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Published 13 January 2014 09:59, Updated 04 February 2014 00:15
David Burns and Elly Meltzer hold 100 per cent of Kwencher but are considering taking on investment.
David Burns and Elly Meltzer sold 10,000 cartons of their Kwencher boutique beers in 2012/13, but plan to double that this year with new contracts for supermarket distribution. They may also seek external funding for the first time.
Burns has been on both sides of the fight for fridge space. He spent seven years at BP Retail Australia, where he developed its service stations’ Wild Bean café concept.
Then, while he and Meltzer, his wife, were travelling in Morocco in 2008, the pair were inspired to blend beer, peach and black tea into a brew aimed at females – still a relatively ignored demographic in the growing craft beer market.
Meltzer oversees Kwencher’s branding and marketing, perhaps the most important differentiator in the increasingly crowded segment – and presumably a big one in the vodka industry too. The pair have just spent an expensive 12 months exchanging legal letters with Double Eagle Brands, the owners of vodka brand Ketel One, over their “K” logo. Burns says the matter is now resolved, with Kwencher trademarked for “beer and cider only”.
Burns home-brewed at first but has since partnered with Southern Bay Brewery at Moolap near Geelong, with whom he also developed a pale ale aimed at craft beer drinkers of any gender.
“We use Galaxy hops that punch out a nice passionfruit aroma that the ladies love. They’re grown in the Yarra Valley,” Burns says.
Distribution through bottle shops
Given his background in convenience retail, it felt natural for Burns to start his distribution strategy with independent bottle shops, even if few other craft brewers do.
“Normally, you’d get your beer into the cool cafes and pubs and then be ready for people to go and look for it in the bottle shops. We’ve done it the other way around, but it doesn’t really matter if the beer tastes good,” he says.
However the first quarter of 2015 is all about distribution through Coles (Liquorland, Vintage Cellars and ‘big box’ player First Choice) and Woolworths (BWS and ‘big box’ leader Dan Murphy’s).
“To be successful you’ve got to be in there,” Burns reasons, even though he knows better margins lie elsewhere.
Distribution through the major supermarkets represents a step-change for Kwencher. Burns has hitherto delivered most of the beer in his van.
He’s prepared a couple of strategies. To combat cashflow challenges, he’s foregone some margin to get 30-day payment terms. He’s also preparing to make the most of the in-store tasting night opportunities on offer.
So that he can spend less time driving and more time on growing the business, he’s also just inked a deal with Metcash, a major distributor to independent bottle shops.
Kwencher is being sold through bottle shops and some bars
“We can supply same day, and the little operators like that flexibility,” he says.
On tap in bars
Kwencher has also begun to appear on tap at a few venues around its Melbourne base.
“The major breweries still have the taps 75 per cent stitched up, but the landlords do have a tap or two to play with these days,” he says.
“We just put three kegs into a little bar on Flinders Lane. That was gone in three days, and the lady that runs it will reorder from us in about six weeks’ time – so you get rotated through like that,” he explains.
Wider distribution will see Kwencher hit profitability in 2015, Burns hopes.
“The efficiencies will increase - you’re moving pallets around once instead of moving boxes around three times,” he says. Bigger production runs on packaging – which Kwencher supplies to its brewing partner – mean savings too.
Kwencher turned over $600,000 in 2012/13, but Burns says that will “at least double” this year.
Burns and Meltzer wholly own Kwencher’s holding company, the Beltz Group Beer Co, and have been self-funded to this stage.
However Burns says he may seek external funding for an international push.