← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
541: They Sell 1 Million Bottles of Alcohol a Year | Matt Jones
01:14:34
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- [00:00]
Matt Jones
Your brand doesn't exist. Your business exists. Your product exists. The reason we need the language of brand is that people feel things about your business and how they feel about your business is going to be really important to your success. I think small mistakes often make you stronger. You learn a lot from them. Small mistakes are like near misses. Hopefully you figure out why you had a near miss and it stops you having a big accident. I love to talk about luck. Serendipity being dealt a lucky hand is one thing. You still got to play it. And we could have still been counting, but we still operated with purpose, with focus and with ambition. Don't just think about why you will be successful and spend some time also thinking about why are you already successful and what would it look like to double down on that recipe for success. Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder podcast with Nathan Chan.
- [01:01]
Nathan Chan
Look, talk us through, Take us back to the early days. You were saying offline. Like I said, share with me, like the real hard times. Perhaps there were times of like, you know, because you've been building this business for well over a decade now, you've been, like I said, perhaps there's times where you felt like giving up or the business was about to go bust and you said, no, no, it's actually for the most part been pretty smooth sailing. Like, how do you guys get started? Talk me, talk me through it.
- [01:25]
Matt Jones
Yeah. And I said that because I wanted to get like the caveat out the way. There isn't this like fantastic, dramatic story apart from the fact that we were building a business based on gin and drinks and hospitality and we did it through Covid. So obviously that was one of like the greatest speed bumps that, you know, life could throw at you. But we'll probably get back to that. But rewind to 2012. So. So it's 2012. I have just recently returned from New York City. I was working there. I was heading up strategy globally for a big brand experience firm. Super fascinating time to be in the world of agencies and brand. Like if you just quickly go with me like on a journey of the five years prior. The iPhone is launched in 2007. Most of us who are old enough to remember we got our first social media account somewhere between 2009 and 2012. There was a mobile digital social revolution going on. The way that brands could be built, direct consumer, e commerce, the way that consumers could connect with brands, learn about, discover brands, access customer service, complain about brands, share what they thought of brands and businesses with their friends and family. Like, all of this was getting radically transformed. And I was working not in advertising, but in brand experience of really learning about this idea of the brand. The business as a verb, like what you do matters more than what you say. The way you show up as a business and a brand, the experiences you create probably mattered more than the, the stor you traditionally told through advertising and things like that. So that was, that was the run up to 2012 and had a baby in New York, moved back to Australia, like, okay, we've got to, got to earn some money, but I don't want to live on a plane anymore. I set up a little consultancy around brand purpose, brand strategy. And I get this random message on LinkedIn one day from a guy who invites me to lunch and we become super fast friends. Like, we just agree on everything around the philosophy of business and brand and food and drink and soccer. We both sport Man United and, you know, half your podcast audience just turned off, so forgive me for that. And we start working together. He introduces me to his best mate, Cameron. Turns out that he and Cam had sort of met in the wine industry that dabbled with wine and they had this daydream about making gin and, you know, a few dinners and catching up and me starting to make some notes and some scribbles and we start to sort of form a plan or an idea to build a gin business. And I think I wanted to kind of start almost by dropping a little. I was about to say truth bomb and I'm like, God, does that make me sound terribly odd? But anyway, I just wanted to, like, drop a little something at the start because I think it's sort of not provocative, but I, I find it really useful, which is people often want to know, like, where did the big idea come from? Like, four pillars. What an idea. Like what? And you're like, it's not an idea, it's a decision. You know, when you, when you look at a category that is, in our case, like, full of gin businesses, even in 2012, before the gin boom that we've all seen in Australia in the last 12 months, where if you walk into your average Dan Murphy's, like, the real estate allocated gin is probably twice the size as it was a decade ago, but even then there was already enough gin in the world, like, no one was losing sleep going, if only had another gin.
- [04:33]
Nathan Chan
Yeah.
- [04:34]
Matt Jones
So you sort of went, well, the decision to make, Gene, was just that. It was a decision. And I think the really critical first step for our business and any business is taking the time to figure out why is this decision a good one? What decision are we really making if we do this, what value are we adding? Who are we doing it for? What's it going to take to make this decision? The right decision? And once we've made this first one, there's going to be like a hundred more decisions that are going to come at us at pace. And have we actually done the thinking and built the frameworks that allow us to make all of those good decisions? And I think it was because of the time we spent, the time we allocated on that thought process, on the thinking through that to some extent made then the journey a bit less eventful than it might otherwise have been, because we did have clarity of thought and strategy right from the beginning, or at least from that first six months.
- [05:30]
Nathan Chan
Yeah. So talk me through what was being discussed at these dinners. Why gin and. And how were you guys going to enter the market and build this massive business? Was that what you thinking you were going to do? Did it was going to be a bit of a hobby business because it was a decision or what?
- [05:44]
Matt Jones
So many questions or great ones. Right. So why gin? Because we like gin. Because why gin for us as a trio? Because we like gin. Why gin? For stew and can? Because they were really into the drinks industry as both consumers. Gin was always sort of the spirit that winemakers and wine lovers. It was the one they gravitated towards. For me, I found it interesting as a. As a brand guy, like I was bringing no value to the table in terms of the liquid. I liked it because I had a view that the world was a world of abundance already. As I've said that the world did not need another anything. It certainly didn't need another gin. So only deserved to get a new thing if that thing had purpose, if that thing was some way better. So I was very quickly convinced by Stuart and Cam that we could make better gin. We could make different gin because we could make gin in Australia. Cameron is an Olympian. He always reminds us there's no past tense. Like if you run fast enough once to make the Olympics. And he ran for Australia in the 400 meters in Atlanta, 96. So you take from that the guy has discipline, the guy is determined and he's got a palate and Stu's got a palate and Stu's got great drinks knowledge and great entrepreneurial hustle and instinct. So I was pretty quickly convinced that these two would be able to make a differentiated product because gin is not vodka. Vodka is Purity vodka is distilling to nothingness. Gin is actually rectifying a pure spirit with flavor through botanicals. So it has to be juniper. If it's not juniper as the base, it's just like weird vodka. Juniper is a little. We call it a juniper berry. It's actually a little conifer. It grows in places like Macedonia and Kosovo wild. And when you distill it, it gives you these beautiful kind of pine, needley pine forestry notes. But gin can then be whatever you want to layer on top of it. And we're like, well, Australia's got this unbelievable flavor culture, this unbelievable access to produce and botanicals. We should be able to make more delicious gin here that the Brits can make up there. So on the one hand, I was convinced that there could be product advantage. And I'm like, well, still, this is a category where if you don't get the brand right, if you don't get the esthetics right, if you don't get the emotions right, if you don't get the appeal right, it doesn't matter how good your product is, you're not going to succeed. So I could see that I could add value, but I could also see that there would be product excellence. So those were the very early conversations. But then I think before we could answer the rest of your questions actually came that moment of humility to go, what do we not know? And the answer was a lot. So the first money we put in the bank was really just enough for Stu and Cam to go on a road trip. And they went on a road trip in the US from Seattle down to Los Angeles. They visited like 35 different distilleries. And they came back just like, buzzing. And they're like, a, there is opportunity here. Like, the. The Americans aren't making gin the old British way. They're doing their own thing. We have the right to do the same in Australia. And B, they're like, we have to get this particular type of still every time. They'd been, like, blown away by a gin and a spirit, it