541: They Sell 1 Million Bottles of Alcohol a Year | Matt Jones

23:57Let's do a bit of promotional marketing. Let's just get absolute volume out there. And instead, what did we do? We focused on making marmalade. We started to make marmalade using the oranges that we were steaming to make every gin because we were already really obsessed with the making process. We'd started to put free jars of marmalade in with bottles of gin that we were sending to e-commerce customers. We were just about to release our second gin, a barrel aged gin, and our third gin, a Navy Strength, like a very strong overproof gin for cocktails. So three months after that, this gin business that was taking on Hendrix, that had one product in market, was 60 % market share.

24:34Instead of just relentlessly chasing down that, we'd already made three different products and a marmalade and Four Pillars as this explorer of what gin could be. Prioritizing keeping this small community of gin fanatics absolutely frothing with excitement about what's Four Pillars going to make next. That was the Four Pillars that emerged. And we were still driving sales at Dan Murphy's, but the priority was really getting this fire burning at the heart of Four Pillars. So that strand of the multiverse I talked about is probably a very different Four Pillars where we just doubled down on that one product.

25:09We set aside all those other experiments and initiatives. And that business would have probably grown really fast for two or three years. We'd have plastered that big double gold medal everywhere. We'd have seen Rare Dry Gin grow and grow and grow. But what was that brand? That brand was defined by one product. Other people could have copied that product. Other people could have taken that flavor profile into a lab and had a crack at replicating it, doing it cheaper. And I'd say if we'd been that business, we'd have been a four pillars business defined by one product. But what we weren't doing in that multiverse was building a brand.

25:46What we did over here was build a brand with real longevity. and it was because we knew we wanted to do things like that that and this is the second part of your question we knew we had to have money in the tank so we weren't greedy i think we were smart we sold 40 of our business before launch to 20 ginvestors we thought it was quite funny to call them all ginvestors came to the point where putting a g in front of every word within started to like be on the nose i think it was ginovation killed it for us but ginvestors they stayed and they put in 25 grand, 25 ,000 Australian dollars. And for that, they got a 2 % stake in the business.

26:23Completely silent partners. We said, you get no voting rights. You have no power. It'll be great fun. We make no promises. We want you to think of it the same way you might think of buying a share in a racehorse. It might win the Kentucky Derby. It might not, but it's going to be fun. You're going to get to watch from the sidelines. Once a year, we'll invite you to a briefing. We'll tell you what we're doing. We'll have a great dinner. We'll send you a bottle of every gym we make. But apart from that, no promises, leave us to it. And what we sought out was patient, unstressed investment. We didn't approach anyone we thought would be stressed by$25 ,000.

26:56So we weren't going to be wasteful with it. But we also weren't going to promise anyone we were chasing an exit. We were building a business to own. We were building a business for the long term. And we knew that to do that, we were going to need what we thought would be three years of cash. So with that$500 ,000 from those 20 Jim Vestors, the money we put in and the sweat put in, that's what gave us at least the initial burst, the initial platform to do the thing. Got you. And you did that first, then the Possible campaign. We actually did them in tandem. It was a really interesting case study.

27:32And I do quite a lot of work with founders who are in that startup and that sort of early seed phase. And it was such a great education into the power of not just storytelling, but signal sending, right? So we craft the sort of investor memorandum. I'm not sure we had the fancy words then to call it an IM, but that's basically what it was. It was a PDF going, hey, we're these three bald middle-aged white guys and we think we know something about gin and brand building and we're kind of interested in this and we think there's something happening in gin and we think there's an opportunity in Australia.

28:06It's not going to be cheap. We're going to try and do it properly. Would you like to buy 2 % for$25 ,000? No promises, but there are some examples of other spirits brands that have gone well. So you never know, but either way, it's gonna be fun. Do you want it? So we send that out to people and we get a few takers. And I think on the day that we launched our Possible campaign, I think we'd filled nine of the 20 Ginvestor slots. And I don't think we had any other warm needs. Four days later, well, no, I should start again. Four hours later, we had hit our Possible target. Four days later, we'd sold out the whole campaign.

28:45And by the end of the week, we had 19 of those 20 slots filled and about five different people emailing in a panic going, please keep that last slot open. I want in. Now, the truth is selling$30 ,000 of gin to 307 people was not material. It was not a material dent in our financial needs. It didn't demonstrate product market fit. but it sent a signal that there is something here, that 307 people haven't just liked a Facebook post, haven't just shared it. They've put their hands in their pockets. And very deliberately when I was working with the team at Possible on the campaign, when you draft a crowdfunding campaign, I'm sure a lot of people listening know this, you draft a crowdfunding campaign and you submit it and then they review it and they'll give you feedback.

29:36And the feedback that came from Possible was, your entry price is too high. And I'm like, what do you mean? They're like, well, you need to have like a baseball cap or a t-shirt or a fridge magnet or a sticker. You need something where people can pledge$10. And I went back and said, it's not going to happen. The minimum pledge has to be, I want to buy a bottle of Four Pillars because we don't have product yet. So I need to demonstrate that people want to buy this because of the story. They want to buy this because of what we are trying to do. They want to buy this because it sounds delicious, because the aesthetics of the content, the photography, all the stuff we've done, all the brand elements we've done are making a promise and they want to buy a bottle of that promise.

