Transcript
Speaker: When Scotch turns up saying mix your whiskey because that's where the culture's leading it kind of feels like grandpa doing rap at a wedding. It's like you're not Snoop Dogg please for the love of God stop.
Speaker: Returning this October, Grainstock is a truly unique conference created for the brewing, distilling and baking industries, and you're invited to be part of the experience. Held at the stunning Witten Malthouse in the Riverina, attendees will be able to take part in grain field tours, a technical symposium, trade show, live demonstrations and sensory tastings, networking with growers, maltsters, brewers, distillers, bakers and industry suppliers from across Australia and bi beyond.
Speaker: Even better, if you're a brewer or distiller and able to supply beer or spirits to be featured at the event, you'll be eligible for a complimentary all-access conference pass and return bus transport from selected capital cities.
Speaker: Check it all out at grainstock.com.au and hit the Fields and Ferment tab for details on the industry conference.
Speaker: For almost two decades, my guest today has been on a mission to conquer the whiskey world one Starwood bottle at a time. He's a former frustrated home brewer, a craft beer lover, a Manhattan fiend, Bao Vinnie double wood devotee, and even an occasional op-ed writer for the broadsheets as well.
Speaker: His monologuing artistry is unrivaled among whiskey founders, and that's something you'll undoubtedly hear all about today. It gives me great pleasure to introduce you today, David Vitale, founder of Starwood Whiskey. Welcome to the Full Measure podcast. Thanks, Luke.
Speaker: Great to be here. um Yeah, so so fantastic to have you in today. And look, we're gonna go through the entire journey. um It's a long journey and we could probably do this for hours and hours as we have done in the past, but um I'd love to start by taking you back to to March 2013.
Speaker: On that night, at a little bar called Whiskey and Almond, you were first bottles of Starwood Solera outside of the Eston Fields Distillery for for punters to have a taste. I was there behind the bar, young, very green, a slightly dumb bartender, um And I remember a fresh-faced Dave Vitale laying down the Starwood vision for the first time. What do you remember from that night? is Things that you can recall? um What was the response like? Yeah, um well, it was equal measures relief, like that we kind of made it to launching. yeah
Speaker: Equal measures like terri yeah like being terrified and... fearful of the response but overwhelmingly like a sense of pride that you know all of that work that you do to bring a product from an idea you know and particularly with whiskey into barrels for years and then you know into a bottle and then on a shelf is like it's that in and of itself is an endeavor and so to get to get to that point was like an achievement but also little did i know that that bit was the the easiest part of all
Speaker: um So yeah, I think that's kind of like my my recollection. Like, you know, it's very nostalgic. It's that that bar has such a, you know, important part in our history. But it's also like the best place to launch a whiskey. Because...
Speaker: i don't know, it's very Melbourne, right? Like it it is takes its whiskey very, very seriously, but also does it without airs and graces. And I think that that, you know, you'll hear, you know, i think we're going to talk a lot about that today in terms of like, what does it mean to be from Melbourne? And, you know, by extension, Australia too. um In this attitude that we have to attention to detail, but approaching it in a casual way, in an approachable way. And so it's made total sense to me that that's the first part that we should do it in.
Speaker: Yeah. Right. And all right, let's go back a bit further from there. Then tell us about, you know, are your origins in whiskey, your time down in Tassie, yeah I guess. Was that, was it, is that the place that you'd say that the vision, the Starwood vision first sort of germinated? Yeah, so I actually moved to Tasmania um for love.
Speaker: Yeah, right. And um the idea was an organic microbrewery, like making a you know really good pale ale. This is 2003. God. And you were going to do it in Tassie? In Tassie, yeah. So, you know, obviously little creatures had had established themselves cooper's Coopers forever. But in terms of the craft world, um certainly in Melbourne, there was Mountain Goat and um Holgate. Yeah, yeah.
Speaker: Grand Ridge down in South, yeah in Gippsland. That was it. So we were pretty early on. um And i think for me, it was like this idea that, you know, craft had become a thing. Yeah.
Speaker: It was really exciting. Like, i just sold a business with enough of a nest egg for a deposit on a house. It wasn't like... you know, mega millions. yeah yeah It was in e-learning. um ah And that's probably a theme. I've been reflecting on this. It's kind of a theme of Dave is like being very early to ideas. yeah um And so I sold this e-learning in two thousand business in 2004 and thought, yeah, I want to make something that's tangible, that like is something that my mother can understand, you know? Yeah.
Speaker: and um yeah be a beer was it i had a huge passion for it I used to make a lot of um homebrew at home like my first actually toured the Cooper's distillery and and brewery the other day yeah and you know my first homebrew was on a Cooper's nea Cooper's kit kit yeah so it's full circle seeing them coming into whiskey which is exciting too yeah I think I
Speaker: Very quickly I realised that making a craft beer, an organic one, unpasteurised, where I saw the main audience of this whisky being in tasmania or sorry and on the mainland, was a really bad idea. Like, good beer doesn't travel well at the best of times, and sort of like having that little stretch of water between the mainland and and where where we were just made that idea impossible.
Speaker: So i shelved the idea. started doing some consulting work for high growth startup tech businesses in Tassie. And then very quickly you realize in Tasmania that like everyone knows everyone and most of the people in their young twenties are there for a government job or because of family connections or they've started a family. And none of those three things were true for me. yeah And so they were like, what are you doing here?
Speaker: Like, they just didn't quite get it. i mean, today it's quite obvious why they're Like, half of Melbourne and Sydney and Brisbane have moved to Tasmania. um and so...
Speaker: I kind of explained the story and someone introduced me to, you they suggested that i meet with um Bill and Lynn Lark. And so that was the beginning of like, you know, it was I walked through the doors of that cafe on the waterfront and it was, you know, it's very cliched. It was like a lightning bolt hit me because everything that i loved about it,
Speaker: craft beer was reflected in single malt whiskey and the old bar used to have like 150 single malts. I mean, it was a lot of whiskeys on that bar. And I'm just like, well, these are the craft, you know, beers of the whiskey world. Like craft whiskey wasn't even a word then. yeah um And so just got, I fell in love with single malt whiskeys because they talk to a place. They have distinctive flavor profiles from different regions, particularly the Scotch whiskeys.
Speaker: um You know, unbelievable provenance and story. How could you not fall in love? And I just kind of thought, well, if I'm a craft beer drinker that's falling in love with single malt whiskey, I think that this is next. And so i worked with Bill and Lynn for,
Speaker: Goodness, three years. Okay, yeah. yeah, it was an amazing time in whiskey. Like, not only Bill, but Patrick at Sullivan's Cove and Casey, you know, really proved that we can make unbelievably well-crafted whiskey.
Speaker: You know, that um it was... It was possible. The challenge, I guess, for me was... So, you know, coming out of that was quite exciting and I thought, well, maybe I can do this. The challenge was that I didn't want to make Tasmanian whiskey.
Speaker: um and Because I think at that point in time, probably because it's Tasmanian and there's this sort of sense of the mainland versus Tasmania... And I think that that then extends out into a cultural kind of perspective about them and the world. 2004, lots changed. Yeah, yeah, yeah.
Speaker: Of like um this notion that like we can make whiskey as good as scotch from Scotland. And I felt like, you know what?
Speaker: Bill is the pioneer of the industry, needed to start having that conversation just to get to scratch people's interest on what the category could be. But that's not the story we need to tell the world on an ongoing basis.
Speaker: And so um it was quite frustrating, I guess, to see whiskeys that were aged in pair of casks called sherry cask whiskeys, 20 barrels called port casks and ex-bourbon barrels when we had like so much more to say. yeah and they had more to say.
Speaker: They had more to say. Absolutely. But they they just defaulted to what was familiar to the drinker, which is fair enough, too. So... um ah I really wanted to champion this idea of innovation, modernity, challenging the status quo.
