For our 10th episode I chat to Black Hops co founder Dan Norris about their amazing story. We talk about how a beer at a pub with 3 mates can really turn into successful craft brewery.
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Full Text Transcript Below:
Lachlan McLean: Welcome everyone to another episode of The Inside Word. My name is Lachlan McLean from Beer Cartel, Australia's number one craft beer retailer.
Lachlan McLean: For our 10th episode, I chat to Black Hops co-founder, Dan Norris, about their amazing story. We talk about how a beer at a pub with three mates can really turn into a successful craft brewery.
Lachlan McLean: Welcome Dan, and thanks for joining me today.
Dan Norris: Thanks for having me. I'm looking forward to it.
Lachlan McLean: So you're just mentioned to me before that you were at the Black Hops II. What's going on today?
Dan Norris: Fair bit's going on today. Actually, we've got the local Member and I think press coming down to talk about this fire levy that we've just been hit with. So it's a bit of a unique day.
Lachlan McLean: Oh, yes. That was a Brisbane thing, is that a nation-wide thing, that was-
Dan Norris: It's Queensland, I'm pretty sure it's all of Queensland, but it's yeah, it's affected us pretty badly because they've sort of just gone and applied a $5,000 fee to your rates notice. Because we've got two breweries-
Lachlan McLean: And that was $500 before, wasn't it?
Dan Norris: Yeah, yeah. No, I think it was even less, like 200 and something.
Lachlan McLean: Big hike.
Dan Norris: Yeah. But because we've got two breweries and we've actually got five different leases. So for us, it means $25,000, which is just insane.
Lachlan McLean: Wow. So you've got the local Member coming down to kind of have a chat about it all?
Dan Norris: Yeah. The Queensland government have sort of said they're going to be supporting the craft beer industry and put out this strategy. So hopefully, they can see that they've kind of stuffed this one up and will help us out. But we'll see how we go.
Lachlan McLean: Yeah, the Queensland government's, I think, been definitely one of the forefront ones. They released the Queensland Craft Beer Initiative or?
Dan Norris: Strategy, yeah.
Lachlan McLean: Strategy, that was it. So they obviously, yeah, it's a bit of a strange one that they've kind of doing all that, yet then go ahead and do this to you.
Dan Norris: Yeah, I worked in government. It's a big organization. It's hard to... for one part to talk to the other, so it's not that uncommon. But hopefully, they'll sort of realize that they're hurting local producers by doing stuff like this.
Lachlan McLean: Yeah, absolutely. So today, we're here to talk about Black Hops. Talk about the story behind it. So I think to begin with, we might go all the way back to the start. So there's the three of you, yourselves, Eddie and Govs. Where did you guys all meet?
Dan Norris: I met Eddie years ago when I worked for the government, so I would have met him in 2002, when I started there. I only worked there for four years. But yeah, I've known him for years and been best mates for years.
Dan Norris: There was a period there when I was working for myself, we'd both moved down to the Gold Coast from Brisbane. Eddie was working behind the bar at Burleigh Brewing, just on Fridays when they'd do the... they used to do brewery bash every Friday and they'd do a big one every month. Govs was the brewer there, and he'd worked in other breweries and eventually left there and went to Fortitude and worked for a couple of other smaller ones as well.
Dan Norris: But yeah, we just kind of got into it as a hobby. I just liked trying the different beers. It was nothing more than that. And Eddie was working behind the bar, just for something fun to do while he still worked for the government. And yeah, Govs was full-time there as a brewer. They were real pioneers for craft beer, definitely on the Gold Coast and in Queensland. One of the pioneers of the current craft beer, hop-driven, craft beer movement. We were just getting into all those beers at the time, the pale ale, the 28 Pale and the FIGJAM and Black Giraffe-
Lachlan McLean: Yeah, I remember all those.
Dan Norris: ... and all these awesome beers that they were making. Yeah, so there was never any intention for us to do anything.
Dan Norris: But probably after a year or so, Eddie was just getting more and more into it. He'd go up to Brisbane and get new beers and bring them down for me to try. We were sitting... actually he had this idea, I think he saw it on the internet. 4 Pines were doing a competition to choose their beer style for their latest limited release. He had this idea for an eggnog stout. I don't really know how or why, but I think he just thought, "Stout's a yummy. Eggnog flavors are the sort of flavors that would work nicely in a stout of cinnamon, nutmeg, vanilla and brandy." So he suggested that to 4 Pines for their competition and he didn't win, but they sent him a carton of beer just for his troubles.
Dan Norris: Probably a few weeks after that, we were just sitting up at the pub in Mount Tamborine and me and Eddie just went up there to drink some beers. Govs was there. Eddie just mentioned this to Govs, and it just turned out, Govs... so Govs had been brewing professionally but he didn't come from a home brew background. So he'd actually only just got a home brew kit and he'd never used it. He'd pulled it together from a bunch of kegs and wired it up himself and whatnot. And so, he's like, "Oh, that sounds like a good idea. Why don't we have a crack at brewing it?"
Dan Norris: Two weeks later, we were back up the mountain, brewing this beer. Yeah, that's how it all started.
Lachlan McLean: That's eggnog stout.
Dan Norris: Yeah.
