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Supplying Indie Brewers As An Indie Producer
514 Plays2 months ago
Derek Lacey is a former medical researcher who, while spending time as a stay-at-home dad, had a "Eureka!" moment that led to the creation of Melbourne-based Bluestone Yeast.
The business launched in 2018, providing local liquid yeasts for brewers, and has been growing ever since to the point that, at time of writing, Derek and his team are putting the finishing touches to a new, far larger production facility. Given said facility is around 800m from Crafty Towers, we felt it was the ideal time to invite him onto the show.
He joined us in the studio for a chat about how he came to swap medical research for his new career, the challenges and triumphs he and the brewers he works with have experienced along the way, what it's like operating as a small indie producer supplying craft brewers and those making beer in their homes, his future plans to diversify, and the lessons learned along the way.
As someone who was born in Ireland, albeit having moved to Australia as a child, he has the gift of the gab and shares as many stories as he does insight on life at a yeast manufacturing business.
In the intro to this episode, we also discuss the latest news, including new openings and the ongoing travails of some local businesses.
Links referenced in or relevant to the show:
The Mill at The Bendigo Hotel: https://craftypint.com/brewery/394/the-mill-brewery-at-the-bendigo-hotel
The latest changes at Dainton Beer: https://craftypint.com/news/3562/daintons-taphouses-reopen-weeks-after-their-sudden-closure
James discussing beer on ABC Brisbane, around 1h23m here: https://www.abc.net.au/listen/programs/brisbane-afternoons/afternoons/104277890
Bluestone Yeast: https://craftypint.com/business/1312/bluestone-yeast-co
Breeding new yeasts: https://craftypint.com/news/3511/the-breeders-bringing-new-brewing-yeasts-to-life
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Transcript
Introduction and Absence of Matt
00:00:05
Speaker
Hello and welcome to the CraftyPump podcast. I'm Will. I'm James, welcome back, episode number eight. We're racking them up fast. We'll lose count soon. We'll lose count soon, yeah. And we'll be the last one for a while where we don't have Matt here on hand to help us. He's currently making his way back from watching Pearl Jam perform in New York, so... The next thing I've ever heard. Exactly, we've been dealing with wild storms here in Melbourne while he's there hanging out with Pearl Jam in New York.
00:00:37
Speaker
um But yeah, hopefully we we get away with it.
Exploration of The Mill Venue
00:00:40
Speaker
um But yeah, so Will, you've been ah out visiting a new venue this week. Yeah, I was just at The Mill, which ah so readers on the site would have already seen. A while ago they announced they're moving to the Bendigo Hotel, which is a legendary live music venue. I think we've already spoken about it on the podcast, but they're in now.
00:00:58
Speaker
I went the other day and it is so cool like it's kind of funny it's just an old pub but it's a very big pub huge big stage significant band room and uh great food from dinghy at my taco so you're kind of there and you're like there's nothing super brand new about this as a venue it's all it's all kind of all bones really but it's still great to be in a space like that that's been a little bit reimagined while still being like a pub pub. but You say pub pub but it was it was calling it was like Melbourne's metal pub as well. Exactly yeah so it was much they've lightened it up a bit it was much darker they're still gonna play lots of metal bands and things like that but the front bar's also sort of I guess the mill tap room which has all that the full range of beers and
00:01:42
Speaker
they're in the process of getting the brewery moved into a tiny garage there. I was there with Merrick the owner and we're talking about how to sort of put a window in so people could see the brewery without, you know, structurally damaging the place to the point where the river collapses. easy He's got big ideas. I think it's another example of how, I guess, craft beer is becoming it about offering experiences as well.
Evolution of Brewery Experiences
00:02:03
Speaker
Like some of the best venues you can go to now, whether it's, you know, you're wanting that sort of music experience or just a cool venue or a family experience, are actually coming from Brewery venues more than pubs especially as you get out of cities or whatever like, you know, they're they're often better than your big barn type pub or your tab or whatever. So, I mean, but I think it's it's pretty exciting and you know,
00:02:24
Speaker
to see these places being reinvented and turn into something new by by breweries. And just, it's such a beautiful match that these, brery you know, this brewery and pub that were only ever less than a K as the croat flies apart. Yeah, hars but like the Mills always had a metal look about it as well. and So it was cool to see them come together. And it's Collingwood for those who have been there and know a lot of pubs, there's a lot of breweries now as well, but to sort of still open a place that's sort of new and do both of those things very differently is exciting to see I think particularly when you're throwing in live music as well you know we talk a lot in the beer industry about how tough it is out there right now it's bloody tough in live music as well so I'd like to see a live music venue survive 2024 is really important too I think yeah and I think there's other examples around the country as well where you've got like you know like to say freeo social in WA or the wheaty's long done that too the wheaty you know what Ravens have been doing with um you know the warehouse space where
00:03:19
Speaker
you know bringing in events gigs bands whatever and just pouring your beer and it's like it's part of the event without having to be central to it it maybe is bringing new people in to try these beers in a way where yeah it's just a different different way of accessing
Dainton Brewery's License Struggles
00:03:33
Speaker
people. um I guess a very different story that you've also been working on recently I guess the ongoing travails of Dayton yes, I'm sure a lot of listeners will send it on the site by now I'm if not go and take a look at it for the full details But they closed a number of weeks ago both venues because they were attached to the same liquor license is what they told us and then let that lapse accidentally and um In order to sort of revive it. They've had that liquor license reinstated to a new venue a new business Yeah owned by the Dayton family ah but owned by Kev Dayton. Yeah
00:04:08
Speaker
probably already getting a bit lost in that. That's obviously it. There's this very confusing convoluted chain of events, but I mean... There also have been two crowd funds prior to that and then they were were in VA late last year. So there's been yeah a number of sort of non-traditional yeah things happen over the last couple of years. Yeah, yeah. um And out of this yeah situation now, those those crowd equity crowd funders are now sort of lost out their equity, although the bari says they'll still get the rewards.
00:04:38
Speaker
If you take a look at the story, you'll see there's obviously there's some pretty white hot anger from some of the equity investors for sure. there's Yeah and probably about equity crowdfunding in general I'd say.
