1 00:00:03,450 --> 00:00:06,029 Sean Aylmer: Welcome to the Fear and Greed Daily interview, I'm Sean 2 00:00:06,050 --> 00:00:08,809 Sean Aylmer: Aylmer. Head into any Dan Murphy's and you'll notice an 3 00:00:08,810 --> 00:00:11,830 Sean Aylmer: increasing amount of shelf space being taken up by a 4 00:00:11,830 --> 00:00:15,770 Sean Aylmer: new trend. The non- alcoholic drinks market is growing quickly, 5 00:00:15,770 --> 00:00:18,890 Sean Aylmer: with everything from alcohol- free gin to non and low 6 00:00:18,890 --> 00:00:22,500 Sean Aylmer: alcohol beer taking off. One of the popular brands is Heaps Normal, 7 00:00:22,500 --> 00:00:26,320 Sean Aylmer: which is produced by Melbourne- based Brick Lane Brewing, one of Australia's most 8 00:00:26,320 --> 00:00:30,330 Sean Aylmer: successful independent brewers. Paul Bowker is a co- founder and 9 00:00:30,330 --> 00:00:33,319 Sean Aylmer: CEO of Brick Lane Brewing. Paul, welcome to Fear and Greed. 10 00:00:33,990 --> 00:00:34,790 Paul Bowker: Thanks, Sean. Great to be here. 11 00:00:35,520 --> 00:00:38,520 Sean Aylmer: Now upfront, I know I mentioned Heaps Normal then, I've 12 00:00:38,520 --> 00:00:40,880 Sean Aylmer: had Brick Lane Brewing. I really like your pale ale. 13 00:00:41,280 --> 00:00:45,040 Paul Bowker: Thanks mate. That's our One Life pale ale that's, I guess, the first product 14 00:00:45,040 --> 00:00:48,190 Paul Bowker: we ever released and it's really become our hero product. 15 00:00:48,190 --> 00:00:51,449 Paul Bowker: So, it's our largest seller in market and something that's 16 00:00:51,550 --> 00:00:53,530 Paul Bowker: accessible to a lot of people. So, it brings a 17 00:00:53,530 --> 00:00:55,540 Paul Bowker: lot of people into our brand, which is great. Good 18 00:00:55,540 --> 00:00:55,900 Paul Bowker: to hear. 19 00:00:56,280 --> 00:00:58,180 Sean Aylmer: Okay. So tell me about Brick Lane. You brew your 20 00:00:58,180 --> 00:01:01,180 Sean Aylmer: own beers, but also you produce product for other people 21 00:01:01,180 --> 00:01:01,610 Sean Aylmer: as well? 22 00:01:01,900 --> 00:01:04,760 Paul Bowker: Yeah, we've got quite an unusual model down at Brick 23 00:01:04,760 --> 00:01:07,940 Paul Bowker: Lane. So we've really got three core parts of our 24 00:01:07,940 --> 00:01:11,020 Paul Bowker: business. One is to make our own brands, which is 25 00:01:11,020 --> 00:01:14,990 Paul Bowker: Brick Lane, and Sidewinder, SunSetter, Someday, a bit of a 26 00:01:14,990 --> 00:01:19,890 Paul Bowker: portfolio. The other part of our business that's emerging is hospitality, but 27 00:01:19,890 --> 00:01:22,569 Paul Bowker: relevant to your intro, I guess, talking about Heaps Normal, 28 00:01:22,569 --> 00:01:26,040 Paul Bowker: is we've got a substantial partner brewing business where we 29 00:01:26,350 --> 00:01:29,729 Paul Bowker: effectively open our facilities for other people to come in 30 00:01:29,730 --> 00:01:32,350 Paul Bowker: and I guess, enjoy the benefit of what we've created 31 00:01:32,350 --> 00:01:32,860 Paul Bowker: to produce our own beers. 32 00:01:33,920 --> 00:01:36,570 Sean Aylmer: Okay, you've spent quite a bit of money in developing 33 00:01:36,640 --> 00:01:40,069 Sean Aylmer: the brewery in Melbourne. It's an interesting model, because I'm 34 00:01:40,069 --> 00:01:43,720 Sean Aylmer: not sure that I've heard others, certainly winemakers do it, 35 00:01:44,170 --> 00:01:46,520 Sean Aylmer: use share facilities, but I'm not sure that I've heard 36 00:01:46,780 --> 00:01:47,490 Sean Aylmer: brewers do it. 37 00:01:47,950 --> 00:01:51,430 Paul Bowker: Yeah, there's pockets of it around Sean. So, what tends 38 00:01:51,430 --> 00:01:54,110 Paul Bowker: to happen if