Behind Bars: Beer Cartel At Ten

“When we bought the premises in 2011, we had sixty craft beers in stock; nowadays we have about a thousand. When we first moved in, the craft beer was just a small portion of the warehouse; now all the warehouse is craft beer.”


Beer Cartel started with mission: to make great beer accessible to people in Australia, and to take people on a journey. But, when Richard Kelsey and Geoff Huens first started sending boxes of beer to people from a self-storage shed in 2009, they didn’t realise they were the ones beginning a long journey.

The two discovered great beer for themselves in different ways. For Geoff, the spark came from a year of travelling that included getting in touch with his Belgian heritage. For Richard, it was when he did a market research project for a brewery in New Zealand and was paid in beer. 

Both of them felt there was a serious lack of access to good beer in Australia in the 2000s and together they landed on a business model they felt would work: Beer Club, a beer subscription where a box of mixed beers would arrive on your doorstep every month. (They considered but eventually dismissed Richard’s original idea, which was “like a Tupperware party, but for beer.”)

While Beer Club gained some loyal and passionate customers, growth was slow, and the online craft beer business was far from self-sustaining. Both Geoff and Richard kept working on other endeavours outside of Beer Cartel, and looked for other ways to stay afloat. They felt they needed a brick and mortar store to keep it up, so they found a store and warehouse in Artarmon. They even bought the corporate supply business that was originally attached to the warehouse, and ran that for a few years to supplement the beer side of things.

But, by the time they introduced their Beer Advent Calendar boxes in 2015 and started running the Australian Craft Beer Survey in 2016, the slow growth they’d been experiencing suddenly became rapid growth. These past few years have seen Beer Cartel blossom into the business it is today – something of a go-to guy for good beer in Australia.

As they mark ten years of making beer more accessible to people, we looked back at some of their highlights then picked their brains for insight into how they view the beer world now and in the future.


Buying Beer Online

 

Ten years on from the days in the self storage shed, online sales form Beer Cartel’s core business, and is what they’re best known for. But it wasn’t always that way – though it was Geoff and Richard’s original drive for the business, there were times they feared it might be unsustainable.

“The consumer demand in those early days didn’t really exist,” Richard says.

Even though it wasn’t long ago, we can be quick to forget that things weren’t always the way they are now. Not only was demand for craft beer still low in 2009, but the concept of buying alcohol online was practically non-existent. Vinomofo didn’t started selling wine online in 2011, and Dan Murphy’s first went online in 2012. But this was 2009, and Beer Cartel were among the first to suggest to people: “You send us money, and we’ll send you beer in the mail.” So, perhaps understandably, the customer response to Beer Club in 2009 was fairly slow.

“Even these days, there’s only a portion of people who have bought beer online,” Richard says. “The proportion of people buying anything online is low compared to other categories, but it’s growing quickly. And it’s growing alongside the craft beer scene.

“As much as anything, it’s all about people getting to know us and trust us.”

And Beer Cartel have indeed built up that trust. While their beer subscription wasn’t quite the first in Australia, it now stands as Australia’s longest-running, and the crew has shipped out more than 30,000 packs over the past ten years. For their tenth birthday, in October 2019, Beer Cartel revamped and relaunched Beer Club to reflect the evolving beer scene in Australia. While the original boxes contained multiples of three or four different beers, bottles a-clinking, the new boxes contain either six or twelve different beers, all of them in cans.

But Beer Club isn’t their only their service; Beer Cartel’s online store has punters from all around Australia buying singles they can’t get at their local bottleshop.


BEER ADVENT CALENDAR

 

“Our Beer Advent Calendar is a fantastic starting place for people. It’s not something that everyone is familiar with.”

Beer Cartel have enjoyed astronomical growth with their Beer Advent Calendars; they’ve sold well over ten thousand in total since they started offering them in 2015.

The seed of the idea actually came in 2014, when Beer Cartel sold Bridge Road’s advent calendar. The boxes sold well and, since customers liked them, the next year they thought: “We should create our own.”

So, in 2015, they used their standard Beer Cartel box, and inlaid a perforated countdown sheet that people could rip through as they tasted their way through December. They received a good number of orders, put the boxes together themselves and shipped them out of their own warehouse, as they did with all of their other boxes.

“We were pretty stretched… but it was okay.”

So, in 2016, they did it again. This time they created a special box for the calendar – although while it was well-suited for bottles, it wasn’t really designed for cans. Then the orders started coming in… and they quadrupled the previous year’s orders.

