Late November 2019 marks the fifteenth anniversary of Gage Roads, a business that’s carved out a serpentine and well documented path, particularly over the past decade.
The WA operation embarked on a partnership with Woolworths before they consciously uncoupled, has notched up multiple stadium supply contracts, launched the overarching Good Drinks banner that includes homegrown brands Alby, Hello Sunshine and the hop-focused Atomic Beer Project as well as Matso's, and claimed an AIBA Champion Australian Beer title. It’s been quite a ride.
However, far less is known about the early years of a brewery that was launched on a credit card with a $20,000 limit.
As the crystal anniversary approaches, Guy Southern caught up with co-founder and managing director John Hoedemaker and CSO, COO and brew chief Aaron Heary, as they reflected on their humble beginnings.
For a duo now so synonymous with the brewery, the pre-Gage days couldn’t have been more different for the pair.
Through the 90s, John was running a ceramic tile adhesive business with some mates before selling up in 2002 which he says, “taught me a lot about how to run a manufacturing business”. At the same time, his brother Bill and Peter Nolin were brewing at the Sail & Anchor, claiming AIBA Champion Beer and Champion Brewery plus gold and silver medals for a swathe of beers, with the trophies still found in a glass cabinet at the Fremantle pub, even though brewing onsite ceased years ago.
With technical ability now backed up by professional accolades, Bill and Peter were keen to strike out on their own.
“I came along and had a beer with them at the Sail and Anchor and talked through it," John says. "We decided that I could be the number cruncher, my brother Bill can be the brewer, and Peter Nolin can be the spruiker, because he was a very eloquent sort of fellow. And that was the beginning, but it was a good two years before we were brewing.”
Meanwhile, for Aaron, a gap year had become a lifestyle choice and, later, a career.
“I grew up in Freo and after school I was going to go to uni but I decided to take a gap year which turned into forever,” he says, laughing.
“I just wanted to go surfing and I went down to Margaret River, just to do a bit of casual work down there, and while I was working down there the house I was living in in Fremantle burned down. So, I kinda got stuck.
"I was really enjoying Margs and just surfing and working in wineries and vineyards and that sort of stuff and I landed a job with Devil's Lair, which Janice [McDonald] was at.
“I was just working in the vineyard and she kinda got wind that I’d done really well at school but there was this dude driving around in a Holden Kingswood with surfboard hanging out the back that had a bit of an education. She needed some help in the winery and she dragged me in there.”
It proved a fortuitous turning point.
“She was one of the first brewers at Matilda Bay with Phil [Sexton] and she would tell me stories about brewing beer and we were trying to convince her to brew beer in the winery and she kinda promised but it never eventuated.
"After about four years of doing that I was kinda getting bored of it and I wanted to go travelling and she said, ‘I’ve got this opportunity that’s just come up. Do you want to come and help me come and build this brewery in Fremantle?’
“I was born in Fremantle and grew up in Fremantle and she said, ‘You can go travelling any time.’. So, we went up and that was Little Creatures."
It was while help commission the original Freo brewhouse Aaron first met Bill and Peter at the Sail & Anchor.
"They would come down and have a look around. After a couple of years there, not long after those guys won all their awards, we got Champion Brewery at the Australian International Beer Awards and that’s where the passion for craft beer came from, but I sorta realised that, at the time that we’d launched Pale Ale, we’d launched Rogers and we’d launched Pilsner and it was starting to become more like a factory pumping out those beers."
Figuring he'd learned what he could as a senior brewer and still keen to travel, he headed to North America, eventually brewing at Steamworks in Canada for a year before the travel bug returned.
“I drove a car down the West Coast of the US and surfed all the way to Mexico and Panama," he says. "During the course of the journey, I met up with Peter Nolin at the Craft Brewers Conference in San Diego and the World Beer Cup. Steamworks had won some awards, so I got up on stage to get this award off Charlie Papazian and, when I stepped off stage, Peter Nolin was there and he said that they were starting this brewery.”
Six months later, he joined the startup team scrubbing the walls of an old margarine factory in his hometown.
Prior to Aaron’s arrival, the embryonic Gage team was still hustling for a location.
“It was drive around, look at some signs, ring up some real estate agents, because realestate.com didn’t exist," John says, "and we ended up finding that site because it came with a boiler, a lab, a tiled fill room and wastewater treatment plant.
“It had sat vacant for a year and half, so we took it on and the owner gave us a good honeymoon. I think it was a year or two where the rent wasn’t so onerous and we went about turning an old margarine factory into what we’ve got now. It looked like a big place when we put our 30 hectolitre brewery into one corner of it.
“Half of the offices we boarded up and didn’t use them but now it’s chockablock.”
Their longstanding tenure at the same location is something of a rarity and provides insight into the initial scope of Gage Roads. The intention was to become a larger microbrewery, with research focused on some of the successful early US breweries such as Sierra Nevada, Sam Adams, Anchor, New Belgium and Widmer Brothers.
“The idea was to create scale from the start," John says. “We could see that the pub brewery model works out quite nicely in the venue but when you want to have the scale you have this big hurdle of ‘we don’t have enough space now’ or ‘we need a production facility’ or whatever, so we decided to take that capital hurdle from the start."
They also decided not to mimic Aaron's previous WA employer.
“Little Creatures were quite unique," John says. "I think that they were the first business that married an industrial sized brewery with a hospitality angle and they did it extraordinarily well. None of us were hospitality people so we didn’t decide to go head to head with Nic Trimboli, Phil Sexton, Howard Cearns and Miles Hull; we weren’t experienced at that stuff.”
Gage Roads Arrives
After two years of cleaning, pouring concrete and commissioning a brewery built from secondhand equipment scavenged from the US, in 2004 Gage Roads was ready to take beer to market.
