Featured Business: Rye River Brewing Company
Name: Niall Phelan, founder of Rye River Brewing Company
With a brewing/distilling history that stretches back as far as 1595, Kilcock in County Kildare was once home to five breweries, two whiskey distilleries and two malt houses at the same time.
Now it’s home to the first “commercial brewery of scale” to be built in Ireland in 100 years, according to the founder of Rye River Brewing Company, Niall Phelan, who set up the company in 2013 with Alan Wolfe.
The company borrows its name from a tributary of the River Liffey, and while it started out with its own brand beer (McGargle’s) in 2013, the company is also an agent for San Miguel and Bavaria.
The management team at the company has a very strong track record in the drinks industry. With a background in consumer goods, Niall had set up Molson Coors in Ireland in 2008. Alan, who is ex-Diageo, was one of the first people Niall hired, taking the position of Strategy and Operations Director. A former colleague Tom Cronin, who later joined them, is formerly of Heineken and had run bars in the US.
Before leaving Molson Coors, Niall headed up the European Craft Beer division and the organisation’s Global Council on Craft Beer. Niall and Alan hadn’t planned to start up until 2014. However, the first sale was on 15 November 2013, with three people on board, and within the company’s first year the team grew to 44 employees.
For Niall, entrepreneurship is in the blood. His family ran pubs, restaurants and hotels for years,and he had seen first hand how these operated.
Rye River Brewing Company’s first batch of beer was brewed under contract in the UK. Since then it has built a state-of-the-art brewery, the first 100% Irish made brewery to be built in over 100 years, and invested heavily in the brewing team and technology to make the beers consistent.
The company has identified a number of categories where there will be growth. These are: small batch beers (its own brand beers), world beer (San Miguel), and value beer (Bavaria).
The company is also looking to opportunities in the non-alcoholic beverage market. San Miguel and Bavaria’s wide portfolio of non-alcoholic and low-alcohol beers has driven Rye River to embark on R&D and take on the challenge of creating its own low-alcohol or 0% alcohol beers that are strong on taste.
Interview with Niall Phelan
What was the inspiration for setting up your business?
I worked in big multinationals for a long time. I worked for Nestle and Molson Coors and I worked for some very big brands like Red Bull. I think one of my frustrations – and Alan’s similarly – is that it’s very difficult for big companies like that to start a new brand. And to do something that’s different. They tend to be very risk averse and there’s a lot of compromises reached before a new brand in a large company gets to market. Our view was that beer had got way too serious. Even the craft beer world, we felt, had become way too serious. We wanted to do something that was truly Irish. As we got into that discussion we thought that, as a nation, we have a great degree of humility. We’re also known for having the craic and being messers. If you come across Irish people for the first time you might be fooled into thinking that’s all there is to us. Underneath that, there’s an extremely serious approach to products in the food and drinks industry. We just wanted to create something that would capture all of that from a brand and company culture perspective.
How did you initially fund your business?
We got some support from Kildare Local Enterprise Office. We invested a lot of our own money. Some ex-colleagues asked could they pitch in. We got a very small term loan at the time to bridge the gap in terms of what we needed. For a start-up in the beer world, it was probably quite small. For a start-up in the craft beer world, it was probably quite substantial.
Have you diversified your offering from your original focus or set up other businesses?
We set the business up with three liquids. We’ve opened that up. We now produce about 14 liquids in the brewery. We do a lot of innovation onsite; we have an R&D facility. So we’re constantly looking at the products we offer. We started to produce some private labels for key customers. We have a contract with Lidl, for example. That has really helped us to bring overall efficiencies into the brewery and keep costs down. We produce a couple of brands and sell exclusively into Tesco. It helps with relationships with retailers and helps us manage our brewery more efficiently.
What have been the highlights to date?
We’re in 15 countries with McGargle’s. We have two full-time people working in New York. We won eight medals at the International Beer Challenge – the only awards we entered last year. We won two international advertising awards from ADFX, and a direct marketing award for our brand. We’ve got to a place where McGargle’s has the potential to be the No.1 craft beer brand in Ireland by late spring / early summer at its current rate of growth. Taking on Bavaria has been transformational for our business in terms of scale and efficiency. It’s the closest I’ve ever come to the culture we’ve been trying to create here.
What’s your favourite part of being a business owner/entrepreneur?
I wake up most Monday mornings and genuinely smile with joy that I don’t have to get a flight at 6am and sit in board meetings and navigate through red tape.I come from an entrepreneurial family. When you’ve got that built into you and you have the benefit of learning all the good and the bad in corporate life, you get to a point where you want to make decisions quickly. Myself and Alan are able to get our hands on information and make decisions quickly. Sometimes we sit over something because the gut is telling us something is wrong and we’ll sit and absorb more data on that.
How do you achieve a work-life balance?
I don’t believe in it. I had a great boss once, Stewart in Nestle. He said to me: “It’s a myth. If you constantly try and separate work from the rest of your life you’re going to have a constant battle with yourself as to what is cut-off time and what does it look like.”In the age of smartphones, email and social media,that doesn’t exist. His view was to blend it together and make it work. That was one of the most helpful things anyone has ever said to me. I had that battle going on. Since I’ve taken on this business, when I go on holidays I still work five to six hours a day. I get up at 4am and do it and I still get time with my kids. You find a way to blend it. Particularly when you’ve your own business, you’re never off. Not having that battle anymore has made it easier to cope with it.
Are you inspired by any business figures or success stories?