Lachlan McLean: So that was the first-ever beer that you guys brewed. I guess, commercially as well, but that seems a great way to start. It's not a pale ale or a lager, it's an eggnog stout.
Dan Norris: Well, at that point, there was no intention to sell it or anything like that. It was just like, "Oh, this'll be fun." And then after we brewed it, me and Eddie just had a habit of starting fake businesses, like when we worked for the government, we had... actually, I've got one the other day, I had a bottle that we made called Brown Sandwich, which is what we used to call beers. So we got this bottle made up and it was called [I Don't Add 00:06:09] Solutions, which is Eddie and Dan spelt backwards. It was super strange looking back at it.
Dan Norris: I think we were just bored working for the government. We had a coffee business selling coffee to co-workers for a dollar each, I Don't Add Coffee. So when we brewed this beer, I was just like, "Let's put some labels on it and make it look like a business." We were just messaging back and forth about these names. By the time we got around to actually tasting it, I'd done these labels, we'd come up with a name, I registered domain, we had an Instagram account, we'd written a blog post. We'd made this label and we actually used the bottles from 4 Pines that they gave Eddie for the competition.
Dan Norris: If you ever see our very first Instagram post, if you scroll back five years, you'll see is just that eggnog stout, the original label, which I did myself. I just Googled military fonts and it's that stumpy-looking 500 ml 4 Pines bottle.
Lachlan McLean: Yeah, yeah, the Kolsch beer kind of bottles?
Dan Norris: Yeah, once we put it into bottles, we kind of sent it out to a few people and they were like, "Man, this is good. What else is Black Hops bringing out?" They were talking about us like we were actually a legit company. So that kind of started the whole thing.
Lachlan McLean: That sounds awesome. I know that on your website, you talk about the whole story. I think you actually were even brave enough to send some of those bottles to some actual reviewers and some bloggers.
Dan Norris: Yeah. I look back at some of this stuff that's happened to get Black Hops to where it is now and you couldn't make it up. That's what I love about what our brand is. It's really genuine and organic. Some of this shit that happened, you just wouldn't make it up.
Dan Norris: For example, we sent a bottle of the original Black Hops to a blogger called Darren, who now works at Newstead, and he had a blog called 250 Beers. He was just reviewing different beers and we were always watching it to see what beers are coming out. It's like, "It'd be cool to have him drink the beer." He wrote a post and just said, he said, "The beer's great." Like he was nervous about it, because he knew Eddie. "The beer tastes great, there's a lot of expectation around this Black Hops brand." So he was the guy to write the article.
Dan Norris: Then probably skipping ahead about 18 months after that, there was a guy who bought a building on the Gold Coast and thought, "It'd be cool to have a brewery in that building." So he contacted a bunch of bloggers in the beer industry and said, "Oh, do you know anyone opening a brewery?" And one of the bloggers he contacted was Darren from 250 Beers, who put him onto us. That is the site of the original Black Hops HQ brewery.
Lachlan McLean: Oh wow. So it all came through from that original beer you sent to 250 Beers?
Dan Norris: Yeah, yep.
Lachlan McLean: That's incredible.
Dan Norris: There's other stuff like that. There's three or four things like that that happened, that I was just like, "Wow. How did that even happen?"
Lachlan McLean: I think there's a couple on my list as we'll go through these. So you brewed this first beer of eggnog stout. It went really well. So you decided to take it a bit further and started gypsy brewing?
Dan Norris: Yeah. So that was August 2014 and we did what was essentially home brew in the bottle. Then we thought, "Okay, well, people think we're bringing out this beer. So why don't we find somewhere to brew it and then just put..." I think we put in $1,000 each or something to start. We registered the business name. We found a place to brew it. It was at Beard and Brau, which is a brewery up in Mount Tamborine, which is at Chris' house.
Dan Norris: By November, we had a launch of the company at a bar called Hoo Ha Bar in South Brisbane, which is no longer there. We had 100 people turn up. We drained the keg in two hours and it was just like, "Hey, we've got a beer brand."
Lachlan McLean: So we'll keep going with it.
Dan Norris: Yeah. And the reception was really good. So that was the eggnog stout. That was in the middle of summer. Again, it wasn't a very sensible beer to bring out, but it was just another kind of cool thing. It was just different.
Dan Norris: Turns out, eventually, we didn't bring a pale out, pale ale out until 18 months ago. That ended up really turning our business around. It was like the least exciting style you could think of. To launch the business, it was really helpful to have just something interesting, I think, and just have a talking point. It wasn't intentional. It was just like, "This is the only beer we thought of making."
Lachlan McLean: Yeah, I was going to say, yeah, it's really interesting. I'm from Brisbane and I remember when all these were coming out. There wasn't much like it, really back even in 2014, 2015. The craft beer industry was not the size it was, at least today, but it was still, it was certainly growing, but it was such a unique beer. So even nowadays, eggnog stout, I can't really think of any other style that's kind of comes close to it.
Dan Norris: Yeah, it was an interesting idea and just worked well. It was just nice flavors. Actually, I was looking at, the other day, we had a whiteboard at Govs' house and we had our first three beers up there. The eggnog stout was done and we started experimenting with all these other ones. Two of the three were what we'd written down as farmhouse pale ale, which ended up becoming our beer, Beach House. And the other one was Code Red, which is a red IPA.