“That was knocking on doors," John says.
Led by sales expert Donald Pleasance, who they'd picked up from Swift & Moore "selling Jim Beam and that sort of stuff" they enjoyed quick success, both with the big retailers and independent bottleshops.
The shelves weren’t so packed back then so it was probably a bit easier,” he adds.
Behind the scenes, Aaron’s wanderlust was paying dividends too.
“Being with Peter and Phil, who had a lot of experience in a pub brewery size, I brought to the table skills from a bigger brewery setup,” he says.
The business grew and, in 2009, Woolworths – for whom a much younger John had worked in their Karringyup bottleshop – became a 25 percent shareholder, a move that afforded Gage Roads both extensive distribution and capital fuel for growth. It was also a period that delivered The Convict, a hoppy, chewy Australian strong ale in 640ml bottles that was unlike anything the brewery had released before.
"It was a really meaningful beer for Gage Roads," Aaron says, "and was, in many ways, the start of our Return To Craft.”
Aaron’s 2012 MBA study trip to China may have been the genesis of the brewery's current direction, but it still took time for the Returning To Craft strategy – one that saw them buy back Woolworths' share in the business and train their focus more keenly onto their own beers and brands over those of their contract customers – to take shape.
“A lot of things were happening in the background before we launched the Returning To Craft strategy," John says. "It takes a long time to change and revolutionise your business in that sort of a way. There was a lot of things that were missing in our business that we needed to build.
“If you look at the key success factors for the beer industry, you’ve gotta have size of scale of production to keep your costs low, you’ve gotta have good distribution, which is about sales, and then you’ve gotta have marketing, really strong marketing.
“So, we had the size of scale from brewing beer in the previous years but we didn’t have any sales team at all and there was no avenue for marketing to convince people to buy our beer. So we had to build those into our business and we’ve been doing that over this period."
One of the most recent outcomes of the strategy was the launch of Atomic Beer Project, initially via beers brewed at Palmyra but with a brewery venue taking shape in Redfern, Sydney. Having avoided the brewpub route thus far, Aaron is cautiously positive about plans for Atomic venues.
“It’s not about going out there and building 50 of them," he says. "It’s about giving each of our brands a home. I think the plan is that we end up with a venue brewery in each state.”
Reprise and reflection
Closing out the decade with a single batch lager is unlikely to have been foremost in release schedule planning at most Australian breweries, but it has its roots in their very earliest days.
“Our first beer we launched with, our Gage Roads Lager, that’s a good example of example of something that we thought might fly but didn’t," John says.
"We started off with a brand idea of being an aspirational European style lager and a range of beers that was brewed locally. It turned out that the lager market is very competitive and it’s really hard to create a brand in the lager world if you’re not spending a lotta money or sponsoring the FA Cup or whatever.
“We’d decided that we wanted to be a bit more interesting, a bit more flavourful, which was – and is still now – an awesome German style lager: a Vienna lager with Munich malts and noble hops. But it was a bit challenging for the consumers because they were moving straight from Swanny D or Emu Export to ours and going, ‘Woah, that’s a bit thick’."
Roll on to today, however, and John says they’re "noticing that a lot of craft breweries are getting a lager now and in America there’s a craft lager movement.”
As the pair reflect on lessons learned over more than 15 years, their yin/yang is evident; the mentor/mentee relationship has evolved into when where they're entwined peers. There’s respect, confidence and a knockabout camaraderie afforded by years. It’s almost familial. Almost.
"The whole 15 years has been a learning curve. I think we’ve learnt something every week, every day. How retail works, how logistics works, how packing machinery works, the cost of CO2, how to QA cans and bottles, that paper labels come off in an esky pretty easy, there’s millions of things. I reckon it’s one of the hardest industries in the world," John says.
“You’re creating a fresh product and you need really skilled and creative people. Each brew is a little bit of continuous improvement. You’ve got excise tax, which is an exciting cash flow problem. You’ve got technical equipment and then you’ve got logistics and distribution and marketing and sales people. You know, you’re learning every day.”
Aaron adds: “For me, it’s been the people piece. When I first got into beer and brewing, I was instantly managing people; even at Devil’s Lair I was managing a team of 40 and I was 19-years-old. And then I went to Creatures and, when Janice left, I was managing a whole team of people there; and then at Gage I was managing people without any experience.
“I look back and I was a bit of a hard arse. I learnt a lot about how to manage people along the way and it was trial and error, and you probably don’t want to be the trial and error do you?"
When they talk about their approach to the workplace now, it's all about "the right culture", giving staff "responsibility and freedom".
“We’ve got this saying that you hire for culture, not skills," Aaron says. "I can’t fix a bad attitude but I can give someone the skills to do the job or someone can train them. Someone who is really passionate and has a can-do attitude and wants to learn, fizzing at the bung, they will quickly learn their role and that cultural person will then have the skills and, when you combine those two, you can achieve anything."
Certainly, the Gage Roads alumni board is impressive, from their first employee Nick d’Espeissis (co-owner of Eagle Bay) through the likes of Red Proudfoot (co-founder of Pirate Life), Lachy Crowthers (head brewer at Ballistic), Brendan O’Sullivan (head brewer at 3 Ravens), Charlie Hodgson (head brewer at Helios), Rhys Lopez (head brewer at Otherside), Eddie Still (head brewer at Nowhereman) and more.
As they prepare to mark fifteen years of brewing with a new version of that Vienna lager many deemed to be too challenging in 2004, John is sagely sanguine about the future of his business.
“If you want to sell records for your whole life, you’ve gotta be Madonna, right," he says. "Change is the only constant; we’re quite adaptive, you have to be. This industry is changing a lot.”
You can read Guy's take on the anniversary lager here.