Speaker: um But there really wasn't an audience for that in Tasmania. And so, you know, I kind of thought, well, you're either with me or you're against me, you know, very young mindset. And it was great because I think Bill and Lynn had seen that for quite some time in me, like this frustration of,
Speaker: And so I remember April 2007 going to the Lark board meeting, setting out a plan of what we should be doing. And, um you know, with with somewhat of an ultimatum and Bill, you know, with his arms crossed as he does, kind of said, well, we've been waiting for this moment for about four months yeah and think you should do this. They sniffed it out. Yeah, they understood. you know They understood that my passion and vision for their whiskey was very different to their passion and vision for for their whiskey. I guess for context as well, like this is pre-David Walsh, this is pre-Monar. I remember being down there once or twice at that time as well. Tasmania is not the Tasmania that we know today. There's been such rapid change down there as well. That sort of must have fed into your... but we're not going to
Speaker: the right place And we'd had a child and so it was time to move home for lots of different reasons. And so with that, um yeah, I had a big kind of, you know, entrepreneurial brain fart and started um ah raising capital for for what became Starwood. Yeah. And so you come back to Melbourne you know how How was it then developing the vision of sort of injecting your your family roots, your Melbourne upbringing? How was how were you able to sort of breathe life into that vision? And and what sort of bits and pieces did you take from from Tassie and from, I guess, Melbourne Victorian culture and sort of inject into a Starwood from there on in? like I think all whiskeys talk to the place they're made.
Speaker: right All of them. Yeah. um the best of them not only talk to the ingredients, the climate, the brook, the castle, right, all of that stuff, but they also talk to the culture of the place.
Speaker: So if you think about... Bourbon, culturally, it's a very different drink than Scotch whiskey is, which is completely different to Japanese whiskey from a cultural perspective. And so for me, it was like, well, this needs to be of the place it's made in every single way. And notwithstanding, you know, we've we've got an abundance of great ingredients to make whiskey and we've got a point of view on, you know, aging.
Speaker: It needed to talk to the place it's made. And also, you know, culturally from my point of view, which is, it's a Sicilian upbringing, but it's very Melbourne, it's very Australian, which is like family and food are kind of the center of your life.
Speaker: And I just wanted whiskey to be part of that story, just like wine and beer is. we're day drinkers. Australians are day drinkers. The Vitalis are day drinkers. Australians are day drinkers. So what if, the big what if for me is like, what if we could have whiskey be relevant before dinner, during dinner, as much as it is relevant after dinner. And so that that was the...
Speaker: That was the idea. you know That was the in like what informed what we were going to do um And then this idea of like distinctiveness carried through, like, like, well, it needs to be distinctive and and relevant for our culture, but also distinctive in flavor.
Speaker: um The interesting thing for me, this is kind of relevant to the audience, right? Like, yeah craft beer in 2002 was objectively better than whatever swill was coming out of Carlton United Breweries and... Absolutely.
Speaker: you know the lion portfolio of twoies or four x like he it's it's just like a we don't even have to talk about that yeah i mean anyone working bars or pubs knew it was it was obvious right and that's why it was so exciting whiskey's different yeah spirits are different and you know we have a mutual acquaintance that talks about drinking better gin and for me it's like what are you talking about Like, could you imagine me sitting in a room saying, I make better whiskey and Dave Stewart or Jim McEwen's in the room? Yeah, yeah. It's just, or Eddie Russell.
Speaker: Like, it's just, i'm you know, unfathomable. So the challenge for us is like, okay, we're walking into a category that doesn't, where we don't have a quality edge.
Speaker: we need to We need to develop quality, but that's for credentials, to have permission to be in the room, not not to lean on as something better than. And so that idea of like, okay, well, culture will get us part of the way, but we have to have like something to talk about and something to say from a whiskey perspective as well, beyond the way we want you to drink it and perhaps how we make it.
Speaker: And so red wine barrels was then one of those things that kind of unlocked unlocked that distinctive flavor profile. And with some of with some of that, so that move to red wine, which we'll get to, um the early feedback that you got on the Starwood Whiskies, which I sort of started with as well, like, I certainly really remember that you could tell that it jarred with people's Tasmanian and traditional and and probably Bakery Hill vision of of what was being established. ah you People are so familiar with Starwood now, but how, I guess, challenging and groundbreaking it was for people at the time, you could tell that their heads were spinning and there was a lot of, this is not traditional, familiar, this is not how i want to come at whiskey. it was like It was such a challenge to people and their perception. um
Speaker: How did you overcome that? and Because it was years of you struggling up against that too. Naively, I wasn't making whiskey for them. yeah Because if you want a 12-year-old port and bourbon cascaged whiskey that's like unbelievable value for money, it starts with Glen. And choose your you know suffix. right like they like It's unbeatable.
Speaker: really yeah in terms of the value proposition, the price point, all of what gets delivered. And so for me, it was like, if we, if the reason why we're going to be successful is because we come to market imitating scotch or imitating bourbon, then ah we won't be.
Speaker: and I have nothing to say. and it's really important to me that if we express, you know, if we're going to to undertake this endeavor, that, um we come with a really clear view of the world of whiskey. And so the the the problem with that naivety, it it was wonderful because like, you know, between being Sicilian and stubborn and having a huge amount of naivety, we pushed through. yeah But the problem with that is that you need to bring people along the journey.
Speaker: You know, you need to bring them with you to like where you can see things kind of being. Yeah. um But yeah, I mean, it was at a time, i think um Netflix had just launched a series on the new Mustang yeah and it was called A Faster Horse. Yeah.
Speaker: right which was the famous quote from Henry Ford, which is if you ask drink consumers, if you ask people what they want, they'll say they'll want a faster horse and he created a car. And so there was an element of that in the back of my mind is like, it's understandable that people can't see it. If they'd come to to look at what we were doing and saying,
Speaker: um they came along and said, this is totally not what we expected and that's really exciting. but it's not well-crafted or it's too expensive for what you're doing, that would be a different conversation. But, you know, fortunately for us, and because of the roots that we developed and the the talent that we recruited, no one ever turned up and said, this is not well-crafted whisky.
Speaker: it they just felt like it didn't fit their worldview of what whiskey can be. And that, that was fine by me yeah because that was my job was to kind of show them what whiskey can be.
Speaker: And I think maybe we can quickly touch on the brewers that were involved in the operation from the get-go. It seems like both you know craft beer in Melbourne and your approach, you connected with a different type of consumer that perhaps the whiskey market didn't traditionally cater for. And that was a consumer that we saw in whiskey and ailment all the time. Like we were engaging with that person all the time. So from our point, it seemed pretty natural and normal, but I guess to a lot of other people... they were thinking, wow, this is not the traditional whiskey consumer. You guys found that found that audience almost immediately. Yeah, and look, this is a consistent theme. Like, I see this overseas all the time, which is...
Speaker: but um people love shortcuts to what they think a product or or brand is and not the least of which when you say the word whiskey so in the United States whiskey is a shortcut to bourbon and depending on whether you're a high wheat kind of guy or a high rye kind of guy that's that's your world right whiskey in Australia was a sort of shortcut to scotch for the longest of times before Irish kind of took a hold in Japanese and obviously Australian now but um So we didn't fit that shortcut mould but and and that was kind of fair. The great thing for me is that, you know, we, because I was thinking about starting a brewery, that you know I understood that flavour begins in the in the you know with the barley that you're choosing, how you ferment it, how you distill it to create an unbelievable spirit that we're then going to put into the barrel. And so you know it's more of a barley schnapps
Speaker: our new make than it is a traditional new make spirit. And that's informed directly from that brewing community and and mindset that we had to crafting of a product that then, again, luck, we recruited winemakers that didn't want to be out in the middle of nowhere, you know, cleaning up.
Speaker: you know, vintage after vintage and being, you know, 10 kilos lighter than they were beforehand. And so we gave them a great opportunity to put their skills, their palette, and their understanding of barrels to work in a different sort of light.