was made by still that had the name Carl on the front. C, A, R, L. But first they're like, why does everyone call their stills Carl? Like, is this an American thing? But it turned out the stills were made by a German steel maker called Christian Carl. They're outside of Stuttgart. They're like the. The Mercedes Benz of gin machines. And so, like, okay, we've got to of those, it will be the first in Australia. And, you know, this is a really important founder moment. Because what are the problems of Carl Stills? They're really expensive and they take a long time to hand make. So it's going to take a lot of money and about 10, 12 months for us to get our first car. Still we named her Wilma after Cameron's late mum. So for Wilma to arrive was going to be the best part of a year and in hindsight that was this unbelievable blessing because it forced us to slow down. It put this big gap between the first decision of we're going to try and learn enough to figure out could we make gin and the first bottle. And that was the time we used to then really do the thinking. That answered the rest of your questions. Why are we doing this? Is this a hobby? Are we taking it seriously? What money is it going to take? Quite a lot. Are we going to fund it? We're going to bring a bunch of ginvestors on board to give us enough Runway to do it properly. What's the branding going to be? How are we going to get a custom bottle done? Can we do distillations? And little chemistry labs still start to explore flavor. So when Wilma turns up we're ready to go. How are we going to launch? Are we going to go the traditional route that you know, every gym brand since Tanqueray has used or are we going to try and take advantage of social media and e commerce and go direct to consumer? And the answer was let's do both, let's have our cake and eat it. So we had that 12 month period to think all those things through to get the theories locked down and that's really the first section of the book I've written because the, the letter I'm trying to send past me from future me is even if you weren't forced to slow down, even if the, the ordering of that still hadn't slowed you down, you actually should slow down anyway. You should take this moment because once it's on, once the game is afoot, you're going and it's really hard to slow the train down. Then it's like Keanu Reeves and speed, you've got to keep it over 50 miles an hour. So actually forcing yourself to slow down and think early on and it feels almost against every contemporary instinct of lean and agile and you know, LinkedIn's like here's the 12 things I did before breakfast and I didn't have breakfast anyway and it's ready, fire, aim and let's go. And look how action orientated I am. But the truth is taking that time to think things through, to lock down some theories because there's going to be, whether they're speed bumps or cliffs that you run into, there are going to be these moments when you doubt and question your strategies and your plans and you're going to need the conviction that gives you the resilience to follow through and gives it time to work. And I think that was a real, a really fortunate sort of baked in feature for us. But I think, you know, we made the most of it in many ways. Yeah.
- [11:35]
Nathan Chan
So talk me through, like you want to start an alcohol brand. You see a lot of, you know, independent, you know, breweries, especially craft breweries, they've been kind of unfortunately doing it tough. You know, I had a, an old friend who, you know, he had to shut his brewery down and he had a, at the time was a brilliant brand and they were stocked everywhere. You know, from the outside it looked like they were doing pretty well. But it's really difficult on the tax side, all these different things. So talk me through kind of you said you had to raise some money. Can you talk us through some of the details there? And how'd you find investors? What did you do on the site?
- [12:15]
Matt Jones
Yeah, it's a great question. It's a great little bundle of questions. And really the unifying factor there is we're talking about the financial dimension of success. And I think this is really, really important for people who enter into a business because of a combination of passion and craft. So there'll always be people who build businesses because they see financial opportunity that they are in of themselves, commercially savvy and maybe a little bit opportunistic. But we're not talking about, or at least I'm not talking about that kind of business. I'm talking about a business that someone built because they wanted to make something. They wanted to create something and they thought they could create something or make something extraordinary because they had a passion, because they had a craft and expertise. And it's really important to think through the financial side of what's going to make that successful. What is going to get that. If your business is a plane, let's not worry at this stage how we're going to like punch through the atmosphere and make it a moonshot. But how are we going to get it to cruising altitude? Like what is that viable first level of scale that starts to make it a meaningful self sustaining business. It might not be the unicorn yet, might not be the billion dollar brand, but it's something that you are no longer losing sleep at night, over. And you've got to then figure out the dynamics, almost like the gravity of your category. What is the stuff that's going to be pulling you down? And you raised one of them in the alcohol and particularly the spirits industry in Australia, which is the level of tax. So when we looked. And this is when humility is really important. So humility, not just to go, why is anyone going to care? Like, if we launch a beer business or a gin business or an anything business, a new SaaS business, humility is both saying, why is anyone going to care? But also it's saying, why have other people not managed to do this? And in gin, one of the answers was, because people have to pay so much tax, costs a lot of money to make a good product, to buy a great still to buy, you know, the first shipment of custom bottles, to access all those botanicals, do all those things like it's hard currency. This is not a capital light business. So you've made this big capital investment, you've just dug a hole, and then you're making sales, you're trying to fill that hole. And every time you make a sale of a $70 bottle of gin, sending 30 bucks to the tax man in the United States, that'd be a dollar. Like, we're paying literally 30 times the tax per bottle in Australia compared to the U.S. now, every category in every market's gonna be different, but right now we're talking about starting that business in Australia. So we really had to think through, what's it going to take to get to meaningful scale where this business sustains itself? And the answer, the clue was in the question, we've got to get to scale, but equally, what's going to make our business special? And the answer was craft quality, uncompromising attention to detail. Now, typically when you use the word craft and scale, they feel it's like an oxymoron, like that they're at tension. So we had to figure out, how do you scale craft? How do you take an uncompromising approach to excellence and putting product for everything else, and how do you achieve scale? So we already were thinking through a model where we went, well, craft gets rewarded when you can talk to your most fanatical customers about that craft. So that means you're going to have to build a direct consumer model. You're going to have to be really good at telling stories. You're going to have to regularly create new products. Because we decided we're only going to make gin. Well, like a craft gin business doesn't play with whiskey or vodka or rum in its spare time, it does one thing to an exceptional standard. So we're going to have to be really good at exploring gin and making different types of gin and collaborating with people and then selling those gins directly to a growing consumer database and holding on to both all the margin and all the brand impact. But then we can't stop there. We've got to use that margin and use that brand power to scale over here. So scaling over here means working with all the best bar operators, working with all the best national retailers, getting into airport duty free, getting into export market. So we very early on envisioned, and I'm not saying we nailed it from the start, but the picture we had in our minds that success was these, these different cogs all working together, some building brands and making really good margin, others driving scale, driving reach, driving availability. I see it as like sort of throwing a bunch of plates up in the air and trying to get them all spinning at the same time. Like, if we just focused on one, we might have built a great brand, but we wouldn't have had the volumes. If we'd focused on another, we might have got volumes quickly, but we'd have been making no money and building no brand. So I think we understood the gravity and the dynamics of the system we were entering into and had a level of realism about it. And I think the challenge for a lot of folks, whether it's craft beer or wine or all sorts of categories, is perhaps people have gone into a category with a great deal of passion, but maybe not enough understanding and insight into what makes this category actually work. And what is it going to take to be successful in this category?
- [17:16]
Nathan Chan
Got you. And is that why one of the reasons why you guys kind of when you launched you the brand is a premium brand, like premium priced as well. Is that, is that one of the reasons? Because that would inherently build brand as well, 100%.