you look at the brewing industry itself, 39 00:01:54,110 --> 00:01:58,559 Paul Bowker: it's very capital intensive. You can either deploy a small 40 00:01:58,560 --> 00:02:01,910 Paul Bowker: amount of capital and build effectively a brew pub, which 41 00:02:01,910 --> 00:02:05,820 Paul Bowker: is fantastic and 600 odd independent breweries in Australia and 42 00:02:05,850 --> 00:02:09,079 Paul Bowker: the vast majority are centered around a brew pub. As 43 00:02:09,080 --> 00:02:11,850 Paul Bowker: you grow, however, you continue to need to grow that 44 00:02:11,850 --> 00:02:14,740 Paul Bowker: capacity. That becomes very difficult for a lot of people. 45 00:02:14,740 --> 00:02:18,880 Paul Bowker: So, what has happened in the past is, as breweries 46 00:02:18,880 --> 00:02:22,630 Paul Bowker: grow, they either deploy additional capital, or they seek out 47 00:02:22,630 --> 00:02:25,220 Paul Bowker: another brewer who has spare capacity, or they end up 48 00:02:25,220 --> 00:02:27,660 Paul Bowker: selling, and that usually means selling to one of the 49 00:02:27,660 --> 00:02:32,300 Paul Bowker: majors. We came into the market and decided to solve 50 00:02:32,300 --> 00:02:35,730 Paul Bowker: a problem that existed, which was the ability for both 51 00:02:35,730 --> 00:02:40,360 Paul Bowker: growing independent breweries, but also large retailers, for example, who 52 00:02:40,360 --> 00:02:42,620 Paul Bowker: didn't have a home to brew their beers. We wanted 53 00:02:42,620 --> 00:02:45,530 Paul Bowker: to create that, so we've put north of $ 50 million 54 00:02:45,950 --> 00:02:49,169 Paul Bowker: into our brewery to create effectively, that home of brewing 55 00:02:49,169 --> 00:02:52,091 Paul Bowker: in Australia, that's accessible to a wide variety of breweries. 56 00:02:52,091 --> 00:02:56,299 Sean Aylmer: Okay. So firstly, when you're creating a beer, how do you 57 00:02:56,530 --> 00:02:59,640 Sean Aylmer: cut through in the market? It is such a competitive 58 00:03:00,180 --> 00:03:02,860 Sean Aylmer: marketplace. I've told this story before, about 10 years ago, 59 00:03:02,860 --> 00:03:05,850 Sean Aylmer: a guy I worked with decided to try a different 60 00:03:05,850 --> 00:03:09,970 Sean Aylmer: beer every day, 365 beers in the country. He really 61 00:03:09,970 --> 00:03:14,460 Sean Aylmer: struggled to actually find 365 beers in the country. He was 62 00:03:14,550 --> 00:03:17,410 Sean Aylmer: traveling to actually find them. Now though, I saw a 63 00:03:17,410 --> 00:03:18,970 Sean Aylmer: number and I'm going to get it totally wrong here, 64 00:03:18,980 --> 00:03:21,209 Sean Aylmer: Paul, but it was like 600 or something or other. It just 65 00:03:21,210 --> 00:03:23,970 Sean Aylmer: seems this proliferation of craft beers. 66 00:03:24,940 --> 00:03:28,500 Paul Bowker: Yeah, there's a lot. So, there's 600 odd, independent breweries. 67 00:03:28,500 --> 00:03:31,239 Paul Bowker: And each of those breweries at any point in time 68 00:03:31,240 --> 00:03:35,850 Paul Bowker: may have 10 or 20 different varieties. Then there's the international, 69 00:03:35,850 --> 00:03:39,270 Paul Bowker: so Kirin through their ownership of Lion and Asahi, through 70 00:03:39,270 --> 00:03:43,430 Paul Bowker: their ownership of CUB, control north of 80% of the 71 00:03:43,430 --> 00:03:46,040 Paul Bowker: beer market as well. And within their portfolios, they have 72 00:03:46,040 --> 00:03:50,330 Paul Bowker: a huge diversity of brands. So you're right, getting cut 73 00:03:50,330 --> 00:03:53,870 Paul Bowker: through is not easy. However, there are ways to do 74 00:03:53,870 --> 00:03:56,020 Paul Bowker: it. Clearly that's what we think otherwise we wouldn't