Challenges in the Beer Industry
00:04:51
Speaker
Well we're recording this four days after the article went live and there's still a fairly active commentary going on. It's like it won't stop, it will have to stop at some point, we will turn his comments off because we have to sort of move on. Yeah but it's interesting, I think we've already discussed it before on the podcast but
00:05:10
Speaker
It's sort of shining a light again on, I guess, the risks of equity cloud funding. You know, a number of businesses have done it over the best part. Yeah, so I mean, I would say like, um since it came online in Australia, it's it's more than 20 for your businesses and a small-ish proportion of them, but still a number have gone into VA. So obviously there's Dainton, Akasha, Blackhops, Valhalla, which has gone through liquidation and now or is in the process of it. And then others have sold like Beer Cartel, Bucket Boys, which is one of the very first. So for some of those investors, it certainly potentially hasn't always worked out. And there's some, um I think it feels like there's some growing anger about the platform or the system. but i guess I guess the one thing is that
00:05:56
Speaker
It's always explained through any of the platforms saying there are risks involved, make sure you're you're aware. um But I guess that doesn't necessarily make it any easier for people and when it when it happens. No, and you know, there's also quite a people who have had contact me that say, well, I was only doing this to say I invested in a brewery and the discount. So it's, it's you know, you've got to sort of take these things as they come. there that There's a There's a lot of people that have invested in equity crowd funds and there's a lot of views out there as a result and because there's been so many as well. Yeah, and talking about there's another brewery open this week in Sydney and that ran a campaign earlier, Pickled Monkey. Yeah. It's run by Mark Feathers, who's Hearts Pub and various other... and and
00:06:40
Speaker
Enterprise, but at the same time, there's also been a another closure in in Sydney as well. Yeah, yeah, obviously, I mean, and part of this danger story is that it's been put up for sale during the liquidation process. And they did say there's probably not many buyers in the market. And if you want to see evidence of that atomic beer has been up for sale since.
00:06:59
Speaker
April months yeah yeah for quite a while um from good drinks. They've been looking to sell it they were Announced it it will it now has shot its losing about half a million dollars a year the rest of the business other parts of it are obviously doing much better in terms of venues like the free i one and also Matzos have been the Sunshine Coast. yeah So, um yeah, they've decided after looking for a buyer for quite a while, really, the lease is up. It's time to sell it. So it's a pretty typical week in crafty. It was 24 closures, liquidation, you know new openings. yeah you know so
00:07:35
Speaker
It's very much, I hate to use the word like that, rollercoaster year, but every single week there's ups and there's downs, and I guess the hope now will be that, no, we're into spring, that the ups will become more frequent. Yeah, I think it's important, I've been thinking about this a lot, that the industry's very big now, with close to 700 breweries, there's probably always going to be closures, there's always going to be stuff going on, and it's very, you know, we talk about this a lot, it's very hard to report on breweries that are just doing fine and okay because it's not a story unfortunately it's just you can't write a story saying here's what's going on over here and nothing much is going on no one's gonna read it sadly I wish they would but so it's very um hard to sort of point to some of those tales where with things are just sort of moving along yeah normally.
Resilience of Small Breweries
00:08:24
Speaker
Well, I was on ABC, Brisbane, chatting to Kat Feeney a few days before we sat down to do this, and I think I'd been brought on to chat about why craft beer had become so expensive, and at the same time breweries are closing. People love yelling about it from high school. All my friends from uni, that's all they ever wanted to talk about. yeah But yeah know about that I think there's, you know, essentially there's almost two separate stories there, but one of the things I was keen to point out is that it's actually given the conditions and I guess everything that's kind of set up against small independent breweries and other small businesses, it's probably actually remarkable how many are still going. And I think there is a lot of strength and resilience and stubbornness amongst people in the industry. And you know I think you know in our case, I could believe that this is a really good industry. yeah
00:09:12
Speaker
bringing benefits to to the bit to the booze world and to communities or whatever. So I think yeah it is worth putting in perspective that, yes, this brings the readers, this makes the most noise, but at the same time, you know people are there are people out there going fine and you know wishing that interest rates would come down and people would have more money to spend. But um yeah it's always worth remembering when things you know might seem doom and gloom that is often a very small percentage of the market. so Yeah, absolutely. Which grabs all the headlines ultimately as well, which is, yeah, tricky. I know that makes us sound sort of like potentially a bit head in the clouds or something like that, like ignoring the reality, but the reality is there's a lot of worries. There's still open and more, more opening. Yeah. Yeah. And it's just so much happening. It's a big industry and in terms of number of players.
00:09:59
Speaker
I think the plus side of the sort of the coverage around the the closures and rise in excise tax and you know shrinking profits is that it is getting more coverage and in the wider media and hopefully will help make it easier um to get the right people to listen and hopefully over time get some sort of systemic change to help the industry.
Crafty Crawl Festival and Acknowledgements
00:10:21
Speaker
um But um before we get to our main interview today, I just want to say a quick thank you to the breweries that participated in our first and festival Crafty Crawl. yes Obviously we couldn't and when we were doing the promo for the Crafty Crawl that we ran at Frothtown.
00:10:35
Speaker
we couldn't say who the breweries were because that would sort of you know undermine the whole thing so big shout out to uh fox friday rocky ridge fat brew club artisan brewing blaster and margaret river beer co um who not only agreed to participate participated in it but are now currently sending beers to our three winners from the three sessions um all seem to run smoothly thankfully so we'll be yes a couple of those breweries particularly artisan they they were really not giving away any hints or anything as well there there were people going up to their stem looking for those uh qr codes and uh they were just sort of ignoring that it was going on not not looking in any direction it was a it was a cool thing to see okay very nice um excellent well um yes so
00:11:17
Speaker
Let's get on to Derek yeah im from Bluestone Yeast, who joined us here um a few days ago. um I guess in part to talk about his new brewery, his new yeast production space.
Bluestone Yeast's New Production Facility
00:11:30
Speaker
Yes, whatever you want to call it. It turns out it's all of 800 metres from where we are. like Even though we lost La Sirene from Alfington we now have like Fox Friday sort of storage a few hundred meters up the road and now Bluestone East doing what they do so um but yeah he was sort of talking about his the expansion of the business. yeah Long overdue is sort of how he puts it and yeah just sort of what they have planned for that space as well while also going into
00:11:55
Speaker
how he came up with the idea, his sort of famous walk. Take some time off and become a stay-at-home dad. Sorry I'll build a business. yeah and um Yeah and he was also going into the challenges of building a business the way he has and um the difficulties and all that kind of stuff as well as the plans he's got for the future which are super exciting as well and he was sort of a bit cagey about talking about some of them which makes it all the more exciting too. yeah Yeah, for sure. no he's it a Great chat. He's a good conversationalist. and So yeah, enjoy that and we'll see you again in a week's time. Cheers. Cheers.
