This week on the Drinks Adventures podcast, I’m talking Australian whisky with Starward Whisky founder David Vitale.
Founded in Melbourne in 2007, Starward is undoubtedly the leading Australian whisky brand from a volume perspective, thanks to David’s ambitious strategy of pursuing larger scale production from the very beginning.
This has meant that Starward has been able to offer its range of high quality whiskies at pretty affordable price points.
They commonly sit under the $100 mark in contrast to the routine pricing upwards of $200 a bottle that you see from most other Australian distillers.
With David, I discuss this pricing differential and other challenges for Australian whisky, as well as his decision to relocate to North America to develop it as an export market.
We also touch on Starward’s recent expansion into distilling gin, which I remind David is something he said they would never do.
And lastly, the company’s entry into bottled cocktails with the launch of the Starward New Old Fashioned.
Theme music ‘Sandbox’ by Rudists. You can listen to more from Rudists/Cameo Culture at https://soundcloud.com/cameoculture.
Australian whisky with Starward Whisky founder David Vitale – full transcript
JAMES ATKINSON: David, thanks very much for joining us for a chat.
DAVID VITALE: Absolute pleasure. It’s good to see you again.
JAMES ATKINSON: Now, just to kick off my questions I’m going to ask you something which someone asked on a whisky page on Facebook this week. Why is Australian whisky so super expensive? Starward seems like the only distillery without jacked up prices. Maybe you can shed some light on that for this gentleman?
DAVID VITALE: Yeah, it’s a good question. And look, I think my view is that — and this is not even regarding Australian whiskies, it’s just generally, any whisky that’s over about the $100 price point, you’re either paying for scarcity or marketing or probably a bit of both. And so, in the context of Australian whisky, there’s no doubt that all of the distillers, I’d be proud to have as my own and offer the world such as the quality of them. But the challenge is under substantially constrained stock, so while they’re still trying to build inventory it just kind of means that the prices, the cost per litre is going to be a lot higher.
And I guess from day one, one of the things that was really important for me was that we began with the end in mind which is like a really affordable, easy to drink whisky that we can offer the world. And if we’re going to do that and compete with the rest of the world, we needed to be competitive from a price perspective. So we scaled up very early in the hope, not belief, in the hope that the market would meet us. And we’ve been really fortunate to have a great tailwind in terms of the rise of craft whiskies around the world. And so a lot of that scale has been absorbed and we’ve been able to afford to reinvest on that basis. But it’s just based on the fact that we laid a hell of a lot of whisky away very early which meant that the cost per litre was a lot lower.
JAMES ATKINSON: Having said that, I am aware of some larger players coming into the market in Australia at the moment that are a bit better resourced and look like they want to do things at scale as well. What do you think that means for the smaller — the micro-distillers if you will?
DAVID VITALE: Yeah, I think the great thing about whisky — and this is regardless of where it comes from around the world, is that you’ve got the ability to really take advantage of a story as a producer. And so, if you’re able to kind of build that narrative around something that’s distinctive and unique, and actually offer somebody something that they can’t get in other places, then you can afford to offer if for a premium. But if we’re talking about — you know, the internet time machine is a wonderful thing. You might want to look this up, but one of the earlier distillers had on their website, we make Tasmanian whisky in the finest of Scottish traditions. And in that context, you have to ask yourself, well, why? Why would you bother to buy that whisky in the finest of Scottish traditions when you can buy a Scotch whisky in the finest of Scottish traditions? So my view is that prices are only going to be an issue if you don’t have a point of difference.
JAMES ATKINSON: And you think that there still could be a place in the market for those guys who are doing the single casks and able to charge $200 a bottle purely because it’s scarce?
DAVID VITALE: Scarce. 100 per cent. There’s no reason why that can’t exist. And I think, at the end of the day, drinkers vote with their hip pocket, and there are plenty of people that are happy to find interesting and scarce whiskies and have them part of that special occasion cabinet. As much as there are plenty — there’s a lot more, but there are plenty of people that just want a whisky for the sharing cabinet. And firmly, from day one, we’ve always thought of ourselves as a sharing cabinet whisky.
JAMES ATKINSON: You never do special releases that are going to be like the absolute rarest of oldest cask?
DAVID VITALE: Last year was our tenth anniversary of production, that moment in time when I thought that’s it, we’re all in. I kind of looked at my wife and said, “We’re all in.” And so that was ten years ago — eleven years ago on Sunday actually. So we released a tenth-anniversary whisky last year.
JAMES ATKINSON: But it was actually quite an affordable price point compared to Sullivans Cove has put out something this week that was $750 a bottle, so.