have 75 00:03:56,070 --> 00:03:58,760 Paul Bowker: entered the market in the way we did. The way 76 00:03:58,760 --> 00:04:01,870 Paul Bowker: to get cut through, I mean really, for a growing 77 00:04:01,870 --> 00:04:04,950 Paul Bowker: or independent brewery, or a new brewery that may be 78 00:04:04,950 --> 00:04:07,970 Paul Bowker: owned by a major, is to really have a story 79 00:04:07,970 --> 00:04:11,460 Paul Bowker: around the brand that resonates with the consumer. That's fundamental, 80 00:04:11,460 --> 00:04:14,559 Paul Bowker: people have choice, so they want to drink, or eat, or 81 00:04:14,560 --> 00:04:17,760 Paul Bowker: drive, or whatever it may be with a brand that 82 00:04:17,760 --> 00:04:20,850 Paul Bowker: has relevance to them. The other key thing is obviously 83 00:04:20,850 --> 00:04:24,279 Paul Bowker: to have a high quality product, to be delivering your 84 00:04:24,279 --> 00:04:27,450 Paul Bowker: product into a market that has growth. I'm sure we'll 85 00:04:27,450 --> 00:04:29,820 Paul Bowker: get onto non-alc, but that's a good example of that. 86 00:04:30,300 --> 00:04:33,370 Paul Bowker: The other thing is really to get scale these days, 87 00:04:33,370 --> 00:04:36,130 Paul Bowker: you need to be able to produce a beer that is consistent 88 00:04:36,230 --> 00:04:41,480 Paul Bowker: in quality, is of quality, has distribution, warehousing, price points, 89 00:04:41,480 --> 00:04:44,250 Paul Bowker: all those things nailed down. So, it is a really, 90 00:04:44,250 --> 00:04:45,180 Paul Bowker: really tough sector. 91 00:04:45,510 --> 00:04:47,830 Sean Aylmer: I want to get onto non- alcohol beers. But just 92 00:04:47,830 --> 00:04:52,089 Sean Aylmer: before I do, that last point you made, manufacturing exactly 93 00:04:52,089 --> 00:04:54,780 Sean Aylmer: the same product every time. How hard is that? 94 00:04:55,060 --> 00:04:58,620 Paul Bowker: It's incredibly difficult. Now, there's different parts of the market and 95 00:04:58,910 --> 00:05:03,050 Paul Bowker: you mentioned wine before, wine celebrates to a large extent 96 00:05:03,050 --> 00:05:08,010 Paul Bowker: diversity, vintage variation, site variation. Beer is not the same thing. 97 00:05:08,070 --> 00:05:11,820 Paul Bowker: When people walk into a bar, a pub, a restaurant, a 98 00:05:11,820 --> 00:05:14,710 Paul Bowker: bottle shop, and open or have one of the beers 99 00:05:14,850 --> 00:05:16,500 Paul Bowker: that they drink poured, they expect it to be the 100 00:05:16,500 --> 00:05:19,479 Paul Bowker: same every time. Now to do that, there's a huge 101 00:05:19,480 --> 00:05:23,060 Paul Bowker: amount of, I guess, technology that goes into the process 102 00:05:23,060 --> 00:05:26,710 Paul Bowker: of creating beer, but it also derives from natural products. 103 00:05:26,710 --> 00:05:31,210 Paul Bowker: So from malt, yeast, hops and bean agricultural products, they 104 00:05:31,210 --> 00:05:34,099 Paul Bowker: vary batch to batch as well. So, to be able 105 00:05:34,160 --> 00:05:36,500 Paul Bowker: to dial all those things in and produce an end 106 00:05:36,500 --> 00:05:39,720 Paul Bowker: product, that's the same every time is difficult and that's 107 00:05:39,720 --> 00:05:44,210 Paul Bowker: what the consumer expects. Certainly, once you're international retail, they 108 00:05:44,210 --> 00:05:46,610 Paul Bowker: expect you to deliver the same product every time and 109 00:05:46,640 --> 00:05:47,540 Paul Bowker: it's incredibly important. 110 00:05:47,940 --> 00:05:49,850 Sean Aylmer: Stay with me, Paul, we'll be back in a minute. 