- [17:31]
Matt Jones
I mean, the, the pricing was. The pricing is a really interesting discussion in brand because price is a signal. And you know, I like to talk a lot about the fact that, you know, for anyone listening and watching and sort of hopefully taking something from this conversation, say to people all the time, your brand doesn't exist. There's no such thing as a brand. Your business exists, your product exists. The reason we need the language of brand is that people feel things about your business and feel things about your product and how they feel about your business, about your product is going to be really important to your success. So when we talk about Brand we're really just talking about. There is the logic of your business, the rational value you create, and then there's how people feel about your business. And feelings matter more than maybe you'd like them to. Maybe you'd like to win because you have a better algorithm, a better line of code, a better product. But you won't win if you don't also make people feel the things you need them to feel. So then you go, well, if that's true, how do we make them feel those things? And the answer is often things like stories, design and signals. Signals are really critical and pricing is a signal. So if you want people to see you as premium, your price has to send that, that signal. Now, we didn't price too high. We had a very, very simple strategy, which was we want to convert people from a bottle of Hendrix to a bottle of four Pillars. Because commercially the Target was very straightforward. When we Launched, Hendrix had 66.0percent of the super premium gin category in Australia. So One brand with one product had six out of 10 bottles sold over $70. We're like, well, that makes, that makes your targeting very straightforward. Just go after them. What are they priced at 70 to 75 bucks a bottle. Fine, that's our price. We don't need to overthink this. But the key signal was not being promoted. So the key signal in the early days was to. And we chose to have a sensible price. We could have gone, we're going to, we're going to price ourselves at $90 and show we're above Hendrix, but then we're regularly going to discount to 75. And actually the signal you're sending there is not the $90 signal, it's the $15 off signal. It's that this isn't worth the money. This is struggling. So we chose to pick what we thought was a sensible price line priced against our competitor, but one that we could hold and not be tempted to discount. And so that connected to lots of other decisions about prioritizing quality, holding a premium, luxury positioning. And all of that meant we had to make decisions not to chase scale too early. So I'll give you one example and then we'll talk about fundraising. So the example is we launch officially on the market in December 2013. We were the first gin brand in the world, as far as I'm aware, to launch through crowdfunding. We did that in October, November used Pozzible, the Australian crowdfunding platform, in December. We then launched to the trade. So we'd done our non traditional launch we built direct community. We'd start to build the first round of our direct to consumer e commerce database. Then we did our traditional launch in December. Drinks, media, bartenders, retailers. So by January, all those plates I talked about are kind of up in the air. They're spinning slowly. We've got bartenders making gin and tonics and martinis with four pillars. We've got funky independent retailers selling four pillars and recommending it. We've got a direct consumer community starting to order their second bottle. And we've got a commitment from Dan Murphy's that as soon as we can make enough, they will range us nationally. Fast forward two months, March 2014. We're still like three, three and a half months old. We get this email from San Francisco and, you know, you said at start, let's, let's talk about things that went wrong. I think in the Marvel Cinematic Universe, in the, in the parallel strand of the multiverse. Yes, of the Spidey verse, here is something that went wrong. But luckily in this universe, it didn't go wrong. So we get this email from San Francisco. Four Pillars rare dry gin. Our original gin has won a double gold medal at the World Spirits Competition. That meant that every judge in a competition that at that time, there was no flavor gin category. There was no contemporary gin category. There was just London Dry Gin. Now London Dry Gin is sort of Nana's Tipple. It's like what the Queen Mother used to drink. It's like, it's Gordon's, it's Beef Eater. It's gin that tastes very, very juniper heavy. So that's what the judges expect. So we'd sent off this gin that was all like fresh orange and spice citrus and it was modern Australia in a glass. And we're like, they're probably going to throw it out the competition. And the double gold medal meant that every single judge had given it a gold. There were only eight other gins in the world that won a double gold that year. So, you know, you and I would not take long to write the press release. Like, four Pillars gin, less than four months old, named one of the world's top ten gins. Happy days. Now, a sensible business at that stage that just listed in Dan Murphy's. And that morning, the phone rings from Dan Murphy's. We want to give you like a full page in our seller press. Like, we want to fully get behind this. A sensible business would have gone. Now is the time to like, put your foot flat to the floor on the accelerator. Take the speed up. Rare dry gin Grow, grow, grow. Let's do a bit of promotional marketing. Let's just get absolute volume out there. And instead, what did we do? We focused on making marmalade. We started to make marmalade using the oranges that we were steaming to make every gin. Because we were already really obsessed with the making process, we'd started to put free jars of marmalade in with bottles of gin that we were sending to E commerce customers. We were just about to release our second gin, a barrel aged gin, and our third gin and navy strength, like a very strong overproof gin for cocktails. So three months after that, this gin business that was taking on Hendrix, that had one product in market with 60% market share, instead of just relentlessly chasing down that, we'd already made three different products and a marmalade and four pillars. As this explorer of what gin could be prioritizing, keeping this small community of gin fanatics absolutely frothing with excitement about what's four pillars going to make next? That was the four pillars that emerged. And we were still driving sales at Dan Murphy's, but the priority was really getting this fire burning at the heart of four pillars. So that strand of the multiverse I talked about is probably a very different four pillars where we just doubled down on that one product. We set aside all those other experiments and initiatives and that business would have probably grown really fast for two or three years. We'd have plastered that big double gold medal everywhere. We'd have seen rare dry gin grow and grow and grow. But what was that brand? That brand was defined by one product. Other people could have copied that product. Other people could have taken that flavor profile into a lab and had a crack at replicating it, doing it cheaper. And I'd say if we'd been that business would have been a four pillars business defined by one product. But what we weren't doing in that multiverse was building a brand. What we did over here was build a brand with real longevity. And it was because we knew we wanted to do things like that, that, and this is the second part of your question, we knew we had to have money in the tank. So we weren't greedy. I think we were smart. We sold 40% of our business before launch to 20ginvestors. We thought it was quite funny to call them all ginvestors. Came to the point where putting a G in front of every word within started to, like, be on the nose. I think it was ginovation killed it for us. But ginvestors, they stayed and they put in 25 grand, 25,000 Australian dollars. And for that they got a 2% stake in the business. Completely silent partners. We said, you get no voting rights, you have no power. It will be great fun. We make no promises. We want you to think of it the same way you might think of buying a share in a racehorse. It might win the Kentucky Derby, it might not. But it's going to be fun. You're going to get to watch from the sidelines. Once a year, we'll invite you to a briefing, we'll tell you what we're doing, we'll have a great dinner, we'll send you a bottle of every gym we make. But apart from that, no promises. Leave us to it. And what we sought out was patient, unstressed investment. We didn't approach anyone we thought would be stressed by $25,000. So we weren't going to be wasteful with it, but we also weren't going to promise anyone. We were chasing an exit. We were building a business to own. We were building a business for the long term and we knew that to do that we were going to need what we thought would be three years of cash. So with that $500,000 from those 20 investors, the money we put in and the sweat put in, that's what gave us at least the initial burst, the initial platform to do the thing got you.
- [26:05]
Nathan Chan
And you did that first, then the possible campaign.