DAVID VITALE: Yeah, and look, from our point of view it was about basically saying it is some of our oldest and rarest stock in that bottling, but we take the view that whisky is to be shared and enjoyed. And for us, those limited releases which are becoming more and more sought after and challenging for us to meet the market, are really a reward for loyalty to our most closest fans than it is an opportunity to increase margins and do those sorts of things. So for us, we’re firmly of the opinion we want to be a bit more of a democratic approach to whisky sales.
JAMES ATKINSON: One of the things I’m seeing at the market in at the moment is the erosion of boundaries between different categories of drinks. And probably one of the most prominent examples of that recently has been Jameson Caskmates, Pernod Ricard actually buying a brewery so they can keep making that whisky that’s being held in casks that have previously had beer in them. What do you think is actually driving that, that whole trend towards experimentation?
DAVID VITALE: Well, I think — and craft beer probably is the biggest driver actually. So if you think about ten or fifteen years ago, maybe even more, it was really the two majors, CUB and Lion, that kind of had the lion’s share of everybody’s throat when it came to beer. And we’ve seen that kind of change quite dramatically because people are interested in flavor-driven drinks. And so I think that that’s really driving it, is people seeking out bigger flavors, interesting flavors.
And my journey really actually began in craft beer. Starward was originally going to be a craft brewery, but good beer doesn’t travel well and in my mind, I really wanted to create something that we could take to the world. And so, as we know, whisky is just a distilled beer and so my mantra from day one is a craft beer drinker is a Starward drinker that doesn’t know it yet. So I think that that’s really been a big catalyst and an eye-opener for drinkers generally. And we’re seeing, I mean, everything is getting bigger in terms of flavor and I think that that’s driving it.
JAMES ATKINSON: And on that note, you’ve recently gone into the gin business. I’m pretty sure I recall you being quite adamant about saying that we’d rather focus on doing one thing and doing it well so I was a little bit surprised when I saw the gin came out.
DAVID VITALE: The quote was if you chase two rabbits you’re not likely to catch any. So I know exactly what you’re talking about.
JAMES ATKINSON: I wasn’t imagining it. It wasn’t some other guy?
DAVID VITALE: No, no. It was me. And this where you say, never say never, right? No, look, the gin’s an indulgence. And by no stretch of the imagination do we think we’re going to compete with the Four Pillars’ of the world or the Archie Roses of the world or the amazing gin producers in Australia. That’s not the intention. I think what we’re trying to do, and it comes back to that whole idea of flavour, is just really — I think making gin from a whisky perspective and thinking about it from that point of view as opposed to necessarily saying this is a modern twist on a traditional dry gin using Australian botanicals or pushing the boundaries of gin. It’s really just basically something that we do. And they’re small batches — 700 bottles at a time. Really, if I’m being honest, it’s just to make sure that the bar at home is stocked with some gin every now and then when the guys at Four Pillars don’t keep me stocked up.
JAMES ATKINSON: So it’s just a little side project? A bit of fun?
DAVID VITALE: It’s definitely a side project. We’re not getting into the gin business in any serious way.
JAMES ATKINSON: We’re obviously here because of the launch if the bottled cocktails. Maybe you could just tell us about what your thinking was there?
DAVID VITALE: Yeah, look, I guess I’m in a quite unique position in that when I go to dinner parties or barbecues or picnics, people expect me to bring whisky along. I’m a distiller. I own a distillery. It’s kind of almost rude if I don’t bring whisky. But most people, I feel like when they bring a bottle of whisky to a party, everyone else is thinking, “Uh-oh, here’s trouble.” And so I wanted to kind of think about how can we make a difference here? Because, ultimately, whisky is best enjoyed in a shared environment. And my two passions in life are my family and obviously whisky, and I love Melbourne. And if you kind of put all those three things together food is kind of at the center of those things.
And so one of the things that really motivated us to think beyond the box was how can we be at the dinner table? And what can we do help that idea come along? And the biggest challenge with whisky is its strength in the first instance, and therefore you go let’s make cocktails with it. Who can make a great bartender quality cocktail at home? It’s very difficult to do. So what we wanted to do is say, you can have a quality spirit, all the prominence and value that Starward brings to the table in terms of the wine credentials of the barrels, the spirit itself, a consistent product every single time, a consistent drink every single time, and it’s really convenient. So you don’t have to keep running back to the kitchen to make more and it’s kept in the fridge and just basically poured over ice and off you go.
JAMES ATKINSON: Obviously the release is the Starward Old Fashioned. Is there potential to expand that range?