30:16And so that act became the signal to say there is something going on here. And then the trust for Jim Vestors was if the liquid can match the promise. And I think that's when they looked at the credentials of my two co-founders and Stu and Cam and went, you know what, it's probably going to. But the question mark, can these guys actually do it from a brand point of view, I think that possible campaign almost answered that question. So they were in tandem. And it was really interesting watching those two levers. So within a week, we'd gone from no one's ever bought a bottle of four pillars, and we've got nine G-Vestors to we've just sold out our first batch before we've made it.

30:51And we've got that G-Vestor roster full. And in fact, we've got the waiting list in the next five people who if we have room for more, we know who they are yeah and it's really clever i do see this this does happen where you see alcohol brands or brands in this space they do crowdfunding or equity-based crowdfunding because they want to build that like you said that getting that fire going of that community and it sounds like that's something that was very key to the early stages of your sky story look it was and And it wasn't equity crowdfunding. I should note that. The equity play and the crowdfunding play were separate.

31:31But I've certainly seen, I mean, BrewDog is a wonderful example with the equity for punks model. I think what was really interesting about both of those communities is both the 300 odd people who bought into the Possible campaign and the 20 Jim Vestors, they both just had so much passion and so much of a sense of ownership. And I think I'd just come out of really reflecting on the importance of brand purpose. And that was the little consultancy practice I'd set up was helping businesses think about purpose. And when I say purpose, I don't mean purely social purpose. I'm not saying turning every business into a Patagonia or a B Corp or saying, what are we doing for our sort of bottom line around sustainability?

32:16I actually just mean the story of how your business adds value to the world, like why your business deserves to exist. And I think we did a really good job. And Stu, I remember in the video that we made, I was sort of behind the camera and he was in front of the camera. When we made the video for the Possible campaign, he did a great job of then articulating it. And I think we gave everyone the feeling that there is something happening here and it's exciting and you are helping make that happen. And so that Jim Vesta community carried with us and always just kept us, it was like having these incredible cheerleaders from the sidelines and they They had skin in the game, but they just also had excitement and enthusiasm.

32:53And you knew that they were fully paid up ambassadors. Every bar, every restaurant, every bottle shop they went into, they walked tall and proudly shared four pillars. But equally, the clever little thing we did with that crowdfunding campaign is whether you bought one bottle of Rare Dry or whether you bought four bottles and X, Y, Z. And we said there's one other benefit. you become a member of the batch number one club because you bought a bottle of batch number one before Cameron had even made it. And you will be a member of that club for life. This isn't like Qantas Platinum membership where if you don't fly enough next year, you lose it.

33:28You are batch number one forever. And what that means is every time we make a batch number one of anything. So I'll come back to that notion about the business system. We knew as a business, we'd be making lots of batch number ones. We knew that was the business we were getting ourselves into. Every business, you think you know what business you're getting yourself into, but you don't. You're going into a category, but you have to decide how you are going to play and win in that category. We were going to be in the business of relentless experimentation and exploration in gin. So we were going to be making lots of new gins, probably four, five, six new styles of gin every year.

34:07Gins made with bartenders, gins made with other distilleries, gins made with go-to skincare. care. We made a gin, over the last two years, we've made gins with Porsche, with Leica, the camera brand, with Qantas, with Zoe Foster-Bates go-to skincare. So to be a member of the batch number one club and say, you will never miss out because you will always get the email before anyone else. You will always get early access. In the early days, as well as making marmalade, we didn't like throwing away the botanicals that basically a still is like a giant kettle. And at the bottom of the still, after you finished making gin, I like the tea leaves.

34:38And so instead of throwing them away we said to a local pig farmer would you would your pigs like these and he had these pure breed Berkshire pigs so he started feeding them so we called them gin pigs and then we would approach chefs that we knew and loved and said would you want to host a gin pig dinner and we'll provide this incredible meat and we'll provide great wine for mates in the Yarra Valley and of course we'll provide gin to do every course and so these dinners were a phenomenon so if someone like Aria advertised a gin pig dinner it'd sell out in about three hours so Again, batch number one club, you're in first, you don't miss out.

35:10So it hardwired this sense of intimacy, community, the belief that a small number of people who are literally and figuratively paid up investors in your brand, people who really care, like money can't buy that. and even if you are trying to become a million plus bottle a year business in 30 markets worldwide and all those things having that small group of people who just have this intensity of passion and then treating them with that same love and respect in return and still honoring that relationship with them and treating them as part of your gin family i think that crowdfunding campaign and that investor campaign hardwired that dna and so then that was a promise we'd made to ourselves and to them that we had to keep forever, no matter how much we scaled.

36:00That's so cool. And, you know, when you really think about a lot of this stuff, it's like building relationships at scale, right? And that's what you did that didn't scale to begin with, but that's the core. Those are your true fans. Those are your customers for life. And it's a belief system, right? And the 20th century, I'm a huge fan and anyone listening who hasn't followed him. There's a guy called Seth Godin. I think he's just an unbelievable thinker about marketing and brand building. I think he's behind you there. I bet you may well be. There he is there. Oh, the tree's blocking you. Yeah, there you go.

