When Two Birds Brewing took flight in 2011, founders Danielle Allen and Jayne Lewis already had their sights set on becoming the number one craft beer brand in Australia.
Allen and Lewis garnered attention for leading the way for women in the traditionally male-dominated craft brewing scene, but they’d also had an eye on the sector for some time. It was on a trip to the US together that they decided it was time to leverage their respective talents—Allen’s knowledge of product development at big corporations and Lewis’s background in viticulture—to create a profitable brewing enterprise.
Over the past five years the popularity of craft beer in Australia has exploded, but the duo’s attention to detail has helped Two Birds Brewing fend off the competition and turn an initial blueprint into a business with approximately $5 million in annual revenue, and its own brewery in the Melbourne suburb of Spotswood.
SmartCompany spoke to Allen about developing a “foolproof” business plan and why the best part of being your own boss is the freedom to hire talented people to help chase your long-term goals.
Jayne and I had pretty different educations, backgrounds and careers.
My background was a commerce degree, and then I had 10 years experience in product development in marketing, the last five years at Woolworths; Jayne studied viticulture, and she transferred her skills into brewing.
We came to the conclusion that we had very different skills, and we hoped that would work.
We thought big at first.
We wanted to be a nationally distributed and known craft beer brand. We wanted to be in every state, and we wanted everyone that enjoyed craft beer to enjoy the brand.
I [always] knew that I was going to have my own business; I just knew that working in a big company was not something I was going to do forever. I had that lightbulb moment with Jane when we were on holiday in the US together.
It was probably the scariest thing I’ve done in my life. I was really just nervous, but at the same time, quietly confident that I knew that it was going to work.
We’d done a business plan; we hadn’t just jumped in with no experience.
It was a foolproof plan, although it was a definite risk. We had a five-year plan, and at the end of the five years we thought we’d get to the point where we’d build our own brewery.
We started off with contract brewing, or “gypsy” brewing, but that changed at the two-year mark, when it was really important to have a home for our brand.
We used three different facilities in the course of building our business. Those facilities provided a service to people to come in, and were operated by the staff from that brewing company.
But the number one question [from customers] was “where is your brand located”? We wanted to give an answer to that question, and we were tracking really well in the first two years.
I guess we backed ourselves.
There’s a lot of up-front outlay that comes with brewing beer that has to be factored into your cash flow; that’s the hardest thing to manage. You’re selling the beer, the terms are 14 days and not everyone pays on time—everyone knows that. Timing is critical.
There’s a saying that beer is a “volume game”. That definitely does come into play, but it does depend what your business model is. There’s different ways to generate revenue. If you’ve got a wholesale model though, volume is really important to get to economies of scale.
Another thing that catches people out is excise tax. You have to pay tax per carton or per keg as soon as it leaves the brewery, before it’s actually sold.
It’s probably the most stressful part of the business. Especially back in the early days when it was just Jayne and I when we were doing all the elements of the business—making the beer, doing the accounts.
It’s all worth it though. We’ve got a team of people now that supports us. So I still stress about it, but not as much.
I think taking the volume of beer into consideration, we’ve grown at around 30% year-on-year.
Now we’re producing 1 million litres of beer—it seems like such a huge feat to get to that point.
But the really rewarding thing to me is being able to employ people. We have a team of 20 now just dedicated to the vision and the brand, so it’s just about being able to work [with them].
In terms of advice we’ve gotten, when it comes to marketing or colours or branding, not everything is going to please everybody. You’re the one that’s going to work with the brand; you’re going to have to love it.
You’ve got to be true to yourself in that sense, and not be swayed by anyone else in your brand and your logo and colours. If it’s not the real you, people can see through that.
In terms of words if encouragement, that probably comes most from family and friends.
For helpful business advice, it’s really come from the people that we’ve employed who start to understand the business from a deeper level, and are able to give us a deeper perspective, especially on financials. They’ve been able to reassure us.
There’s been plenty of changes to craft brewing [since we started].
The number of entrants in the markets has probably doubled, maybe even tripled. From that aspect, the number of people that have beers that they’re all trying to sell to the same customers has changed, and probably the number of styles of beer is never ending.
There’s a creativity when it comes to beer and what you can do with it. People have [more] interest in the weird and wonderful; the consumer has come a long way.
At this point, I think the business is financially stable enough to support myself. I’m too old to go back [to corporate life]!
You’d be silly to say that we don’t have an exit strategy, everybody should definitely have one. You can’t work forever, but we’re definitely hoping we’ve building a strong enough business down the line for someone else to come along.
What that means is not important at this stage; all I know is that it’s all about building a strong business.