00:12:33
Speaker
Hello, welcome back to the Crafty Point podcast. After a couple of weeks of audio recordings and being on the road, we're back in the home studio. How are you going, Will? Great. How are you? Very good. And our guest today is actually just moved into the hood, actually. Yeah, open a new place, a mere 800 metres from here. Derek from Bluestone. How are you going? Thank you very much for inviting me. I was actually going to walk, but I don't know whether it was a bit inclement. No, at one stage we were worried that we might have sort of flapping window frames and everything but fingers crossed we get through. It can still happen. So do you want to tell us exactly what you've been doing 800 meters away from us in Fairfield? Yeah, absolutely. We got possession of a new food factory or it's an old food factory that it's new for us and basically we're setting up our
00:13:18
Speaker
small operation that was in the innovation centre out in Mulgrave and moved to the inner north because that's where the action happens. and Yeah and so yeah we transported that small setup and we're upscaling so we're getting you know new kettles, ah new fermenters, new tanks, the whole whole lot. um And just anyone that doesn't know you this isn't to make beer, this is to make Oh yes, we're a yeast manufacturer and we're here to make yeast to make the beer. That's right. It's classic that the terms are all the same. That's right. I mean it's similar equipment to a brewery and it'll look very similar to a brewery except that we have to be super careful with cleanliness and CIP and our lab is to be super clean and you know our most
00:14:05
Speaker
precious piece of equipment is an autoclave, which is basically a big fancy kettle for sterilizing all our glassware and things. But yeah, that's that's ah that's the price of a small car. But it. but were yeah Yeah. And so so you be how long have you had the site? How long has it been ongoing? When is it going to be open for you to bring yeah customers in? So it's really new. So we we originally were going to build our own place in Coburg North.
00:14:33
Speaker
ah But that seemed to be a mammoth undertaking and a lot more expensive than we had really given the credit for. And then in the middle of June, this this place came up ah up on realestate.com. They like someone looking for a house. you Basically, I was just like somebody looking for a house. This suburb and surrounding suburbs. Here's my price range. Two bathrooms. Yeah, basically I've gone desperate. I was anywhere in Melbourne. basically But this was perfect. It it was available, called the agent, sought the next morning, had a deposit and signed a lease or an offer.
00:15:12
Speaker
for a lease straight away and spent then two weeks biting our nails waiting for the agent to confirm. And then then they said yes. And the previous tenant was gonna move out a couple of weeks early. So we moved in basically three weeks from signing up to giving an offer. We were we were moving, which was a big shock for my staff. They hadn't seen moved that quick before. ah ah Yeah, so it was just one of those Rare occasions where you see the perfect place or as close to perfect as you can get and you just have to jump Yeah, there was a very Goldilocks kind of in terms of what you're looking for
00:15:51
Speaker
Yeah, well it had power, it had a grease trap, it had enough space, it was food grade already so they didn't have to bring it up to food grade. So what was it there before? Was it food production? Yep, it was dumplings. Okay. It was dumplings and before that it was Baskin and Robbins cakes and before that it was a boning room for chickens. I was about to say all delicious things. signing through me off a little bit. Okay so effectively walk in, are you bringing in existing gear or are you bringing in adding new gear? We're bringing in the existing setup so we can continue production. So we had sort of an interruption in our production for about a week and then we're bringing in new gear which is you know better kettles, bigger fermenters and things like that. yeah definitely we we hope to offer a lot more for the brewers in Australia so that they can you know just ring up and get shipping next day delivery type of things which we do for a couple of strains but not for a lot of strains and then also then our retail partners like for home brewers we we offer
00:17:05
Speaker
12 strains for the homebrew community, but they they like they're like variety and yeah and why dry as ah as a home brew yourself Yeah, ah so hopefully ah by the end of the year we'll have expanded that out to 20 strains and that will cover you know 80 90 percent of the strains that that home brewers are after so we're really excited about that we have got the packaging already done which was um You know something that takes a lot longer than again I give credit for it. You're not going to become like one of these brewers putting out four different new releases a week though. No, no,
Founding of Bluestone Yeast
00:17:38
Speaker
no, no. I've got to keep the skews pretty tight. But yeah, so mainly it's the the strains that the pro brewers already want. So we're already making these strains. The pro brewers are ah using them, but we don't offer it to the home brewers because to be able to keep it in stock for a home brewer or retailers is a lot
00:17:56
Speaker
There's a lot more to juggle in terms of our production schedule. um It's not just we do it once. It's like, okay, if we do it this month, we need to do it again next month or at least six weeks time. yeah Does that fit into our schedule with all our other capacity? And we couldn't do it in the setup we were.
00:18:11
Speaker
And what was your original setup? was it Did you already yeah originally so go straight into like a ah lab setup? Was it attached to the house? like How have things evolved since? It's been seven or eight years, hasn't it? since you ah its been one of It's been five five years. five years ah So basically it are I started the idea in Well, I got the idea at the end of 2018 and then registered the company in at the beginning of 2019, but didn't really do anything. um like I did a lot of research ah just looking at ah what I can do yeah through to the middle of 2019.
00:18:51
Speaker
and convinced my wife that it was a good idea for me to go to a homebrew conference in Portland, Oregon. And that was partly to go with my mates to drink beer, but partly to to go on it inspector so and And you weren't speaking, you weren't part of it. It was pure no purely research. yeah yeah because ah and the may The best category when you're filling in your best. yeah Research and samples.