111 00:05:54,630 --> 00:05:56,850 Sean Aylmer: My guest this morning is Paul Bowker, co- founder and 112 00:05:56,850 --> 00:06:00,980 Sean Aylmer: CEO of Brick Lane Brewing. Okay, non- alcoholic beers. There's 113 00:06:01,300 --> 00:06:02,989 Sean Aylmer: a lot more of them around, or at least there's 114 00:06:02,990 --> 00:06:05,839 Sean Aylmer: a lot more shelf space given to them. What's happening 115 00:06:05,839 --> 00:06:06,500 Sean Aylmer: in that market? 116 00:06:06,830 --> 00:06:09,690 Paul Bowker: The non- alc is a really interesting space. For some 117 00:06:09,690 --> 00:06:12,490 Paul Bowker: people it's sort of difficult to wrap your mind around. 118 00:06:12,600 --> 00:06:16,310 Paul Bowker: For us, it's just a completely natural evolution of, I 119 00:06:16,310 --> 00:06:19,440 Paul Bowker: guess, the broader trend in society to a better for 120 00:06:19,440 --> 00:06:24,670 Paul Bowker: you environment, but also people like choice. Historically in beer, 121 00:06:24,760 --> 00:06:27,150 Paul Bowker: there's not been a great deal of choice outside of 122 00:06:27,150 --> 00:06:30,210 Paul Bowker: classic beers. We saw the emergence of craft beer, which 123 00:06:30,210 --> 00:06:32,870 Paul Bowker: gave people a huge amount of choice. And now we're 124 00:06:32,870 --> 00:06:36,570 Paul Bowker: seeing people looking to increase the occasions in which they 125 00:06:36,570 --> 00:06:39,070 Paul Bowker: can be social and drink a beer, whether alcohol or 126 00:06:39,070 --> 00:06:42,240 Paul Bowker: not, be able to drink different varieties of beers, different flavors 127 00:06:42,240 --> 00:06:44,320 Paul Bowker: of beer, but also be able to drink beer and 128 00:06:44,320 --> 00:06:47,120 Paul Bowker: carry on with their daily life and activities. These are 129 00:06:47,120 --> 00:06:50,660 Paul Bowker: the things that non- alcoholic beer is playing to. I 130 00:06:50,660 --> 00:06:52,310 Paul Bowker: think one of the key things, when we look at 131 00:06:52,400 --> 00:06:56,339 Paul Bowker: the rise of non- alcoholic beer, it is coming off 132 00:06:56,339 --> 00:07:00,190 Paul Bowker: a small base, however to put some numbers in context, 133 00:07:00,230 --> 00:07:04,360 Paul Bowker: beer in Australia generates about $ 8 billion a year and the non- alc 134 00:07:04,360 --> 00:07:07,810 Paul Bowker: sector globally in beer is over $ 10 billion. So, it is a 135 00:07:07,810 --> 00:07:12,290 Paul Bowker: huge sector it's growing rapidly and it's one that Brick 136 00:07:12,290 --> 00:07:15,560 Paul Bowker: Lane in particular has, I guess, talking back to the 137 00:07:15,560 --> 00:07:19,010 Paul Bowker: technology, has a technology to produce these beers of a 138 00:07:19,060 --> 00:07:21,790 Paul Bowker: level of quality and safety time after time, which is 139 00:07:21,790 --> 00:07:23,670 Paul Bowker: why we've become the leader in the space. 140 00:07:23,960 --> 00:07:26,230 Sean Aylmer: I'm ashamed to say, I've never had a non- alcoholic 141 00:07:26,230 --> 00:07:29,320 Sean Aylmer: beer. I will have one after this conversation, Paul. Is 142 00:07:29,320 --> 00:07:32,500 Sean Aylmer: it very similar to the full strength beer? Because certainly mid- 143 00:07:32,500 --> 00:07:35,840 Sean Aylmer: strength and low alcohol beer, there is a taste difference. 