The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 2 years ago

9. Taking Hold of Opportunities with Matt Phillips of Phillips Brewing and Malting Co.

ABOUT THIS EPISODE

Matt Phillips is the founder and CEO of Phillips Brewing and Malting Co. in Victoria, British Columbia. After years of working for other brewers, Matt decided to start up his own brand as craft brewers across the industry were shutting shop in the early 2000s.

Almost two decades later, Phillips is not only still standing, but thriving as BC’s Biggest Little Brewery.

You're listening to the Ivy Entrepreneurship podcast from the Pierrol Morrissett Institute for Entrepreneurship at the Abbey Business Cool. My name is Eric Morris and I will be your host for this episode. Matt Phillips is the founder and CEO of Phillips Brewing and Malting Company in Victoria, British Columbia. After years of working for other brewers, Matt decided to start up his own brand, just as craft brewers across the industry we're shutting shop in the early S. almost two decades later, Phillips is not only still standing but thriving. Today. I'm going to talk with Matt largely about searching for opportunity, though will cover some other ground. Now here's Matt Phillips and the story of BC's biggest little brewery. I started my brewery eighteen years ago. I'd worked for a few breies at that time and I guess I've been working for brewers about for five years at that point and really, you know, kind of saw an opportunity early on that you know that its industry is going to grow and had some experiences working for others that realized that to kind of take the direction I wanted to go in my brewery. Autonomy was going to be important. So, you know, in the late s a lot of Brewis were closing. There's a boom and craft breweries through the through the early s and mid S, and a lot of them didn't make it. So there was a lot of gear floating around turn of the century that that was, you know, going for a pretty significant discount. And with this idea that I really wanted to be able to start my own brewery and not have to answer to anyone, I really saw the opportunity there that I if I was going to start, it was now, because it was starting to get snapped out. The availability of equipment wasn't quite there like it was a year or two before that, and so I thought, if I'm gonna do this, this is the right time. I got to jump and and so I did. I put a business plan together, I ran around all the banks and drop them off and typically got a...

...pretty quick now. So so I just grabbed credit card applications on the way out and sent them all in and they all got to proved for various amounts from, you know, two to tenzero dollars and and I kind of pooled them all up and had a high interest start to to my business. But that's kind of how I got goes. So I've a friend that says that's VC funded. Yeah, it's about the saying please a card piece of Carlo. I. You know, cool. So when you were thinking about it, the environment you were looking at, obviously in terms of there was equipment ready. Had You had entrepreneur on experience before that or always been working within other breweries? And Yeah, yeah, exactly. So, no, I worked for a few buries, ran one, but right, actually ran to to, I guess. But but no, I'd never, never had any entrepreneural experience. So you mentioned that you wanted to kind of do it your own way. What was the gap that you saw in the market, that that you didn't feel was really being hit? Yeah, well, I guess maybe slightly two different things. So what really inspired me to want to do it my way? It was my second job. I was given the task of taking a really well made logger and and watering it down into particularly unsatisfying lightlogger and, you know, wasn't wasn't keen about it. Voiced my opinion but was kind of pushed in that direction. So you know that that was kind of the reality is. I realized that, you know, if we wanted, if I wanted, to make beers I was proud of that, was going to be challenged unless I had a little more control than that. Okay, but the opportunity in the market was one where every bruise pretty much making the same thing. Not that it was a big market, but there was a niche market for interesting, one off kind of beers, and so that's what I did. I kind of went down the road of making just big format bottles, kind of single sale units of you know, IPAs and esprescal stouts and those kinds of things that really, you know, didn't requite.