00:19:18
Speaker
Yeah, well, that that that's true. I did do did claim a lot of beer that that year um on my bus. But ah yeah, there's an imperial yeast is there. and They started a few years before I started and they you could go and visit their lab and they do a tour and it was brilliant. ah And how would you heard about them through Homebrew circles or just research for your business idea? or So I was when I when I got the idea I was going for a run around Princes Park listening to a podcast and as you do ah and I was at the top of Princes Park near the lake and they were talking to these guys from Imperial Yeast and they had just set up a lab or they'd set up a lab a couple of years ago and they were saying oh yeah you can come and you know come to Hombru Khan and you can ah come and visit where we're sponsoring and saying okay right
00:20:10
Speaker
Gee, they set up a yeast lab ah Sounds pretty straightforward ah Maybe somebody should do that here because I had started at home brewing and we were flying liquid yeast in from the States which seemed mad and So, sort oh, well, I've got a science background. Yeah, maybe I'll give a go and yeah, so I did How long have you been home brewing for at that stage without relatively new feel? Yeah, it was. Yeah, it's pretty naive I don't have been home brewing for about 3-4 months. So it was like straight from, you know, here we go. not not Not just going quickly from kits to all grain, but actually I'm going to supply this industry. Yeah, yeah it was pretty naive looking back on it. yeah ah
00:20:49
Speaker
yeah but yeah It's just like, well, at some point, you got you just got to jump. and and yeah And at that stage, I had been a stay-home parent for three years. And so I guess I was getting a little bit of itchy feet and wanted to do something. And my wife, ah Sally, God bless her heart, ah supported me and is still supporting me. I don't really know why. Yes. And I thought the worst thing that could happen with selling this yeast company up was I have a really awesome homebrew setup yeah yeah and and I haven't homebrewed since. Oh right okay and so so what was was the first setup then in terms of you know the steps to I guess to test the product and then go commercial was it just you doing all the work yeah but was it literally you know in the pan you know the sort of the the room off the kitchen at home with you know test tubes and what have you. Yeah what so did the the way it transpired so I i was I'm scientist by training and
00:21:46
Speaker
that's a benefit but it's also a big hindrance because I had this expectation of what I wanted the place to look like. And so I was looking all around Melbourne for somewhere I could just move in and and just do some R and&D. And there's not many places that as a as a startup company, you can jump in and do that. Yeah, I do think I imagine if you're looking for cleanliness and hygiene and all these things as well. That's right. You can get ultra high end yeah and try and work with universities, which is a nightmare, or you can go ultra low end. And I luckily found this little happy medium in this innovation space at it, run by Monash Council at in Melbourne. And so I have a lab, I just, the best thing about that was, it was a month by month lease. So I was terrified of going, you're gonna have to sign a three by three lease. I just don't know if this crazy idea is going to work. And yes, this place is you you jump in month by month, does
00:22:41
Speaker
There's no real contract per se and that's when I did that in the middle of 2019. I jumped in there, was doing to two, three days a week because you know I'm still a full-time parent and so I would do pick ups, drop-offs,
00:22:57
Speaker
drive out to Mulgrave for a few hours, drive back to and pick up. Then I'd drive back out again at about 7.38 when my wife gets home, work through till like sometimes two, three o'clock in the morning, come back and then do it all over again. yeah that The first six months or so was a little bit crazy. yeah um but that's not an unusual thing to happen in in medical research that you do that crazy the hours so to me it was a little bit normal and ah and that that first six months we were really lucky we got we spoke to a number of brewers we spoke to um the the first brewer I ever spoke to was Simon Biz
00:23:37
Speaker
At down in Ocean Ridge. Yeah. Yeah. Yeah. Yeah. So we dropped out there and spoke to Simon. He's brilliant. He was great. yeah hims Well, you too. Yeah, they're a great team. Yeah, they make great beer. Were you just sending out cold emails out of that? Yeah, just give him a call. So a neighbor was, he'd come over. ah Over for a barbecue and he had a contact with Simon i got Simon he goes I should give Simon a call and so yeah I just called Simon Cole called in and you know, it's very generous of this time. Yeah, and he was great Yeah, yeah, cuz you'd assume you would have gone to a Melbourne brewery because I thought yeah, I know it's stupid, right? I the first brewer I speak to I drive down to to fill by lunch. Yeah and talk to him
00:24:20
Speaker
But yeah and yeah, I spoke to a number of brewers then around town. ah some Some of them, like I think ah Dan from Tallboy and Mooty was a second brewer I think I spoke to and and he goes, mate,
00:24:34
Speaker
You thought about your name? Because at that stage... I was about to say you have a name, no, no. Derek's Liquid Yeast.
Bluestone Yeast's Growth and Rebranding
00:24:41
Speaker
So when I registered the company in February, I mean not knowing anything, I came up with the name True Brew Yeast. So registered the company True Brew Yeast. Really crap name. You try and say that over the phone and people don't know what you're saying. Blue? True? Blue?
00:24:56
Speaker
it was it was a mess yeah and i'm very thankful for dan but you know he didn't didn't hold back and he told me exactly what he told which is really ah ah it's a valuable ah thing for something he's coming a similar route i guess you know that him and steve were both home brewers that stepped up into the game as well so maybe he's like he's one of mine. yeah I hope so. i i hope so yeah yeah um And so the innovation space I went to they had a marketer right right right there who just started and he was he's super talented his name's Patrick and he's paperclips studios. He went through and we workshop over a hundred different names wow and
00:25:37
Speaker
you know we wanted something that felt a little bit I guess edgy Melbourne and just came up with that blue stone used as the sort of I guess a homage to the laneways of Melbourne yeah um but also being a little bit more I guess modern and he's easier to digest for somebody who's not from Melbourne. Yeah and what what was what were the the first Australians you put out there and at that point was it just you producing. Yeah, so I was just ah producing test batches just in a 60-liter benchtop fermenter or propagator as I called it but it was really a fermenter that turned into a propagator. Yep, first couple of batches. I think the first batch we went to went to um up to Mulaney
00:26:29
Speaker
Bruja. Yeah, we gave them some kabai yeast. We gave them way too much kabai yeast. They were fermented in 80 seconds. Well, it went off like a rocket and it stalled out and at that stage I didn't really know that you could give too much yeast. That might have come up in your research, no? Yeah, you'd think if I was a better researcher. Maybe that's why I left research. Yeah, so we gave them way too much yeast but After that, we we we had ah Callum and Nat from Kaiju and Grom from Exit come out and visit us in really early stages. And when I look back at it, I go, my God, how did they back us? Because the way when we first spoke to you, they were, the I guess, the main ones that you were supplying at the time. right yeah So that was great to get someone that established and that successful to have confidence in you. Yeah, that but that that was a real, it really boosted our confidence when when they they ordered. and yeah ah the The first order we ever had was Carol from Jindebein. He just, yeah, ordered 12 liters of yeast thrown off the bat and it's like, you don't want it tested? yeah and He's a great guy. yeah You've gone for a very geographic spread here. Are you just posting on homebrew groups? was How people find out?