36:33And he's a legend. And he, along with a couple of other writers, has really shaped how I think about brand building. And Seth will talk about the 20th century sort of advertising industrial complex. And we don't have to build brands like that anymore. We can believe that intimacy can scale, that relationships can scale. And we don't always have to do the scaling. What we can control is the intensity of that relationship. We get to stoke that fire in people's hearts. We get to create people who are loyal, passionate advocates. And we do that because of how we make them feel, because of how we treat them, because of how we show up, how we serve them with product, how we go way beyond their expectations, how we figure out the thing that we can do that is really awesome and really remarkable and almost shocks them.

37:26Like they've got experience of a category and then they go, but I've never tasted gin like Blasier has gin, but I've never had service like I had in that Ritz-Carlton hotel because I've never been dealt with so well as X, Y, Z. And that shocking moment makes them customers and loyalists and advocates for life. And then they will do the scaling. That's what the digital and social revolutions have done. They've given people the tools to shout about the things that they're passionate about. And I think, of course, as Four Pillars has grown, we've had to take responsibility to help that scaling happen.

37:56But I think there was a fundamental belief in the power of intimacy and, as you say, in the power of relationships, that if we invested in that, if we paid it forward in that, we would get the growth. And I think sometimes businesses start up and they want to skip that step. They want to jump straight to the scale bit. And they haven't really thought about, How do I make sure that the heart and the fire is there, that the really strong relationships that will sustain me are there before I then try and springboard to scale? So did you guys do any other crowdfunding campaigns? Only that one. We then sort of, we then would do sometimes pre-sales campaigns.

38:35we would leverage that database, but we really then worked on a model of, we'd use social media to build the following that we then sort of leveraged into that possible campaign. So then we just worked that same system. So when I came in today, I brought a bottle of Christmas gin for you guys. And Christmas gin was, I think, just one of, along with Blay Shiraz, are two of the gins that really sort of defined what Four Pillars is about. Because in both cases, like making gin by soaking Shiraz grapes, making gin by distilling Christmas puddings, these were not things that the world needed. These were not things that people were asking for.

39:09No one ran a focus group and said, what gin do you want next? You know, the grape experiment was just Cameron, frankly, stealing grapes because we were still bunking down the back of a winery. And he was like, I wonder what will happen. And the truth is all the colour and flavour and sweetness just bled out from those grapes into the gin. Then we pressed the grapes and bloody Shroud's gin was born. The first gin that Australia has really given the world as a unique category. There is now a global category of grape-based gins. It comes from Four Pillars, Buddy Shiraz. It's a true Four Pillars, an Australian original.

39:41Christmas gin was even more unusual. It was Cameron distilling Christmas puddings made to his mother's recipe. And him just looking at the recipe and going, all this stuff sounds delicious. Let's make a couple of extra puddings. Let's distill. Let's age that gin in these hundred-year-old musket barrels. Because, you know, Christmas is the only time you drink musket because you've got a, you know, random uncle who turns up with a bottle of Rutherglen musket and you drink that. It's delicious and very Christmassy. And then I had this idea to wrap that not in a branded label, but in artwork. Because I'm like, this is Cameron's family tradition.

40:11Let's like honor that and put wrapping paper around it. But equally, I could already see 10 years ahead and go, how good is it going to be when you've got 10 years of them lined up next to each other? And each one has a completely unique artwork and they become collectible and desirable. So we made a very small batch in that first year. And so we would follow that same rhythm every time we would sort of reveal through social media. We would build and we would drive like 5 ,000 new signups to that database through social media. So by the time you went on a presale to batch number one club and then to what we called Wilmer's List, which was the bigger database, you'd already just swollen that database with that release.

40:52So we just followed that logic again and again and sort of grew from those 300 people who are in that original batch number one to a database of about sort of 75 ,000 people who were really excited to hear from Four Pillars about everything that we were making. And of course, ultimately, those 75 ,000 weren't going to give us all the scale we needed, but they were going to be a fantastic way to launch and trial new products and new flavors. And so, you know, a great example of that, we flew off to Japan. we made gin with the Kyoto distillery we found that they love the yuzu we made a gin called changing seasons gin because every time we went to Japan or they came here we swapped seasons and beautiful label became a real cult classic of a gin people are constantly asking like when's changing seasons coming back but then the really interesting thing we didn't foresee is within 12 months lots of questions from our friends in the trade and in retail going all our focus groups say that people want to drink less sugar.

41:50They want to drink gin with soda, not tonic. Could you make a gin that works with that? And we're like, well, that secret ingredient of Changing Seasons was actually the yuzu. And then we've just found this grower of yuzu in Victoria. Why don't we, we normally try and make quite balanced gins. Why don't we make a gin that just turns all the dials to 11 on citrus. The yuzu's super bright. It's going to stand up really well in the gin and soda. So we'd been able to use that Changing Seasons gin as a little incubator for a flavor experiment. We didn't know we were going to then deploy it into a mainstream gin.