Speaker: And that informed so much of the flavor profile that we have in in those early releases. Yeah. And I mean, you've got, well, we'll probably, we might get to that in a moment. But...
Speaker: Early releases, Solera, you give it a rethink and then obviously winemakers are coming into the business. um When was the moment? Were there a couple of moments or when did you get the signal that Red Wine is the place where Starwood needs to travel to? There were few. So when we first started...
Speaker: So we commissioned the distillery from 2009 to two thousand early 2010 and started making whiskey. In that period of time, we were sourcing barrels and we were lucky enough to get for $30,000. Like, that is you'd get 10 today. yeah And full size as well. Full size. Crazy.
Speaker: Crazy. Crazy, crazy, crazy. And so that kind of info is like, well, that's what we're doing. And I liked that also because a it was appara and most of Tassie was tawny, some sherry, some appara. Like I think Casey was probably equal splits between, at Overeem was equal splits between bourbon, sherry and port. But the favourite was always port. Port they always support was his thing. So for me, for me, it was like, okay, well, this is already a point of difference to Tasmania, not deliberately, not being anti kind of Tassie, but just like, well, let's give people something that they haven't had a lot of.
Speaker: The price was great. But then trying to back that up with more a pair of casks at that price point just became increasingly difficult to do. And so we were like looking at alternatives and the two obvious alternatives. Well, the obvious alternative was ex-burbon casks.
Speaker: um Today, maybe 2-3% of our whiskey is aged in ex-bourbon barrels. You go to any distillery in the world and... It's the inverse, yeah. It's totally the opposite, which is kind of cool, right? And perversely, the most scarce barrels at our distillery are the most abundant at others.
Speaker: Which talks to our commitment and my Sicilian stubbornness, right, of like, no, we're going to go down this path. Especially once you've tasted some of these bourbon, Kyle Starwood. They're pretty good. taste They're pretty amazing. I remember when we did our first release, I was actually in the States and I texted Sam and said, why didn't we put more away? And he kind of expletively said, because you didn't want to.
Speaker: I wrote it down actually you do you want to see the conversation oh I'd imagine something that's lame Sam say that the manager the dis or what the general manager of he's asked production director first employee employee number one yeah and without whom none of what's great at Starwood would exist for sure yeah so um I knew it would be good. and you know Given the style of new make spirit that we created, it would just shine in those sorts of barrels.
Speaker: But I just felt like, what if? What if we could kind of master red wine barrels? And I'd you know been exposed at Lark to experimentation that they were doing in small cast format, shaved, toasted, rechar barrels. And they were both hit and miss.
Speaker: And then compared to what you could extract from bourbon port and sherry, the way that they were aged and and and the barrels were coopered. Yeah.
Speaker: you would much prefer to spend $200 on a pork cascaged lark than you would one of those. Yeah. And so um that kind of, with most things in Tasmania, permeated the industry, right? The style of still, ale yeast, M1.
Speaker: Tazimol. Tazimol. Like, it just permeated, you it's like not red wine barrels. Yeah. And so... I i it was actually one of our Coopers, Roger Deaves, that said, I think red wine can work, Dave.
Speaker: I think it can work. We just have to treat it differently. And we did. you know And so we piloted it very early on and kind of looked at each other and thought, this isn't bad. And we did a couple of experiments where it was like shaved, toasted, recharred, heads,
Speaker: um lightly toasted stays. um The inverse of that, um sherry staves, wine heads, all these sorts of things. We're just getting positive reinforcement and feedback from that. And then Sam was on a home brewing forum and there was some Yolumba octaves for sale.
Speaker: We got 80 of those.
Speaker: Well, actually for nothing because I couldn't pay. Like it was a pretty bleak time at the distillery, but it was like, I need to fill barrels. I need to fill barrels. These are available at the right price. I'm going to call them and ask them if they can give me extended trading terms, which they did. Yeah, wow.
Speaker: He said, don't make a fool of me. i remember that. and um was that the hills missth yeah yeah and and funnily enough that was our first double gold so I sent him a bottle with a photo of the double gold medal and said I hope I paid him but like also I sent him this you know note saying thank you yeah so these quarter casks are amazing and we learned we were so lucky Because had we got 80 barrels from a random winery anywhere, the Barossa Yarra Valley, and hadn't had that hadn't had the attention, the care, the provenance, the craftsmanship put into them, we might not have... We'd probably have ex-bourbon casks. Yeah, We were so lucky to get those barrels.
Speaker: um Why do I say that? you know your lumber is one of the very few family owned wineries. I think even wineries that have a cooper on site. Yeah.
Speaker: Cooperage on site. So they're buying their lumber flat from, you know, uh, the North American forests, uh, from French forests all, all over France that, um, they then cooper into the barrels and,
Speaker: They're also 100 litres in size, so they give you a very early signal on how they're approaching, how they're going. yes And so we filled half of them, 40 of them, with New Make Spirit wet.
Speaker: And the other 40, I didn't have the money to make the malt, the New Make. yeah So they just sat, I don't know if you remember, like as a border around the bar for the longest of times. Ah, yeah, yeah, yeah. Empty.
Speaker: Until we had enough um cash flow to then fill the barrels. and But we had those shaved, toasted and recharged. we had this great experiment of like one cooperage, unbelievable provenance of the oak and winery that we could then kind of understand what red cask maturation, red wine cask maturation could actually yield and deliver. And it was like months, six months in, it was strawberries and cream. And like, I think we were just like, okay, this is, we're onto something here. And so that wet filled,
Speaker: wine out whiskey in approach to aging red wine barrels was born yeah right that's an incredible relationship um and look i think now we're sort of getting towards the the new vision the fresh vision what i suppose becomes the bones of starwood moving forward so it might be a really good place to to take a break and i reckon when we come back in part two we can we can explore starwood's you know growth and then you know eventual explosion onto the world stage so we'll be back in a tick
Speaker: Calling all distilleries and spirit industry suppliers. At the full measure, we're aiming to build Australia's most comprehensive directory of distillers and the industry that supports them.
Speaker: Every listed distillery will benefit from product profiles, venue information, event promotion and more. Not only is it a great avenue to connect with new customers, driving both online sales and cellar door footfall,
Speaker: You'll also be supporting The Full Measure as we create a new home for spirits journalism. Be part of The Full Measure Directory. Reach out to Craig via craig at thefullmeasure.com.au for more information.
Speaker: We're back here for part two of our fantastic chat with Starwood founder Dave Vitale, digging into everything Starwood, Winecast, and of course, what's happened to Starwood, I guess, over the last decade has been an extraordinary rise. A lot has happened, to put it mildly. So I guess if we think about the progression of... the wine cask element in your whiskies. That was obviously a big boon and a massive attraction for some some large firms overseas. A lot of people were looking Australian whiskey this time thinking, you know, what's next on the horizon? And so 2015, 16, you get this approach from distilled ventures and everything changes. So do you want to talk to us about that period, sort of what you recall from that and how Starwood evolved from that period onwards?
Speaker: Yeah, so um you know launching a product at the price point that we did, so Solera um and Wine Cask were $75-ish on the shelf, um was a challenge. Yep.
Speaker: The objective in my mind was to prove that we could do it, that there was appetite for whiskey at that point, and then to scale the business from there yeah by raising more capital to do so. and what I really learned very quickly was the appetite for investment in you know products that have such a long lead time. There just wasn't any in Australia.