There was no brand loyalty to overcome. It was it was the kind of consumer that was interested in that was going to be interested in that, and you know it was. It was so few on the market I knew right I would have a pretty good chance of being able to kind of get initial sales pretty quickly. Okay, you were relatively early on the craft beer not not right at the beginning, kind of as it started to me, you were there pretty early on. Is that right? Well, yeah, you know, I kind of think it was their kind of two ways. So there was there was a NBC. At least there was a group that started in the mid S and kind of mid s through mid s or yes, there were, you know, fair number brews. It started number close as well, and then the next real wave kind of started in your own two thousand and seven, two thousand and eight, and and so I was two thousand and one. So I was right in the trough between the two and I guess yeah, okay, interesting. I heard you talk about the quality of the beer and you know with the logger being watered down, and I love your beer. So the qualities there. It's funny, though, because when I think of your brand, I probably think of the art, the marketing, the connection to the customer in that messaging kind of way, as much as I think about the beer itself. It was that an obviously conscious decision on your part to be different and how you reach out to customers. It was an evolutionary process, you know, when I began it was. In fact, one of these days I'll show you my original labels and you'll know this graphic evidence for the fact that it didn't begin this way. But we began where I began as a one man show and very product centered. It was. These are the kind of beers that I know are going to resonate with customers and you know, it's very fortunate early on to choose a graphic artist that it's just an amazing he's just amazing. He is cultural understanding is phenomenal, his ability to work in almost any style is phenomenal and any schools guy I know. And so you know, I've been really fortunate to have him as part of the creative team and and to be honest,...

...we've hired creative people along the way with that that in mind. So it's really kind of part of the DNA of the company and it but it didn't start that way. It kind of evolved that way and quite early on we started making beers that weren't just designed to be you know, we need to tell people what's in the bottle. You know, also got past that. Hey, this is the very basic level communication we need to give customers and we you know, we've got a little more band with let's have some fun with it. Right. That's when the real character the brand began. Oh, it's interesting and I don't think there's another beer out there that I actually read the whole label because there's there's something, you know, all the way around the CAN. That's that's interesting. You obviously had a foundation before that in terms of some success and local success. Do you think that's what really took it to that next level? Was it that because it's a differentiated, you know product? That way for sure? Yeah, you know, it's a good question. I you know, like anything, yeah, we spend a lot of high naval gazing trying to figure out what it is that worked about brands that worked right and what it is about brands that didn't work. And the inevitable reality is we come up with a million reasons for both and quite often those overlap. You know that you can't really tease them out. But you know, I think we being a Victoria base brewery, Victoria had a really strong craft following and was really open to those kind of novel Beers and and so that kind of leaked out and I think I think partly because of the kind of beers were making and and the quality that we were making them in, we were able to kind of get wrap followings in areas that were more distant to the brewery really on. But yeah, you know you can. If you have a great label, people will will try out us, right and if it's good, but they'll try it twice. And Cool. Comment about the copy. I mean every little piece, every detail matters, right. So we actually have a separate group that rights our copy to the group that does a graphics, to the group that does the name. So we we tease them apart because, you know, it's if you break them down into little bits, you can put a lot of focus on each...

...individual bit, whereas if it's one big project, sometimes the details don't have as much resonance. So yeah, I think they're important. I think all those things are important. We put that much care into making the beer. We got to put that much love and an effort into making the Labor the label. Sorry, but you know my my wife loves your beer as well, but very specifically, you know a couple of the beers and she's not a beer drinker. So I think you've somehow done something magical. As far as I can tell, you're one of the biggest, if not the biggest, regional kind of brewer now in Canada. Is that? Is that something you've aspired to or did it just happen, you know, when you think back to that original business. But yeah, it was a plan of the original business plan with very modest which is part of what the banks all kind of looked at. They thought, you know, you cannot start a brewery this this small. No one like it just did. It's not the model, it's not the paradigm of what a brewery look like to them. So No, it was really modest. I think we topped out a thin. There's a five year plan and we topped out at five people, I think, and it was really specialized in these unique one off beers and and a wider geographic distribution. And I guess I started as one person game and the first two years were incredible in terms of the work requirements. So I would typically be working, you know, I was building my own machinery at the same time, welding tanks, fabricating equipment. I used to anime talent. Yeah, well, you haven't seen these tanks, but I would build two tanks and sell one and and and the Labor would pay for the material on the others. That's how it's able to build up a tank firm. So I'd be you know, typically I'd get up in the morning and I do my bottling run and then I'd go out and I do sales and deliveries and then I come home and I grew at night and I'd sleep for a couple hours and get up and do it again. And after a few years, I was two years, I was pretty done. I was pretty burnt out and very early on I started the brewery and there was a it was very...

