said. Instead, the greatest highlight has been being able to walk into a pub and see people drinking Barons. And, more importantly, choosing to drink Barons – that’s what puts a smile on his face at night. “There is true loyalty behind the brand,” he reflected. “It doesn’t get any better than that.”

So what’s next for the uni mates who have turned their hobby into a flourishing business?

One gets the sense talking to Mr Garnett that his passion for the business burns brighter than ever. Not prepared to rest on his laurels, the business still has substantial room to expand. “It will take about five years to grow Barons into what we want it to be,” he advised. Their international operations are anticipated to grow but they remain committed to only expand “as markets present themselves”. The main focus is Australia, however, where they are hoping to gain more on-premise exposure.

Mr Garnett added that he was hoping to continue to reward the Barons Squadron, a loyalty program that strengthens connections of customers to the brand. “Beer lovers get behind brands like us (and) we want to give back to our supporters,” he proclaimed.

A new flavour in their ‘native range’ will soon be unveiled – likely to be called the ‘Passionberry Porter”. It has been trialled at a few pubs in Australia, with early signs suggesting a fantastic reception to the beer, which includes ‘passionberry’ – a native Australian bush tomato – to provide the unique Australian twist. A new addition to the premium craft range could also be on the horizon, but nothing is yet decided.

“The future is not certain,” Mr Garnett concluded. But one thing appears sure, with the passion of their employees, they are likely to make further inroads in the competitive beer sector.