42:21So there was this way of both building community and building intensity, but also trialing things and having fun with things before things maybe made it to prime time. It sounds like such a fun, crazy, fantastic journey, but a really rewarding one. Tell me about the partnership with Lion, how that came about. Talk to me. yeah so there's i think there's you want to get a return for investors as well you're yeah you do you do and and i think this is a really great opportunity to talk about two partnerships quickly you know the first one is the founding trio right and we were super lucky in that we started out really aligned we we were all you know we were not diverse like i was whenever i give like a keynote i always put the photo i'm like yeah it is embarrassing to show these like three bald middle-aged white blokes who frankly like we look interchangeable and it's probably good for insurance purposes, right?

43:17Like if the distiller gets run over, one of the other two, you're going to take over and you're all the same. And while we were quite diverse in our professional abilities, and we all brought something unique to the table, we were very aligned on strategy and ambition. We all wanted to do something properly. We all wanted to build something for the long run. So you're absolutely right. In the back of your mind, as you take on investment, you're like, at some stage, we have to create a moment for these guys, a good day, whether that's an exit or a liquidity event or something. But really critically, we put no time on that.

43:51And we built to own. There was no sense of a ticking clock. And I think our decisions would have been different. Had we gone, we have to exit within five years, it would have been a very different business to the one where we just calmly went, no, no, we're going to build this and see how far we can take it. And we operated a co-CEO model. And we were challenged a lot by people who said it was never going to work. You need someone to make the decisions. But actually, being co-CEOs who went at the beginning, all the major decisions we were aligned on, and we're going to require that alignment. So we didn't do 2v1 voting.

44:24We had no majority rule. We were unanimity on all key strategic decisions. And it made us smarter because it made you go, wait a minute, if one of the three of us is feeling a little bit uncomfortable about the decision to sack a distributor overseas or to go into ready to drink cans which you're like if you said 2013 will four pillars make a ready to drink gin and tonic in a can we'd be like hell no have you tasted gordon's gnt in a can it's gross and yet eight years later we're like the drinking culture in australia has changed so much four pillars alone was about four times the size of the whole super premium gin category when we launched we had inspired people to want to go to a barbecue or go to a party, be in a backyard and not crack a beer.

45:08That world of like, you know, beer for the blokes and a glass of white wine for the girls had been replaced by gin and tonic for everyone. And so that then meant people wanted to have a good gin and tonic even when they didn't have access to a bottle of ice and all those things. We're like, okay. And we spent two years trying to create a product that was good enough to put four pillars on the can. But if one person was uncomfortable with a big decision like that, we didn't do it. we interrogated it until we got to a point where with reason and with compromise the three of us went okay we're up for this and i think that forced us to be smarter but even a model that works really well it reaches a point of like natural limitation so the first one for us was none of the three of us were a natural financial leader stew was the most business minded and entrepreneurial, but his passion is still opportunity creating and storytelling and opening doors.

46:04And I want to be the strategist and the creative guy and the brand guy. And Cameron is just an extraordinary gin maker and operator and builder of teams and builder of community and the hospitality community he built in Healesville. We have 200 ,000 people a year coming to Four Pillars Distillery in Healesville. It's an amazing experience that he's built, but none of us really wanted to be the CFO. And you realize that in the early days, the risk was don't run out of money. And I think we did that okay with the financial management we had in place. But we started to realize that the new risk was going to be not taking enough financial risk, if that makes sense.

46:39Actually, we need to invest in our growth and not having a strategic financial leader will get in the way. But the other risk was that the risk appetite of the people who own the business couldn't match the growth appetite of the business. And that's where I think we had to have, and I've used this word a lot today, the humility to go, what got us here won't get us there. We need a partner. And it happened earlier than we expected. Every raise need happened early and expected because of success. At the beginning, we thought we had three years of financial runway. 18 months in, we had to go back to those to investors say, good news, we think your investment's worth four times what you made it at.

47:18Bad news, we need more cash. and 18 of the 20 of them doubled down. Two just held their position. We brought in another 15 Jim Vestors and that kept us going until the phone started ringing. And the phone started ringing earlier than we expected. We had big global spirits holding companies wanting to talk to us, but also we had this amazing Australian-based beer business. And ultimately Lion appealed to us for two reasons. One, they didn't have a spirits business. So they weren't coming in going, we're going to figure out how Four Pillars fits and we can fix four pillars. Instead, they were going, actually, we want four pillars to teach us how to do spirits.

47:53But also, as an Australian beer business that owned brands like Stone & Wood, Little Creatures, Furphy, Forex, Tooies, they valued the Australian market. They weren't a global brand who was going, well, you fit in at a price point and a demographic fit, and now we're going to try and grow your brand anywhere other than Australia. Instead, Lion valued Australia. They valued having physical home and production here. And we really wanted to protect what we saw as the critical strategy of winning at home. So winning at home for four pillars are like, we've got to win the Yarra Valley. And then we've got to win Melbourne.