Speaker: Debt financing wasn't an option. And so um we looked overseas, we looked at to foreign investment, yeah and the obvious place to look was within the distillery environment, particularly in whiskey whi whiskeky firms that had an understanding of that sort of cycle, that inventory cycle measured in years, not weeks. So, um yeah, coincidentally, we approached each other at the same time. Yeah, right, okay. So they were doing a bit of a field um analysis of new world whiskeys around the world. Yeah, and so this is Distilled Ventures, the venture capital, what would you call it? How how do you describe it they were they called it? They were called a drinks accelerator. Gotcha, yeah. um
Speaker: Whose number one investor, only investor, was Diageo. Yeah. And so um the idea was that they would look at emerging spirits categories and and and emerging ski spirits within existing categories, um particularly in whiskey, and look at ways in which they could kind of accelerate the brands to a point at which um they'd be at a scale and size that would be um appropriate for Diageo to acquire them and bring them on board. yeah very established model within the tech industry and in other food, um you know, fast moving consumer goods areas as well. But the first of its kind in kind in drinks. yeah um so
Speaker: I'd been given a link to their website by someone and said, you should check this out. Sort of seems right up your alley. And um I filled out the form and literally like a day later, I got a call and I thought, wow, that's pretty quick. Rapid.
Speaker: But the two things didn't connect. they were just It was purely coincidence that they were doing this field work and that I submitted the... So, of course, when they called, I'm thinking, well, you know, I've got one on the hook here. Like, I was so keen that within 24 hours...
Speaker: so okay yeah And so i think it was helpful for me to have a bit of... Just a little bit of hubris going in there. Like, oh, you're clearly interested in what I'm, you know, getting. Because otherwise...
Speaker: you know ah one always undersells the opportunity, the idea, the proposition. yep um It's just human nature. And I think that having having some knowing or thinking that someone's actually really interested in what you've got helps you be a bit more confident to sell the real merits of what we had. yeah So i told them a story about Solera, Distinctly Australian Whiskey, the five um anchors of Starward, this new product called Wine Cask Edition, and they were really excited by that. And then I said, and this, but wait, there's, you know, one more thing.
Speaker: um And explained to them the idea of Twofold and where I kind of wanted it to sit. The thing um i've since been told that really got them excited was that when we launched Wine Cask, I actually positioned it at a lower price to Solera.
Speaker: Right. So Solera was $75, and I think we launched Wine Cask at $70.
Speaker: And they were impressed with this idea and my understanding that if we wanted to scale the business, that price positioning was going to be a critical success factor in where we're going. yeah And so when i then said, oh, one more thing.
Speaker: I want to take on Monkey Shoulder and Maker's Mark with a, you know, um a weeded whiskey, something that can kind of work in bars to be an ingredient in a great drink.
Speaker: Leaning on what we'd just done with the Wine Cask Edition, which then became Nova, you know, lit up their eyes because they had nothing in there. You know, they had Diageo has one of the best portfolios of single malts in the world.
Speaker: even though that was attractive to them, like a distinctly Australian single malt whiskey, the idea that they could have something in their portfolio that could work, you know, take it up to,
Speaker: monkey shoulder and trade up bourbons in the well was extremely exciting. All right. And so they come on board, that sparks enormous change. You move from Essendon Fields to Port Melbourne, very large, you know brilliant site. It's obviously developed ah extensively since then. um And then you launched Starwood Twofold in 2018. So you realize that vision with with their backing. And to me, I mean, Starwood Twofold probably remains one of the most important whiskey releases, probably a Strained Spirits releases of the last decade by far. yeah
Speaker: Really changed the game. It put a lot of... Well, maybe pressure's the right word or not. It definitely put other whiskey brands on notice that, um you know, Australia can play in this space. And, you know, we've got a blueprint now for developing blended whiskeys, which is, you know, for for anyone who's familiar with whiskey around the world, it's commonly blends that dominate the... the market um and they have done for a very long time, especially in Scotland. So you enter you enter the fray with Starwood Twofold. So what do you remember from that period? And then how was Starwood Twofold received? And then I guess what were you able to do from there?
Speaker: I actually had a look at the... um presentation that I did to media I think you might have been there yeah i was there yep yeah yeah it was um I don't know I've shared this before was actually modeled on the iPhone launch no no no delusions a grand year you would stay jobs tell you what mate you handle blow So, in my own mind, I felt that this was either going to be remembered as a bit of a shift in the marketplace or an abysmal failure because it would be fair to say that Australian whiskey was single malt whiskey up until that point in time. I think Whippersnapper was doing some four grain mashes Whippersnapper. Western Australia, maybe Cam at Tiger Snake. Cam, I think, launched by that yeah, with Tiger Snake.
Speaker: So there was some corn mash happening. But when it came to word association, if we say Scotch, we kind of think single malt and blends. In as Australia, if you say Australian whiskey, most people would say it's single malt whiskey. yeah And so it was a big...
Speaker: I wasn't sure whether the the drinker and the market was ready for something that wasn't a single malt. um But we had a lot of things go our way. i think that There was just so so much um discovery happening in whiskey at that point in time for every one person that thought, you know, there goes the farm, you know, and like Dave sold out.
Speaker: You know, um this is influence from the large multinationals, which it wasn't. It was all, you know, like my thinking. um There were 20 new drinkers that frankly were leaving Scotch in droves, yeah looking at what else was out there.
Speaker: And we'd done a really good job of saying, well, before you go to bourbon and all those amazing trade-up bourbons that exist, have a go with this. Yeah, cool. And then was that was right at the point where bourbon starts to explode. It had been sort of humming along. And obviously the secondary market, the the people you know trying to hunt down the old unicorn bottlings for American bourbons had already started. But um then Starwood Twofold comes in. And at this price point, which, you know, you know, we can talk about, I guess, that the trade nitty gritty of it, but the price was ah massive step for a lot of people. It changed perceptions. It really got everyone thinking, geez, Australian whiskey, maybe maybe it's really here to play now. Yeah, we were about, ah and we still are about a 10% premium to monkey shoulder and maker's mark.
Speaker: we think we're worth it. but But at that stage you're probably 30, 40% cheaper than almost any other Australian whiskey. Yeah, and like 20% cheaper than our own products. yeah And so that was the other thing. A lot of people were like, you're cannibalizing Nova and Solera. It's like, well, it's 50 million bottles of whiskey you're drunk every year.
Speaker: I'm selling 20,000 of them. I think I'm going to be cannibalizing more of the other 49.998 of them than I will my own.
Speaker: And cocktails as well, because that's the big thing. like Suddenly you open up the rail, you open up opportunities for cocktails, which from a bartending perspective, we'd been we'd been screaming out for. like you know it's It's very, very difficult from and from a bartending point of view to get people engaged with Australian whiskey if you can't mix it.
Speaker: If you can't put it in something... if if it's gonna put at that stage God if we wanted to put a strand single malt you know cocktails it would have elevated the cocktail price by five six dollars minimum um in some cases so it opened up at a completely new Avenue on that front as well which was hugely significant yeah it was and and um Not just because it's Australian.
Speaker: like What we're able to achieve by using wheat and single malt, aged in all fully aged in red wine barrels, was a new kind of canvas for bartenders to take classic cocktails for a walk.
Speaker: that were very different. And so um most of these classics are American based. So the fact that it's twofold, 60% wheat kind of really leaned into those really approachable bourbons that we no one love.
Speaker: um But the red wine kind of plays like a proxy for rye. Yeah. Gives you that a spicy element that works. But softer. Yeah. And so then, and I learned this while we were in America, i could kind of talk to bartenders and say, look, we're not...
Speaker: completely off piste but like this canvas is a little different and you can craft in my view craft cocktails that get people coming back for a second one because they're so delicious and easy to drink in a way that if you make a manhattan with a rye particularly if it's bottled in bond 50 percent rice as a rack written house which are like Amazing.
Speaker: um Maybe one's enough. Yeah. Yeah. So that was kind of like a hu like moment for for bartenders as well. is like, OK, I've got another tool that I can use to craft really interesting and delicious cocktails, the classics.
Speaker: i remember I remember going to San Francisco and going over the the Bay Bridge to um some of the suburbs near Berkeley and and speaking to a bartender there who'd been working on a particular cocktail for six months. And he was using a blended scotch.
