The Entrepreneur Podcast
The Entrepreneur Podcast

Episode · 1 year 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 ibion tofenertiapod cast from the prl Mora sed institute, Pronto Menorship at the AvyBusiness Gool, my name is Eric Morrs and IILL. Be Your host for this episode. Mat Phillips is the founder in CE O ofPHILP's brewing and malting company, an Victoria British Columbia. After yearsof working for other brewers, Mat decided to start up his own brand, justas craft brewers across the industry. We're shutting shop in the early two,thousands almost two decades later phillips is not only still standing butthriving. Today, I'm Gong to talk with Matt largely about searching foropportunity that will cover some other ground. Now, here's Mat Phillips andthe story of BS's biggest little brewery. I started my bury eighteenyears ago. I'd worked for a few beries at that time and Um. I guess I've beenworking for Bais about four or five years at that point and really Ou Kno kindan opportunity earlyon that. You know that this industry was going to grow and had someexperiences working for others. T at realized that to kind of take thedirection I wanted to go in my brewery, autonomy was going to be important. Soyou know in the late nineties a lot of breies were closing therewas a boom andcraftburries through the through the early nineties and mid nineties, and alot of them didn't make it, and so there was a lot of gear floating aroundTur, the Centry that that was. You know going for a pretty significant dis outand h with this idea that I really wanted tobe able to to start my own bury and not have to answer to anyone. I really sawthe opportunity there that if I was going to start it was now because itwas starting to get snapped up. The availability of equipment wasn't quitethere like it was a year or two before that, and so I thought, if I'm going todo this. This is the right time. I got a jump and, and so I did, I put abusiness plan together. I ran around all the banks and h dropped them offand...

...typically got a pretty quick now. So soI just grabbed credit card applications on the way out and sent them all in andthey all got approved for various aounts from you know, two to tenthousand dollars and- and I kind of pouled them all up and had a highinterest start to to my business, but that's KINDOF. How Got Os? I have afriend that says: THAT'S VC funded yeah, soseoe, ASA cary, you know cool. Sowhen you were thinking about it, the environment you were looking at.Obviously, in terms of there was equipment ready had you had entrernealexperience before that, or always been working within other Breweris Yeah Yeah.Exactly so, no I'd worked for a few BERRIYS ran one butactually ran to two. I guess but Um, but no I'd never never had no prenelalexperience. So you mentioned that you wanted to kind of. Do it your own way?What what was the gap that you saw in the market? That hat you didn't feelwas really being hit Yeahwell, I, I guess M, maybe slightly two different things. Sowhat really inspired me to want to do it? My way was my second job. I wasgiven the task of taking a really well made logger and and watering it downinto Um, particularly unsatisfying light. Logger.U, and you know, wasn't wasn't keen about it- voiced my opinion but waskind of pushed in that direction. So you know H,t that was kind of the reality is I realized that you know if we wanted. IfI wanted to make beers t, I was proud of that was going to be challengedunless I had a little more control than that, but the opportunity in the marketwas one where every brew is pretty much making the same thing, not that it wasa big market, but there was a Nich market for interesting one off kind ofbears, and so that's what I I I kindaf went down the road of making just bigformat, bottles, kind of single sale, units of you know, IPAs and Espressostouts and those kinds of things that...