144 00:07:36,240 --> 00:07:39,530 Paul Bowker: Yeah, they're getting better and better and in fact, mid- 145 00:07:39,530 --> 00:07:41,990 Paul Bowker: strength beer, there's mid- strength beers out there now that 146 00:07:41,990 --> 00:07:46,060 Paul Bowker: are absolutely packed with flavor. A slight aside, but to 147 00:07:46,120 --> 00:07:48,180 Paul Bowker: I guess, try and show the market how much flavor 148 00:07:48,180 --> 00:07:51,380 Paul Bowker: you could pack in with reducing the alcohol, we released 149 00:07:51,380 --> 00:07:55,840 Paul Bowker: a 1.1% beer about six months ago, which is Sidewinder Hazy 150 00:07:55,840 --> 00:07:59,820 Paul Bowker: Pale. That's nationally available in Dan's but that has showed 151 00:07:59,820 --> 00:08:04,170 Paul Bowker: the consumer market that you don't necessarily need alcohol to 152 00:08:04,170 --> 00:08:07,080 Paul Bowker: carry flavor. There's other ways of doing it. When you 153 00:08:07,080 --> 00:08:09,630 Paul Bowker: get down to the zero space and by zero, I mean 0. 154 00:08:09,630 --> 00:08:13,730 Paul Bowker: 5 or less, because that classifies as food, there are 155 00:08:13,730 --> 00:08:16,290 Paul Bowker: tricks you can play with your brewing and judicious use 156 00:08:16,290 --> 00:08:19,480 Paul Bowker: of hops use of, instead of malt, different materials in 157 00:08:19,480 --> 00:08:22,490 Paul Bowker: there that fill out the palette. I recommend you definitely 158 00:08:22,490 --> 00:08:24,690 Paul Bowker: jump in and try a couple. Heaps Normal that you 159 00:08:24,690 --> 00:08:28,510 Paul Bowker: mentioned is a fantastic beer. Our Sidewinder beers are fantastic. 160 00:08:28,510 --> 00:08:32,140 Paul Bowker: And even in the mainstream sector, things like Heineken, there 161 00:08:32,140 --> 00:08:34,809 Paul Bowker: are very good approximation of the full strength version. So, 162 00:08:34,809 --> 00:08:37,309 Paul Bowker: it's a really interesting sector to start to explore if 163 00:08:37,309 --> 00:08:37,709 Paul Bowker: you haven't. 164 00:08:38,910 --> 00:08:41,460 Sean Aylmer: The flavored beer sector, always been huge in America, definitely in the 165 00:08:41,460 --> 00:08:44,740 Sean Aylmer: US. It doesn't seem to have taken off here, though 166 00:08:44,740 --> 00:08:48,709 Sean Aylmer: I have noticed in bottle shops more and more flavored beers. 167 00:08:49,400 --> 00:08:52,870 Paul Bowker: Yeah. And again, what's happening in the market across alcohol 168 00:08:52,870 --> 00:08:57,030 Paul Bowker: really, is a blurring of categories. So, beer is not beer necessarily anymore. 169 00:08:57,620 --> 00:09:00,130 Paul Bowker: People still drink classic beer, it's still a big part 170 00:09:00,130 --> 00:09:03,190 Paul Bowker: of the market. However, with the rise of things like 171 00:09:03,440 --> 00:09:07,170 Paul Bowker: hard seltzers, fruit beers, lots of people are now drinking, 172 00:09:07,170 --> 00:09:11,650 Paul Bowker: for example, canned cocktails, rose, spritzer, all these categories have 173 00:09:11,720 --> 00:09:14,310 Paul Bowker: significant overlap and they're starting to merge in a way. 174 00:09:15,130 --> 00:09:17,729 Paul Bowker: With the flavored beers for example, and we make one 175 00:09:17,730 --> 00:09:20,990 Paul Bowker: under a range called Someday, we add fruit effectively to 176 00:09:20,990 --> 00:09:24,320 Paul Bowker: a really light, fresh tasting beer. We produce something that 177 00:09:24,320 --> 00:09:28,480 Paul Bowker: has overtones of beer, but is fruit dominant as well. It 178 00:09:28,480 --> 00:09:31,690 Paul Bowker: just opens up the category to a number of people 179 00:09:31,690 --> 00:09:37,190 Paul Bowker: that may have been drinking R2D spritzers, sauv blanc, rose, and the whole 180 00:09:37,200 --> 00:09:39,700 Paul Bowker: idea is to bring more and more people into the 181 00:09:39,700 --> 00:09:42,760 Paul Bowker: beer category, which is a very natural, delicious product and 182 00:09:42,760 --> 00:09:45,340 Paul Bowker: one that Australia has long been a leader in. 183 00:09:46,720 --> 00:09:50,329 Sean Aylmer: You mentioned earlier on, the idea of consolidation. Previously, we 184 00:09:50,330 --> 