48:25Then we've got to win Australia. And that gives you the springboard to win the world. So both from a cultural fit, an ethos fit, and a focus fit, we thought you can work. And we spent about eight months on the transaction going back and forth, getting it structured properly. And the ultimate transaction was that they took a 50 % stake in the business. they invested significant capital that allowed us to both purchase the neighboring site next to our original distillery double the size of our home also take a long 10-year lease on a brand home in sydney and fit that out beautifully as a drinks laboratory so we have a gin distillery in heels from the yarrow valley and a drinks laboratory in sydney which really talk to the two key pillars of our purpose the flavor of the gin and the flavor of the drinks you can make with it and they backed us and we didn't know that COVID was coming we didn't know that we were going to go through this unbelievable period of first lockdowns and then a supply chain crisis around the world and then a cost of living crisis around the world but having that sort of big brother who basically said look you've got operational independence we want a board meeting they had two people on the board I chaired the board we had a board meeting once a quarter but apart from that they just let us run our race but they let us know they were there we had their support you do your thing you know four pillars that's why we chose you and we said well you're letting us do our thing that's why we chose you but for four and a half years we then had that that combination of support but a little bit of security and of course the capital investment and then first to july 23 they exercised the option they had to take out the remaining 50 of the business and um yeah brings us pretty much to today yeah crazy crazy so the g investors did pretty well hey g investors had two good days.

50:12So we really wanted to keep everything that made Four Pillars intact from that first to that second liquidity event. So both the three co-founders and all the investors sold 50 % of our equity, held on to the other 50. And then at that final event, again, the same with the second 50%. So they stayed with us through the whole journey. And I think that was a really important thing, because when that first transaction went through, it was March, 2019, you know, Four Pillars was still only five years and four months old. We were still at a fragile stage. And I think Lion had the wisdom and the foresight and the respect for what we'd done to go, you just keep doing that.

50:57And so we really got to almost, you know, complete, we were six months short of completing our first decade when they took out the rest of the equity. But I think that was really wise by them that they let us do another four and a half years. And obviously, it was a disrupted four and a half years. It was not the four and a half years that anyone particularly expected or wanted. But the core DNA of Four Pillars remained. And, you know, I talked about Changing Seasons Gin earlier. Like, that's a really important sort of little story in the book. And it's probably as close as we get to a major crisis because we were supposed to be launching Changing Seasons Gin in March of 2020.

51:35and I don't remind anyone of what was starting to happen in February of 2020 but COVID was fully arriving and everyone's hair was on fire and no one knew what it was going to mean for global travel for categories for cost of living is it going to be a banking like who knows what was what was going to happen and so we set out a bunch of principles and which was mainly about safeguarding our people and you know we very quickly gave every person in the business a haircut. We had the biggest salary haircut to the three co-founders. And we had a lot of casual staff in our business, casual staff in hospitality, bottling and logistics.

52:14And we talked about how we want to prioritize their financial well-being, not just salary. So we were all going to kind of in it together and take a bit of pain together and keep the business together. And 12 months later, we still hadn't lost a single person and we'd still managed to give shifts to every casual member of staff in that business through that period of lockdowns and disruption. But critically, with two big decisions to make, one was we'd started to see breweries, distilleries around the world make small batches of hand sanitizer. And we were like, look, we get it. And a lot of people were saying, oh, when's Four Pillars going to make hand sanitizer?

52:49And for a while, we resisted because it's just not very helpful. Like a little spritzy bottle you get as like a gift with purchase if you buy a bottle of gin and get a little spritzy bottle of 50 mils of hand sanitizer. to us felt like marketing. And I'm not suggesting that other people were being cynical. I'm just saying from a four pillars point of view, it wouldn't have felt authentic and right. And then Cameron gets a message one day from a woman who was running a Facebook forum for doctors around Australia. And she's like, there is a crisis. These people, clinicians on the front line, they've got just about enough hand sanitizer for surgery, for hospitals, for clinics.

53:27They've got nothing at home. And none of them want to take stuff home and rob the front line. So they don't feel their families are protected. They're coming home and, you know, the clothing they've been wearing in hospitals. And so within a week, he has figured out a way to make hand sanitizer using the heads and tails of our distillation, which is basically the high proof alcohol that you don't bottle at the start and the end of the distillation. We run it down the bottling line because something that's happened to our business. We were the number nine selling gin worldwide in airport duty-free, anywhere in the world.

54:00So we've got all these one liter bottles. You can't fly around the world anymore. So we ran hand sanitizer down the bottling line exclusively in one liter bottles. So we're doing it at bulk, at scale, at speed. We did a bottling exclusively for healthcare professionals. So you had to declare on our website that you were a healthcare professional before you could access to it. We called it Take Care. We sold it at cost. Once we felt that we had achieved, we had dealt with that existing demand, we made a product that we built a tiny bit of margin into. And we call it Head's, Tails and Clean Hands.

54:39And we sold that at just a tiny, tiny markup just to basically keep the lights on and keep people in work. And the same week we launched that, we decided to press ahead and launch Changing Seasons Gin. our initial estimate for how much Changing Seasons gym we'd sell. By the end of the year, we'd sold five times that because everyone was at home looking for delicious distraction and things to do. And so I always look back at that moment of going with his genius and then with the support of the marketing team. Within a week, we had spun up a whole new product line that was a properly scalable response to a genuine human need.