00:27:50
Speaker
that yeah so that that's a really good question i'm not sure exactly how they found out but so we we actually had um the bee healer chris reach out to us in our early days and he put us on a podcast and so a lot of home brewers got in contact with us and we weren't doing the home brew market at that stage and then we were just reaching out to a few brewers and then building those contacts and then they would tell others and because our setup was so small we couldn't actually brew or cultivate a lot of yeast. We were very limited in who we could supply and what we could supply. So it was very, it was a very organic and still is a very organic world trajectory. Yeah, I know how many of there are, how many of you are there now? Okay, so there's about six or seven of us. Yeah, if you include me, yeah, six, seven. I can get the words out for the questions. If you're confused over the answer, that's fine. So yeah, I've got a full-timer, a couple of paratimers, a couple of casuals, a lot of them have science backgrounds. So yeah, it's been a very
00:29:05
Speaker
ah Network oriented recruiting process yes i think that my very first employee use of his still with us he started as an intern just the the center was getting these interns i got three interns and he ah realized after about a week.
00:29:22
Speaker
I really didn't have the time for the interns. I got rid of them and kept using them and then he then after the internship and finished his studies he he then came part-time then he became full-time and yeah he's now our main production manager and then yeah I used my network of ah in science a friend of mine had a son who was doing uni who needed part-time jobs Sam and He came and worked with us. I said, oh, is his hands any good? This is very scientific. It's a science way of describing somebody in the lab. But if they've got good hands, it means that they can prepare and not make any mistakes. And so he said, yeah, because I knew that he'd been in the lab with his dad, like helping him out on weekends and stuff. So he was pretty good. And he's very good. And then Yusef's girlfriend is Korean. She did science and
00:30:15
Speaker
So she came and worked with us and then my mother-in-law has a friend who's also a scientist who's looking for jobs, so they came in. and yeah So that's kind of my recruitment strategy. yeah yeah it's working but It's kind of what you know and who you know. yeah yeah yeah Yeah, that's right. So just with the yeah Innovation Centre, so you've been there this whole time, I mean those early days you were supplying like a very small number of breweries, you've got a much larger customer base now, I imagine you've been heating capacity for a very long time. Yeah, that the that's true. We've been slowly taking over different offices and turning them into labs. When I was looking at the cement behind that yeah that, somebody looks away and we just go, oh what can can we just store some stuff in there for, you know, a couple of weeks? Just don't drink it. Yeah. yeah And then just sort of take it over. So we've been expanding it out and we've been wheeling
00:31:08
Speaker
fermenters in and out of our small 10 square meter lab that that's for production and just because that's what we have to do and yeah you do what you have to do because you've got order a lot of choice right so yeah and you're going from 10 square meters to 500 square meters that's right yeah so we can yeah so there's a lot of oh who's over there you know and the plan is that you be able to have customers in host events that that kind of thing yeah does do a new place that's the ultimate dream is to have customers in, do do events, ah you know start exploring what different yeast strains can do and have the brewers come in and taste beer that's been made with different strains and then have a quick chat about it. But mainly so that the brewers can actually get together and collaborate and and work on projects, hopefully using our yeast, but come together rather than you know a strict sales pitch.
00:32:00
Speaker
per se. And how would like say an event like that work? Obviously seeing in hops, people come in, they rub the hops between their hands, have a sniff, malt, you can have a chew, like yeast, you sort of pour it over you. Yeah, yeah, yeah. So yeah it's really good in the shower. that that's That's going to take a bit of coordination. so It has to be finished beers, I'm assuming. that they Yeah, so we would work with a couple of brewers to do some finished beers with particular strains of yeast, then have them and their peers to come in and taste it and then discuss it. Yeah, so that and mary might only be one or two brewers to begin with or might be three or might be some award-winning beers that brewers have brewed with our yeast and then get them to come in and talk to the brewers about their beer and about the yeast and do things like that. So that's that' kind of the concept.
00:32:50
Speaker
I'm more concerned about getting all the the tanks up and running, but yeah, yeah that's definitely. Down the line. Yeah, that's that's right. It's definitely the the the dream is to have that ah touch point with but our customers. For sure. Now, like we're going to take a quick break now. I'd love to come back in here, sort of what a typical day in the life is like for some producing yeast, hear a bit more about how you work with brewers and that kind of thing. We'll take a quick break and we'll be straight back.
00:33:18
Speaker
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Speaker
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00:34:49
Speaker
Welcome back to the Crafty part Podcast. Derek, we were just talking about award-winning beers and breweries that have used your beers and then gone on to win trophies. What's that like as a supplier? Like, is it very vicarious or you get a real buzz?