DAVID VITALE: So the idea behind the bottled cocktail is that we’ll release a series. So this is number one. We’ll have, ideally, more in the range. But unlike other producers who might have four or five on the shelf that you can choose from, these will be limited in release. So when the Old Fashioned is done, it’s done and we’ll move onto the next one and the one after that. And the idea behind that is that really what we’re doing is running into the bottle store, identifying a parcel of barrels that we think fits the cocktail or that could work with a particular cocktail, as opposed to shoehorning the standard style of releases into different cocktails. So it’s giving us an opportunity to really explore the boundaries of the bottle store, too and finding interesting parcels of whisky we can use for the cocktails.
JAMES ATKINSON: So what do you look for in the whisky for this particular Old Fashioned? Because I just actually had one had it was probably on the drier side for an Old Fashioned which I actually liked because often when you buy that as a cocktail it can be really sweet.
DAVID VITALE: Sweet. That’s right. So we had to strike a balance of if it’s going to be at the dinner table we can’t have it as a desert. So that was kind of the first point there. But the bottom line is, the main ingredient in an Old Fashioned is whisky. And so that has to sing. That’s where we always start. And then what we wanted to do was say, well, classic whisky cocktails are classics for a reason. They don’t need much work to make them anything else. They’ve stood the test of time. And so what we tried to do in that regard was just think about how we can really bring out the Starward characteristics and also make them versatile at the dinner table. So, as we know, an Old Fashioned is basically whisky, sugar syrup, and bitters. And what we’ve done in this instance is really kind of worked on the sugar syrup and the bitters aspect to just enhance the characteristics and the flavors. So some of that dryness is also coming from the wattleseed that we’ve infused into the sugar syrup.
JAMES ATKINSON: So you’ve sort of combined the sugar and the bitters ingredient basically?
DAVID VITALE: That’s right. So it’s effectively a spiced sugar syrup, if you want to think of it that way, alongside bitters as well. So that kind of gives it a deeper palette, a more complex palette that can sit at the dinner table more readily.
JAMES ATKINSON: Sure. And obviously, you took the investment from Distill Ventures, a Diageo subsidiary, a few years ago now. Is there an end in sight for where they’re going to want to take control of the company? Is that something that’s on the cards any time soon?
DAVID VITALE: Not any time soon. And look, I think Distill Ventures has been transformational for Starward. It’s given me the ability to really go after that ambition that we set early on which is to be in every sharing cabinet around the world. And that’s meant investment in plant equipment and infrastructure, but also support to make sure that we’re able to navigate our way through the world of brand-building without — minimizing the mistakes. Without making mistakes is silly, but trying to minimize those mistakes. That’s not to say that it’s a Diageo way of doing things. It’s effectively saying, you’ve got the wherewithal and the experience to draw on if you think you need it.
So that’s been fantastic. And there’s no plans right now for anything to change at Starward, and even if, I think, ownership changed, I don’t think control would if that makes sense? We’re still a baby in the universe of whisky, of spirits, and even within that sort of orbit of Diageo we’re a very, very small brand. And they understand that the thing that makes brands like Starward so successful is that leadership from the founding team that kind of came up with the idea. And that’s not just me. It’s the production distiller, it’s the management team. There’s a certain mentality about start-up businesses that’s very different to corporate.
So my expectation and belief, very strong belief is that for a very long time, despite control or ownership changing, this will still be a founder-led brand that is pursuing the very thing that got them excited about investing in the first instance which is creating an Australian icon.
JAMES ATKINSON: You mentioned how small Starward is relative to Diageo’s other brands. How far away do you think it is for Australian craft spirits to get serious scale?
DAVID VITALE: Yeah, look, I think the next five years is going to be really interesting. If I think back five years ago, it was really then a lot of distilleries were taking big strides to invest in infrastructure and plant to scale up. And we’re seeing more and more of that every week. So I think the next five years is going to be really interesting in terms of getting the market to scale. We’re still a baby. If we use craft beer as an example, we’re probably circa 1995 in that story. So there’s a long, long way to go. The great thing, though, is that I think our drinker is far more open-minded to drinking craft spirits than we all were drinking craft beer in the late ‘90s. So that growth is going to happen a lot quicker.
JAMES ATKINSON: You just dropped a little nugget of news just before we started recording which is that you’re moving over to the States. Maybe you can talk about that?
DAVID VITALE: Yes, so when we first started making whisky, the ambition was to — I can still see the blank sheet of paper and the first words were to offer the world a uniquely Australian whisky with pride. And as much as we’ve done a great job of building a brand in Australia, we’re not going to set anyone’s hearts racing or achieve that ambition if we don’t start to export. And so ten percent of our sales at the moment come from effectively London, like the London city. It’s not much more — but the U.K. But we’ve got an ambition, I think, to kind of get to about 50 percent of our sales coming from the United States and like a 40/10 split between Australia and the U.K.
