Featured Business: Eight Degrees Brewing
Name: Cameron Wallace, co-owner and brewer at Eight Degrees
Brewing, a brewery
Setting up a brewery is a bar stool conversation many a group of friends has had. However, for friends Cameron Wallace from Melbourne, Australia and Scott Baigent from Nelson in New Zealand, a love of beer has turned into a commercial brewery in County Cork.
Established in 2010, it took nearly a year of planning, getting equipment, finding a location and dealing with bureaucracy to set up a commercially viable brewery. In 2011, Eight Degrees Brewery started brewing and in 2012 it grew to a customer base of 350 in Ireland in the restaurant, bar and off licence trade – as well as exporting to Italy.
So how did two Antipodeans come to set up a craft brewery in Ireland? Now married to Irish women, Scott and Cameron met in Dublin in the early 2000s where they shared a house with other Australians and Kiwis, always coming up with business ideas.
As beer lovers, they noticed that there was a lack of diversity in beers available in Ireland, despite the thriving pub scene. And so they started home brewing.
Cameron returned to Australia for a few years and, when he returned with his wife in 2010, he and Scott decided it was time to set up a brewery. As a chartered accountant, Cameron looked after the financial side of business planning. Scott, a hydrologist and engineer, pored over maps and discovered that the industrial units in Ballyhoura took their water feed directly from the Galtee Mountains.
The result, despite a few raised eyebrows, is a new, serious contender in the Irish craft brewery industry that knows that a blend of hobby, passion and good business strategy makes for a good brew.
Eight Degrees was recognised at the Small Firms Association (SFA) National Small Business Awards in March 2013, receiving an Emerging New Businesses award. This category is for companies that have the potential to grow into successful organisations that will be innovative, create employment and have the ability to win the SFA National Small Business Award in the future.
Interview with Cameron Wallace
What was the inspiration for setting up your business?
It was to have a larger diversity of beers in Ireland, and we felt we could do that. We felt we could offer a bit of an alternative to the lagers out there, which are very similar tasting, and Guinness on the other end of the scale, and not really much in between. From a business point of view, we saw a big niche market that wasn’t being filled at the time – aside from a couple of other small craft breweries.
What have been the highlights to date?
I can’t believe how successful 2012 was – from about 50 customers to about 350 by the end of the year. We’ve also started exporting to Italy; that was a real highlight.
How did you initially fund your business?
It was a combination of beg, borrow and steal – mainly from family and what we could gather together ourselves. We finally got some support from the Ballyhoura Development Fund. I think, probably on the back of that, we were able to get some bank funding from AIB Mitchelstown, which was very beneficial.
Have you diversified your offering from your original focus or set up other businesses?
We have diversified a little bit. We were initially launching with one beer and we had always planned to build that up to three of our core beers: a pale ale, a red and a porter. Then we were going to do limited release beers or seasonal beers on top of that. One of our first seasonal beers was in summer 2012, the lager was very popular – the Bohemian Pilsner – so we decided to add that to the core beers as well.
What’s your favourite part of being a business owner/entrepreneur?
Both Scott and I talk about it when we’re out at the weekend. If we ever go out for dinner or to a pub, invariably it’s to customers – good restaurants and pubs. You get a real buzz out of seeing people drinking our beers and enjoying our beers.
How do you achieve a work-life balance?
That’s a funny question because, as many small business owners will tell you, they work 90-100 hour weeks. The key, I think, is to redefine what you think work is. Brewing used to be a hobby, so all of a sudden why do you consider it work? I used to do it in my spare time as an enjoyable experience; why has that really changed? Does brewing feel like work? Not particularly.
Are you inspired by any business figures or success stories?
Obviously, when setting up a brewery, there’s other craft breweries you’d aspire towards. There’s probably two or three in Ireland that we look at for inspiration and want to follow: the Franciscan Well, the Porterhouse in Dublin, and Carlow Brewing Company are three of the larger ones that have been around 10 or 15 years. There’s other local businesses as well: Cully and Sully, Green Saffron Spices, Keoghs Crisps
What tools do you utilise that benefit your customers or that make running your business easier or more profitable?
I have to say social media for us has been a big advantage. We use Facebook and Twitter quite a lot. We have spent a lot of time on our branding as well. As a brewery, the brand and the image is crucial. We have a very small marketing budget but, being able to use social media, we can ask our customers what kind of beer we should use next and have a competition to name our latest beer.
Do you feel you know what your customers really want? How do you stay updated with this information?
On social media, you can ask your customers directly and they’ll tell you directly about what they like about your products, what they don’t like. We still make a large amount of deliveries ourselves, kegs and cases of beer, so Scott and I are constantly going out, talking to our customers and finding out how sales are going, which product lines are doing well, which aren’t.
What has been the biggest challenge your business has faced?