Bluestone's Success Stories and Collaborations
00:35:03
Speaker
Oh look, definitely we get a real buzz. yeah when when When our customers can ah do well and succeed, that's great. ah it It really I guess validates what we're doing. ah like Yes, we're we're a product replacement in the sense that, you know, liquid use has been flown in, now the brewer's able to get it locally. Yeah, that's nice. But when they can actually really achieve something like with the product, it's, look, if it feels great. um yeah The first one being,
00:35:31
Speaker
Ratenhund. That that was that never really put us on the map. That was it was your yeast in the first Ratenhund. Yeah right from the start because I can tell you now that when they first dropped off some cans of Ratenhund at Will's, I don't think we were having a work chatter only but I got a message from Will just going I've just had this beer dropped off and this is mind-blowing like it was into one can was just like blown away. So clearly you know obviously they're good brewers but something about that, you know, how they work with that yeast from the start. Yeah, definitely. I remember as Duncan called me up before Christmas and he he desperately wanted a particular yeast for for this lager he was doing and we we kind of spoke about it and decided it on the yeast. And then it was like hell for leather, just making sure that we got this batch of of yeast to them before Christmas. And yeah, it was it was a really um
00:36:27
Speaker
It was really gratifying to know that all that hard work we put in like before Christmas to to to get the yeast to them and all the work that Tim and Duncan did was then rewarded, um you know, three three, four months later at the awards. said It was really great. how close did you work with, obviously you had, you know, a yeast strain they wanted to use, yeah but did you give them any advice, Guy, I mean, this is how it's been used most successfully, or did they then give you feedback going, we pitched like this, and this is what you should tell other brewers to do, or they're like, we're not fucking telling you anything. No, no, brewers aren't like that, they're pretty generous. but yeah um do There's a bit of that, there's a bit of like, okay, this is what the the recommended pitch rate, this we really should should look at doing, and then they'd
00:37:10
Speaker
tell you, ah you know, how they did it and um not like down to the diesel, this is the mash temperature, this is the whatever, but like general terms that what they did and how long they sell it and things like that. But so it's that back and forth. And and also too, then when another brewer has used that yeast and maybe they've run into trouble, you can, they'll ring up and say, oh, look, it's not really, you know, finishing off for this you know for not for this reason well do you know a reason and we'll reach out then to our other brewers who have used that same yeast or that even that same batch of yeast and see what's going on. Have you had any problems? Did you have any issues? um Is there something our end? Is there something their end? They might go out look no but um you know we previously used that and we've mashed that say
00:37:59
Speaker
you know 62 and we should have be mashing at 66 or something like that and they've they've been tweaking it and so they they give you that feedback and then you can pass that on to the other brewers and obviously you don't, I mean we will sometimes connect the brewers but we'll ask the brewer hey are you happy for a brewer to contact you about this particular problem. yeah um and most brewers are yeah absolutely and yeah that they they know each other so not at all. Do you have that sort of back and forth with home brewers as well or is it mainly with you? No mainly with my retail partners ah so if there's a home brewer that has has an issue. Home brewers it's a little bit more challenging because you have
00:38:40
Speaker
big swings in ability and when set ups and like definitely we've had a number of issues especially in the early days with our homebrew packs as we're learning how to ship ship that yeast in that format and prevent it from you know because those packages are quite small they're sealed yeah there's no way for the yeast to breathe There's a lot of other challenges in the homebrew packs and actually there's no money in it at all. But it's definitely something we have to do for our community right because they are our future brewers. yeah yeah um And you're not homebrewing anymore. This is your sort of thing that's still in the pie. Yeah. yeah yeah and and And we're still learning all the time, and especially in that homebrew space. And we're still modifying what we're doing to improve the quality and get the quality out. And one of the reasons we didn't release our Belgian strains
00:39:33
Speaker
ah for the first year is because it was not lasting in pack. And we know that it wasn't lasting on pack for our competitors either. Yeah. Because we would do side by side testing. And if you want to do a six month study on how long the yeast lasts in pack or 12 months, obviously you have to put it in pack for 12 months and you have to wait 12 months before you know that what that modification you did worked. And if it didn't work, then what you do next? or that game so Yeah. So it it takes it takes a while to to improve a product like that.
00:40:05
Speaker
has Has any feedback ever surprised you and someone gone, oh, I tried this in this particular style and got this amazing result? Or as have people will generally been going, well, we know what this is supposed to be for, we'll stick to... yeah Yeah, definitely we get we get some great stories of, you know, somebody who's used a pack of our yeast, ah especially a home brewer, it was 12 months out of date and, you know, they did a starter and they came back to life and they did a great beer and they loved it. So, yeah, we we get stories like that the whole time and it's really you know, warm the heart. They hear that people are getting such enjoyment from the product. But back to what you're saying um about, do i how do I feel when a brewer gets an award or that? And it actually reminded me of very early on. It's not an award, but I remember going to our local pub, The Terminus, and going in with our family. Sorry, I get it. Sometimes get emotional about this because
00:41:02
Speaker
ah I remember my eldest daughter going, are any of those Arabs? And it was, you know, Kaiju's crush and metamorphosis was on tap. And it was like, you know, the yeah, they're Arabs, you know, as in like, you know, our yeast is yeah is in that product. So that was like something that really, um yeah, i' really hit home. Yeah. Yeah. How old was your daughter at the time?
00:41:30
Speaker
Oh, that was probably four years ago. She was about probably about 10. Yeah. Yeah. Yeah. So just but taking eye interest tonight and realizing yeah like but a goodbye but but taking an interest in putting two and two together yeah and realizing, yeah. Yeah. Oh, that's yeah that's great. when Because you could easily have it, oh, it's just dad's job. He goes off. Daddy's off in his lab doing whatever. Yeah, that's right. know yeah But actually to yeah put two and two together and realize what it is. Yeah, that's yeah right.
00:41:55
Speaker
Yes, so, I mean, it's different to the, I guess, joy and gratitude that we get when our customer wins the award, but probably more personal when, you know, has an impact on your family and they can actually be part of that journey that you're on as well. I don't know where the mic is going. Do we have to go to another brewery? Which started many many years ago. You mentioned competitors there now. Honestly my competitors sort of peers, what have you. There's obviously there's a small community of
00:42:27
Speaker
local yeast producers now in Australia, there's obviously Josh at Mogwai, Tommaso at Fervia yeast site. Do you sort of chat regularly about things? How how do you use, is there a yeah is there a community? Tom was at Brucon, we all met up and we we we said hello and I've spoken to Josh a couple of times um and I've rang him up when you know, especially um when I know that there was some you know unscrupulous practices being done by some of ah you know our customers and I just sort of get gave them a heads up that you know this this could be happening, just be tied on your payment terms and things. like um you know yeah I know they're competitors but I don't want them to be suffering because you know we all put our financial dollars into this and you know that we could be spending that money on our on a house or or kids or or whatever and and we don't want to somebody who's who's doing something a little bit underhanded um to to having other people suffer. And I imagine if you cut someone off yeah then they might go to the other local. f yes That's right. yeah And that's a very small pool. Yeah that's that's it. um Yeah so you know I've reached out like that and you know
00:43:44
Speaker
I've chatted to Josh and not so much Tommaso I mean I have I've chatted Tommaso and reached out to him But ah I don't know if he's still in the industry because I know he got a job um With the Department of Agriculture or something and so I'm not ah not sure what's going on there yeah And this is interesting. that I mean, I guess it's another example of how I guess the rise of craft beer has helped foster other industries, other sort of spinoffs, you know, chance for other people to follow their dreams. Your dream might have been to become a great home brewer now. You're just supplying home brews around the country. yeah But I guess it just shows, I think when people think of craft beer, it's like, oh, it's it's this liquid.
00:44:21
Speaker
there's breweries you can go to, there's events, but there's there's been all this sort of spin-off, you know, whether it's, you know, the the small molesters or whatever. um I mean, it's yeah within the world of yeast, is is there room are there room for more local yeast producers, do you think? because As the industry grows or, you know, how? I think you know what I'm saying. But honestly, there probably isn't even enough room for for one or two yeah local yeast producers, because it's actually really tight, especially with, because you're competing with obviously our overseas liquid yeast competitors and then local and then also dried yeast. and Although liquid and dried, they're actually very different products and you know there's some overlapping customer base but not not an awful lot.