Lachlan McLean: Yeah, I think we just had some in in the last six months.
Dan Norris: Yeah. That one, I was listening to the Dainton episode on your podcast. It was his red beer that inspired us to do a red beer, because that was one of the beers we drunk on the way, this is really cool.
Lachlan McLean: The Dainton Red Eye Rye, I think it is?
Dan Norris: That's the one, yeah.
Lachlan McLean: Yeah. That's awesome.
Dan Norris: Those beers ended up becoming, like Beach House ended up winning Champion Saison at the AIBAs last year and Code Red won Champion Queensland IPA this year at the Queensland Beer Awards, which is just crazy, to think that they were two of the first three home brews we did.
Lachlan McLean: And they're so interesting styles. There's none of this, "Oh, we'll start with a pale ale." Or, "We'll start with a session ale or a lager." We'll jump right into it and I think that really got the brand going and got people to pay attention.
Dan Norris: It did, but it actually ended up being a big problem for us, because after probably about a year or so of running the brewery, we realized that we didn't have any of these beers that people wanted. Our main flagship beer was Beach House and it was a style that no one really knew what it was. Our idea was this could be our Pacific Ale, it could be a new style, like a fruity-hopped, modern-hopped Saison. It is, it's a great beer, it's gone really well for us, but as far as big sellers go, it just wasn't a big seller. You had to explain to people what it was.
Dan Norris: It wasn't until we brought out a core range of just good, solid beers that are the sort of beers we drink all the time, that the company really took off. Before then, we were really struggling.
Lachlan McLean: I guess, you were talking about these beers that got people interested and put you on the map. I think it was start of 2016, was it 2015? There was a really big international publicity, not stunt, but publicity thing that happened to Black Hops? What was it?
Dan Norris: Yeah. Yeah. It was 2015. This is another one of those stories that I only just found out two weeks ago how this came about, actually. Because from our point of view, we just got an email from Activision, actually wasn't from Activision. It was from the agency that they work with, the marketing agency. And they said, "Oh, we're thinking of doing a beer for the new Call of Duty game." They said it was Black Ops II, I think, when they sent the email.
Dan Norris: Eddie plays Call of Duty, so he knows the games. He was like, "I'm pretty sure this is spam. Black Ops II's actually already out. So it's probably spam." I remember looking at the email, I'm like, "It doesn't look like spam." I've seen a lot of spam, I used to be in the email marketing game. Yeah, I was like, "Doesn't look like spam, but we may as well just ring them up and see what it is."
Dan Norris: And it just turned out to be a typo in the email. It was legit. The company was looking for a brewery to brew the official Call of Duty beer for the beer release. We said, "Yes." We didn't have a brewery at the time, we were just in the mode of just saying, "Yes," and figuring it out later, to be honest. Which we've been in ever since.
Lachlan McLean: When Activision come, I don't think you say, "No."
Dan Norris: No. It was pretty cool. It was pretty cool. We knew we had this crowdfunding coming in and we were going to have to raise money to build a brewery, so it was like we can use some of this marketing as a way to get more attention to the brand and hopefully get some interest in what we're doing.
Dan Norris: I only just found out a couple of weeks ago, I was down at Harts Pub and talking to Mark, the owner there. He's got a marketing background and they actually reached out to him first, because he had Rocks Brewing at the time and said, "Oh, we're thinking of doing this." And he said, "You should talk to Black Hops because it's a company that's called Black Hops." Yeah, I only found that out two weeks ago, which is crazy.
Lachlan McLean: So Mark Fethers gave you the Black Ops, that's fantastic.
Dan Norris: Yeah. So that was cool.
Dan Norris: So what we ended up doing was we brewed a midnight Pale Ale. It was just a black pale ale, which is pretty cool. It was in black bottles. They did the design and they did an awesome production video behind it and got us on Channel Nine News and all this kind of stuff. We flew down to BrewPack to brew it and do a big photoshoot. It was really cool.
Dan Norris: The beer was bloody delicious, too. It's a craft beer drinker's beer. It's a black pale ale, so it's not an easy drink and not a safe option, but it was yum. Hopefully people don't see it as a stunt, because we were like, "We can just brew a really good beer and get some free marketing." Which is basically what everyone in this industry does, is tries to brew good beer and tries to market what they're doing so people can drink it. So from our point of view, it was a good opportunity to do both.
Lachlan McLean: Yeah, absolutely. Do you know from Activision themselves, do they do a beer every time they do a game, or is this the first time?
Dan Norris: No. This was the first one. First one in the world.
Lachlan McLean: Wow. So is there any reason they came to Australia? Or is it just that they had kind of seen the name?
Dan Norris: No. I think it was just the agency were just brainstorming ideas for ways to promote the game release. The Australian agency came up with the idea of doing a beer and everyone liked it. They've got a lot of legals to get through with that kind of stuff, so there was a few hoops to jump through. Yeah, but for whatever reason, the Australian guys liked it and they were the one that ran with it.
Dan Norris: We didn't really send it overseas. I think they gave some cases out to influencers and whatnot. I think Guy Sebastian got a case, which was pretty cool. He was pretty big at the time. I guess he still is.