Speaker: to craft it but it just wasn't right yeah right it didn't kind of fit the bill and it was just um he took a sip of twofold neat and he just kind of walked away and i thought oh geez it's that bad but he came back with his kind of pre-batched concoction and then kind of blended it and goes this is perfect wow and so it's just like one of those moments where this jigsaw piece perfectly fit the puzzle that he'd been trying to crack for a while amazing you know like an amazing story and then you know high balls Japanese high balls we're starting to take off and ah there was a Japanese producer who kind of cornered the market on high balls by installing high ball machine yeah and you could either serve the whiskey neat one way
Speaker: I think it wass just carbonated water the other or like a highball with amazing bubbles. Yeah, yeah. The other way, pre-batched. But most bars that I attended would then add something that I called super juice, which was just basically a concoction of like bitters. It might be just something to give it a lift. Yeah, yeah. Often lemon or they'd usually a citrus or something. Citrus and, you know, like Ango or something just to kind of lift the highball because it was...
Speaker: not kind of like dialed in. yeah and you know for a while with with those bartenders, it was like twofold super juice not required. and It was all in the bottle. Wow, that's great. it was pretty pretty exciting to have those conversations with people that are that were thinking about flavor.
Speaker: And understanding that we cracked we'd cracked something yeah that was award-winning, double gold medal winning whiskeys in San Francisco World Spirits competition. Neat. 40% ABV, but also could play well with friends in cocktails, like universally, whether it's the classics, something that someone was... designing themselves or just in a long drink. But you mentioned that experience in the States um post twofold, you know, you, you make the enormous decision to to relocate um to the States, um you know, bottles of twofold, I'm sure are in your briefcase. And that experience was, you know, i imagine pretty life changing. And
Speaker: it's I guess the first time Australian whiskey enters that market, it's probably the first time. I guess Four Pillars comes a bit after that. but you know You're probably the first Australian spirits brand to really have a crack at it. So what was it like? Talk us through it. Yeah. um So there was there were there was like Random bottles of Lark. Oh, yeah, I remember that. yeah Like in, you know, the old olive oil style bottles. Yeah, yeah. Like you'd find them in these stores. I saw San Francisco as well on it they must have really hit San Francisco back there. Yeah, and, you know, you'd see some really random and rare Sullivan's Cove. um Four Pillars actually preceded us into the US. Just preceded. um no one no one kind of...
Speaker: you know, randomly had a lobotomy one night and then decided to move their family ah to America and start launching a brand over there, which was always my dream. Like, yeah yeah before I even knew that I'd be making whiskey, I just wanted a crack and launch a brand in the United States. And so it was very...
Speaker: It was a big moment for me. Like I learned so much about that market and how to how to actually sell a product um from that experience because um Americans love to be sold.
Speaker: You know, you don't want to waste their time, but they love a good pitch. yeah And um I learned that pretty brutally very early on. We went into a New York bottle shop, much to the sales rep's kind of like consternation and hesitation. He he didn't want me to go into this bottle shop because he knew the retailer was pretty prickly. But I'd done my desk research and there was like, Kavalan was there,
Speaker: All of the craft distilleries that I admired were in there. The American craft single malts were in the store. So I just thought, well, naturalized my people are here. yeah I've got to be in this store.
Speaker: So I walked in, um was introduced by the sales rep as like David from Australia making Australian whiskey. And the guy just stopped us in our tracks and just said, in the 40 years I've been running this store, no one's ever asked for Australian whiskey. He took my business card and says, I know who to call now.
Speaker: And literally shook my hand, turned around and left. And so that was pretty brutal. um And I learned a really good lesson that like, you know, we hadn't built any connection with a drinker or trade in the United States.
Speaker: And whatever work we had done collectively as an industry hadn't really had resonance or reach in that market. yeah And so that's the first point. So it's not dismissing all of the great work that the Tasmanian industry did to establish us as well credentialed, but it just didn't cut through in America.
Speaker: um More importantly, We hadn't developed any cultural connection with like the amazing food and beverage scene that we have in Australia.
Speaker: All Americans know of the United States is like the beaches, the outback. critters and things that will kill you. yeah, yeah, shrimps on the barbie, that sort of stuff. You know, and yeah, celebrities. Whether it's right right going back from Paul Hogan all the way to today with Liam, or Chris Hemsworth and Margot Robbie. And so we didn't have cultural permission either.
Speaker: it was a bit of an overwhelming moment to realise the job that we all had to do, that I was kind of at the front of, to do to kind of build...
Speaker: a reputation for well-crafted whiskeys, a reputation for um distinctive flavor profiles, a reputation for you know um accessibility and affordability, like all of that.
Speaker: that There was just none of that there. Yeah. and
Speaker: you know, the first 20 minutes of my presentation was often talking about Melbourne and Australia being one of the foodie, great food cities of the world and how we kind of have high attention to detail, but, you know, no airs and graces about our approach, you know, that we, you know, so imagine like um a Michelin star diner.
Speaker: yeah Yeah. You know, that's kind of the approach that we take to food and, And so I'd spent all of this time talking about Australia before I even got to talking about the whiskey, because I needed to lay the groundwork of why Starwood was so different to what they'd seen beforehand. And...
Speaker: and
Speaker: That didn't get me anywhere either because it's like, well, this isn't a Tourism Australia ad yeah And that's not my job to do. And so one of the things actually since I've returned back to Australia in talking to government beyond talking about excise just generally is tourism.
Speaker: The tourism department and the trade department need to start talking to each other because when you talk to the trade department, they talk about you know being Southeast Asia's food bowl and all these sorts of things. And that works B2B.
Speaker: But if you want to, in you know, get consumer pull for the product and develop a reputation, stop talking about beaches and start talking about amazing restaurants. Yeah, right. Spot on. yeah And so um i had to pivot. I changed tack completely, with particularly with Twofold. And because there was just so much discovery going on in whiskey, particularly bourbon...
Speaker: I led with twofold and just said, it's a weeded whiskey, 90 proof for under 40 bucks, aged in red wine barrels. And now I'll just like take my money. Yeah, right. So I had to re... Like Australia got me nowhere.
Speaker: And you can't have that experience if you're not in market as well. Correct. that is It's impossible to do that job and to have those... realizations without being there, right? Well, yeah, because we're you know in the echo chamber of our home market, not the least of which, you know, Starwood in Melbourne. It's like huge. And we have a lot of like local credentials. And so, for example, saying we're local, award-winning and reasonably priced. well that those those three slots already taken by great American whiskeys.
Speaker: So that doesn't translate well. So I think that, and in coming back to Australia, that's kind of been my next phase of like, okay, we need to elevate the brand. into being part of culture, not just local, well-credentialed and accessible from a price point. yeah Because we're so much more than that, and that's all the groundwork we did 10, 15 years ago, that um it would be we'd be doing the liquid a disservice if that's all we kind of talked about. Mm-hmm. And when you got there, obviously, everything's thrown into into bloody chaos, COVID hits, and then you know the post-COVID phase um becomes even more complex. um And then I guess a couple of significant things happened at that time. You win big at the San Francisco International Spirits Competition, and then subsequently, you basically return home. um
Speaker: Talk us through, i guess, that period, that transition, um Everything must have been flying from a bar's point of view. I remember the momentum you had when you first went over there and then the whole world shut down. Stalled, yeah. yeah So we, we in our first 12 months in America, sold more than we did in our first five years in Australia. Jesus, right.
Speaker: right i'm like okay this is this is exactly i knew it i knew it you know what i mean like let's go um and it was a really healthy mix of on-premise sales and off-premise sales right like we had this amazing um ah bartender advocacy going on so that they could kind of suggests people try you know in whiskey bars and cocktail bars try this australian whiskey that then would lead to someone pulling it off the shelf and that's just such a well-trodden path particularly in america um and then yeah we like uh march march 2020 40 of our businesses like switched off overnight
Speaker: And then all of the activity and tools that we had in trade, like for retail, off-location displays, sampling, educating the staff, all switched off as well. And people were just walking in buying handles of like old granddad for $18. Handles like a 1.75-meter. Yeah, yeah.