One that every small business gets is being constantly concerned about cashflow in the first few years of business. As an expanding business, you’re generally cashflow negative because you’re always trying to fund for that next expansion. If your sales are steadily increasing, you’ve incurred all these costs beforehand. The other thing is juggling demand with trying to maintain a reasonable amount of supply and making sure you keep your product quality as high as you possibly can, not taking shortcuts.
What do you think the biggest challenge to businesses in Ireland is at the moment?
As a small business owner, every dollar counts and you’re really trying to count the pennies. Then you’ve got these costs which you get no benefit from; things like, as I see it, insurance. The council rates are ridiculously high; the cost of employing is just mad – PRSI charges and everything. JobBridge is excellent. It gave us six months where the business could grow and catch up. The grants system is great. We’ve been a recipient of grants, but the amount of work to get it and even draw down on the funds is very frustrating. It would be much easier if we abolished the grants system and we were told “We’ll pay your rent, don’t worry about council rates, we’ll pay your insurance and sort you out for an employee or two for the first three years.” There’d be no red tape; it’d be so much easier.
What part of running a business comes to you naturally?
I’m actually a chartered accountant, so the figures come reasonably easy to me. Scott’s an engineer, so the operations come easy to him. Our assistant brewer, Mike, has a Masters of chemistry, so brewing comes naturally to him. Scott’s wife, Caroline, is a journalist and a food blogger, so PR and marketing come naturally to her. We’re quite balanced in that regard.
What has been the best reward in running your own business?
It’s basically seeing people enjoying the beers; it’s a massive buzz, seeing people try the beers for the first time and the look on their face. Often they’re a bit sceptical, then they try it and their faces light up.
What was the main catalyst for growth?
The craft beer revolution has actually now taken off in Ireland. In the US, it was 15 years ago. In Australia and New Zealand, it was 10 years ago. In the UK, they’ve probably had it 40-odd years. In Ireland, it’s the past couple of years it’s really taken off. It really has come to fruition in the last year or so; there’s a big, big interest in craft beer.
How did you scale/grow your business?
Initially we got equipment that was a higher spec and larger scale than what we initially thought we’d need, because we got Carlow Brewing’s second-hand equipment. To expand, your limiting capacity is your fermenters, so it’s easy to add on your fermenters (additional tanks). We’ve gone through two or three expansions, the last just before Christmas 2012, with a relatively small capital cost. In that regard, to scale up has not been too costly and not too much of an interruption in operations. Of course it will get to a critical point, but we probably have at least three more years.
How do you get ideas to further your business?
Scott and I run a business where people love to talk to you about it. Half the time it’s just listening to people, and often they come up with excellent suggestions for various things: a new market or a new beer. A lot of it is talking to people and listening. Whenever we go on holiday, or to Australia or New Zealand, we’ll pay a visit to breweries.
What motivates you to stay running a business?
I think we’re having fun. When we started out, we had the passion and the drive and the business skills to give it a go. It is hard work and things do go wrong, but I think we’re enjoying it and we’re creating tasty beers that are in a lot of places around the country.
What’s your vision for the future?
Bord Bia just did a study on the impact of craft beer in Ireland. Currently craft beers (15 breweries on the island) have 0.5% of the market. I’d love to see that increase tenfold in the next 10 years. Does that sound ridiculous and fanciful? I don’t think so, because in the States craft beer has 7% market share. I think there’s a massive potential, both domestically and internationally. Domestically that would be through an awareness campaign and getting people to try craft beers.
What obstacles to growth have you faced in the past?
I think it’s changing people’s perceptions and getting people to try something new. I’ve been told that Irish attitudes and behaviours are harder to change than, say, Australians. Sometimes convincing them to just try something new can be a challenge. We’re getting there slowly, one pint at a time.
Do you have a mentor; do you find this has positively impacted on your success?
We did a Bord Bia marketing/retail programme; as part of that we had a mentor who we met once every few months. At first, we were sceptical about how a mentor would add value. We actually found he added immense value, because very rarely would Scott and I sit down and talk strategically about the business and our ambitions and goals. Sometimes you need a structured meeting to really flesh it out.
What’s the best business advice you’ve received?
Don’t take yourself so seriously.
What’s your favourite motivational business quote?
Beer is proof that God loves us and wants us to be happy – Benjamin Franklin.
What would be your advice to businesses starting out?
When we first started out, a few agencies (not the bank) almost laughed at us. “Right, you’re going to make your own beer, are you lads? You won’t be getting any help from us.” My advice would be to do a proper business plan: detailed financials, a proper marketing study – making it realistic as well. Far too many businesses do what I call “stupid economics”. They say “This particular market is 100 million. I’m going to take 1% of that market, so my sales will be one million.”
What, if anything, would you do differently?
Nothing really. We have an ongoing debate as to the bottle size – whether it should be 330ml or 500ml. That’s the one we always debate, whether or not we’ve gone down the right path.
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