- [26:10]
Matt Jones
We actually did them in tandem as a really interesting case study. And I, I, you know, I do quite a lot of work with, with founders who are in that startup and that sort of early seed phase and it was such a great education into the power of not just storytelling but signal sending. Right. So we craft the, the sort of investor memorandum. I'm not sure we had the fancy words then to call it an im, but that's basically what it was. It was a PDF going, hey, we're these three bald, middle aged white guys and we think we know something about gin and brand building and we're kind of interested in this and we think there's something happening in gin and we think there's an opportunity in Australia. It's not going to be cheap. We're going to try and do it properly. Would you like to, you know, buy 2% for $25,000? No promises, but there are some examples of other spirits, brands that have gone well, so you never know, but either way it's going to be fun. Do you want it? So we send that out to people and we get a few takers and I think on the day that we launched our Possible campaign, I think we'd filled nine of the 20 GInvestor slots and I don't think we had any other warm leads. Four days later, well, no, I should start again. Four hours later, we had hit our Possible target. Four days later, we'd sold out the whole campaign. And by the end of the week, with 19 of those 20 slots filled and about five different people emailing in a panic going, please keep that last slot open. I want it now. The truth is, selling $30,000 of gin to 307 people was not material. It was not a material dent in our financial needs. It didn't demonstrate product market fit, but it sent a signal that there is something here that 307 people haven't just liked a Facebook post, haven't just shared it, they've put their hands in their pockets and very deliberately, when I was working with the team at Possible on the campaign. When you draft a crowdfunding campaign, I'm sure a lot of people listening know this. You draft craft campaign and you submit it and then they review and they'll give you feedback. And the feedback that came from Possible was your entry price is too high. And I'm like, what do you mean? They're like, well, you need to have like a baseball cap or a T shirt or a fridge magnet or sticker. You need something where people can pledge $10. And I went back and said, it's not going to happen. The minimum pledge has to be, I want to buy a bottle of Four Pillars because we don't have product yet. So I need to demonstrate that people want to buy this because of the story. They want to buy this because of what we are trying to do. They want to buy this because it sounds delicious. Because the aesthetics of the content, the photography, all the stuff we done, all the brand elements we've done, are making a promise and they want to buy a bottle of that promise. And so that act became the signal to say, there is something going on here. And then the trust for Gymvestors was if the liquid can match the promise. And I think that's when they looked at the credentials of my two co founders and Stuart and Cam and went, you know what, it's probably going to. But the question mark, can these guys actually do it from a brand point of view? I think that Possible campaign almost answered that question. So they were in tandem and it was really interesting watching those two levers. So within a week we'd gone from no one's ever bought A bottle of four pillars and we've got nine divestors to. We've just sold out our first batch before we've made it. And we've got that gym Vesta roster full and in fact we've got the waiting list of the next five people who if we have room for more, we know who they are.
- [29:42]
Nathan Chan
Yeah. And it's really clever. I do see this, this does happen. Where you see alcohol brands or brands in this space, they do crowdfunding or equity based crowdfunding because they want to build that. Like you said that getting that fire going of that community. And it sounds like that's something that was very key to the early stages of your story.
- [30:07]
Matt Jones
Look, it was and, and it wasn't equity crowdfunding. I should should note that they're very much the equity player. The crowdfunding like it was separate. But I've certainly seen, I mean Brewdog is a wonderful example with equity punks model.
- [30:19]
Nathan Chan
Yeah.
- [30:19]
Matt Jones
I think what was really interesting about both of those communities is both the 300 odd people who bought into the possible campaign and the 20G investors. They both just had so much passion and so much of a sense of ownership. And I think I just come out of really reflecting on the importance of brand purpose. And that was the little consultancy practice I'd set up was helping businesses think about purpose. And when I say purpose I don't mean purely social purpose. I'm not saying turning every business into a Patagonia or a B Corp or saying what are we doing for our sort of bottom line around sustainability. I actually just mean the story of how your business adds value to the world, like why your business deserves to exist. And I think we did a really good job. And Stu, I remember in the, in the video that we made, I was sort of behind the camera and he was in front of the came when we made the video for the possible campaign. He did a great job of then articulating it. And I think we gave everyone the feeling that there is something happening here and it's exciting and you are helping make that happen. And so that gym Vesta community carried with us and always just kept us. It was like having these incredible cheerleaders from the sidelines and they had skin in the game but they just also had excitement and enthusiasm and you knew that they were fully paid up ambassadors. Every bar, every restaurant, every bottle shop they went into, they walked tall and proudly shared four pillars. But equally the clever little thing we did with that crowdfunding campaign is whether you bought one bottle of Red Dry or whether you bought four bottles and xyz. And we said, there's one other benefit. You become a member of the batch number one club because you bought a bottle of batch number one before Cameron had even made it. And you will be a member of that club for life. This isn't like Qantas Platinum membership, where if you don't fly enough next year you lose it. You are batch number one forever. And what that means is every time we make a batch number one of anything. So I'll come back to that notion about the business system. We knew as a business we'd be making lots of batch number ones. We knew that was the business we were getting ourselves into. Every business you think you know what business you're getting yourself into, but you don't. You're going into a category, but you have to decide how you are going to play and win in that category. We were going to be in the business of relentless experimentation and exploration in gin. So we were going to be making lots of new gins, probably 4, 5, 6 new styles of gin every year. Gins made with bartenders, gins made with other distilleries, gins made with go to skin care. We made a last two years we've made gins with Porsche, with Leica, the Camera brand, with Qantas, with Zoe Foster Bates, go to skincare. So to be a member of the batch number one club and say, you will never miss out because you will always get the email before anyone else. You will always get early access in the early days. As well as making marmalade, we didn't like throwing away the botanicals that basically a still is like a giant kettle and at the bottom of the still, after you finish making gin, like the tea leaves. And so instead of throwing them away, we said to a local pig farmer, would you, would your pigs like these? And he had these pure breed Berkshire pigs, so he started feeding them. So we called them gin pigs. And then we would approach chefs that we knew and loved and said, would you want to host a gin pig dinner? And we'll provide this incredible and we'll provide great wine from mates in the Yarra Valley and of course we'll provide gin to do every course. And so these dinners were phenomenon. So if someone like Aria advertised a gin pig dinner, it would sell out in about three hours. So again, batch number one club, you're in first, you don't miss out. So it hardwired this sense of intimacy, community, the belief that a small number of people who are literally and figuratively paid up investors in your brand. People who really care. Like, money can't buy that. And even if you are trying to become a million plus bottle a year business in 30 markets worldwide and all those things, having that small group of people who just have this intensity of passion and then treating them with that same love and respect in return and still honoring that relationship with them and treating them as part of your gin family. I think that crowdfunding campaign and that investor campaign hardwired that DNA. And so then that was a promise we'd made to ourselves and to them that we had to keep forever, no matter how much we scaled.
- [34:43]
Nathan Chan
That's so cool. And you know, when you really think about a lot of this stuff, it's like building relationships at scale, right? And that's what you did. That didn't scale to begin with, but that's the core. Those are your true fans, Those are your customers.
- [34:59]
Matt Jones
And it's a belief system, right? And the 20th century. I'm a huge fan. And anyone listening who hasn't followed him, there's a guy called Seth Godden. I think he's just an unbelievable thinker about marketing and brand building.
- [35:10]
Nathan Chan
He's behind you there.
- [35:12]
Matt Jones
He might.
- [35:12]
Nathan Chan
Well, there he is, the trees blocking it.
- [35:15]
Matt Jones
And he's a legend. And he's. He, along with a couple of other writers, has really shaped how I think about brand building. And Seth will talk about the 20th century, sort of advertising industrial complex. And we don't have to build brands, like, anymore. We can believe that intimacy can scale, that relationships can scale. And we don't always have to do the scaling. What we can control is the intensity of that relationship. We. We get to stoke that fire in people's hearts. We get to create people who are loyal, passionate advocates. And we do that because of how we make them feel, because of how we treat them, because of how we show up, how we serve them with product, how we go way beyond their expectations, how we figure out the thing that we can do that is really awesome and really remarkable and almost shocks them. Like they've got experience of a category and then they go, but I've never tasted gin. Like, place your ass gin. But I've never had service like I had in that Ritz Carlton hotel because I've never been dealt with so well as X, Y, Z. And that shocking moment makes them customers and loyalists and advocates for life. And then they will do the scaling. That's what the digital and social revolutions have done. They've given people the tools to Shout about the things that they're passionate about. And I think of course as four pillars has grown, we've had to take responsibility to help that scaling happen. But I think there was a fundamental belief in the power of intimacy and as you say, in the power of relationships that if we invested in that, if we paid it forward in that, we would get the growth. And I think sometimes businesses start up and they want to skip that step. They want to jump straight to the scale bit and they haven't really thought about how do I make sure that the heart and the fire is there, that the really strong relationships that will sustain me are there before I then try and springboard to scale.