...tight timeline. I think I signed a lease in June and I needed to have sales in August to make sure that I would get paid in September from the liquor branch, which is a minor mirror call. It is able to pull license off and all, but you know, it was the ignorance sometimes pays off, and so, in any case, of pulled it off and I called up my traditional bottle supplier for the people that I've been working for, if at the Bruce had been working for, and I said I need some need a few palettes, and they said, Oh, well, we're out. Somebody mean we're at. Well, the whole industry's out. They haven't because they only run this bottle every three months and they're out and the next scheduled run is in October, so we should have them in November. How's that great? And I said I well, I need them next week or on bankrupts. So that doesn't worry. I'm not going to make rent next month. So so anyway, I was able to kN sweet talk somebody in the glass plant down in Portland into selling me a couple off of the dock, and so I drove down on a five ton truck and I got there's huge dock. Forty, fifty, could eighteen wheelers lined up and my truck was six inches too short for the dock. And I went and I talked to the guy and he said yeah, well, well, we'll figure it out, we'll sort you out, but you gotta know you are the last guy I care about today. So just make yourself at home. We'll get you a loaded by the time we close the night at five. It's not going to be till then. And I said it is just before nine hundred and eleven. While security slack, I said, do you mind if a walk around in this huge warehouse? And and I did. I went for a hike and it felt like I was long walk and in the very back corner where these old stubby bottles. I said, what's the story with these? Can I buy those? And they said no, no, no, those are those are spoken for. Whatever we're we're holding them. Yeah, use them. So looking. Well, whatever. And you know, try it again with some bottle brokers and no one can get a hold of them. So I kind of stopped thinking. Put it the back. Had something about it. Anyway, I thought. For two years later, I you know, I was up twenty percent for the previous year. I was paying my bills, but I wasn't getting ahead. It was and I was...

...worried. I wasn't yet at a point where I could hire anybody just punishing work and I kind of hit that break point and you know, I think a lot of people hit that break point and you know, it actually for me it came down to a box of shrink wrap. So I'd go through, I'd build a Palette and I'd have to shrink wrap it and then I drive it over to Vancouver and deliver it. And typically a box of shrink rap cost about forty bucks a last me maybe three four months. Yep. Anyway, I got to be end of the box and I thought do I I'm gonna buy another box this is another three or four months and I I kind of had that point out. No, you know what this is. This is the point. It's a does not writ doesn't recognize I recognize them. I this is this is killing me. I'm not going any further. I kind of made the decision and I'm done and I called my dad. Isn't it packing it in, and he was very supportive. But I slept on it. I woke up in the morning and I can't give up. This is too far in. That's they I just can't quit after one try. Right. So I called up the bottle supplier and I said those bottles. Any chancels are for sale yet? And I well, she's funny. Should call. Yeah, you know, we've just had a meeting about that. There for sale. So I said okay, and so set about designing a beer that would suit that that's going to be bottle, and came up with she's funny. We needed after an old brewery that was in the interior of BC called Phoenix, the town called Phoenix, and they had the biggest gold mine in or copper mind story, in the British Commonwealth and then they had a strike and they closed it and then during the Second World War, they needed copper again, so they started as an open pit mine and just wiped out the town wow. And that was a kind of a cool story and you know, no trademark issues with that or other gone so called this beer phoenix made a old log or built some tanks that worked for loggers and and kind of double down on it and it really hit and it started to take off and started to be able to hire people and all of a sudden has his moment him so but of course this was totally contrary to the original...

