What separates the producers who scale

9 Sept

I spent two days at the Spirits Victoria Association conference in Geelong recently, and the question that kept coming up in the corridors was route to market. Where do we sell it. How do we get in front of people. What do we do about social media.

‍ A fortnight later I sat down with Seb Reaburn to record a Growth Edit podcast episode called State of Spirits. Seb co-head judges the Melbourne Royal Australian International Spirits Awards, so he has tasted more Australian spirits blind than almost anyone alive. He also runs Anther in Geelong with his partner Derv McGowan, where they consult to producers who are just starting out.

I asked him what he sees in the businesses that climb. He gave me this answer:

"Anyone can start a hundred million dollar spirit brand. There is no single decision in that process that is hard to make. The problem is that there are hundreds of thousands of decisions, and it's incredibly hard to make all of them well yourself."

That is the whole thing, and it applies just as much to a brewer or a winemaker as it does to a distiller.

Nobody is stuck because one decision defeated them. They are stuck because five hundred small ones arrived at once and there was only one person to make them.

Four things the ones who get through have in common

Across the conversation, and against what I see in my own client work, four things separate the businesses that make it past the early years from the ones that stall at the same size for a decade.

1. A strong identity, which is not the same as the best one

Seb was careful about this, and I think it is a useful distinction.

"Have a strong identity. It doesn't have to be the best, right? But it has to be strong."

Businesses lose years trying to arrive at the perfect positioning. Meanwhile a competitor with a clear, ordinary, well-held identity is out selling, because people can tell in four seconds what they are and who they are for.

‍ A strong identity is one you can hold consistently under pressure.

2. A route to market that already exists

This is the one I would take back to almost every producer I met in Geelong.

Seb's language for it is priming the pump. Before you make the product, know where the first hundred cases go.

"We're seeing people now that say we know where we can sell our first hundred cases. And then they're building out from that. Three years ago they were coming in saying, I want to make this amazing product, and everyone will come to me if I make it."

He described that shift as the single biggest change in the last twelve months, and he thinks it is why the businesses arriving now are in better shape.

The version I see in wine and hospitality is a business with an existing audience it has never counted as one. Farm accommodation. A function room. A cellar door with four thousand people a year walking through it and no database. That audience is your first hundred cases, and it is usually sitting there unused while the owner worries about Instagram. I have written before about what it takes to capture the visitors who are already coming.

‍Which is the other half of this. Route to market has quietly become the hardest part of the job, because the online route that worked five years ago has closed over.

"If you are relying on Instagram and Meta and TikTok, you're competing with the world's biggest brands and you're competing head to head. If you try to do what they're doing, they'll outperform."

‍His answer is to go where the corporates cannot. Local markets. Local events. The football club. Anther does work with The Gordon in Geelong, which puts them in front of local chefs, local producers and their local member of parliament. None of that is available to a national brand with a media buy. ‍

"Local partnerships are probably more impactful than just putting content out on social media."

‍This is the same argument I made after the conference in five things drinks producers can still control for growth. You cannot do much about the market conditions, and you can decide where you show up.

3. Responsibilities split early

Seb's examples were Four Pillars, with Cam on production, Stu on brand and Matt on strategy, and Never Never, with Tim in production, George on the business and Sean out in market.

Both split the work before they were big enough to need to, and both grew.

‍The point is not headcount. It is that one person holding every function is the reason those hundreds of thousands of decisions become unmanageable. You do not have to hire to fix it. A co-founder, a good staff member, a consultant, or simply naming which decisions you will stop making yourself will all do the job.

"Acknowledge the things you're no good at, and find someone who's good at it and loves it to do it for you.”

What I ask founders is a version of the same question. What gives you energy. If you are carrying the tasks that drain you as well as the ones that drive the business, you will not scale, and you will not enjoy the thing you built.‍ ‍

4. An understanding of how the money moves

This is the part of the conversation I would put in front of anyone thinking of moving from hospitality into production, and it is the thing Seb says caught them out.

"Knowing how to build a successful hospitality business does not in any way prepare you to build a successful production business."

In hospitality, a busy week pays for last week. Customers pay on the spot, suppliers give you terms, and a growing venue can trade its way into profit. ‍

Production runs the other way. You pay for glass, labels, ingredients and staff months before anyone pays you, and a wholesaler pays on terms after the customer has bought.

"You can grow yourself broke. If your growth is more than 20%, then you have to put more money in."

Twenty per cent. That is a number worth writing down, because it is well inside what most owners would call a good year. Growth beyond it needs capital behind it, and a business that does not know that finds out in the middle of a season when the bottles cannot be paid for.

What to do with this

None of this is complicated, and that is the point Seb keeps making. Every one of these decisions is easy on its own.

So the useful question is not which of the four you should work on. It is which one you have been putting off, and what it is costing you to keep putting it off.

‍ If you cannot say who your product is for in a sentence, start there.

If you cannot name where the next hundred sales come from, start there instead, and look hard at the audience you already have before you spend anything on finding a new one. ‍

If you are making every decision yourself, pick two you will stop making this quarter.

And if you are growing faster than twenty per cent and have not run the cash flow, do that this week.

Seb's closing line was about sustaining it, and it is the right place to finish.

"It's a long game, and if you're not loving what you do at work every day, it's really hard to sustain."

Ten years to be an overnight success, as he put it. The businesses that get there are the ones that made the work manageable early enough to stay in it.