Speaker: one point seven five yeah yeah know And it was just like in and out. Like who wants to dwell in a store where you might kind of contract this thing that no one had any idea what's going on about. So it was a pretty harrowing time.
Speaker: um And we lost our momentum. Like we genuinely lost our momentum. And um
Speaker: it was a moment really where we needed to make a decision as to whether we were going to stay in market or just basically say, okay, maybe we should just kind of retreat and come back home and sort it out. And we decided to stay. And I think um what we learned from that staying and then kind of re-engaging in the market was that notwithstanding people were familiar and there were some really loyal and avid fans, particularly in in retail world, that sort of like said, I know We'll stock your product. We'll kind of get you back in. We'll buy a single barrel. wow The momentum kind of shifted and like we lost, like the world had changed. The way that it was discovering had changed. The way that it was engaging with spirits had changed. And we'd missed out on this huge kind of bubble
Speaker: of discovery during that period of time while people were just sort of like flicking on their phones. And so with hindsight, I can say, yeah, that was the beginning of like a really tough three years in America following that, where a lot of the work that we'd done beforehand didn't translate into the second half.
Speaker: To the point at which it was like, okay, it looks like we're going to have to recruit our own team. So we had like 15 people on the ground. geez Just West Coast or East Coast as well? Eastern, West, Central, Eastern, West. central east And west yeah and um um that becomes a very expensive undertaking in the United States. So they were already well paid, converted into US dollars.
Speaker: momentum had kind of shifted and it was like very painful you know lots of red ink but you know this is where when you have the belief of an investor on your side they're going to like back your judgment and kind of keep pushing forward fast forward three years by the end of that period i was like look We've got challenges at home that we haven't necessarily solved.
Speaker: The market in the US is way more difficult than we anticipated. we don't have the, like no one has the appetite or patience to continue to invest at this scale in this market yeah the way we were. We need to reframe and reconfigure the way that we enter the market and and move forward from there. So that was, you know, some really tough decisions the at the back end of 2023, early 24. Just trying to understand what,
Speaker: um just trying to understand what what the future looked like for the United States. And, you know, we're not Robinson Crusoe with that. A lot of craft American craft whiskey distilleries were going through the walls at that point in time. Yeah.
Speaker: We, the thing, the thing what do we what did we miss out on? I think during the lockdown period, we didn't kind of pivot enough to like digital first kind of marketing and branding. Yeah. yeah and And you had to go hard and you had to go early. That was, yeah that was. Yeah. And we missed that window.
Speaker: and then by the time we figured it out, the market had moved on. Yeah. So in the marrow of my bones, like America is still the promised land for Starwood.
Speaker: You know, like i am not giving up on that market. But now's not the time for us to be going, you know, balls deep into that market and trying to establish reestablish ourselves as a credible whiskey plurient in that territory. So what does that mean?
Speaker: <unk> you know are available good independent retailers, some chains are available online. um If you go to Oldmates you'll get a twofold and in everything.
Speaker: We're still there. it just doesn't have the same growth ambitions that we had 10 years ago for obvious reasons. And so... um
Speaker: and yeah Coming back home, I i think what i discovered was that all of that insight that i developed in in the United States in terms of like award-winning, sharply-priced, well-crafted whiskey isn't enough yeah was that's all we were doing in Australia.
Speaker: And so like it became obvious to me that if we wanted to kind of scale the brand to fulfill its ambition in Australia, we needed to deploy some of that thinking that we had in the United States back here. Yeah, right. And move beyond just being good local whiskey to being interesting whiskey for all the reasons that you and I know, connected with this bigger idea that I've had from day one, which is like, why do we just drink whiskey after dinner?
Speaker: Why is this with a tweed jacket, a pipe and a leather, you know, and and a leathered lounge? Like why why is it that people have no problem spending $60 or $70 on gin?
Speaker: on a gin And ruining it with tonic, right? But you would ruin a whiskey if you mix it. Yeah, yeah, yeah. Yeah, no, that's wrong, definitely.
Speaker: And so we are day drinkers as a culture, right? Which Americans seem... All the Americans I've talked to you get a bit freaked out by that, don't they? And so, like, whiskey should be part of that day drinking...
Speaker: conversation as much as beer and wine is and so coming back now like the idea for Starwood is that like we connect ourselves with that culture more intimately and that we start you know at 12 or what? No, 3 o'clock in the afternoon, right? And go all the way till 10 p.m.
Speaker: And, you know, broaden the occasion for whiskey. Get people really, you know, get whiskey drinkers more confident and excited by the fact that they don't have to kind of go to another drink. yeah That they can still be in love with whiskey and and use it in a different way. Because the perverse thing is where do most whiskey drinkers go to tequila and how do they drink it with soda in a margarita? You know, they're mixing all of those things, but somehow Scotch whiskey particularly has this kind of heretic notion of like, as soon as you've mixed it. You mix you're right. Nothing matter how it should be drank, you know. How dare you? So, you know, and the great thing about that is like, you keep saying that because it counter positions our point of view. And then also what we've sort of found is that like now when those brands start to say things like that, it becomes a little bit illegitimate. Like like climate does, you know, like, you know, we've been a non-age statement whiskey forever.
Speaker: And then when things started to kind of really ramp up in global whiskey sales, a lot of the Scotch whiskey just... I'll never forget this. Like, you know, driving down the freeway, there used to be a Shivers Regal... Yeah.
Speaker: had that said age matters yeah and then Pernod the owner of sugar shivers regal also have earned the Glenlivet and then moved away from their standard release which was an age statement 12 year old yeah to a non age statement and suddenly age didn't matter and you know drinkers are not silly they see through that whereas when we kind of say well it doesn't matter in Australia here's why Melbourne's four seasons in a day climate. And, you know, think about when you've been to Scotland, it's either in, you know, winter or June. You know i mean? Like all of these sorts of truths come out and people go, yeah, you're actually right. So when Scotch turns up saying mix your whiskey, because that's where the culture's leading, it kind of feels like grandpa doing rap at a wedding. It's like, you're not Snoop Dogg. Please, for the love of God, stop.
Speaker: It hasn't quite worked. i know what you mean. That's a good point. Registrations for CIBD 2027 are now open. Held in Brisbane from the 15th to the 18th of March, 2027, the 39th edition of the Chartered Institute of Brewers and Distillers Convention is a must attend for every forward thinking brewery and distillery.
Speaker: This year's theme is brewing and distilling the adaptive future. Resilience, relevance, reinvention. Celebrating innovation and craftsmanship, the convention brings together professionals from across the Asia-Pacific region and beyond to share knowledge, explore new ideas and strengthen the connections that make our industry so collaborative and compelling.
Speaker: From mash to mastery, the future of our industry will be defined not by volume alone, but by value, quality, adaptability and bold leadership. This convention is an opportunity for attendees to contribute to that future together.
Speaker: Don't miss your chance to be a part of the thirty ninth CIBD Asia Pacific Convention in Brisbane. Book now at CIBD2027.com.au.
Speaker: Thinking back to this period again, I suppose you have some really pivotal moments, 2022, 2024. You take out, oh, i can't of remember the superlatives, the names, but may i you can. The most awarded distillery.
Speaker: The most awarded distillery. In the San Francisco World Spirits Competition, which is widely regarded as the Oscars of... spirits yeah and so most awarded distillery pitted us up against any distillery of any category not just whiskey and we took home um yeah the most medals that night which is a huge yeah um recognition for all the work the team does yeah did it twice so i mean you're on top of the world from the awards point of view there and then fast forward to sort of 24 25 things start to get i guess a little more complicated from uh well from an everything point of view really everyone at that stage seems to be hunkering down by that stage certainly by last year um you know production stops and ceases in major scottish irish american distilleries um those production pauses and australian and australian distilleries
Speaker: You know, the liquidations are starting. We've seen obviously what's happening in craft beer in terms of um the wave of voluntary administrations that swept the industry and the and the consequences of that sort of development. um Talk to us about how Starwood has changed in the last sort of 12 to 18 months, I guess, within that period as well.
