Lessons Learned: Parched Brewery
In the Bintani Lessons Learned series, Brews News revisits businesses a year on from a significant milestone like opening, expanding or raising capital to find out what the experience has been like and what lessons others might learn.
Parched Brewery in Brisbane’s West End is set to reach its first year in business, having learned the importance of adaptation and resilience for a new brewery.
The business, which opened in December last year, experienced an eventful first year with a number of large-scale challenges impacting the business.
“We’ve had our fair share of challenges since opening last December,” head brewer and owner Carl Hallion told Brews News.
“In January, COVID lockdowns had a big impact on business and unfortunately new businesses that opened in 2022 didn’t see much if anything in the way of government support.
“We then got hit with the flood in late February which had a big impact. We lost a full 10hL batch of beer as well as significant damage to equipment and the business interruption.”
The flooding disaster, which impacted many regions including South East Queensland and Northern New South Wales earlier this year, continues to be an ongoing issue for many businesses, including Parched.
“Insurance has taken 10 months to process our claims and we still have repairs and compensation outstanding,” Hallion said.
“We’ve had to cover that in our working capital which makes things a bit tougher in year one.
“We’ve been able to manage around it but a new brewery doesn’t really need more challenges like this. Fortunately we did get some flood assistance which offset the lack of COVID assistance.
“In general, 2022 was a tough year for a new business. We’ve needed to be extra vigilant on our cost structures and really focused on building our support base. We’ve been lucky that local support has been strong and we’re really happy to be part of the West End community.”
Budget and marketing
For any new brewery, understanding cost models is important however, Carl said it’s also important to refine costs as the business grows.
“A couple of key lessons is to make sure you have your cost models right and keep refining them as you go,” he said.
“The one thing you can guarantee is that your cost base will move pretty quickly at the moment with inflation and being new, so staying on top of it and focusing on margin over volume should be the first goal.”
As other new breweries have noted, finding the right marketing strategy is key in creating a unique brand however, forging a point of difference for customers can be difficult, as Parched learned.
“I think our marketing plan has also had to adapt with the shifting environment and it’s an area you need to stay on top of from day one,” Hallion said.
“Fortunately my wife is a guru so we’ve been adapting as we learn but you need to match the marketing plan to the business model before you start operating and then constantly refine it to define your market and get your message out.”
In terms of build costs for any breweries-in-planning, Hallion offered sage advice.
“I’d also plan to have about 30 per cent of your build costs in a project fund and at least 20 per cent in working capital. In other words, I’d fund at least 50 per cent more than your budget for the build.
“You need to cover rising costs, unpredictable revenue and also the unknowns that you can’t possibly plan for and only find out once you get into it.”
A focus on community
Despite its first year providing difficult challenges to manoeuvre, Carl Hallion noted how the year brought many successes for Parched.
“We’ve kicked some great goals and have built a fantastic operation,” he said.
“The brewpub venue has featured in several “Brisbane’s best brewery/venue” style articles and has developed a great reputation with its customers.
“I think our staff play a huge role in that. We’ve been lucky enough to have some great people come on board and be part of our journey and I think they make a real difference.
“Particularly for our locals who feel like they are greeting friends and not just staff when they come in.”
Parched’s beers also performed strongly at this year’s Indies, picking up five medals for its Smiling eyes Irish red ale, Mi Amigo Pagara Mexican lager, Snafu Dos XPA, Because I’m Hoppy NEIPA and Brave New World Hazy IPA.
The business also launched its wholesale program in the second half of the year with over 35 venues and bottleshops stocking its beers.
While the brewery has drawn successes with its beers and brewpub model, it has also looked into giving back to the local community in West End with its 4101 Community Hop(e) initiative.
“The 4101ers have been great,” Hallion said.
“We’ve been embraced by them from day one but never more so than following the floods. That was the catalyst for our 4101 Community Hop(e) Initiative.”
Based on the brewery’s 4101 WCIPA, with 4101 being the postcode for West End, the initiative sees 10 per cent of sales revenue from the beer go towards local community programs.
“We saw how great the community was and wanted to find a way to play a bigger role in the community,” Hallion explained.
“We love the program and have helped West End Film Festival, Micah’s [Projects] Hope on Boundary café and their Street to Home program as well as local community gardens.
“We are planning on getting the 4101 into local bottleshops in West End to help build this program further.”
In terms of the immediate future, Hallion explained the brewery is looking forward to a busy Summer period.
“We have a huge function season coming up and are pretty heavily booked through to Christmas. We still have some availability left but we are filling it fast,” he said.
“The upshot is we’ve realised what a great functions space we have in the venue so we’ll keep building that side of the business.”
Looking ahead, wholesale and brand recognition will be a key goal for the business, as Hallion explained.
“Broadly we have a vision to get better at everything we do so I want to keep us pushing down the path of continuous improvement,” he said.
“Our next goal is to become a first choice selection for venues and customers in and around Brisbane and recognised as a destination in the West End. So far, so good.
“Oh and I’d like a holiday at some stage, but that might be in 2024.”