- [37:09]
Nathan Chan
So did you guys do any other crowdfunding campaigns?
- [37:12]
Matt Jones
Only that one. We, we then sort of, we then would do sometimes pre sales campaigns. We would, we leverage that database. But we really then worked on a model of we'd use social media to build the following that we then sort of leveraged into that possible campaign. So then we just worked that same system. So when I came in today, I brought a bottle of Christmas gin for you guys. And Christmas gin was I think just one of along with bleacher Az are two of the gins really sort of defined what four pillars is about. Because in both cases like making gin by soaking shiraz grapes, making gin by distilling Christmas puddings, these were not things that the world needed. These were not things that people were asking for. No one ran a focus group and said what gin do you want next? You know, the, the grape experiment was just Cameron frankly stealing grapes because we were still bunking down the back of a winery. And he was like, I wonder what will happen. And the truth is all the color and flavor and sweetness just bled out from those grapes into the gin. And we pressed the grapes and bloody shreds. Gin was born. The first gin that Australia has really given the world as a unique category. There is now a global category of grape based gins. It comes from four pillars bloody Shiraz. It's a true four pillars in Australian original Christmas gin was even more unusual. It was Cameron distilling Christmas puddings made to his mother's recipe and him just looking at the recipe and going all this stuff sounds delicious. Let's make a couple of extra puddings, let's distill, let's age that gin in these hundred year old musket barrels. Because you know, Christmas is the only time you drink musket because you've got a random uncle who turns up with a bottle of Rutherglen musket and you drink that, it's delicious and very Christmassy. And then I had this idea to wrap that not in a branded label but in artwork. Because I'm like, this is Cameron's family tradition. Let's like honor that and put wrapping paper around it. But equally, I could already see 10 years ahead and go, how good is it going to be when you've got 10 years of them lined up next to each other and each one has a completely unique artwork and they become collectible and desirable. So we made a very small batch in that first year. And so we would follow that same rhythm every time we would sort of reveal through social media. We would build and we would drive like 5,000 new signups to that database through social media. So by the time you went on a pre sale to batch number one club and then to what we called Wilmers list, which was the bigger database, you'd already just swollen that, that database with that release. So we just followed that logic again and again and sort of grew from those 300 people who are in that original batch number one to a database of about sort of 75,000 people who were really excited to hear from Four Pillars about everything that we were making. And of course, ultimately those 75,000 weren't going to give us all the scale we needed, but they were going to be a fantastic way to launch and trial new products and new flavors. And so, you know, great example of that. We flew off to Japan. We made gin with the Kyoto Distiller. We found that they love the yuzu. We made a gin called Changing Seasons gin because every time we went to Japan or they came here, we swapped seasons and beautiful label became a real cult classic of a gin. People are constantly asking like, when's Changing Seasons coming back? But then the really interesting thing we didn't foresee is within 12 months, lots of questions from our friends in the trade and in retail going. All our focus groups say that people want to drink less sugar. They want to drink gin with soda, not tonic. Could you make a gin that works with that? And we're like, well, that secret ingredient of Changing Seasons was actually the yuzu. And then we've just found this grower of yuzu in Victoria. Why don't we, we normally try and make quite balanced gins. Why don't we make a gin that just turns all the dials to 11 on citrus? The yuzu is super bright. It's going to stand up really well in the gin and soda. So we'd been Able to use that Changing Seasons gin as a, a little incubator for a flavor experiment. We didn't know we were going to then deploy it into a mainstream gin. So there was this way of both building community and building intensity, but also trialing things and having fun with things before things maybe made it to prime time.
- [41:15]
Nathan Chan
It sounds like such a fun, crazy, fantastic journey, but a really rewarding one. Tell me about the partnership with lion, how that came about. Talk to me.
- [41:29]
Matt Jones
Yeah, so there's, I think, because you.
- [41:31]
Nathan Chan
Want to get a return for investors as well.
- [41:33]
Matt Jones
You.
- [41:33]
Nathan Chan
Yeah, you invest.
- [41:34]
Matt Jones
You do. And, and I think this is a really great opportunity to talk about two partnerships quickly. You know, the first one is the founding trio, right? And we were super lucky in that we started out really aligned. We, we were all, you know, we were not diverse like I was. Whenever I give like a keynote, I always put the photo. I'm like, yeah, it is embarrassing to show these like three bold middle aged white blokes who frankly, like, we look interchangeable. And it's probably good for insurance purposes, right? Like if the Distiller gets run over one of the other two, you're going to take over and you're all the same. And. And while we were quite diverse in our professional abilities and we all brought something unique to the table, we were very aligned on strategy and ambition. We all wanted to do something properly. We all wanted to build something for the long run. So you're absolutely right in the back of your mind as you take on investment, you're like, at some stage we have to create a moment for these guys, a good day, whether that's an exit or a liquidity event or something. But really critically, we put no time on that and we built to own. There was no sense of a ticking clock. And I think our decisions would have been different had we gone, we have to exit within five years. It would have been a very different business to the one where we just calmly went, no, no, we're going to build this and see how far we can take it. And we operated a co CEO model and we were challenged a lot by people who said it was never going to work. Like how you need someone to make the decisions. But actually being co CEOs who went at the beginning, all the major decisions we were aligned on and we're going to require that alignment. So we didn't do 2v1 voting. We had no majority rule. We were unanimity on all key strategic decisions and it made us smarter because it made you go, well, wait A minute. If one of the three of us is feeling a little bit uncomfortable about the decision to sack a distributor overseas or to go into ready to drink cans, which, like, if you said in 2013, will four pillars make a ready to drink gin and tonic in a can? We be like, hell no. Have you tasted Gordon's GNT in a can? It's gross. And yet eight years later, we're like, the drinking culture in Australia has changed so much. Four Pillars alone was about four times the size of the whole super premium gin category. When we launched. We had inspired people to want to go to a barbecue or go to a party, be in a backyard and not crack a beer. That that world of like, you know, beer for the blokes and a glass of, glass of white wine for the girls had been replaced by gin and tonic for everyone. And so that then meant people wanted to have a good gin and tonic even when they didn't have access to a bottle and ice and all those things. We're like, okay. And we spent two years trying to create a product that was good enough to put four pillars on, on the, the, on the can. But if one person was uncomfortable with a big decision like that, we didn't do it. We interrogated it until we got to a point where with reason and with compromise, the three of us went, okay, we're up for this. And I think that forced us to be smarter. But even a model that works really well, it reaches a point of like, natural limitation. So the first one for us was none of the three of us were a natural financial leader. Stu was the most business minded and entrepreneurial, but his passion is still opportunity, creating and storytelling and opening doors. And I want to be the strategist and the creative guy and the brand guy. And Cameron is just an extraordinary gin maker and operator, a builder of teams and builder of community and the hospitality community he built in Healesville. We have 200,000 people a year coming to Four Pillars Distillery in Healer, but it was an amazing experience that he's built. But none of us really wanted to be the cfo. And you realize that in the early days the risk was don't run out of money. And I think we did that okay with the financial management we had in place. But we started to realize that the new risk was going to be not taking enough financial risk, if that makes sense. Actually, we need to invest in our growth and not having a strategic financial leader will get in the way. But the other risk was that the risk appetite of the people who own the business couldn't match the growth appetite of the business. And that's where I think we had to have, and I've used this word a lot today, the humility to go. What got us here won't get us there. We need a partner. And it happened earlier than we expected. Every raise need happened earlier than expected because of success. At the beginning, we thought we had three years of financial Runway. Eighteen months in, we had to go back to those gymvestors, say, good news, we think your investment's worth four times what you made it at. Bad news, we need more cash. And 18 of the 20 of them doubled down. Two just held their position. We brought in another 15 investors and that kept us going until the phone started ringing. And the phone started ringing earlier than we expected. We had big global spirits holding companies wanting to talk to us, but also