Speaker: So there was a huge kind of reckoning post-pandemic. And weirdly, consumption is just going back to the trend line. It's not come off...
Speaker: below the trend line. But if you've just had this big bubble of sales, that decline is pretty dramatic. I think a lot of forecasts estimated that it was going to continue at some level around that as well, which was bonkers from from my point of view, but that's where it often landed. And so we're just kind of reverting back to the norm. and But that decline was quite dramatic as was the ascent. And so a lot of large scale, large multinational distilleries around the world had to deal with that. And um ah won't speak for Diageo, but they had their own challenges in terms of like dealing with their priorities internally.
Speaker: And um one of the things that they realized was that like having a craft portfolio of brands that maybe in 10 or 20 years time might be a million cases. And if they've got five or 10 of those, that that could collectively be the size of a Johnny Walker.
Speaker: wasn't a priority as much as it was 15 years ago. yeah And so um they made the decision to or called out that they weren't going to pursue an acquisition of Starwood, which was within their rights to do.
Speaker: And so the board of the company decided then to put the company up for sale. um So when... I should go back a bit, because like in 2015,
Speaker: And this opportunity was pretty um groundbreaking to have a large multinational invest in a startup distillery to scale it to the ambitions that I had and which were pretty audacious. We're not called Starwood for nothing. yeah yeah um And I'm a chronic pleaser, Luke. Yeah.
Speaker: One of the things that like really weighed on me was that we were afforded this amazing opportunity and I didn't want to be the reason why it failed.
Speaker: which you know I mentor a few businesses. If any founders said that to me, I'd kind of slap them and tell them to get a grip and you know i f yeah pull yourself together and this is the reason why you're gonna succeed. And um and so I made the decision at that point in time to um not what pursue being the CEO of the business And the structure of the equity, which is really complicated, meant that I wasn't on the board. So fast forward to 2024, 25, those decisions were made independent of myself.
Speaker: Like I wasn't part of that decision-making process. And in fact, a lot of the decisions at a brand level and strategic level, I was you know in the room for, but ultimately didn't rest with me to make.
Speaker: um And so when the board decided to sell the business, it wasn't It was the right thing for the business, but it wasn't necessarily exciting for me because I didn't know what was next as founder.
Speaker: um And so they went through a sale process and by pure happenstance, I met someone that said, I think we can put a bid together for you to acquire the business back and own it 100%. And so I did that.
Speaker: And yeah as of 30th of December last year, ah now own all of the equity in in Starwood, which is, true and a lot of debt. But yeah, all of the equity in Starwood, which is exciting because like, I know so much more than I did
Speaker: 10 years ago, um ah come back into the business leading it. And I'm a different person. The business is definitely different. And I get to kind of really pursue this ambition that we've always had, albeit without the funding envelope and the you know the bag of money to go and do it. So there's no Bank of Diageo anymore, like it's just ah me.
Speaker: Bank of Dave. And and you know trying to get to positive cash flow and and and drive the business forward into the future. And I guess, so ah this would be two pronged when we think about consumers and producers. Obviously, certainly in the craft beer world, ownership is ah is a much more complicated story. um And for the consumers and producers out there listening, um what are your takeaways from that period? Do you think that, I mean, we've got never, never four pillars um in that space under, you know, larger conglomerate ownership.
Speaker: what are people What do you say to producers who are maybe chasing it or maybe not even thinking about it, not anywhere near it? And what do you say to consumers about what it means to their product for it to be owned by a conglomerate versus independently owned? Yeah, that's a a very vexed issue.
Speaker: Like I think... um
Speaker: It's highly circumstantial on the consumer side. Because I think that um i don't I don't know many of many, particularly over the last few years, I don't know of many um investment board meetings that go in, yeah, let's buy this business to run it into the ground.
Speaker: You know, but inevitably, statistically, a lot of them end up that way. yeah that way And I think a reason for that is because um they don't retain founder involvement. And the very thing that got them to that level is lost.
Speaker: And in some ways it needs to kind of change to adapt to a larger ecosystem. But the best examples are those where actually the management team have actually continued on in some capacity moving forward. And um the the you know the ones that like I think of ah on an international level, probably the most um famous is Casamigos with like yeah um you know famously George Clooney, but there are two other, Randy Gerber and Mike Melman, who are like, part that are triumvirate in there and you know George was the talent on the the motorcycle and you know um but the other two had kind of really a real deep understanding of the business of spirits and such that when Diageo acquired that business they acquired the team not just the brand yeah yeah and there's no accident that they kind of hit business case five years before they thought they were going to do
Speaker: right because it was the best of both worlds. The power and might of this distribution engine that Diageo has, particularly in the United States, and then the insights of like founders to to you know hold firm on, you know what, the haptic feeling of pulling on this tear tab is really important. I know it's an extra 17 cents cap,
Speaker: But we're keeping it. Yeah. Yeah. Right. That sort of like insight is is what makes the difference between like good acquisitions and ones that kind of falter.
Speaker: um The harsh reality of spirits in Australia is that it's bloody expensive, you know, way more expensive to serve than beer and wine um because of our excise system. And so if you don't have that scale route to market available to you,
Speaker: It's infinitely harder. and I'm dealing with that right now. And we never had it. We weren't part of the Diageo ecosystem in terms of distribution. They weren't going to pay for value. They were creating themselves.
Speaker: um But um i see the attraction you know obviously see the attraction of like,
Speaker: a founder coming up with an idea, proving commercially that it can scale, having the commercial and marketing growth drivers really clearly articulated, and then laying it out for someone to execute.
Speaker: Just don't mess it up, right? That's gold. Because, like, my ambition, and this is why i was... happy to kind of forego equity, you know, like be a lower equity holder, not lead the business because I just felt like, well, we are aligned in the ambition of this brand. And the number one thing, you know, it's my name on the bottle that I want to do is fu fulfill its ambition.
Speaker: That's it. There are what, I mean, there are way easier money, ways to make money than setting up a spirits business in Australia. Mm-hmm.
Speaker: infinitely easier ways to make money. So it was never about the money. It was about this idea that every self-respecting back bar in the world and drinks carted home needed Starwood on it.
Speaker: And so... that seemed like the most obvious way for us to get there and that we just needed to kind of bulletproof the brand proposition, how it's delivered and how we execute to get that to be a reality.
Speaker: And so, you know, Diageo had their own reasons as to why they didn't want to pursue, but equally I feel like we weren't necessarily ready to kind of be part of that mothership as well because there's lots of things that I'm still working on it every day in terms of being part of that culture that moves whiskey earlier in the day.
Speaker: you know And if we crack that nut, well, get out of the way, right? like I mean, that's going to be transformational for Starwood, but also the Australian whiskey category. Absolutely.
Speaker: I mean, that the fascinating part of this whole story is that in some ways we've been here before. um You and me have talked about, disagreed with, um I guess, the the former legacy of Australian spirits production where the forerunner to what is today Diageo Distillers Company Limited came into the Australian market, changed it irrevocably by buying up um some very large malt whiskey distilleries here in Melbourne in the 1920s and Well, 1930 when that started.
Speaker: And so recently I've been you know cracking open and tasting some of the whiskeys from these former eras. And it's been you know fascinating to to see what was prioritized from a flavor point of view, the production processes that were at play um in the 30s, 40s and 50s to create whiskeys that by the 1950s were fairly dominant cryo in 1956. And post that period was you know was probably 40 to 50% of the market, which is absolutely staggering considering where we sit at the moment. um If we're sitting down and drinking Starwood whiskey, maybe 10 years, 20 years, 30 years in the future, um if anyone's thinking about, you know, squirreling some bottles away for for future sort of tastings, what do you think people will be tasting of of the whiskey that's been made now, that's been made over the last 10 years um into the future? Because you talked about that ambition for for Starwood moving forward. um what do you What do you think people would find cracking these bottles open in 10, 20 years time?