55:19But at the same time, we launched Changing Seasons Gin. We kept this reputation for innovation and creativity. Within four months, we launched Olive Leaf Gin, which was the incredible gin that we made with Copper Mistake olive oil. It's the world's best martini gin. We never lost sight of the core purpose of Four Pillars, but we spent four months where we made an extraordinary quantity of hand sanitizer. We supplied the Australian postal system. We supplied people in healthcare and care environments. We didn't do it as a hobby on the side. We did it at scale. We were probably the first to get into it at scale.

55:55And we're also the first to get out of it again. We weren't tempted to keep it going. We weren't tempted to go, oh, this is a whole new line of business. Let's do it forever. We whipped it up quick. And so I really look at that additional balancing act. I talked early on about how we sort of maintain this balancing act between understanding the traditional dynamics of the spirits category, selling in bars, selling in bottle shops, but the opportunities of e-commerce and direct to consumer. But then this was a whole new balancing act, like the short term COVID response, but equally going, the world is going to emerge from this.

56:28And we have to make sure that the brand we are the other side is even stronger and even more four pillars than the one that went into it, rather than waking up one day post COVID and going, oh, now we've got to rebuild what we stood for. And that balancing act was really important to me. And it's a real source of pride how we navigated it. But again, back to humility, we were also very fortunate that 12 months earlier, we'd chosen to take on a bigger partner. So then when we were looking at things like developing a hospitality site in Sydney in the middle of a lockdown and a pandemic, and doubling the size of our hospitality experience in the Yarra Valley in the middle of a lockdown and a pandemic, we could have the conviction to continue because we knew we had that support behind us.

57:12Do you think if you hadn't have taken on that partnership with Lion pre-COVID that the business would still exist? I think it would still exist. I think I'd have had much more colorful stories to tell you about crisis and sleepless nights in that period. I think we would have had much more. I think it would be much harder for us to be courageous. You know, we wrote all these principles, right? And we lived them. We're like people, not paper. So we like canceled every bit of collateral that we were gonna make that year. We just cut every bit of non-quality cost out of the business. We would never cut cost out of the gin.

57:54But we're like, sending people beautiful cocktail books is something we love to do. But if it's a choice between sending a beautiful cocktail book out with every bottle of gin we sell and giving Steve over here another 10 shifts, we'll give Steve another 10 shifts. So we articulated these principles. We, you know, like I say, we gave everyone a pay cut, but we made no one redundant. We cut no casual shifts we could. When hospitality was completely closed down in Victoria, but because of changing seasons, because of hand sanitizer, because of our bottle cocktail program, we were sending so much more out through logistics.

58:28We didn't go and find a bunch of people who were working in a 3PL center to do the logistics. We brought all these chatterboxes from hospitality who were super unproductive because they They just wanted to talk to people all day. And we're like, no, no, you're going to work in bottling. You're going to work in logistics. Could we have found more efficient people to do that job? Yes, but our job was to take care of our people and keep them busy and keep them in work. Our job was to maintain conviction that, you know, the sun will rise again and keep going on building those homes and keep going and investing in those collaborations.

58:59So, yes, I think Four Pillars absolutely would still exist. But would we have let go of some of those things? Would we have just pumped the brakes on something not being quite so brave? I think that is the difference. And so that's why I love to talk about luck, serendipity. We didn't foresee that stuff coming, but we were definitely fortunate that we'd made that decision when we did, that it gave us that security. But equally, being handed up, you know, being dealt a lucky hand is one thing. You still got to play it. And we could have still been cowardly. We could have still gone, no, it's going to batten down the hatches, keep things simple, protect the founders, protect the value of our investment.

59:40Our houses were still mortgaged against the business. But we didn't do that. We still operated with ambition. We took the benefits of the security of the luck, but then we still operated, I think, I'd like to think, with purpose, with focus and with ambition. There's a balance, like everything. So we have to work towards wrapping up. this has been an awesome conversation you're a really good storyteller Matt so is there anything that you would have done differently any big mistake or any lesson that you'd like to share with our community I love this question because I don't think we made any big mistakes I think you know we made dozens hundreds thousands of small mistakes and I think small mistakes often make you stronger.

1:00:33You learn a lot from them. You know, small mistakes are like near misses. Hopefully you figure out why you had a near miss and it stops you having the big accident. Small mistakes give you chances to apologize to customers or make up with partners and learn more about why they feel the things that they feel and become better. And we were very fortunate that then also calamities outside of our control didn't end up mattering too much. We ordered our first pallet of custom glass, like from day one, that beautiful, heavy, quite, I think, iconic bottle with the four tactile dots on it. It was coming from China and it got stuck in a typhoon season in the South China Sea.

1:01:11And so then we had to spend extra money to air freight enough for the first two batches of gin. And we made the most of that. The first batch was the crowdfunding batch. The second just went into small bottle shops and bars. It meant we had to keep Dan Murphy's waiting a bit longer. In the end, it didn't matter. So small stuff, small mistakes, small calamities, small problems. There were lots of them. We got through them. We learned from them. But there is something big I would change. And the big thing I would change was about understanding sooner why Australia was working so hard for us. I think sometimes as a business, you can, A, not think enough about what is going to make you successful in the future.