...really you know didn't reque. There was no bbrand loyalty to overcome it was. It was the kind of consumer that wasinterested in that it was going to be interested in that, and you know it Wathere Wase so few on the market. I knewi, I would have a pretty goodchance of of being able o kind o get initial sales pretty quickly. Okay, youwere relatively early on the craft beer, not not right at the beginning kind ofas it started to boom y. You were there pretty early on. Is that right? Well,yeah! You know I kind of think of there kindof two waves, so there was therewas n BC. At least there was a a group that started in the mid eighties andKINDOF mid eighties through Midniney, so es there were. You know, fair numberBeies that started number close as well, and then the next real wave kind ofstarted an around two thousand and seven two thousand and eight, and so Iwas two thousand once so. I was right in th the trough between the T, aagasyeah, okay, interesting. I heard you talk about the quality of the beer andyou know with the loger being watered down, and I I love your beer, so thequalityis there it's funny, though, because when I think of your brand, I,I probably think of the art, the marketing the connection to thecustomer in that messaging kind of way. As much as I think about the beeritself, it was that an obviously conscious decision on your part to bedifferent and how you reach out te customers. It was an evolutionaryprocess, you know when I began. It was in fact one of these days I'll show youmy original labels and no there's graphic evidence for the fact that itdidn't begin this way, but we began where I began as one man's show andvery produccentred. It was. These are the kind of beers that I know are goingto resonate with custom, and you know it's very fortunate, early on to choose a graphic artist. That M just amazing. It's just amazing. He Icultural understanding is phenomenal. His ability to work in almost anystylist phenomenal and anhe's, the coolest guy. I know- and so you know,I've been really fortunate to to have him as part of the creative team andand to be honest, we've hired creative...

...people along the way with that that inmind, so it's really kind of part of the Dan of the company, but it didn'tstart that way. It kind of evolved that way. Um and quite early on. We started making beersthat weren't just designed to be. You know we weneed to tell people what's inthe bottle. You know once we got past that hey this is the very basic level ocommunication. We need to give customers a we Y ow we've got a littleband with USS, have some fun with it. That's when the real character of thebrand began. Oh It's interesting and I don't think there's another beer outthere that I actually read the whole label bthere's, something you know allthe way around the CAN. That's that's interesting. You obviously had afoundation before that in terms of some success and local success. Do you thinkthat's what really took you to that next level was, if that 'cause, it's adifferentiated. You know a product that way for sure yeah. You know it. It's agood question. You know, like anything, we spend a lot of time naval glazing,trying to figure out what it is that worked about Brans that worked and whatit is about. Bronds that didn't work and the inevitable reality is we come up with a million reasons forboth and quite often is overlab. You know you can't really tease them out, butyou know I I think we being a Victoria based Bery Victoria had a really strongcraft following and was really open to, those kind of novel bears and, and sothat kind of leaked out- and I think I think, partly because of the kind ofbeers we were making and the quality that we were making them in, we wereable to kind of g RAB followings in the areas that were more distnn of theburry it got really on but yeah. You know you can. If you have a great label,people will will try a OSS right and if it's goodthey'll try it twice and coolcomment about the copy. I mean every little piece every detail matters right,so we actually have a separate group that writes our copy to the group thathoes a graphics to the group that Doesnh' name. So we we tease them apart,because you know it's it's f. If you break them down inte little bits, youcan put a lot of focus on each...

...individual bit, whereas of is one bigproject. Sometimes the details don't have as much resonance H. I thinkthey're important, I think all o thos things are important. Who put that muchcare into making the beer. We got to put that most love a D, an effort intomaking the Labor the label Sorryyou Know My. My wife loves your beer aswell, but, very specifically, you know a couple of the years and she's not abeer drinker, so I think you've somehow done something magical. As far as I cantell you're, one of the biggest of not the biggest regional kind of brewer nowin Canada is that is that something you aspired to? Or did it just happen? Youknow when you back to that original business, yeah, yeah, H, Awas, APL. Theoriginal business plan was very modest, which is part of what the banks allkind of looked at. They they thought. You know, you cannot start to bury this,this small none like t j, it's not the model, it's not the Paradim of what aber look like to that ors. No, it was really modest Um. I think we topped outthink it was a five year plan d. We topped out at five people I think- andit was really specialized in these unique one off beers n and a widergeographic antribution Um, and I guess I start as one person game an the first two years were incredible interms of the work requirement, so I would typically be working. You know Iwas building Mo machinery at the same time, welding tanks, fabricatiequipment. I used to anima talent, yeah, well, yea, haven't seen these tanks, but I would iwoud build two tanks andsell one and the laborafor the material, an the other. So that's how IW's ableto build up the tank firm, so I'd be yeah. You know typically I'd I'd get upin the morning and I' I' do my bottling run and then I go out and I do salesand deliveries and th N. I come at home and I brew at night and and sleep for acouple of hours and get up and do it again and after a few years I was twoyears I was pretty done. I was pretty burning out and h very early on. Istarted the bury and there was it was a...