Dan Norris: But yeah, it was a cool experience.
Lachlan McLean: Yeah, I think that's a great way just to get your brand out there and it's certainly unique as well. I think a lot of the things you guys do at Black Hops is certainly unique.
Lachlan McLean: I guess that's a good segue into, you mentioned crowdfunding. I know a lot of people listening to this would know that you've just done a crowdfunding, but they probably don't realize is that you did the very first brewery fundraiser or crowdfunding three years ago.
Dan Norris: Yeah, that was, yeah, 2015 or just the very start of '16, I think, just before we launched the brewery. So we did it just after the Activision. We sort of used some of that momentum to put into the crowdfunding.
Dan Norris: We were just trying to scrape together anything we could to start this brewery. So we raised $18,000, which we used in the build and helped enormously to get the doors open. I think breweries maybe had done them before but not to launch a brewery. So we were sort of the first to do that.
Dan Norris: Ultimately, ended up being the first to raise via equity crowdfunding as well.
Lachlan McLean: As far as I... well, not know, but the whole crowdfunding thing's obviously been in the spotlight very recently. Was there some legislation that changed? Did you guys have to do anything different back then to do the whole crowdfunding?
Dan Norris: There's two different types of crowdfunding. So reward-based crowdfunding, which is, it's basically like pre-selling. It's like we're launching this thing, if you give us a hundred bucks, we'll give you a carton of beer, when we have it ready. That's been legal. That's never been a problem.
Dan Norris: But it's the equity crowdfunding that the laws have changed. I've been wanting to do it for ages. There's been talking about this in articles and podcasts for years. We were just waiting around for the legislation to come into Australia, which it did at the end of last year.
Lachlan McLean: So you said that that was a reward-based crowdfunding. What was the reward? What did people get out of it?
Dan Norris: We had things like T-shirts. We used it to buy our first bottling machine. We actually had bottles before cans, so we had our Beach House went into bottles and we had a carton of beer as the reward. T-shirts, we had a shirt which said, "Black Hops OG," on the front. We still see those shirts in the taproom now. People will rock up wearing these shirts. I've still got one, mine looks pretty old. But you see some people rock up and they look brand new. I'm like, "How did you do that?" but yeah, that kind of stuff.
Dan Norris: Oh, and the book as well. I wrote a book at some point in there as well and we had the book as a reward in the crowdfunding too.
Lachlan McLean: What was the book all about?
Dan Norris: It was called Operation Brewery, so same name as our podcast. It was just everything that had led to building and opening the brewery.
Lachlan McLean: Yeah, right. I'm going to touch on that in a bit down the track, but I wanted to jump in because you've mentioned pale ale and that. The business really didn't take off until you went to cans and you got your core range. Was that done out of necessity or what was the reasons? One you went to cans, and two, the Pale Ale?
Dan Norris: Well, we were always going to go to cans, we just couldn't afford a canning machine. So we had to wait around for a company to offer mobile canning. As soon as they did, we jumped into cans straightaway.
Dan Norris: Yeah, it was a process going to pale. So when we did that pale ale, it was our first pale ale, basically. We'd done another one called Bitter Fun, which was a real hoppy, bitter pale ale. It was basically our first pale ale. It ended up being a double-batch, brewed our first beer into cans and our first beer with this mobile canning company. All of it went into cans. That was a critical turning point. If that went badly, Black Hops would not be here right now.
Dan Norris: It just came about because the first time I remember thinking about it was when the Hottest 100 came out. It was the second year we'd had beer in the market. We'd done all this, the crowdfunding and the Call of Duty stuff. The beers were getting a good amount of love. People like the beers. So we knew the beers were good.
Dan Norris: But Beach House was the one we were pushing. It was our flagship beer. I listen to the Hottest 100, I listen to every single one, all the way up to 100, and we weren't in there at all. I was just like, "How can we not even be in there?" We weren't selling a lot of beer. It was only very, very much local, but we had a good local support and I just thought, for something like that, I know it's just a popularity contest, but I just felt like if we were as relevant as we should have been as a brand, we should have been in that list.
Dan Norris: I was having a beer with a mate of mine the next day at a bar around the corner and they had Beach House on tap and they had I think Pacific Ale or something. I think it was Pacific Ale. He was like, "Oh, you guys should do a beer like this." I'm like, "He's right." We're a craft beer brewery that doesn't have a pale ale and that's the kind of beer I drink all the time. If I go into the bottle shop, I would get pale ale.
Dan Norris: I was drinking, I'm trying to think what ones I would have been drinking at the moment. I don't know if [Hando's 00:22:49] beers would have still been out? I used to drink his Hops Own a lot. Yeah and just beers like that. Just like hoppy pale. Just tasty pale ales. I drink them all the time. I think Balter would have had theirs out.
Lachlan McLean: Yep, Pirate Life.
Dan Norris: Yeah, we were drinking heaps of Pirate Life beers. That was when Pirate Life were just firing. Oh, Hop Hog. All those sort of beers. Pack Ale. All of those ones. They were the beers, my favorite beers and they still are. They're the beers I drink a lot.
Dan Norris: And we didn't have one. We didn't even have a standard IPA. We were doing a quarterly IPA seasonal release. I was like, "You're right. We need the sort of beers that we like drinking."