1:01:58And we've talked about that. But sometimes you can also not think enough about what is making you successful in the moment. Because if you do think about that, if you do interrogate that, you might find. So the old cliche, I think his name was Wanamaker. He was a store owner, retailer. And he used to say, I know that only 50 % of my advertising is working. The problem is, I don't know which 50%. I think it can be true for all forms of activity. Some of what you're doing is absolutely driving your growth, and some of it makes you feel good, but it's really not working that hard. I think in Australia, we had latched on to this incredibly, almost magical relationship between the direct consumer business, both online, through social media, through email marketing, and then through these physical homes, and the distributed business, the wider business.

1:02:49The relationship between the people who walked in to our homes, who went onto our website, bought a bottle of gin, and then didn't check out because then they went, oh, wait a minute, maybe I need another one. And then grabbed a jar of marmalade. And then we threw something into their bag for free. And then we added a beautiful cocktail book. And they just went away going, gosh, I love Four Pillars. And then they went and told 10 of their mates, stop drinking Hendrix, stop drinking that, try Four Pillars and sent them into bottle shops. And that system was just working fantastically well. Very quickly, we wanted to send another signal.

1:03:19Four Pillars is a global brand. Four Pillars has global ambition. Very quickly, we're in 10, then 20 markets worldwide. We're now in more than 30. I don't think we necessarily slowed down to think, how do we replicate that magical relationship between intimacy and scale, direct and distributed in those overseas markets? So Stu and Cam would go and do an amazing job. They'd go into a market like the UK. They'd find a great distributor, really good fit. Felt like the version of our great distributor here in Australia. Felt like their portfolio of other spirits was good. We liked the family we were going to be in.

1:03:58Stu and Cam would get their teams really revved up. They'd go meet a bunch of people in bars and bottle shops. They'd host a couple of consumer events. And like the initial fire was lit. And then we'd fly home. And now we're 10 ,000 miles away. And while Four Pillars is our only love, it's our only baby, it's probably one of 40, 50 brands in that distributor's portfolio. And as much as we've fired them up, that fire doesn't keep burning that brightly. You know, it's like, you know, when you're lighting your barbecue and you put that ignition cube in, but then if there isn't enough oxygen going into the barbecue, those coals will start to fade away.

1:04:33And what we hadn't figured out was this is all good. There's nothing wrong with anything we're doing, but we've not replaced the other part of the formula which is building that direct intimacy. We're doing it a bit when we can but we haven't figured out a way to replicate it. Now I'm not saying that we necessarily had we named that and figured it out maybe we would have still done what we did because by the end of 2019 so just before COVID we're in more than 30 of the 50 world's best bars. You can go to most great bars in most great cities in the world and get a Four Pillars martini or a Four Pillars Negroni.

1:05:09That was an unbelievable signal to our most important customers in Australia. Think about the most important customer in Australia. He or she is someone who flies to London and they left through Qantas First Class Lounge and there was a Four Pillars gin that we made for Qantas. They stopped in Singapore Changi. There was a big retail display in Singapore Changi Airport and then more Four Pillars being served in the lounge. Then they went to London and they stayed at the Savoy or at Ham Yard or at Sohas And there was four pillars served in all of those venues. And even if all of that was just then sending back this signal of, oh, my goodness, how awesome is four pillars back to the Australian market?

1:05:45So in that sense, it absolutely was working. But if the objective was to grow meaningfully in those overseas markets as well and not just talk to Australian travellers, I think that extra bit of the code was a bit that we hadn't quite figured out. And so I think now COVID kind of created this reset where you really couldn't go overseas. So we doubled down on Australian growth. And I think now the next frontier for four pillars is to figure out how to send, if you think about a radio signal that loses power as it goes in the distance, how we can basically send a stronger signal to the West Coast of the United States, to the UK.

1:06:21And what has that meant in terms of strategy? I can hear your brain asking. It is that we are now going to continue to be a global brand, but we are really going to seek to extend our home market from Australia to Asia. So we're really going to go, right, we have spent 10 years winning at home. Home was Healesville. Home was the Arrow Valley. Home was Melbourne. Home was Australia. And home is now Asia, Southeast Asia and Asia. And then over the years that come, one day home will be every great gin market in the world. But I think that additional focus is the one thing that we've we've eventually got to.

1:06:58And maybe we wouldn't have changed strategy, execution, have we had that. But that's the one thing I would change a bit more of that consciousness as to why this market was just blowing up in the way that it was. Easy to say, hard to do. But something I'd urge everyone listening to this, everyone watching this, don't just think about why you will be successful. Just spend some time also thinking about why are you already successful and what would it look like to double down on that recipe for success? Yeah, it's such a hard thing because you get so caught up, right? And you always think naturally to scale, you need to do more, right?

1:07:34Something new as often. And I love little simplistic models, probably because I've got a very simplistic brain. And I think I see the world mostly in Venn diagrams and X and Y axes. So we're going to go with an X and Y axis. And this might be my little wrap up, I've said enough today. But if you think about two axes for me for a second, and one runs from external to internal, and one runs from long-term to short-term, I think all of us start something. And if we're doing it right, we're thinking long-term and external. And we're going, right, there are a bunch of people out there in the world.