And so that starts the journey to building the brand in the United States in a month or two actually. In August we’ll be shipping over our first batch of whisky. And to do it properly there’s a lot of shoe leather, there’s a lot of talking, there’s a lot of [inaudible 00:16:53] classes, and just doing that from Melbourne is going to be really difficult. Not many people know this, but my wife is actually American so it will also keep my mother-in-law really happy for us to kind of move to the States and start to be more active in that market.
JAMES ATKINSON: Pretty crowded craft spirits market that you’re going into over there, but I suppose from a whisky standpoint you’ll be bringing something pretty different to what’s available?
DAVID VITALE: Yeah, it’s really interesting. So, obviously, we’re not a bourbon. We’re a single malt whisky and malt whiskies in the United States made in America need to be in brand new American oak barrels. So the idea of an Australian whisky in Australian wine barrels matured for three years is quite novel and very, very exciting. So I can’t wait to get over there. We’ve got a great wine-making history and credentials in the U.S. and so we can kind of hang on those coattails and really celebrate all those great things about Australia and Starward.
JAMES ATKINSON: So you’re not taking them over an IPA made with American hops?
DAVID VITALE: No, that’s right. That’s exactly right. So I think that the idea is that if we’re ever going to be relevant in that sharing cabinet at home or the back bar of great bars around the world, it’s got to be because we’ve got something that’s unique and distinctly Australian and that you can tell is Starward or Australian whisky. And we think that those Australian wine barrels are our secret weapon to doing that.
JAMES ATKINSON: So who will be filling your shoes in Australia then?
DAVID VITALE: Very good question. We’re just in the final processes of recruiting an Australian marketing manager who will take part of the role. It’s been quite some time since I’ve put on some work boots and been on the production floor. So very early on that was a very deliberate decision on my part to find a team that I could trust blindly almost to kind of take care of the production side of things. So that has taken place and from a management point of view, we’ve got a great team, a leadership team. But the last piece in that puzzle is probably the hardest to let go of, and that’s taking care of the activations and the marketing of the business in Australia. But that’s not far away.
JAMES ATKINSON: You’re obviously someone who watches what’s happening across all categories of spirits, and beer we’ve certainly discussed, and I’m sure probably other categories as well. What’s exciting you right now outside of what Starward’s doing?
DAVID VITALE: I think that the most exciting thing is actually the drinkers appetite for craft spirits generally. Melbourne has an amazing bar called Bad Frankie which just stocks Australian spirits. And for those of you that don’t live in Melbourne but are visiting, if there’s one place you need to visit to celebrate Australian spirits, that would be it. And so that’s really exciting. That’s so exciting for me to see that appetite for Australian spirits and the fact that we can have a bar fully stocked that can make any cocktail in the world just from Australian spirits is something that we should be really proud of and celebrate.
JAMES ATKINSON: You’ve noticed that appetite has really picked up in the last few years?
DAVID VITALE: Yeah, I’d say over the last 18 months in particular. And it’s off the back of a lot of hard work that the likes of Bill Lark have been kind of toiling away at for 26 years now. And Patrick Maguire at Sullivans Cove in the whisky space and more recently the team at Four Pillars Gin and Archie Rose and a whole heap of small-scale distilleries just really going out there and explaining to people drink less but better. And I think that that’s the exciting trend. And of course, for us, one of the things that we get really excited about because it opens the opportunity for whisky is the idea that people are starting to think about cocktails as an alternative to wine or beer. And that’s exciting.
JAMES ATKINSON: And actually, on that note, I remember last time we caught up I remember you speaking about ice at home, the dilemma of being able to get good quality ice in the home. Are you seeing any solution to that dilemma?
DAVID VITALE: Yes and no. So I think you’re able to buy better ice now which is great. So beyond the stuff you get at a local petrol station or 7-11. So that’s been an advancement. In fact, we’re seeing trends overseas of convenience stores stocking block of —
JAMES ATKINSON: Deoxygenated quality ice.
DAVID VITALE: — quality ice. And so I don’t think that that’s too far away. So once that happens we’re away. And the challenge at our house is having enough ice actually. As much as it’s good ice, it’s always having enough ice to entertain. So once we’ve solved that problem we’re well away, but the trick will be getting more venues, more bottle shops to have quality ice that they can kind of sell.
JAMES ATKINSON: So what ice is in the Vitale arsenal?
DAVID VITALE: Well, fortunately, we’ve got a 300-person venue at the distillery that we can kind of —
JAMES ATKINSON: Stupid question.
DAVID VITALE: So it’s not quite I keep an esky in the back of the car, but almost. So I could just get a couple of buckets and bring them home when I need them.
JAMES ATKINSON: Fantastic. All right, we’ll leave it there. Thanks very much for a fantastic chat.
DAVID VITALE: Absolutely a pleasure. Thank you.
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