we had this amazing Australian based beer business. And ultimately lion appealed to us for two reasons. One, they didn't have a spirits business, so they weren't coming in going, we're going to figure out how four pillars fits and we can fix four pillars. Instead they were going, actually we want four pillars to teach us how to do spirits. But also as an Australian beer business that owned brands like Stone and Wood, Little Creatures, Furphy, Forex, Tuis, they valued the Australian market. They weren't a global brand who was going, well, you fit in at a price point and a demographic fit and now we're going to try and grow your brand anywhere other than Australia. Instead, lion valued Australia. They valued having physical home and production here. We really wanted to protect what we saw as the critical strategy of winning at home. So winning at home for four pillars, like we got to win the Yarra Valley and then we're going to win Melbourne, then we've got to win Australia and that gives you a springboard to win the world. So both from a cultural fit and ethos fit and a focus fit, we thought you can work. And we spent about eight months on the transaction going back and forth, getting it structured properly. And the ultimate transaction was that they took a 50% stake in the business. They invested significant capital that allowed us to both purchase the neighboring site next to our original distillery, double the size of our home. Also take a long 10 year lease on a brand home in Sydney and fit that out beautifully as a drinks laboratory. So we have a gin distillery in Healdsville in the Yarra Valley and a drinks laboratory in Sydney which really talk to the two key pillars of our purpose, the flavor of the gin and the Flavor of the drinks you can make with it. And they backed us. And we didn't know that Covid was coming. We didn't know that we were going to go through this unbelievable period of first lockdowns and then a supply chain crisis around the world, and then a cost of living crisis around the world. But having that sort of big brother who basically said, look, you've got operational independence. We want a board meeting. They had two people on the board, I chaired the board. We had a board meeting once a quarter, but apart from that they just let us run our road race, but they let us know they were there. We had their support. You do your thing, you know, four pillars, that's why we chose you. And we said, well, you're letting us do our thing, that's why we chose you. But for four and a half years, we then had that, that combination of support, but a little bit of security and of course the capital investment. And then first of July 23rd, they exercised the option. They had to take out the remaining 50% of the business. And yeah, brings us pretty much to today.
- [48:47]
Nathan Chan
Yeah, crazy, crazy. So the Ginvestors did pretty well.
- [48:52]
Matt Jones
GInvestors had two good days. So we, we really wanted to keep everything that made four pillars intact from that first to that second liquidity event. So both the three co founders and all the GInvestors sold 50% of our equity, held onto the other 50, and then at that final event, again, the same with the second 50%. So they, they stayed with us through the whole journey. And I think that was a really important thing because when that first transaction went through, it was March 2019, you know, four pillars was still only five years and four months old. We were still at a fragile stage. And I think lion had the wisdom and the foresight and the respect for what we'd done to go, you just keep doing that. And so we really got to almost, you know, complete. We were six months short of completing our first decade when they took out the rest of the equity. But I think that was really wise by them that they let us do another four and a half years. And obviously it was a disrupted four and a half years. It was not the four and a half years that anyone particularly expected or wanted, but the core DNA of four pillars remained. And you know, I talked about changing seasons generally. Like that's a really important sort of little story in the book. And it's probably as close as we get to a major crisis crisis, because we were supposed to be launching Changing Seasons Gin in March of 2020. And I don't remind anyone of what was starting to happen in February of 2020. But Covid was fully arriving and everyone's hair was on fire and no one knew what it was going to mean for global travel, for categories, for cost of living. Is it going to be a banking? Like who knows what was, what was going to happen. And so we set out a bunch of principals and which was mainly about safeguarding our people. And you know, we very quickly gave every person in the business a haircut. We have the biggest salary haircut to the three co founders. And we had a lot of casual staff in our business, casual staff in hospitality and bottling and logistics. And we talked about how we wanted to prioritize their financial well being, not just salaried. So we were all going to kind of in it together and take a bit of pain together and keep the business together. And 12 months later we still hadn't lost a single person and we'd still managed to give shifts to every casual member of staff in that business through that period of lockdowns and disruption. But critically, with two big decisions to make, one was we'd start to see breweries, distilleries around the world make small batches of hand sanitizer. And we were like, look, we get it. And a lot of people were saying, when's four pillars can make hand sanitizer. And for a while we resisted because we're like, it's just not very helpful. Like a little spritzy bottle you get as like a gift with purchase, if you'd know, buy a bottle of gin and get a little spritzy bottle of 50 mils of hand sanitizer to us felt like marketing. And I'm not suggesting that other people were being cynical, I'm just saying from a four pillars point of view it wouldn't have felt authentic and right. And then Cameron gets a message one day from a woman who is running a Facebook forum for doctors around Australia and she's like, there is a crisis. These people, clinicians on the front line, they've got just about enough hand sanitizer for surgery, for hospitals, for clinics, they've got nothing at home and none of them want to take stuff home and rob the front line so they don't feel their families are protected, they're coming home and you know, the clothing they've been wearing in, in hospitals. And so within a week he has figured out a way to make hand sanitizer using the heads and tails of our distillation, which is basically the High proof alcohol that you don't bottle at the start and the end of the distillation, we run it down the bottling line because something that's happened to our business. We were the number nine selling gin worldwide in airport duty free anywhere in the world. So we've got all these 1 liter bottles. You can't fly around the world anymore. So we ran hand sanitizer down the bottling line exclusively in one liter bottle. So we're doing it at bulk, at scale, at speed. We did a bottling exclusively for healthcare professionals. So you had to declare on our website that you were a healthcare professional before you could access to it. We call it Take Care. We sold it at cost. Once we felt that we had achieved, we had dealt with that existing demand, we made a product that we built a tiny bit of margin into and we call it Heads, Tails and Clean Hands. And we sold that at just a tiny, tiny market just to basically keep the lights on and keep people in work. And the same week we launched that, we decided to press ahead and launch Changing Seasons Gin. Our initial estimate for how much Changing Seasons Gin we'd sell by the end of the year, we'd sold five times that because everyone was at home looking for delicious distraction and things to do. And so I always look back at that moment of going with his genius. And then with the support of the marketing team, within a week we had spun up a whole new product line that was a properly scalable response to a genuine human need. But at the same time, we launched Changing Seasons Gin. We kept this reputation for innovation and creativity. Within four months, we launched Olive Leaf Gin, which was the incredible gin that we made with Copper Mistake olive oil. It's the world's best martini gin. We never lost sight of the core purpose of four pillars, but we spent four months where we made an extraordinary quantity of hand sanitizer. We supplied the Australian postal system, we supplied people in health care and care environments. We didn't do it as a, as a hobby on the side, we did it at scale. We were probably the first to get into it at scale and we're also the first to get out of it again. We weren't tempted to keep it going. We weren't tempted to go, oh, oh, this is a whole new line of business, let's do it forever. We whipped it. And you know, and, and so I really look at that, that additional balancing act. I talked early on about how we, we sort of maintain this balancing act between understanding the traditional dynamics of the spirits category, selling in Bars selling in bottle shops, but the opportunities of e commerce and direct to consumer. But then this was a whole new balancing act. Like the, the short term Covid response but equally going, the world is going to emerge from this and we have to make sure that the brand we are the other side is even stronger and even more full pillars than the one that went into it. Rather than waking up one day post Covid and going oh, now we've got to rebuild what we stood for. And that balancing act was really important to me and it's a real source of pride how we navigated it. But again, back to humility. We were also very fortunate that 12 months earlier we had chosen to take on a bigger partner. So then when we were looking at things like developing a hospitality site in Sydney in the middle of a lockdown and a pandemic and doubling the size of our hospitality experience in the Yarra Valley in the middle of a lockdown and a pandemic, we could have the conviction to continue because we knew we had that support behind us.