1:08:15How do I reach them? How do I persuade them? How do I win them? and I know it's going to take time and I'm patient and I've got a plan. And that is this optimal moment to think about your theory of growth and your theory of brand. And then as that starts to work, first of all, you start to think shorter term because you're like, I've made a big growth promise next year. I've got big targets to hit. I've hit a couple of speed bumps. I've got investors. I've got partners. And so now you're like, okay, growth has to come a bit quicker. So we start to think shorter term. And then you go, I need even more growth.

1:08:48What can I control? Well, I can't control things out in the world because other things happen. Culture, consumers change behavior, competitors do different things, categories shift. But what I can control is stuff that's internal. And so as we grow and as we mature, we start to think more and more short term and more and more internal. And I think what we've got to take these moments to do, and this is probably what I'm trying to leave everyone with, take these moments to reconnect with that moment when we were thinking external and thinking long-term and thinking big and thinking brand and thinking next frontier and going, what is it that's got us this far?

1:09:27And what is it that's going to get us to the next place? And I was talking about my book at the start and saying the first section was all about thinking. I broke it into four sections because of four pillars, I can only think in fours. And that last section is all about this. It's navigating that experience of growth and learning how to sort of trade off and play this balance between doubling down on what got you here while also figuring out which parts of what got you here are not going to get you where you want to go and where do you need to question and where you need to adapt. And, you know, that's the hard thing about life.

1:10:00Life is ambiguous. You know, just when you think you've got it figured out, it changes. I'm a parent. Just when you think you've figured out how to be a parent, your kids change. Your business is the same. So I hope that in this chat and in the book, like, A, there's some tools that people can use to, like, think clearly about the focus and the theory and the strategy and the craft and the storytelling that's going to give them growth. But in that last section also, that how to then go through that discipline to go back to first principles and keep checking in and going, are we still on course?

1:10:34Do we need to keep going? Do we need to do something a little bit different? and that's I think the nature of life and the nature of business and I wish everyone listening really well with their growth journey. Awesome thank you so much Matt just one last question before we wrap a million bowls of gin every year that's that's a lot can you just kind of wrap just for context for our community the size of the business revenue turnover anything you can share? Yeah do you know what my face is less a commercial and confident face and more the face of embarrassment of someone who made a very deliberate choice a couple of years ago.

1:11:09So on the 1st of July, 2023, when we sold our equity, I chose to stay on full time in the business because I really felt that the job was only half done. But what I decided I wanted to focus on entirely was the outward facing brand creative growth. And I thought, you know what, I've spent 10 years in operations, in HR, always as partners to steering camp, never doing this on my own, goodness me, but always involved and alive and losing sleep over and thinking about the numbers and the revenue and the gross margin and what's dropping through the EBIT and the banking covenants and all that. And then I've really enjoyed the fact that for the last 15 months, I just let that fall away and go, you know what I worry about?

1:11:56The only numbers I worry about are the numbers that come through on the brand tracker because we track our brand. We use YouGov, YouGov's brand index. And we started to track our brand back in 2020 because at that stage, we realized the next wave of growth was not just gonna come from people who interacted directly with us. Because before that, we tracked our brand by looking at what are people saying on social media? What are they saying on Google reviews? What are they emailing back to us? Because people replied. We sent emails to people who wanted to receive emails from Four Pillars and they actually, they didn't just buy gin.

1:12:27They sent us emails back. We had that intensity of relationship. But then you realized this wider audience weren't going to have that direct relationship. They were going to buy four pillars in Dan Murphy's. They were going to go home. If they didn't like something about it, they wouldn't tell us. They would just not buy four pillars again. And so we had to start track that. So that's the only metric I still track. But I can tell you, look, a million bottles a year, it's a really substantial business from a revenue point of view. When we exited equity-wise, we had 150 staff. We were a really substantial player in the Australian gene scene globally.

1:13:03It's still a drop in the gin ocean. You alluded to a mate of yours in craft beer. You realize that big craft businesses are still very, very small when you look at the scale of commercial businesses. But we've built a business that could probably go that again in terms of volume of production while maintaining absolute quality of small batch. You know, we still hand weigh out botanicals. You get to Four Pillars at 6 a.m. in the morning. You'll see us filling these big white tubs of botanicals that are being weighed out microscopically by hand. Because craft is quality, but it's also consistency.

1:13:44You want every bottle of Four Pillars Rare Dry Gin to be exactly as delicious and perfectly made as the last one. So we can probably double our volumes and maintain that. So that's the job. It's not to become the world's biggest gin brand. It's to become the world's best gin brand, craft brand at scale. And yeah, it will be a not insignificant sized financial business if we achieve that. But the goal is never financial. The goal is always getting to a volume level while maintaining an absolute level of quality. Awesome. Well, thank you so much for sharing. And Matt, thank you so much for taking the time coming down.

1:14:21It's been an absolute blast. Loved it. Been a ripper chat. If you love this episode, make sure to check out my interview with Emma Greed on how solving a problem she was so passionate about led to the creation of Skims and Good American. And so I do think it's so much of it starts with like addressing things that bother you, that you find, you know, you've got to create a solution for because, you know, at the end of the day, you've got to be passionate enough and sometimes crazy enough to go round and round and round to actually solve a problem.