I had a huge amount of time for Steve Jobs’ uncompromising view of what’s great and what’s not. He had this general view that things are either amazing or not and there’s nothing in between. I get the team to focus on that. David Jones, who ran Next for a number of years, would be quite inspirational in terms of his approach to business. He took that business from a 50p share price to £15 over his tenure of 12 years. One of the things he said was “I’ve never fired anybody for making a decision but I fired plenty for not making a decision.” It’s that view: use your gut, take a risk. If it goes wrong, learn from it and let’s move on, versus procrastinating and things getting worse.
What tools do you utilise that benefit your customers or that make running your business easier or more profitable?
From a brewing perspective we’ve invested hundreds of thousands in our brewing software system. We have one of the most advanced breweries in the country outside of James’s Gate. It can be run remotely from a smartphone or iPad. It allows brewers to control temperatures on the kit and open and close valves as required.
Do you feel you know what your customers really want? How do you stay updated with this information?
I look at North America quite closely. It is a much more advanced beer market than we have here. They are about 15 years ahead. I’ve spent a lot of time there over the past 10 years. You can predict some of the trends. Though the Irish have a different flavour, palate and profile than in the US, you can look at regions: Washington State and Colorado, for example, would be much further ahead on beer trends and styles. While we don’t operate in Colorado or Washington State, we can look at those areas and try and match those trends as they come to New York, Chicago and Florida.
What has been the biggest challenge your business has faced?
Our growth has scared a lot of financial institutions. Even Enterprise Ireland has found it difficult to keep up with the growth. The business plan is constantly changing when we take on things like Bavaria or go into Chicago and everything completely changes.
What part of running a business comes to you naturally?
The risk-taking element,as I grew up in an entrepreneurial family. Alan’s very similar to me. We don’t get scared about taking risks. Generally they’re very calculated but we use gut feeling a lot as well, based on our experience. The structure around finances comes very easily. I’ve no formal financial qualifications but I’ve grown up in that family, and had that time in the corporate world. It’s all about numbers and making sure that they work.
What has been the best reward in running your own business?
Seeing stuff that Alan and I came up with out of the blue translate into a finished product is pretty spectacular. Closing a deal that you’ve been working on for a year and knowing it’s your business and you’re going to get the long-term value out of it. It’s very different to doing it for a big company.
What was the main catalyst for growth?
The beer market is changing significantly; we spotted that and try to latch onto those trends or, in some cases, drive them. We’ve got a big non-alcoholic product portfolio in Ireland in particular. It’s a growing area that doesn’t have a lot of focus on it at the minute. We’ve been putting a lot of our focus on that to try to drive a new category in Ireland. The distribution brands have driven a lot as well.
How did you scale/grow your business?
We had a plan to grow internationally quite early on. We’ve driven that quite hard during 2014. That’s been a core focus for us. The craft beer market in Ireland is quite small so we knew we’d never make a lot of money out of it in the short term. We reached out into a lot of markets. We launched in North America a year earlier than planned. It’s been hard graft, getting out there and finding where the opportunities for growth are, and not restricting ourselves by borders.
How do you get ideas to further your business?
Anywhere and everywhere. Some are focused – looking at those trends, gaps in the market where we think there’s opportunity for more palatable entry-level craft beer. There’s a lot of strategy behind what we’ve launched with McGargle’s. It’s a mix of focused strategy and some detailed research. On the flip side, some of the best ideas come from chatting when marketing the business.
What motivates you to stay running a business?
I love getting up in the morning and coming in and knowing we have a cracking team there. It feels like a family. Our hope is to create a family culture in the business. We celebrate the people around us more than the achievements of the business.
What’s your vision for the future?
North America and the UK are going to be extremely important to us. Our plan is pretty simple. We want to be the best little beer business in the world. That’s not our company motto or mission statement. That’s how we try to behave. We think we can be the third biggest beer company in Ireland by the end of 2015 and definitely the biggest independent beer company. Internationally we want to have the biggest small batch beer exported out of Ireland.
Do you have a mentor; do you find this has positively impacted on your success?
I have some ex-bosses I still lean into quite regularly, particularly Mike Burke in Nestle. He hired me there, and took a chance on me. We’ve remained friends for a long time. When I’m going through a difficult time, he’s probably the first person I pick up the phone to. I have a couple of industry peers in Ireland for whom I have a lot of time and respect. I pick up the phone to them and have a good relationship with them. You can be quite lonely when running your own business if you don’t have people to lean in to.
What’s the best business advice you’ve received?
An old boss said to me early in my career,“Pioneers get shot and settlers make money.”It’s always stuck with me as I look at new opportunities. The cost to create a category in consumer goods is in the millions if not hundreds of millions so you see people perfecting it and making real money out of it. Steve Jobs is a great example of that; he perfected ideas that were out there. Whenever I think of something, I have that ringing around in the back of my head.
What would be your advice to businesses starting out?
Get double the amount of cash you think you’re going to need and then double it again.
What’s your favourite motivational business quote?
It’s from a Van Morrison song and something I preach quite heavily: “You have to fight every day to keep mediocrity away.” It was how I often felt when I worked in large corporates. Mediocrity seemed to win out a lot and it always frustrated me. It’s easier to be mediocre and accept compromise. But that’s not what we’re about. You have to fight hard to produce the best products.
What, if anything, would you do differently?
I would have set up with more cash. It’s been a battle. We’re lucky in that we seem to be past that pinch point for the time being.
Phone: +353 (01) 628 7255
Interviewed by: Web Content Partners
Please be aware that all of the views expressed in this Blog are purely the personal views of the authors and commentators (including those working for AIB as members of the AIB website team or in any other capacity) and are based on their personal experiences and knowledge at the time of writing.
Some of the links above bring you to external websites. Your use of an external website is subject to the terms of that site.
Allied Irish Banks, p.l.c. is regulated by the Central Bank of Ireland. Copyright Allied Irish Banks, p.l.c. 1995.