00:45:05
Speaker
um But it's a bit like a craft brewery right like if you're they they have cost a solid customer base and if those that solid customer base is then dividing their dollar over fifty breweries you know at some point. They have to start cutting back those those customers and if they.
00:45:25
Speaker
just gave all their money to one brewery, the breweries got a better chance of surviving. It's the same in the East game, right? If your customers are spreading their that cash around different ones, then and you know in in a couple of years, they won't have different ones. They won't be different ones. They'll only be one or two overseas ones.
00:45:47
Speaker
yeah okay yeah i guess we just need you know the economy like for everyone in beer the economies turn around yeah people to be drinking beer people to be producing more beer yeah well well that's it um like We have the the the big end of town in beer, right? And the way that we we try and get the customer is to highlight the independence, the local nature, the the local product, and that comes back to yeast as well. And and it's never highlighted on ah on ah ah hardly ever highlighted on on the beer that you've got these breweries who are
00:46:23
Speaker
all talking about local and then some of them are buying all their ingredients from overseas and not supporting say the local mold store or the local hop farm or or the local yeast manufacturer. yeah they They can't have it both ways. um not There are also great advocates for local that only buy local ingredients wherever they can. And it's those guys that we should be really highlighting. Yeah. Yeah. And um and so I guess ah so I thought we'd do this sort of back to front. We talked about you what you're doing now, but sort of it in terms of the medical research, like what what were you doing there? Did it have any relation at all to what you're doing now? Like, you know, uh yeah no no not really so ah my my background is ah immunology and inflammation research so i i actually really love science i love that process of discovery it's the closest you can get to being an explorer right you get to discover something new that nobody else has discovered in the world and that's a real buzz mind you that that's something new might be completely
00:47:32
Speaker
insignificant and nobody really cares about but to you it's important. ah So my area was inflammation research, inflammatory bowel disease, proteins in the body that cause ah your inflamme your your immune cells to become inflamed and to attack itself basically is the research I did. Now I love it, I'd go back to it in a heartbeat if I was independently wealthy and didn't have to worry about money.
Derek's Career Shift and Innovation
00:47:56
Speaker
Yeah, okay. So it's a tougher game than being first in the country. Yeah, it is it is. It's a pretty tough game. yeah I think most jobs are are tough, really, I think. But that job, medical research
00:48:15
Speaker
You can be extraordinary and great. I'm not saying I was. And do great work and you on this grant cycle and then you're just not funded because the funding yeah is not there because you're relying on government funding. And we know how sort of precarious that yeah that is. It just disappears. And so, you know, 20, 30, 40 years ago, the the success rate on grants was something like 30% or 40% and it's been steadily going down and now it's below 10% 12 or 10% and which is just not a sustainable way where you have 100% of people 10 of them are going to get it funded in this cycle the next year another 10 quite commonly the ones that were funded the year before and so it gets to a point where
00:49:03
Speaker
people just have to leave the the industry. And that's kind of basically how I got to, it's like, do I go back on that grant round to get another job and in it in in a lab that is funded, but then in three years time or two years time, I'm back in the same position. And Sally was all about, well, go be a stay-home parent and let me go out yeah and and work on my career, which was, okay, yeah, let's do that. and But that's what you turned into creating your own business. steve That's right. yeah Yeah. In terms of um that, that science and exploring and things like that, do you still feel you're sort of doing that at Blue Stone or are you too busy running the business? so No, no. So actually that was one of the great things about
00:49:49
Speaker
Moving to the new site like we've already started a project where we can develop new product So I have now the headspace because we have a new side i'm not looking or or that I'm still trying to set it up, but I can develop new product and um Yeah, I'm always reading papers so that that's it's easier for me to read a paper. ah like So when I say a paper, I mean a scientific yeah journal article. Yeah, which would pepper most people's eyes. Yeah, but most people go to sleep, right? But I can, because I've done the 20 odd years of of reading them, I can just quickly look at it and go, oh, you pick out the bits of information you need. You don't have to, in a way, read the whole thing. You can ah get the bits you want. So I'm i'm doing that. I spent all this week looking at different papers for for new products.
00:50:37
Speaker
Yeah, so new variety, sort of breeding or what? Oh no, come on, that's super secret. I can't be giving you a scoop. though i Actually, products that that aren't going to be necessarily for the the beer sector will do adjacent products. And i even like um looking at, say, nutrient blends. So, yeah you know, products that will benefit brewers, but it's not necessarily yeast, it's nutrients. And then, okay, if nutrients get Broken down or inactivating the boil. How do we get them to the brewer when it's not in the bottle? Okay, so that needs to be filter sterilized go in the cold side Really really help the brewer on that side. So those sorts of things. Yeah, and in other Completely unrelated to to to beer as well so that so we need to diversify the product range Yeah, I get the impression just from listening to you and you know
00:51:32
Speaker
watching the Facebook and while you talk about certain things, you probably really, you know, probably don't just enjoy running the business, building successful business, working with brewers, seeing their beers go well, but actually really enjoy that side of things as well, like the development and, you know, the the the testing of new products and sort of the actual results and, you know, really getting into the analytical side of things. most I reckon there's a part of you that really enjoys that as well. So you're almost like the kid in the candy shop absolutely you're in the business. Yeah. Yeah, it's that problem solving. yeah right well you You see a problem. Like one of the simplest products that we developed was the the clean pitch system, which is to allow brewers to repitch their yeast in a really simple way where they don't have to worry about contamination. They don't have to worry about
00:52:17
Speaker
you know cleaning out some keg or anything like that so yeah we developed this it's stupidly simple right it's just a hose connection a sterilized collapsible container that will expand when when you put the yeast in and they can just cap it off put it in the cold room and that was that took a better part of a year and a half to two years. well ah But it was ah a problem we identified that like a lot of our customers, especially the smaller guys, couldn't re-pitch their yeast or didn't know how to re-pitch their yeast or were not confident in re-pitching their yeast and say, okay, how do we help them there? like well What can we do to to make their life easier? And that's where you know we we worked on this problem for you know in the background for well over a year yeah to then
00:53:04
Speaker
Get these parts manufactured get these parts in and gamma irradiated so that everything is sterile and then They can they can store the yeast in in with confidence basically. Yeah, and um'm Have you reached a point where I know with some of the smaller molesters someone could go to them and say hey I actually want you know 25 kilogram bag of manuka smoked corn or whatever you have some recipe you know can people come to you and say i want to be making this beer i need this down that was it got to be like a pretty mass interest for you to want to go down to develop a new strain i'm assuming it's probably more
00:53:40
Speaker
in the latter camp but I don't know sort of what level of granularity you can sort of offer to people. Yeah, so so um we can we can definitely biobank specific strains for brewers. So like um back to the awards question before where Nat is going to be about Nat and his lager yeast. If anyone in the industry has met Nat in the last six months or whatever, all he'll talk about is a lager yeast he's so excited about. That's right. Good reason. Yeah, good reason. He makes great deal with it. And that was ah that took a year. we He called me up and said, hey, I want to get this yeast in, but I'm having trouble. Can you help me? And so we worked with him to get this yeast in, buy our banquet for him.
