Young Henrys

Against the grain

YOUNG HENRYS CO-FOUNDERS RICHARD ADAMSON AND OSCAR MCMAHON MAY HAVE THOUGHT THEY WERE GOING IT ALONE WHEN THEY WENT AGAINST THE GRAIN IN 2012 AND BEGAN BREWING MORE ADVENTUROUS BEERS, BUT THEY HAVE BEEN ANYTHING BUT. THEIR INDEPENDENT CRAFT BEERS HAVE ATTRACTED A STRONG FOLLOWING OVER THE PAST EIGHT YEARS, FROM THOSE WHO WANTED TO LEARN HOW TO MAKE BEER AND COULD AT YOUNG HENRYS EARLY ON, TO OTHERS WHO SIMPLY WANTED EASY-DRINKING CRAFT BEERS.

DRINKS TRADE’S ASHLEY PINI CAUGHT UP WITH RICHARD AND OSCAR TO TALK ABOUT HOW THEY’VE CARVED OUT A UNIQUE PATH TO CONSUMERS AND PLACE WITHIN THE INDUSTRY.

How did you meet?

Richard and Oscar: At the pub.

Richard: I was on my way out of a project and looking for a brewery to experiment in that had a face-to-face presence with consumers (Richard’s background was in brewing and Oscar’s was in hospitality).

Was Newtown your first choice for where the brewery would be located?

Richard: The Inner West but not Newtown to begin with. Oscar: We were looking everywhere, from St Peters to Paddington for a space big enough and where people could get to on foot.

What type of experience were you hoping to provide at the brewery?

Richard: We were looking at a restaurant/bar with a brewery attached but had to move into a wholesale model because of some issues with the council.

Oscar: So we started wholesaling without little know-how.

How many staff did you have back then and how many do you have now?

Oscar: There were about three or four of us working here at the start. Luckily, we were about the only ones on this side of town you could get a brewing job with. So in the first two years, we were propped up by people who wanted to learn about brewing and who would trade their time to learn because we didn’t have any paid jobs to offer. Usually now we have 60 full-time and usually 20 casual staff, but due to COVID-19 we’ve got 60 staff on Jobkeeper.

“We predict that support for independent businesses is going to intensify with the recession. People are going to be more interested in supporting Australian products and jobs.” Young Henrys co-founder Oscar McMahon

So COVID-19 has had a big impact on your revenue?

Both: Yes, massively.

Did the boom in the off-premise from panic-buying off-set that?

Richard: It helped but having keg sales go from a good rate to zero because bars and pubs were closed was pretty tough.

Oscar: Our business was about 65 to 35 keg to pack volume and all of our margin is in kegs. So we lost 65 per cent of our revenue that also had all of our margin in it.

How many people are you restricted to letting into the tasting bar now?

Oscar: 50, which is great. We actually didn’t open up our bar as soon as we could or do bottle shop sales from our bar because we were able to do wholesale. All of the bars and restaurants around us could only do takeaway so we stopped to give everyone a share of the market. They’re businesses that supported us before, throughout and will again so we had to look after them.

Richard: We also didn’t want our staff to be exposed to COVID-19.

Do you think all craft breweries would be feeling some sort of pain from COVID-19?

Richard: Yes, some more acutely. Others are doing it tougher; we’re seeing some closures already. Oscar: Everyone’s pack to keg ratio is going to change how this has impacted them. Jobkeeper has been important for us and I’d say every independent brewer would say the same thing. Breweries are capital intensive businesses - most breweries have an element of debt, probably more than bars and restaurants, so to have a financial prop on our headcount was a Godsend.

Can you forecast to September, do you think you’ll be back to pre-COVID-19 figures by then?

Richard: By Christmas, we might be back to where we should have been a few months ago. You have to remember that we had bushfires before this. Our bank account was 20 per cent down from summer because of the smoke, people weren’t going out.

Oscar: And people in rural areas couldn’t drink because they were prepared to leave or fight a fire. Fires also came close to our hop crops which were already droughtaffected and challenging us in the brewery to maintain quality.

I wanted to ask you about the independent nature of Young Henrys. How important is that?

Richard: The independent beer industry is a large employer, about 47 per cent of the industry is employed by independent producers even though we only represent about two to three per cent of beer sales. A lot more hands go into making independent beer.

I think independence matters; people care about where their beer comes from and who owns it.

Oscar: We predict that support for independent businesses is going to intensify with the recession. People are going to be more interested in supporting Australian products and jobs.