- [55:56]
Nathan Chan
Do you think if you hadn't have taken on that partnership with Lyon Pre covered that the business would still exist?
- [56:04]
Matt Jones
I think it would still exist. I think I'd have had much more colorful stories to tell you about crisis and sleepless nights in that period. I think we would have had much more. I think it would be much harder for us to be courageous. You know, we, we wrote all these principles, right? And we lived them. We're like people, not paper. So we like canceled every bit of collateral that we were going to make that year. We just cut every bit of non quality cost out the business. We would never cut cost out of the gin. But we're like sending people beautiful cocktail books is something we love to do. But if it's a choice between sending a beautiful cocktail book out with every bottle of gin we sell and giving Steve over here another 10 shifts, we'll give Steve another 10 shifts. So we articulate these principles. We, we, you know, like I say, we gave everyone a pay cut, but we made no one redundant. We, we cut no casual shift we could when hospitality was completely closed down in Victoria, but because of changing seasons, because of hand sanitizer, because of our bottle cocktail program, we were sending so much more out through logistics. We didn't go and find a bunch of people who were working in a 3 PL center to do the logistics. We brought all these chatterboxes from hospitality who was super unproductive because they just want to talk to people all day. And we're like, no, no, you're going to work in bottling, you're going to work in logistics. Could we have found more efficient people to do that job? Yes, but our job was to take care of our people and keep them busy and keep them in work. Our job was to maintain conviction that, you know, the sun will rise again and keep going on building those homes and keep going and investing in those collaborations. So yes, I think four pillars absolutely would still exist, but would we have let go of some of those things? Would we have just, just pump the brakes on something not being quite so brave? I think that is the difference. And so that's why I love to talk about luck, serendipity. We, you know, we didn't foresee that stuff coming, but we were definitely fortunate that we'd made that decision when we did that. It gave us that security. But equally being handed a, you know, being dealt a lucky hand is one thing. You still got to play it. And we could have still been cowardly, we could have still gone. Now, you know, it's going to batten down the hatches, keep things simple, protect the founders, protect the value of our investment. Our houses were still mortgaged against the business, but we didn't do that. We still operated with ambition. We took the benefits of the security of the luck, but then we still operated. I think I'd like to think with purpose, with focus, and with ambition. There's a balance like everything thing.
- [58:42]
Nathan Chan
So we have to work towards wrapping up. This has been an awesome conversation. You're a really good storyteller, Matt. So is there anything that you would have done differently, any big mistake or any lesson that you'd like to share with our community?
- [58:58]
Matt Jones
I love this question because I don't think we made any big mistakes. I think, you know, we made dozens, hundreds, thousands of small mistakes. And I think small mistakes often make you stronger. You learn a lot from them. You know, small mistakes are like near misses. Hopefully you figure out why you had a near miss and it stops you having the big accident. Small mistakes give you chances to apologize to customers or make up with with partners and learn more about why they feel the things that they feel and become better. And we were very fortunate that then also calamities outside of our control didn't end up mattering too much. We ordered our first pallet of custom glass, like from day one. That beautiful, heavy, quite, I think, iconic bottle with the four tactile dots on it. It was coming from China and it got stuck in a typhoon season in the south China Sea. And so then we had to spend extra money to air freight enough for the first two batches of gin and we made the most of that. The first batch was the crowdfunding batch. The second just went into small bottle shops and bars. It meant we had to keep Dan Murphy's waiting a bit longer. In the end, it didn't matter. So small stuff, small mistakes, small calamities, small problems. There were lots of them. We got through them, we learned from them. But there is something big I would change and the big thing I would change was about understanding sooner why Australia was working so hard for us. I think sometimes as a business, you can a not think enough about what is going to make you successful in the future. And we've talked about that. But sometimes you can also not think enough about what is making you successful in the moment. Because if you do think about that, if you do interrogate that, you might find. So the old cliche, I think his name was Wanamaker. He was a store owner retailer and he used to say, I know that only 50% of my advertising is working. The problem is I don't know which 50%. I think it can be true for all forms of activity. Some of what you're doing is absolutely driving your growth and some of it makes you feel good, but it's really not working that hard. I think in Australia, we had latched on to this incredibly, almost magical relationship between the direct consumer business, both online, through social media, through email marketing, and then through these physical homes, and the distributed business, the wider business, the relationship between the people who walked in to our homes, who went onto our website, bought a bottle of gin and then didn't check out because then they went, oh, wait a minute, maybe I need another one. And then grabbed a jar of marmalade and then we threw something into their bag for free. And then we added a beautiful cocktail book and they just went away going, Gosh, I love Four Pillars. And then they went and told 10 of their mates, stop drinking Hendrix, stop drinking that. Try Four Pillars. And sent them into bottle shops. And that system was just working fantastically well. Very quickly we wanted to send another signal. Four Pillars is a global brand. Four Pillars has global ambition. Very quickly, we're in 10, then 20 markets worldwide, we're now in more than 30. I don't think we necessarily slowed down to think, how do we replicate that magical relationship between intimacy and scale, direct and distributed in those overseas markets. So Stu and Cam would go and do an amazing job. They'd go into a market like the uk, they'd find a great distributor, really good fit. Felt like the version of our great distributor here in Australia. Felt like that their portfolio of other spirits was good. We liked the family we were going to be in. Stu and Cam would get their teams really revved up. They go meet a bunch of people in bars and bottle shops that host a couple of consumer events and, like, the initial fire was lit and then we'd fly home and now we're 10,000 miles away. And while Four Pillars is our only love, it's our only baby. It's probably one of 40, 50 brands in that distributor's portfolio. And as much as we've fired them up, that fire doesn't keep burning that brightly. You know, it's. It's like, you know when you're lighting your barbecue and you put that, that ignition cube in, but then if there isn't enough oxygen going into the barbecue, those coals will start to fade away. And what we hadn't figured out was this is all good. There's nothing wrong with anything we're doing, but we've not replaced the other part of the formula, which is building that direct intimacy. We're doing it a bit when we can, but we haven't figured out a way to replicate it. Now, I'm not saying that we necessarily had. We named that and figured that maybe we've still done what we did, because by the end of 2019, so just before COVID we're in more than 30 of the 50 world's best bars. You can go to most great bars in most great cities in the world and get a Four Pillars Martini or Four Pillars Negroni. That was an unbelievable signal to our most important customers in Australia. Think about the most important customer in Australia. He or she is someone who flies to London and they left through Qantas first class lounge. And there was a Four Pillars gin that we made for Qantas. They stopped in Singapore Changi. There was a big retail display in Singapore Changi Airport. And then more four pillars being served in the land. Then they went to London and they stayed at the Savoy or at Hamyard or at Sohaz, and there was four pillars served in all of those venues. And even if all of that was just then sending back this signal of, oh, my goodness, how awesome is four Pillars back to the Australian market? So in that sense, it absolutely was working. But if the objective was to grow meaningfully in those overseas markets as well and not just talk to Australian travelers, I think that extra bit of the code was A bit that we hadn't quite figured out. And so I think now Covid kind of created this, this reset where you really couldn't go overseas. So we doubled down on Australian growth and I think now the next frontier for four pillars is to figure out how to send, if you think about a radio signal that loses power as it goes into the distance, how we can basically send a stronger signal to the West Coast, United States, to the UK and what does that meant in terms of strategy? I can hear your brain asking. It is that we are now going to continue to be a global brand, but we are really going to seek to extend our home market from Australia to Asia. So we're really going to go right, we have spent 10 years winning at home. Home was Healesville, home was the Aravalli, home was Melbourne, home was Australia and home is now Asia, Southeast Asia and Asia. And then over the years that come one day, home will be every great gin market in the world. But I think that additional focus is the one thing that we've, we've eventually got to. And maybe we wouldn't have changed strategy, execution, have we had that? But that's the one thing I would change a bit more of that consciousness as to why this market was just blowing up in the way that it was easy to say, hard to do, but something I'd urge everyone listening to this, everyone watching this, don't just think about why you will be successful, to spend some time also thinking about why are you already successful and what would it look like to double down on that recipe for success?