Dan Norris: So yeah, literally, we went into work the next day and I brought it up at the meeting and I'm like, "We need to do a really, really, really good pale ale." The guys agreed. It was around about the time we were looking at the mobile canning. So we thought, "Let's do this properly. Let's completely redesign the package and we'll put it as the first beer into cans and we'll brew the best pale ale that we can."
Dan Norris: Burleigh was the other one we were drinking. Probably not so much then, it was a few years before. But that was one of the ones that really got me into Little Creatures and Burleigh Pale Ale were the two that were like, "Oh, this is amazing, like American hop. Just fruity and delicious."
Dan Norris: So yeah, so we put the pale ale out and the cans looked really sick and we were one of the first to do the sort of labeled cans. Modus were before us, but now it's just like super common. But for us, it just worked so perfectly well to be able to have a really sick-looking can but with a label that we could change each time. So we could put three or four beers out without having loads and loads of cans and loads of designs. That just hit. As soon as that got into stores, that was the one that that was the turning point. And that's been our number-one selling beer ever since. It's gone on to do amazing things for us.
Lachlan McLean: You mentioned the pale ale and the whole style. That was the beer that you were drinking and all that sort of stuff. But back in, what's that? Late 2016, I'm guessing? Early 2017.
Dan Norris: It was 2017, I think. Maybe it was even 20-
Lachlan McLean: Yeah.
Dan Norris: 2017, I think.
Lachlan McLean: Cans were big back then, but they didn't have the industry dominance that we see today. Was there any reason why you chose cans?
Dan Norris: Oh yeah. We were always going to go cans. For the, I guess, the craft beer nerds and I'm including myself in that category, I'm not disparaging anyone else, cans were the only option. We could see that coming. We love cans and it was just a matter of being able to afford a canning machine, which we couldn't.
Dan Norris: So, I'm just trying to think what was happening at the time. Balter had theirs out, so they... Balter started a few months before we did in 2016. I think they were into cans straightaway. So they'd had theirs out. We were drinking quite a few cans. I'm trying to think who else had cans out.
Lachlan McLean: Would have been Pirate Life, that's a big one [crosstalk 00:26:10].
Dan Norris: Pirate Life of course, Pirate Life of course. All of their stuff was in cans. We certainly weren't one of the first. There was plenty.
Lachlan McLean: Yeah, so you had... I guess, could see what's working before you get to make that decision. Definitely cans... we were always staggered to the hold that cans had taken on. I know we posted on our socials, I think it was only yesterday, a photo of our little store and the shelves on that from, I think 2013, and not one can in sight. All bottles.
Lachlan McLean: If you go down there right now, I don't think outside of some of the bigger stouts, Farm House, there's pretty much no bottles cold.
Dan Norris: Yeah. I've just been to America, too. It was just a fluke. I'd been over there right when Black Hops started, to sell my other business, and just sort of saw what was happening over there. We were kind of inspired. Me and the two guys ended up going later on. But I'd been over by myself at the start and just inspired by what was going over there. So it was probably driven by that too.
Dan Norris: But yeah, it was big for us because while we did have beer in bottles, we weren't wholesaling any of it. It was like a four-head manual bottling line, guys would come in. We'd do five cartons in a day and sell them at the taproom. It wasn't a meaningful part of the business.
Dan Norris: But as soon as we put the cans. I think we were in one bottle shop before we put the cans out. You can see in our history, financial history, our business just goes nuts as soon as we'd put the beer into cans. And it was the right beer at the right time and the design was well-received and all of that stuff. It was just the perfect storm. It came at such a critical time, was going into winter. We were running out of money. It was a big turning point.
Lachlan McLean: So you did the Pale Ale, the first core range beer. You've now got a core range of four or five beers?
Dan Norris: We've actually got six now. It's a little tricky though because we've got some customers that want certain beers, so we've got some customers that are regularly getting Pink Mist and Eggnog Stout, which are not technically part of our core range. But we do put them in cans.
Dan Norris: But our core ranges, we've got mid-range, our mid-strength, Send It, a session ale. Lay Day, our lager. Pale Ale. Hornet, our IPA and Super Hornet, our double IPA.
Lachlan McLean: Yeah, I know from us that since we've been able to get them down here, they've just been going absolutely gangbusters whenever we get them in. On top of the core range, you've got a highly, what's the word? Agile, ever-changing, limited-release program?
Dan Norris: Yeah. We're lucky enough to have... ever since we started, we had a backup pilot brewery, so it was originally the thing that Govs threw together with his kegs. And then it was a brew-in-the-bag system that our friend [Mood 00:28:54] put together this brew-in-the-bag setup for us, which was our pilot brewery for a little while. Then we eventually brought one from [inaudible 00:29:01], now we have two breweries, two sites which have two breweries at each site, so we've got the main brewhouse and the pilot brewery at each site. So we're just cranking out limited releases. And we can can them as well, because we've got a canning machine at each site now.
Lachlan McLean: If you're looking for any of the Black Hops beers, new releases or an old favorite, be sure to check out the Beer Cartel website at www.beercartel.com.au.
Lachlan McLean: So yeah, you've mentioned that you've got two breweries, which we'll get onto, but you've got a pilot batch at one, both of them sorry. And you've got a production at both of them. Does that just give you that agileness? Why do you do that?