...very tight timeline. I think I signed alease in June and I needed to have sales in August to make sure that Iwould get paid in September from the liquor branch, which is a minor miraclethat is able to pull license off and all. But you know it was the ignorancesometimes pays off, and so so in in case it pulled it off, and I called upmy traditional bottle supplier for the people that I've been working for ifrother bees have been working for- and I said, I need some few palates andthey said o well we're out somebody MEA wer well the whole industry's out. Theyhave 'cause, they only run this bottle every three months and they're out andthe next schedule run is in October. So we should have hem in November how'sthat Gran and I sai well. I need them next week, Oron Bancraft, so thatdoesn't Wor, I'm not going to make rent next month. So so anyway, I was able tosweet talk. Somebody in the glass plant down in Portland into selling me acouple off of the DOCG, and so I drove down on a five ton truck and I got out.There is huge dog, forty, Fifty C eighteen wheelers lined up and my mytruck was six inches too short for the dock, and I went and talked to the guyand he said Yeah Wel, we'll figure it out, we'll sort you out, but you got toknow you are the last guy I care about today. So just make yourself at home,we'll get you loaded by the time we close the night of five. It's not goingto be till th, and I said it as is just before nine eleven wow security slack.I said: Do you mind if I walk around in this huge warehouse and- and I did- Iwent for a hike and I fel it was a long walk and in the very back corner, werethese old, stubby bottles a what's the story with these? Can I buythose and Hi adozer those are spoken for or whatever ere we're holding them.Yo can't use Hem s whatever and you K O try it again with some bottle brokersand no one could get a hold of them. So I kindof stopped Thinkin, put it thebatter. It had something rount about it. Thoughtwere, two years later, I youknow I was up twenty percent for the previous year. I was paying my bills,but I wasn't getting ahead. It was and...

...it was wor. I wasn't yet at a pointwhere I could hire anybody. His punishing work and I kinda hit thatbrakepoint and you know I think, a lot of people hit that breakpoint, Um and h. You know actually, for me, it came downto a box of shrink rap, so I'd go through I'd, build a Palet and I'd haveto shrink rap it and then I'd drive it over to Vancouver and and deliver itand Um. Typically, a box of shrink rap cost Abou. Forty Bucks it'l last me,maybe three four months ye anyway, I got to the end of the box and I thoughtD O am I going to buy. Another box list. Is s another three or four months, thenI I kindo had that pointout. No, you know what this is. This is the point:t' Dos art it doesn't eleize. I recognizeamy. This is this is killing me, I'm not going ou further. I kindo made thedecision, I'm done and I called it my dad and I said eah packing it in and hewas very supportive, but I slept on it. I woke up in the morning and I can'tgive up. This is no too far in S. I just can't quit after one try right. SoI called up the bottle supplier and I said those bottles. Any chancels arefor sale yet and Wy she's funny o should call yeah Y H, W we've just hada meeting about that there for sale. So I said Okay and so set about designinga beer that would suit that thatcabby bottle and came up with M shewas funny.We needed it after an old giry that was in the interior of BC called Phoenix,the town called Phoenix and they had um the biggest gold line in O coppermindsor in the Bridish Commonwealth, and then they had a strike and they closedit. And then, during the Second World War they need a copper again, so theystarted as an open, pipd mine and just wiped out. The town and T at was a kindof a cool story and no trademark issues wor that or they'rGod um so call this beer phoenix made loger built some tanks, it worked forloggers and and KINDOF doubled down on it and it really hit and it startdg totake off and Starte to be able to hire people and all of a sudden has metHimso. But of course this was totally...