...business plan. So that's that was kind of when the departure happened. All this is where we're going, is when that was the first label that was graphically a little more interesting. That was the first for a into that world and it worked pretty well. Interestingly, it turned out that there was another phoenix brewery and it was actually in Victoria and actually kitty corner to our current you get location. So anytime we'd open the ground and big hole to put a new tank in or something, we always come across this phoenix bottle that's wow buried in the ground there. So wow, research, research is a key thing. But from there you took off. Yeah, well, you mean, I'm sure there's there was lots of upsy downs and brands of hit and didn't, but but that was kind of, I think, a real inflection point for the business. Okay, and and my right and saying you're the one of the largest cropt brewers in the country now. Yeah, you know, numbers aren't really published, so we're but we're definitely in the largest side of things. Yeah, fantastic, congratulations. When you think about that growth and you know a lot of perseverance pushing through anything that comes to you in terms of that, you'd want to share the lessons learned. That just kind of you look back and to go wow, you know that that was key. You talked about one moment, but in any of the lessons that just wow. Wish I would have known that ten years earlier. There's so many moments that he kind of go oh man, I wish I could have learned that the easier way. You know, I think when I look back, understanding the value of culture earlier would have would have been a really wonderful asset and you know, for me it was something that I didn't really understand until it was shaky and it's so much more difficult to to rebuild than it is to maintain a furse. And so, you know, really understanding what it is about your culture that special and what drives it would have been something that you know, I would just recommend everybody kind of spend some time thinking about. Okay, how to communicate within your organizations that you maintain it. Pretty basic stuff, but I didn't know it. Well, you wouldn't know today. I mean, you've got a fun workplace, you know. You...

...say you you hired the coolest guy. I'm not sure it's not you, though, that you know, I really enjoy getting to know you over the years and thanks so much for meeting with us today. Pleasure. Thanks, cherish. Well, thanks again Matt. You know what a lot of fun he is and to get to chance to talk with him about his startup and some of the things that he went through as he got his business to where it is today. I just wanted to cover a couple of points around opportunity. You know, we talked a lot about being in the flow and I think Matt is a great example of that. He was in the industry, he'd worked for a number of different players. He was watching what was happening and he saw his opportunity in a couple of ways. One, there was spare equipment still out there that he could pick up for cheap to get his ideas off the ground and to he saw a need around the product, that the product that was out there was really quite generic. He thought he could make a much better product as we move forward. The thing that's really interesting to me and that I hope that you picked up on is that that product and his company itself really evolved over time to meet the customers more where they were and where they were going. So he had a great idea, but it was changed a number of times to really get where he is today, and that's typical of all ideas. So one of the things about being in the flow that I wanted to point out is that lots of people are there. We all, you know, many of us go to work every day it, but it's those that are searching and looking and open to ideas that, frankly spot opportunity. So how open to you our new new ideas? Are you searching for those new ideas and searching for those opportunities as they come along? Sometimes it's inspiration, but it's just as much perspiration of Oh, I see that's different. How might I work that and change that into something that really could be interesting in terms of a business opportunity? Something else I hope you picked up through this particular podcast is just perseverance and resilience. You know, there's a lot of up and downs as you get a business up...

...and going and it's in it's staying open to those new opportunities and the stubb bottles with Matt, but it's that real persistence to stay with it, to keep going that made a difference from Matt in this case. Lastly, Matt talked a little bit about growth and how important culture was as he got up and going, and we're going to use that as a bit of a jumping off point. The next podcast I'll be talking to don bell, who talks an awful lot about culture. Thanks. You've been listening to the IVY entrepwinneur podcast. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player or visit IV dot Ca, a forward slash entrepreneurship. Thank you so much for listening. Until next time,.

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