“Straight away, we had to do that offsite,” Richard says. “Just for this one project alone, we wouldn’t be able to stock everything in our warehouse, let alone all the other stock that we have. It’d fill the whole warehouse, and then some.

“So we got a third party logistics company, and they packed it all. And they’ve been doing that for the last three years. They basically get hundreds of pallets of beer, and pallets of boxes, that arrive for them to pack and send off to people.

“Last year we did about 6,500. It’s pretty damn massive.”

Since the industry has witnessed a big shift of focus from bottles to cans, Beer Cartel have changed their advent calendar accordingly.

“We came up with square box – five by five – and moved to 100 percent cans and a big focus on doing one-off beers that have never been canned before.

“I had one at home last year, and even though I knew what the beer was going to be every day, it’s massive fun. You get the beer out in the morning, put it in the fridge, think about it during the day. 

“It’s been crazy, the evolution of it all. Some serious time and effort goes into it, but it’s well worth it – we love putting it together.”

  



THE SURVEY

Beer Cartel’s annual Australian Craft Beer Survey is one of a kind. As a piece of market research, it’s both ambitious and impressive: more than 23,000 drinkers and industry workers responded to the survey in 2019. And it hasn’t gone unrecognised – the survey has helped win Beer Cartel the Marketing Innovation Award with BigCommerce, Retail Innovator of the Year through the Australian Retailers Association, and Best Online Retail Marketing through the Online Retail Industry Awards.

But what really makes the survey stand out is the way it captures the we’re-all-in-it-together attitude of the Australian craft beer industry.

Both Geoff and Richard have a background in market research; they even worked for the same company for several years before starting Beer Cartel. When Richard finally went full time with Beer Cartel in 2014, he left the world of market research behind for good… until he immediately went about designing the Australian Craft Beer Survey.

“I always thought it would be kind of cool to do some sort of research project on the beer market. I didn’t know how it would look… just a real small thing.

“But then somewhere along the lines I came up with the idea: what if we got the industry actively involved?”

So they did, then decided they should make the results of the survey public and give them back to the beer industry.

“We’ve always tried to be very transparent about the results we get. A lot of people get told they should be doing market research, but they don’t know how. I was just trying to answer those problems that people have.

“I asked the industry, ‘What are things you’d like to know more about?’ And that directed how we wrote the survey questions.”

When the survey first came out in 2016, a solid 6,000 people responded, showing Beer Cartel they were on the right track. The next year, it was 17,000, the third year, 18,000, before this year saw it jump by another 5,000.

“I get a lot of emails and phone calls that say, ‘Thank you for doing this - you’re doing something massively helpful.’ It does take quite a few hours, but it’s something that’s very special to us.”

And, of course, the survey isn’t only of benefit to the industry as a whole, but has played a role in Beer Cartel’s growth as well.

“If you go back to our starting point, we always wanted to help people on their craft beer journey, and be seen as a trusted source of knowledge that people can go to. And it’s definitely helped in that sense. It’s helped create awareness of us, and it’s shown that we have expertise in the industry – that we know what we’re on about.”

The team at Beer Cartel have been peddling their wares for a decade now, so we asked them to give us some insight from their experiences. Here Richard shares with us some of the collective wisdom of Beer Cartel.


Geoff and Richard in 2009, full of dreams and excellent beer.

 

HOW HAS BEER CARTEL CHANGED OVER TEN YEARS?

Back in 2009 when we first started, we were an online only business and operated out of a Kennards Storage wine shed. It was a tiny little shed and, as we grew, we went from one to three sheds over about 18 months. But we realised that if we're going to keep growing and keep surviving that we actually needed a store. So we purchased an existing liquor store on Sydney's North Shore in a suburb called Artarmon in 2011. That came with a warehouse as well, which was great for us online.

When we first started the store we had about 60 craft beers and we grew that over time to be the thousand-plus that we have today. And while we were growing the store our online business began to grow significantly. Over the ten-year period we've had three different versions of our website and this has continued to evolve. When we began it was just Geoff Huens and myself who started the business and did everything, now we have a team of amazing staff who handle so much of the business.


HOW'S THE BEER SCENE AROUND YOU CHANGED?

It's funny… where we're located on Sydney's North Shore there still isn’t a huge craft beer presence. There is ourselves and Flat Rock Brew Café located in Naremburn. But, aside from the two of us, there is not a massive amount of other craft beer focused places around us and sadly no other breweries! 

But, in the scheme of things within Sydney, there's a lot more competition than when we first began. We've seen a huge amount of new craft breweries start and, alongside that, a number of bottleshops which specialise in craft beer. 