00:09:52,360 Sean Aylmer: seem to have seen the big guys taking out these 185 00:09:52,360 --> 00:09:54,949 Sean Aylmer: smaller guys, Stone & Wood, not being such a small guy, $ 186 00:09:55,170 --> 00:09:57,650 Sean Aylmer: 500 million purchase by Lion but that was a good 187 00:09:57,650 --> 00:10:01,110 Sean Aylmer: example last year. I was reading you in the Financial Review 188 00:10:01,110 --> 00:10:04,790 Sean Aylmer: talking about the next stage of consolidation, being about smaller players 189 00:10:04,790 --> 00:10:09,179 Sean Aylmer: grouping together, rather than CUB or Lion buying out the 190 00:10:09,179 --> 00:10:09,970 Sean Aylmer: craft players. 191 00:10:10,450 --> 00:10:13,010 Paul Bowker: I mean, there's a few interesting things happening in the 192 00:10:13,010 --> 00:10:17,099 Paul Bowker: sector. The rise of, I guess, the craft breweries and that's a 193 00:10:17,100 --> 00:10:20,090 Paul Bowker: broad term, we won't get into the definitions of it because it's 194 00:10:20,090 --> 00:10:23,300 Paul Bowker: a hot topic. However, the rise of breweries such as, 195 00:10:23,420 --> 00:10:26,510 Paul Bowker: if you look at the recent ones, 4 Pines, Balter, 196 00:10:26,700 --> 00:10:31,410 Paul Bowker: Pirate Life, Feral, Mountain Goat, Green Beacon, all these breweries 197 00:10:31,470 --> 00:10:35,530 Paul Bowker: captured the public attention in some way. The challenge that 198 00:10:35,690 --> 00:10:38,990 Paul Bowker: they all faced, or most of them faced, is that 199 00:10:38,990 --> 00:10:41,490 Paul Bowker: you reach a certain point, which may be one, two, 200 00:10:41,490 --> 00:10:45,630 Paul Bowker: three, four million leaders, where the next wave is really 201 00:10:45,740 --> 00:10:51,130 Paul Bowker: a substantial deployment of capex, high level corporate management expertise 202 00:10:51,130 --> 00:10:54,640 Paul Bowker: to take on, I guess, potentially large equity partners or 203 00:10:54,640 --> 00:10:57,760 Paul Bowker: debt partners, and then the expertise to build a production 204 00:10:57,760 --> 00:11:02,090 Paul Bowker: scale brewery. Now the larger two breweries, which is effectively 205 00:11:02,090 --> 00:11:05,710 Paul Bowker: what it is in Australia, have come in and supported 206 00:11:05,710 --> 00:11:08,730 Paul Bowker: these businesses by effectively buying them, bringing them into their 207 00:11:08,730 --> 00:11:11,510 Paul Bowker: network and handling that next wave of growth for them. 208 00:11:12,150 --> 00:11:15,270 Paul Bowker: What there hasn't been to date is a real other option. 209 00:11:15,330 --> 00:11:18,650 Paul Bowker: And at Brick Lane, for example, we've got a very 210 00:11:18,650 --> 00:11:22,240 Paul Bowker: substantial brewery that is eminently scalable and has one of 211 00:11:22,240 --> 00:11:24,559 Paul Bowker: the lowest cost of production or probably the lowest cost 212 00:11:24,650 --> 00:11:28,990 Paul Bowker: of production outside of the majors, including Coopers. Coopers are 213 00:11:28,990 --> 00:11:30,959 Paul Bowker: bigger than us, but I put them in as a 214 00:11:30,960 --> 00:11:34,500 Paul Bowker: major. I think from our perspective, when we look at 215 00:11:34,650 --> 00:11:37,429 Paul Bowker: where the market can go, there's no reason why some 216 00:11:37,429 --> 00:11:40,720 Paul Bowker: of these breweries can't continue to exist in another format 217 00:11:40,720 --> 00:11:43,699 Paul Bowker: rather than falling in line to the Asahi or Kirin 218 00:11:43,700 --> 00:11:47,790 Paul Bowker: portfolio. whether it's through Brick Lane or through someone else, 219 00:11:47,880 --> 00:11:51,589 Paul Bowker: I think there's a genuine opportunity and a consumer and 220 00:11:51,610 --> 00:11:54,559 Paul Bowker: a customer appetite to have a real challenger to the 221 00:11:54,559 --> 00:11:57,640 Paul Bowker: major brands. That's certainly a role that we see Brick 222 00:11:57,640 --> 00:11:58,250 Paul Bowker: Lane playing. 