- [66:09]
Nathan Chan
Yeah, it's such a hard thing because you get so caught up, right and you always think naturally to scale, you need to do more. Right. Something new as often.
- [66:19]
Matt Jones
And I want to, I, I love, I love little simplistic models probably because I've got a very simplistic brain and I see, I think I see the world mostly in Venn diagrams and x and Y axes. So we're going to go with an X and Y axis and this might be, might be my little wrap up. I've said enough today. But if you, if you think about two axes for me for a second and one runs from external to internal and one runs from long term to short term. I think all of us start something and if we're doing it right, we're thinking long term and external and we're going right, there are a bunch of people out there in the world, how do I reach them, how do I persuade them, how do I win them? And I know it's going to take time, and I'm patient and I've got a plan. And that is this optimal moment to think about your theory of growth and your theory of brand. And then as that starts to work, first of all, you start to think shorter term. Because you're like, I've made a big growth promise next year. I've got big targets to hit. I've hit a couple of speed bumps. I've got investors, I've got partners. And so now you're like, okay, growth has to come a bit quicker, so we start to think shorter term, term. And then you go, I need even more growth. What can I control? Well, I can't control things out in the world because other things happen. Culture, consumers change behavior, competitors do different things, categories shift. But what I can control is stuff that's internal. And so as we grow and as we mature, we start to think more and more short term and more and more internal. And I think what we've got to take these moments to do, and this is probably what I'm trying to leave everyone with, with take these moments to reconnect with that moment when we were thinking external and thinking long term and thinking big and thinking brand and thinking next frontier and going, what is it that's got us this far? And what is it that's going to get us to the next place? And I was talking about my book at the start and saying the first section was all about thinking. I broke it into four sections. Because of four pillars, I can only think in fours. And that last section is all about this. This. It's navigating that experience of growth and learning how to sort of trade off and play this balance between doubling down on what got you here while also figuring out which parts of what got you here are not going to get you where you want to go and where do you need to question and where you need to adapt. And, you know, that's the hard thing about life. Life is ambiguous. You know, just when you think you got it figured out, it changes. I'm a parent. Just when you think you figured out how to be a parent, parent, your kids change, your business is the same. So I hope that in this chat and in the book, like a. There's some, some tools that people can use to like, think clearly about the, the focus and the theory and the strategy and the craft and the storytelling that's going to give them growth. But in that last section also that how to then go through that discipline to go back to first principles and keep checking in and going, going. Are we still on course? Do we need to keep, keep going? Do we need to do something a little bit different? And that's I think the nature of life and the nature of business and I wish everyone listening really well with their growth journey.
- [69:27]
Nathan Chan
Awesome. Thank you so much, Matt. Just one last question before we wrap. A million bowls of gin every year. That's, that's a lot. Can you just kind of wrap, just for context for our community, the size of the business, revenue turnover, anything you can share?
- [69:42]
Matt Jones
Yeah. Do you know what? My face is less a commercial and confident face and more the face of embarrassment of someone who made a very deliberate choice a couple of years ago. So on the 1st of July 2023, when we sold our equity, I chose to stay on full time in the business because I really felt that the job was only half done. But what I decided I wanted to focus on entirely was the outward facing brand creating growth. And I thought, you know What, I've spent 10 years in operations, in HR, always as partners to steering ham, never doing this on my own, goodness me. But always involved and alive and losing Sleepover and thinking about the numbers and the revenue and the gross margin and what's dropping through to EBIT and the banking covenants and all that. And then I've really enjoyed the fact that for the last 15 months I just let that fall away and go. You know what I worry about? The only numbers I worry about are the numbers that come through on the brand tracker because we track our brand. We use YouGov, YouGov's brand index. And we started to track our brand back in 2020 because at that stage we realized next wave of growth was not just going to come from people who interacted directly with us. Because before that we tracked our brand by looking at what are people saying on social media, what are they saying on Google reviews, what are they emailing back to us? Because people replied. We sent emails to people who wanted to receive emails from four pillars and they actually, they didn't just buy gin, they sent us emails back. We had that intensity of relationship. But then you realized this, this wider audience weren't going to have that direct relationship. They were going to buy four pillars in Dan Murphy's they were going to go home. If they didn't like something about it, they wouldn't tell us, they would just not buy four pillars again. And so we had to start track that. So that's the only, the only metric I, I still, I still track. But I can tell you look a million bottles a year. It's a, it's a, it's a, it's a really substantial business from a, from a revenue point of view we, when we exited equity wise around 150 staff, you know, we were a really substantial player in the Australian ginseng. Globally it's still a drop in the gin ocean. You know, it's sort of, and you know you alluded to a mate of yours in craft beer. You realize that big craft businesses are still very, very small when you look at the scale of commercial businesses. But we've built a business that could probably, probably go that again in terms of volume of production while maintaining absolute quality of small batch. You know we still hand weigh out botanicals. You get to Four Pillars at 6am in the morning, you'll see us filling these big white tubs of botanicals are being weighed at microscopically by hand because craft is quality but it's also consistency. You want every bottle of Four Pillars red dry gin to be exactly as delicious and perfectly made as the last one. So we can probably double our volumes and maintain that. So that's the job. It's not to become the world's biggest gin brand, it's to become the world's best gin brand, craft brand at scale. And yeah, it will be a not insignificant brand sized financial business if we achieve that. But the goal is never financial. The goal is always getting to a volume level while maintaining an absolute level of quality.
- [72:58]
Nathan Chan
Awesome. Well, thank you so much for sharing and Matt, thank you so much for taking the time coming down. It's been an absolute blast.
- [73:05]
Matt Jones
Loved it. Been a rep, a chat.
- [73:07]
Nathan Chan
If you love this episode, make sure to check out my interview with Emma Greed on how solving a problem she was so passionate passion about led to the creation of skims and good American.
- [73:17]
Matt Jones
And so I do think it's. So much of it starts with like addressing things that bother you that you find you know, you've got to create a solution for because you know at the end of the day you've got to be passionate enough and sometimes crazy enough to go round and round and round to actually solve a problem.