Dan Norris: Yeah. We have two taprooms, too. So the pilot breweries are basically just brewing beer for the taprooms and we've just brewed our hundredth beer which... and every week, you go to the Black Hops taproom, there'll be different beers on tap. We brewed 52 last year, so we brewed one beer week, just with one brewery.
Dan Norris: We'll do events, like we did a IPA day on the weekend and we had 10 different IPAs on tap. We did a tap blackout a few weeks before in winter and we had 14 different black beers on tap. So we can do stuff like that. And we can also put them into cans. So we can brew on that pilot system. We've designed the cans so we can print them in-house for just the limited release cans that we sell only at the taproom.
Dan Norris: It's always been what Black Hops does, is just brew lots and lots of different beers. Some of them end up being released far and wide, but for the most part, they're just brewed on a tiny scale and sold at the taproom here.
Lachlan McLean: I know that in our research and our craft beer survey, we're talking about the core range, has the current trends of all these limited releases and people always wanting new, I think in our research, one in two beers that people buy will always be something new. Have you found, is that hard to deal with?
Dan Norris: Isn't that the whole beauty of what we do? I listen to podcasts talking about this and complaining that everyone's always wanting something new and you hear it in the Facebook groups. To me, it's kind of the beauty of this whole thing. It's just innovating on new ideas and it's the whole reason we're here.
Dan Norris: So yeah, I'm not going to complain about that. There's a lot of things that are challenging. Obviously, from a business point of view, you'd rather sell a million liters of pale ale and nothing else, because it'd be a hell of a lot easier. But if you did that, you're just going to be one of the big brewers and you're not really all that relevant. So I think it's awesome.
Dan Norris: Our staff love all these beers we have coming out. The brewers love making different beers. We do a staff beer for people who'd been here for a year, so the staff get to write their own recipe and get their own fully-branded design and brew their own beer. That's the beauty of what we do.
Dan Norris: So yeah, it's certainly challenging, but you wouldn't have it any other way.
Lachlan McLean: I know for myself, it's what kind of keeps you interested. It's always ever-changing and it never gets stale. You come into work and I think, oh god, we're averaging 30 to 40 new beers a week at the moment. So what's that? Over 2,000 new beers a year, getting close to. It's just always different. It's never the same. It kind of just keeps you engaged.
Dan Norris: Yeah and also you've got to remember a lot of the conversations in the Facebook groups and whatnot, are all about these new individual crazy beers. But for the vast majority of people, they're drinking lagers and pale ales, and maybe IPAs. That's where all the bulk of the beer is.
Dan Norris: So it's a good fun thing to talk about and it's always cool to see the latest NEIPA and whatnot, but that's really right at the pointy end of what we do. For the most part, people are drinking lagers and pale ales and IPAs. For us, our monthly limited normally goes pretty well, but we still sell more pale ale than we do our monthly limited. We could brew more of the monthly limited, but we probably wouldn't be able to sell it, because people might buy a single can or they might buy a four-pack if it's a particularly good one, but people are buying whole cartons of pale ale and lagers and IPAs.
Lachlan McLean: Yeah, I think we forget that even though the rate that the craft beer sector is growing, it still is only a five, six percent share of the beer market in Australia. So there's still so much growth that can happen in the industry, which is exciting.
Dan Norris: That's right. That five percent, how much of that is taken up by Pacific Ale and Balter XPA and-
Lachlan McLean: Absolutely.
Dan Norris: ... these specific beers that are probably just selling shitloads. The limited one-offs, Hazys and the crazy imperial stouts and whatnot, get a lot of the attention, but they're probably just an absolute minuscule percentage of what gets consumed.
Lachlan McLean: It's almost five percent on the five percent, I'd say.
Dan Norris: Yep, yep.
Lachlan McLean: So yeah, which is exciting, I guess, for the craft beer community because there's such a potential for growth. It has been growing at such a rate. But it still is so small, which is super exciting to see.
Lachlan McLean: I know I've been in the industry six, seven years. The growth that we've seen has just been incredible. To see where it's going is even more exciting.
Dan Norris: Yeah, it's amazing. The last few years have been insane. Our timing to open a brewery... at the time was sort of like, "Oh yeah, there's not that many breweries on the Gold Coast. We think there's room for another one." You know what I mean?
Dan Norris: But in hindsight, the timing of when we and Balter opened on the Gold Coast, is just absolutely perfect. It's pure luck, at least from my point of view, was pure luck.
Lachlan McLean: Absolutely. It was just a perfect storm.
Dan Norris: Yeah. What's happened since is just staggering. Back then, there was really one brewery. There was Burleigh Brewing. And even Brisbane, Brisbane's gone mental with craft beer. I was in Brisbane at the time. Black Hops launched in Brisbane.
Lachlan McLean: I remember, I know Hoo Ha Bar.
Dan Norris: Yeah. That was a bar with... it was one of the best craft beer bars and they only had four taps, I think. There was only a few. There was Scratch, Scratch were there very early. There was Archive.
Lachlan McLean: Yeah, The Scratch is where I got into craft beer back in 2011, I think it happened.
Dan Norris: Same, yeah, same.