223 00:11:58,790 --> 00:12:02,620 Sean Aylmer: Just one final question, food costs and ingredient costs. Are 224 00:12:02,620 --> 00:12:05,370 Sean Aylmer: you worried about that, given what's going on with grain 225 00:12:05,370 --> 00:12:07,329 Sean Aylmer: prices, et cetera, out of Europe? 226 00:12:07,750 --> 00:12:11,969 Paul Bowker: Simple answer is yes. So, grain is one component. Water, 227 00:12:11,970 --> 00:12:14,820 Paul Bowker: and we know the importance of conserving water is becoming 228 00:12:14,820 --> 00:12:19,890 Paul Bowker: more and more important. Aluminum prices, glass prices, CO2, for 229 00:12:19,890 --> 00:12:25,150 Paul Bowker: example, sometimes not recognized, but all these costs are increasing 230 00:12:25,150 --> 00:12:28,530 Paul Bowker: significantly. It is a real challenge for the industry and 231 00:12:28,530 --> 00:12:32,949 Paul Bowker: how we manage these costs and keep our engagement with 232 00:12:32,950 --> 00:12:35,420 Paul Bowker: the consumers when they have a lot of different alternatives 233 00:12:35,950 --> 00:12:38,729 Paul Bowker: is from our perspective, the way that we've approached that 234 00:12:38,730 --> 00:12:41,230 Paul Bowker: is really going back to the start of the business, 235 00:12:41,230 --> 00:12:46,050 Paul Bowker: which was to build a brewery of scale. So, we produce 24 hours 236 00:12:46,050 --> 00:12:48,770 Paul Bowker: a day, six days a week. We have brewing capacity 237 00:12:48,770 --> 00:12:53,309 Paul Bowker: for 40 odd million liters. This gives us substantial, I 238 00:12:53,309 --> 00:12:56,620 Paul Bowker: guess, economies of scale in our procurement and supply chain. 239 00:12:57,000 --> 00:12:59,420 Paul Bowker: The other thing that is really important now is to 240 00:12:59,420 --> 00:13:03,290 Paul Bowker: have an incredibly efficient brewery. That's no longer really feasible, 241 00:13:03,290 --> 00:13:07,250 Paul Bowker: apart from hyper local breweries that sell over their own 242 00:13:07,250 --> 00:13:10,730 Paul Bowker: bar to be able to produce beers without being able 243 00:13:10,730 --> 00:13:14,699 Paul Bowker: to compete broadly in terms of price with the larger 244 00:13:14,700 --> 00:13:18,170 Paul Bowker: independents and the major international breweries. So, it will be 245 00:13:18,270 --> 00:13:21,220 Paul Bowker: a challenge and I think businesses will need to adapt 246 00:13:21,260 --> 00:13:25,650 Paul Bowker: their production and logistics around that. Hopefully, some of the 247 00:13:25,679 --> 00:13:29,330 Paul Bowker: more emerging breweries do start to look at some synergies, 248 00:13:29,330 --> 00:13:32,620 Paul Bowker: whether it's through equity tie- ups, other sort of relationships, 249 00:13:32,620 --> 00:13:34,720 Paul Bowker: to manage some of these increasing costs. 250 00:13:35,040 --> 00:13:36,590 Sean Aylmer: Paul, thank you for talking to Fear and Greed. 251 00:13:37,140 --> 00:13:37,600 Paul Bowker: Thanks Sean. 252 00:13:37,900 --> 00:13:40,530 Sean Aylmer: That was Paul Bowker, co- founder and CEO of Brick 253 00:13:40,600 --> 00:13:43,300 Sean Aylmer: Lane Brewing. This is the Fear and Greed Daily Interview. 254 00:13:43,300 --> 00:13:45,390 Sean Aylmer: Join me every morning for the full Fear and Greed 255 00:13:45,390 --> 00:13:48,020 Sean Aylmer: podcast, with all the business news you need to know. 256 00:13:48,150 --> 00:13:49,730 Sean Aylmer: I'm Sean Aylmer, enjoy your day.