Speaker: The magical thing about whiskey and rum, I'm discovering, is that it talks to the place it's made. I mean, rum's the Wild West, they're cowboys. like But my but like you know when we think of whiskey, whether it's Scotch whiskey, Irish whiskey, American whiskey, they're anchored in the place they're made.
Speaker: And so for me, i mean, without being cute, like you should be tasting Australia. And like, what does that mean? You know, like, so then let's double click on that. Of course, like if we've got these amazing red wine barrels on our doorstep that deliver this juicy, delicious kind of really generous taste.
Speaker: flavor profile, it's quite ownable by Australia. It must be aged in red wine barrels, right? Like there's no other option.
Speaker: um I kind of, I said this once in Glasgow and I'm lucky to be alive. Lucky to have some taste. You know, that Australia, Starwood is more Australian than Scotch is Scottish because of course they're aging their whiskey in Spanish sherry barrels and Portuguese port barrels and American bourbon barrels. And so where does the flavour come from? All of those places. And so I just think that we've got a, you know, like a moral and functional right to win the place that's made argument, probably second to just, well, equal to American whiskey.
Speaker: I guess the the final maybe counter to that would be where do you see Australian whiskey moving forward? Because the counter to the, I guess, the wine cask argument is, you know, we want to hear from grain. We want to hear from distillate. There's certainly been that push and movement from, you know, certain people within the the UK industry, Europe, Japan to really hero distillate, get the cask out of the way and allow the distillate to shine. Mm-hmm.
Speaker: Australian whiskey has quite famously you know been port cast led or you know um tawny cast led. um It's been wine cast led. Some people love this style. Some people have have problems with it. um There's some very famous whiskey critics in in parts of Northern Europe, obviously, that ah that people can research and have a look at on that front. Do you think is barrel cast... is Barrel forward whiskey is just going to be the reality for Australia moving forward because it's the the best shorthand for capturing people's attention or are there other things that we can explore there as well?
Speaker: Yes. you know um No, I'm not going to um no but give you an idea it about creating an entirely different whiskey to what we're doing. No, no, no. I think... i think um you know If I've learned something, shorthand, shortcuts are really important to consumers.
Speaker: Like if I've learned anything through this whole exercise, it's that. That at a consumer level, you've got to give people shortcuts. And so there's no accident that that first generation of Tasmanian whiskey used parchment paper, per scripted font,
Speaker: you know, really kind of anchored themselves with that Scottish tradition because it was just a shorthand for people to go, okay, I see what they're doing here. Tasmania feels like Scotland. This makes sense. Tasmania feels like Scotland, all those sorts of things, right? Like it makes perfect sense. yeah But staying there, you know, is risky and we're seeing that shift in Tasmania, which is fantastic. And, you know, you'll see it with us too. Like I think that there was nothing wrong with Nova We could have just stayed a single malt whiskey distillery aged in red wine barrels and just done a really good job of that and being quite distinctive and a shining example of what new world whiskey can be yeah on the world stage.
Speaker: we developed twofold. We then did bottled cocktails, which again, we want to talk about like departure from norms. Like that was 2007. We were still at SNM when we started with our bottled cocktails. So that's 2015, 16, when we started doing bottled cocktails.
Speaker: Um, Our idea is to serve the drinker you know what they want on their terms and so and inspire them a little too to think differently about whiskey.
Speaker: So that's one way we've gone, like lighter in style, more approachable, palatable, closer to the occasion. And then from an innovation point of view, like more more recently, Carly's pioneered yeah co-ferment a co-ferment, which is way less to do with the with a barrel and way more to do with the spirit. Maybe just a quick explanation on what that is because it so it'ss it's got some complexity to it. but It does. So, you know, we have to, when we're when we're when we're making a spirit, we start with...
Speaker: um raw material, grains, that we then ferment to create alcohol and then distill that alcohol, put it in a barrel. That's a whiskey.
Speaker: um Brandy, by contrast, you're starting with grapes that you ferment and then distill and put in a barrel and off you go. Now there's lots of different... blended spirits where you might take some brandy and whiskey that might that is either unaged or fully aged and marry them together and see what happens at the other end carly's idea was to actually co-ferment grape juice and wort barley juice yeah barley juice um together, ferment that into an alcohol and then distill that and put it into a into a barrel.
Speaker: That's quite novel and unique. It's not a whiskey, it's not a brandy, it's its own thing. And so I guess the point of raising it is that like we still want to challenge people's perceptions of spirits, of what whiskey can be, of like doing more, um but you know, pushing the boundaries. Because we can, Luke. You know, I think the thing that like we come we wake up every day and in Australia with this idea of possibilities in a way that bourbon and Scotch whiskey particularly are anchored by tradition.
Speaker: And putting all of the commercials to one side of like not alienating a drinker and kind of asking too much of them and all that, putting that to one side, the commercial side, it's not broken. It's so not broken.
Speaker: You know, like... Again, you know for for those of you that might be craft beer drinkers, whiskey and gin and rum is not broken ah as categories. And so when craft distilleries turn up, it's very different to the way craft beer turned up 20 years turning up with...
Speaker: right we're turning up with um distilleries that have got family legacies um that are four or five generations old.
Speaker: We're turning up with um distillers or blenders that have been working at the distillery for 50 years, honing their craft and getting the spirit to be just the way they want it. So the idea of drinking better whiskey from Australia or drinking better gin, that's one of my kind of pet peeves, is like ludicrous, right? There's nothing wrong with Tanqueray.
Speaker: Right? So, down you know, the only opportunity Starwood has, that Australian Craft Spirits has, is to excite people by being interesting and different, not being the same.
Speaker: And so that's the opportunity for us. And I think that over time, we can move away from those shortcuts that get people excited by it in the first instance, and then bring them along with us.
Speaker: But we've got to start with the shortcut. And barrels, like color does so much of the heavy lifting. Oh, yeah. Yeah. Fantastic, mate. Well, maybe a final one, just looking forward.
Speaker: I think you've touched on it there, how we progress, how we you know get people more interested in in what's happening locally. um How do you see the next sort of five to 10? Are we thinking products like Coferment are going to continue to drive Australian whiskey making forward? is Is there still space for us to develop that sort of affordable whiskey that sort of bumps others off the shelf? How do you see, i guess... what what do you see consumers should be looking out for um on that front on the australian whiskey front over the next sort of five to ten years yeah i i like your thoughts about like it needs to kind of be more than just the barrel like barrel is shorthand we know sherry casks in scotland are kind of highly revered mcallen's made a name for themselves procuring these barrels you know um and so
Speaker: We have lots to explore with Australian but fortified and red wine barrels and and white wine barrels for that matter. like let's Let's explore that fully.
Speaker: um But the reason one of the reasons why I love bourbon so much is that actually the barrel is at the margins. Like it's a brand new American oak barrel. Now, every distillery will tell you they've got trade secrets on which barrels they're sourcing, from which forest, and all those sorts of things. Toasted this way, forth. But it's less to do with the barrel and way more to do with the mash bill, the fermentation, the distillation process. And so I think that that's the era that we're coming into. And Twofold probably was the first to, just so like it was with, you know, like Nova was with Red Wine Barrels, to kind of pioneer like, hey, let's celebrate.
Speaker: the grains let's celebrate the fact that it doesn't have to just be single mold. um I think, you know, we're going to see more of that. I think we'll see more, more grains come to the floor. I think we're going to see more um innovation in fermentation and how we actually drive flavor from the grains. yeah yeah um And that's really exciting. That's very, very exciting. yeah Definitely. Definitely.
Speaker: Lots to be excited about in the Australian risky front at the moment and certainly moving forward. So thanks for coming in and chatting to us on The Full Measure. Cheers. The Full Measure podcast is produced and edited by Matt Hoffman.
Speaker: For all partnership inquiries, reach out to c Craig Williams, craig at thefullmeasure.com.au. To keep up to date with everything happening in Australian spirits, visit thefullmeasure.com.au and subscribe.