Lachlan McLean: I remember back then from when I used to work at a bottle shop in Brisbane and the only Brisbane breweries we could get were really Green Beacon and Newstead and Fortitude.
Dan Norris: Yeah, and when they opened, like Green Beacon, I went to the Newstead opening. It wasn't that long ago. There was nothing there. There was Green Beacon, now there's way more breweries just in that part of the city, than there were bars that served craft beers at the time. And that's only four or five years ago.
Lachlan McLean: Yeah, it's absolutely growing incredibly fast. On that kind of growth, you talked about you opened the brewery, your Black Hops I, but I think it's only in the last year you've opened a second brewery?
Dan Norris: Yep, we opened in March this year. So the original one I talked about, the location in Burleigh was just awesome. We're actually very close to opening near Balter in Currumbin. We were looking around for industrial land and you just couldn't get it anywhere. There was a little pocket of industrial, semi-industrial space in the northern end of Burleigh. This came up and that was just epic. It was such a good location.
Dan Norris: But it's semi-industrial. There's literally houses across the road from us. It's not a place to build a huge brewery. It was always going to be, if things went to plan, we were always going to outgrow the place. But we knew it was always going to be a great location for a brewery. It's as good as you can get for a location for a brewery.
Dan Norris: Actually, not as good as you can get. The other one's probably better. Little Creatures probably better. But it's pretty good. Pretty good.
Dan Norris: So then it was, "Okay, do we..." so we were always going to open another brewery if things went well. And we started thinking about it halfway through last year and we were looking at again, potentially Currumbin which obviously, by that time, Balter had blown up and it just wouldn't have made sense for us to go down to Currumbin. Burleigh Industrial was the other option, but that's where Burleigh Brewing are. So I was kind of driving around there thinking, "It's close, but it would mean two breweries in Burleigh." Burleigh Brewing are already here. It would be kind of weird for us to open next door in this industrial estate.
Dan Norris: But there's just not much industrial land on the Gold Coast. So we're looking around, the north end was always appealing, but again, there wasn't a lot of places available that looked good.
Dan Norris: We found this shed, it was actually one of the first ones I looked at in this area. It turned out to be the original Riviera Boat Building Company sheds. It was just used for dodgy storage of some sort. It's just been sitting here basically vacant.
Dan Norris: I just walked in here and I was just like, "This looks like a brewery." It had a perfect 150-square-meter space for a taproom and I could just see instantly exactly how that was going to look. And then, to the right of that, there's a big, big, 1000-square-meter big open shed with absolutely nothing in it, seven, eight-meter ceilings. There was a mezzanine office upstairs. There was a shed next door with even higher ceilings. So we could expand into that. It was just like, "This is perfect." But it was so much bigger than the current one.
Dan Norris: We had no money. Equity crowdfunding wasn't legal. We'd never had any assistance from the bank. We'd recently raised money from investors for expanding Black Hops, so it was like, "How the hell are we going to do this?" We knew it was going to cost $3 million, too.
Dan Norris: Anyway, we somehow did it. Again, it's just another one of those freaky things. I look back and just think, "I don't even know how we did." But yeah, we opened it up in March this year. Took us, I think, seven months. The brewery's massive compared to the original one. The taproom's really nice. We designed all that ourself and worked with our builder to build that for us and it's just like a big step-up from HQ.
Lachlan McLean: Now, you're able to provide beer to the demand.
Dan Norris: Yeah, we've got a lot of room to grow into now. So before, it was more like, "We'd better not sign up any big customers because we're not going to be able to re-supply them, especially in summer." So summer last year was looking like, "Man, we're going to be close to running out of capacity." And we were close, because we didn't get the new brewery open until March.
Dan Norris: By that point, the seasonality was starting to affect it. But yeah, the volume we're doing now, we wouldn't be able to do at the original site. Now's the middle of winter, so summer, it's going to be our first summer where we can brew literally as much beer as we want to, as we can sell, just about.
Lachlan McLean: That's so exciting. I guess, you've been touching on it throughout this podcast. I want to have a chat about it. That's you're always open in telling the stories and go on social media and you can find anything that's about the business.
Lachlan McLean: The first one that I kind of was looking into was when you were doing the original investment back in 2015, I think it was, and you mentioned your podcast. It was how open you were about the investment. To the point where I think you were even released some of the investment calls?
Dan Norris: Yeah. Yeah, that was our first episode was me ringing Simpo, who was our first investor and just trying to figure out if he wanted to invest in Black Hops. So yeah, it was a fun way to go about it.
Dan Norris: To be honest, that's why I like the crowdfunding thing, because it's not... that transparency doesn't really exist with traditional fundraising. I had no idea how these breweries actually got built. We were like, "How are we going to build a brewery? It's going to cost us $400,000." This is the first one. It was like, "Well, we sign a lease and then we figure out how to get $400,000." That's what we did.
Lachlan McLean: Throughout the entire, what is it, four years now? Five years now? Of Black Hops. You've always released how you do things... I remember one blog post that I read was about how you get to your pricing and the craft beer pricing. But right down to the detail of, this is how much we pay our designer. This is the label prices. All this. Why do you do that?
Dan Norris: It's just for me, it's really the only sort of marketing I've ever really been able to do. It's a sort of marketing that I think is great because it's helping out other people in the industry.