00:54:22
Speaker
run it through our QC, step it up, then give it to him to test, and then do batches just for him. So we do do batches just for brewers. Getting a yeast strain in, biobanking it, you know, that that's okay. That doesn't take a lot of resources. It does take some, but it doesn't take a lot. Developing a new strain is is a lot lot more resources. And we did we have been looking at it, but we haven't had the space or facility to do it. So we've we've been speaking we spoke with both Melbourne Uni and La Trobe Uni about developing strains. And there's a lot of stuff that that when you're working with universities, but they want an unreasonable portion of what really is
00:55:07
Speaker
passion project. It may not be commercially successful, so that's something that we just have to negotiate with it for the unis. But then there's not a part, like if we want to do genetically altered yeast strains, we've got to go through GMO regulation and you've got to get everything has to be registered, it has to be cleared off with the OGTR, which is a government body that overlooks all genetic modified organisms in the country, which is totally fine, but it's paperwork. It's stuff that you have to do. So it's an investment in time. and you but it yeah but You've got a new facility to build in the first place. So that is something you can do in Australia if you had unlimited time and resources. Oh yes absolutely yeah, absolutely. It's a big sticking point for breweries at the moment. They they can't bring in yeast. They hear about like those from Omega and places like that. yeah but And look, we reached out to Omega and said, hey, can we just ah can you license it to us? Can we grow it here? Those GMOs for you here. And they weren't interested, which is fair enough. It's their product. and yeah you know
00:56:08
Speaker
that um they they want to concentrate. Yeah, HBI aren't exactly going to give someone overseas galaxy to grow. Yeah, yeah, yeah yeah same same same sort of thing. Yeah. Yeah. Now, I feel we could and talk forever, but at the same time, we probably need to wrap up but before, you know, the camera stops or something goes wrong. We hope we get everything, you know, under in hand technically so far. And we do like to finish with, I guess, variation on the three questions like past, present, future.
Advice for Industry Entrants
00:56:35
Speaker
So the first one, hopefully you've had time to give some thought to this, but um if you go back to you know the Derek Lacey of the late 2010s, so the one thing you wish you'd known then as you were launching into into Bluestone.
00:56:48
Speaker
um There's a whole lot I wish I had known there. But I guess the one thing was if to be more courageous. yeah When I was a bit too scared to know jump into a property and like in the end of 2019, there was some two two or three properties actually in Fairfield that were perfect. And I was too scared to to so jump in because we were too small at that stage.
00:57:17
Speaker
and in nothing for four or five years. So it was like, I should have had the courage yeah to do it and I should have backed myself back said more. yeah So that would have been but what one of the thousand things I would have really told myself. And what about sort of someone coming into the industry right now, whether or they're an entirely different kind of supplier or or or something like that. I mean, you'd say all sides of it.
00:57:41
Speaker
Yeah, I think you ain't gotta come in with your eyes wide open. you know that the The industry is doing it tough. I mean, it's i mean we we want to promote the industry and I do believe that the industry will we'll get through this stage, but you know it's cost of living. We all know it. It is tough. It's not impossible though. like It's tough, but everything's bloody tough, right? like but ah But if you you know put your mind to something, you can you can accomplish it.
00:58:09
Speaker
yeah Yeah, definitely. And looking ahead, you know if you had one wish for the beer industry in Australia or for the yeast industry, whatever it might be, what would that be? yeah The one thing you'd love to see for the for the industry? Well, obviously, I'd like the Australian government to legislate that they can only use Australian-grown yeast.
00:58:28
Speaker
um Look, I'd like to see um the wider community embrace what the craft brewers are doing in terms of supporting their local economy, they're supporting the local community, but they're making fantastic beer. And beer isn't just, you know, that that the one fizzy yellow drink that we, you know, when I was growing up, that that's what I thought it was. if they They could really have their eyes open to the variety and the flavor profiles that beer can bring to them. ah that would be yeah That would be great. And I think even going beyond beyond and understanding you know the network, the community that exists around your local brewery yeah you know and the connections that are there as well. I think that's kind of the direction that the and you know the industry story is starting to go a little bit more as well. And now that there is a wider community around it, um because I'm sure
00:59:19
Speaker
if someone heard your story who knew you or you know knew of you within the school community whatever it might be they'd be like oh that's fascinating it's like oh yeah if you've had this beer i've made that in my lab and people like people when people start connecting the dots and realize what a lovely sort of network is out there i think it is more than oh there's just too many beers in that fridge i can't cycle to have you know there is something a bit more ah okay this means something to me now so yeah Yeah. So I think we all take have a role to play in that sort of broader education of the community. And and it comes back to an education piece, right? Because it's not the public's, the broader public's fault that they don't know about it. It's kind of our fault that we haven't told them yet. Yeah. yeah
00:59:58
Speaker
Yeah Okay, okay fantastic well Derek, thanks you so much for joining us. Oh, thank you for inviting me. It's been great Yeah, best of luck with the the completion of the build and I'll i'll happily walk the 800 meters over to go and test some yeast in a few weeks time.
01:00:14
Speaker
deal yeah
01:00:19
Speaker
The Crafty Client Podcast is produced and edited by Matt Hoffman. You can get all your beer related news and reviews on the Crafty Client website, craftyclient.com and can stay up to date on future podcast episodes via our socials.
01:00:34
Speaker
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