TELL US ABOUT THE WORLD OF ONLINE BEER RETAIL, PAST AND PRESENT.

When we started in 2009 there was next to no craft beer being sold online - we were largely pioneers in that space. We were online well before Dan Murphy's, which I think began online in 2012. Because of that, it meant the concept of buying beer online was really foreign to people. You look at it now, and there's been a significant change in purchasing on beer online just in the last 12 months; 30 percent have bought beer online in the last six months or so, up from 22 percent the year before. 

It’s one area we think will continue to grow in the future, similar to most other industries. Consumers want to be able to buy beer or any other products when and where they can, and that's what we're trying to deliver on while providing great service, excellent shipping and an awesome range of beers. 

 


WHAT ARE YOUR CUSTOMERS ASKING FOR AT THE MOMENT?

At the moment it's largely around new beers. People are constantly coming to us for something that is new and fresh from interesting breweries. Balter’s limited releases have been a real favourite this year with people loving their different hazies, but we don’t really find customers are focused on just one beer… there’s just so much good stuff now on the market. 


HAVE YOU SEEN A CHANGE IN BUYING HABITS IN TERMS OF VOLUME OR FORMAT?

There's definitely been a massive shift to cans, which we've seen in the Australian Craft Beer Survey as well. Five years ago, we would have held about 99 percent of our product in bottles. Now we have 10 percent or less of our stock in bottles so that's a massive change. 

When we first started, we had some Australian Brewery cans and they just wouldn't move. Now, the challenge is with bottled product and trying to actually get that to move.

From a volume perspective, I think now there's also a much greater amount of people willing to pick and choose individual beers, buying a range of single beers rather than just focusing on a case or a six-pack. 

 

Beer Cartel in 2013, and nary a can to be seen.

WHAT'S THE BEER CARTEL TEAM DRINKING AFTER WORK?

We get sent lots of samples every month so we're always trying those. It’s a great chance to see what else is out there and helps us work out what we want to stock going forward. Alongside this we also share a few things that are normally hard to get, which could be from a very nice customer that brought some beer back from overseas, or from our own travels. 

This afternoon for our Friday drinks we’ve got some beer I’ve brought back from New Zealand including a blended beer from Urbanaut Brewing, which has two different cans that are wrapped together, which is an interesting concept.


HOW DO YOU MANAGE SUCH A HUGE RANGE?

It's a massive challenge but we’re up for it! 

It's largely the result of having great staff who really stay attuned to what the market wants. Alongside this is our amazing suppliers that keep us in the loop of what's coming out. And then we add to the mix customer requests, as well as keeping up with the different rating sites and what people are generally saying in the market. 

It really is a whole lot of different ways blended together that keeps us busy! 


HOW DO YOU INTRODUCE NEWCOMERS TO CRAFT BEER WHEN THERE ARE SO MANY STYLES OUT THERE?

I think the easiest thing is to find a starting point where someone likes a certain beer. It could be as simple as a Little Creatures Pale Ale – you use that as a starting point and go from there, getting them to try other pale ales that have different flavour profiles. Then it’s introducing other styles and going from there. 

You definitely can't just start on an imperial stout or double IPA or anything that’s going to have big, bold, completely foreign flavours. It’s all about baby steps.


WHAT DO YOU THINK WILL BE THE NEXT BIG THING IN BEER?

I don't think it's going to happen anytime in the near future, but I see a huge opportunity for a focus on flavours from different yeast. There’s a huge amount of different yeasts in the world which brewers have only scraped the surface of so far. But all these yeasts provide different flavours on their own while also helping to showcase different flavour aspects of the hops and malt. 

I think this ability to alter flavours is a really unique opportunity. We’ve seen gypsy brewer Mikkeller bring out a yeast series a few years back but there hasn’t been much other activity in this area to date.

 

Norwegian farmhouse yeast kveik has got plenty of brewers and drinkers excited here this year. Photo credit Lars Marius Garshol.

WHAT'S NEXT FOR BEER CARTEL?

Our big focus alongside having amazing beer is just about making it as easy as possible to buy beer online. We're constantly looking to refine our website to improve the shopping experience and over the next 12 months there should be some pretty big changes in that area.

As well as this, we're always on the lookout for good beer, whether it be from Australia or from overseas. We’re always chasing stuff that we think people might like, plus we’ll hopefully be doing some more collaborations over the next 12 months.


You can read other entries in our Behind Bars series here.

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