Dan Norris: I know there's lots of breweries that have opened up after reading our book or listening to our podcast or reading some of our content and I know it's helped them. That's good. Normal marketing doesn't do that. Normal marketing is just purely self-serving and doesn't help anyone.
Dan Norris: So to me, this content marketing is just something I did before Black Hops. It was how I marketed my business before, because again, I just didn't really know how to do anything else.
Dan Norris: I tried to do paid ads and Yellow Pages back in the day and I just couldn't make anything else work. So once I started this content thing, it just felt really natural. It just felt like a really good way to tell your story but also help other people out at the same time. It's pretty cheap and easy. So it's just the way we always did it.
Dan Norris: I just always liked the idea of doing it in the beer world, because it just wasn't really the done thing. It felt like at the time, there was just a lot of secrecy. It's not really like that anymore, I don't think. There's a lot of transparency now, which is cool, but I felt like at the time, this transparency thing was happening to other industries. I was in online marketing and it was happening there, but it wasn't really happening in beer. It was quite secretive.
Dan Norris: So I thought doing it in beer would be a really cool... rather than doing it in the online marketing world, which is just full of noise and you're up against everyone else doing the same thing, doing it in an industry where it's quite new and different, I thought would go quite well. It's turned out to be a bit of a unique thing about what we do.
Lachlan McLean: I know that's one of very similar philosophy for us for the craft beer survey. Why we wade, why we do all that, give all the information back to the breweries, so it's a very similar sort of philosophy.
Dan Norris: Yeah, I was listening to the episode with Richard. It's awesome. I love that stuff. I've been reading that survey since you guys brought it out and it's super beneficial to people in the industry. It's really good content. It's not just the same stories. It produces something new. It creates debate.
Dan Norris: To me, that's an awesome way to do marketing. If you can do the sort of marketing that's going to help your brand and also help other people and also create some fun content and stuff for people to talk about, then that's cool.
Lachlan McLean: Absolutely. I think Richard's done an amazing job with the craft beer survey and exactly the same with you guys, with Black Hops. That your marketing is unique and it's absolutely on point. So massive kudos from us at Beer Cartel.
Dan Norris: Thanks.
Lachlan McLean: Last but not least, what's next for Black Hops? What can we see in the next year, five years, 10 years?
Dan Norris: Oh god. Five years, 10 years, hopefully-
Lachlan McLean: There we go. What do we see in the next year?
Dan Norris: We're just trying to keep going, doing what we're doing. It's a really... I was thinking about this the other day. We're in declining market. We're building a business in an area, alcohol is so heavily taxed in Australia, it's a declining thing. People are drinking less.
Dan Norris: So, for craft breweries to actually do well, it requires... the amount of talent in this industry is insane. I was on our podcast talking to Stirling from Balter during the week. The effort and the thought and everything that goes into what they do. The small amount of resource. You'd think Balter would have 20 people on their marketing team. It's just Stirls and Ben, pretty much.
Dan Norris: Same as us. I've never hired a marketing person. I've got me and Leah, Leah just basically runs Black Hops but she helps out with the marketing. It's so lean and you have to do such good work that it's actually-
Lachlan McLean: That's exactly the same as us.
Dan Norris: Yeah. It's super challenging. Breweries would not last if they weren't doing a good job at basically everything. Because it's so competitive. It's so financially difficult to run a brewery in Australia.
Dan Norris: So for us, it's keep doing the same thing, hopefully be able to do it for as long as we can. Just create a great business. That's what I would love. To be able to keep making great beer, keep this amazing team employed and create a brand that people like. I could just keep doing that forever if the conditions allow us to do that.
Dan Norris: But yeah, we really need to get up to scale more so than we are now. We built a huge brewery, so we're doing a lot of work finalizing the core range, bringing out monthly limited releases, getting the taprooms cranking and building the brand. Just getting beer into more bottle shops, more bars, getting beer interstate, so just getting ready for summer and hopefully getting up to a scale where this thing can just sustainably keep doing what it's doing.
Lachlan McLean: Well, you've built the brewery, you've got the tools, I guess. And I hope to see Black Hops go from strength to strength.
Dan Norris: Thanks, me too.
Lachlan McLean: Thank you so much for joining me today and taking some time out of your busy day. For everyone out there, make sure you get the Black Hops beer. I know we've got them all in stock. Thank you again.
Dan Norris: Thanks mate. Keep doing what you're doing. It's awesome. I think more podcasts in this industry's fantastic. So I'm a huge supporter of you guys for this content and the survey and everything else you do.
Lachlan McLean: Cheers Dan.
Lachlan McLean: The Black Hops story is one that really must be seen to be believed. Who would have thought that three mates drinking in a pub would go onto open one of Australia's best breweries? It just shows what a little bit of creativity, a passion for beer and some savvy marketing can really do.
Lachlan McLean: Once again, thank you so much to Dan for joining me today. And if you have any questions, please let us know on our Facebook group, Beer Cartel's Craft Beer Collective. If you'd like to continue to stay up-to-date with the latest from the craft beer industry, please hit subscribe at either iTunes podcast, Stitcher or wherever you listen to your podcasts. That's it for today. I'll see you next time.