...contrary to the original businessplants that was kind of when the departure happened. Athatas, wherewe're going. That was the first label that was graphically a little moreinteresting. That was the first for Ay into that world and it worked prettywell. Interestingly, it turned out that there was another Phoenix brery and itwas actually Invictoria and actually kitty cornered to our currentyou're getting occasion. So any time, we' open the ground and tig a hall toput a new tank in or something we always come across. Tha Phoenix bottle,that's wowburied in the ground. There so a research reseurcas a key thing,but from there you took off yeah. Well, I mean I'm sure, there's lot I op pontdown and brands it hit and didn't, but but that was kind of, I think, a realinflection point for the business. Ok, a and right in saying you're, the oneof the largest crap rovers in the country yeah you now numbers aren'treally published so e, but we're definitely in the largest side ofthings: yeah, yeah, fantastic! Congratulations! When you think aboutthat growth- and you know a lot of persoverance pushing through anything that comes to you in terms ofthat you'd want to share the lessons learned that just kind of you look backand you go wow. You know that that was key. You talked about one moment but inany ofther lessons that just wow wish. I would have known that ten yearsearlier, there's so many moments that Ou Kinda go. Oh Man, I wish I couldhave learned that the easier way you know, I think, when I look backunderstanding the value of culture earlier would have would have been areally wonderful Assen and you know for me it was something that I didn'treally understand until it was shaky and it was so much more difficult to torebuild than it is to maintain forersand. So you know reallyunderstanding what it is about. Your culture it special and what drives it hwould have been something that you know. I would just recommend everybody kindof spent some time thinking about Ho how to communicate within yourorganizations. So you maintain it pty basic stuff, but I didn't know it well,O wouldn't know it. Today I mean you've got a fun workplace. You know you say Y,U you hired the coolest Guy, I'm not...

...sure it's not! You, though man. You nowreally enjoyed getting to know you over the years and thanks so much formeeting with us today pleasure Ba Cher. Well, thanks o getting map you w whatwhat a lot of fun he is and to get to chance to talk with him about his startup and and some of the things that he went through as he got his business towhere it is today. I just wanted to cover a couple of points aroundopportunity. You know we talk a lot about being in the flow, and I thinkMatt is a great example of that he was in the industry. He'd worked for anumber of different players. He was watching what was happening and he sawhis opportunity in a couple of ways. One there was spare equipment still outthere that he could pick up for cheap to get his ideas off the ground and twohe saw a need around the product that the product that was out there wasreally quite generic. He thought he could make a much better product as wemoved forward. The thing that's really interesting to me and that I hope, Thayou picked up on is that that product in his company itself really evolvedover time to meet the customers more where they were and where they weregoing. So we had a great idea, but it was changed a number of times to reallyget where he is today and that's typical of all ideas. So one of thethings about being in the flow that I wanted to point out is that lots ofpeople are there. We all. You know many of us go to work every day, but it'sthose that are searching and looking and open to ideas that frankly spotopportunity. So how open to you our new new ideas, are you searching for thosenew ideas and searching for those opportunities? Is They come along?Sometimes it's inspiration, but it's just as much perspiration of Oh. I seethat's different. How might I work that and change that into something thatreally could be interesting in terms of a business opportunity? Something elseI hope you picked up through this particular pondcast is justperseverance and resilience. You know...

...there's a lot of up and downs as youget a business up and going and it's and it's staying open to those newopportunities and the stubb bottles with Mat, but it's that realpersistence to stay with it t to keep going that made a difference. FROR Adinthis case. Lastly, Matt talked a little bit aboutgrowth and how important culture was as he got up and going and Rina use thatas a bit of a jumping off point in the next pod, gast I'll be talking to donbell who talks an awful lot about culture. Thanks, you've been listeningto the Iviongmin or potcast to ensure that you never miss an episodesubscribe to the show in your favorite podcast player, or visit ivy dot caforward, slash entrprenership! Thank you so much for listening until nexttime.

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