Phil Sexton: Wine and beer entrepreneur – S9E3

Brewer and winemaker Phil Sexton is a legendary figure in the Australian drinks industry.

He founded Matilda Bay Brewing Company, Australia’s first craft brewery, in 1983.

After Foster’s acquired Matilda Bay, Phil went on to co-found arguably the country’s most influential craft brewery, Little Creatures.

He established Margaret River winery Devil’s Lair in 1981, and in 1997 came his foray into cooler climate wines in the Yarra Valley, where he created the Innocent Bystander and Giant Steps brands.

Phil has had a very eventful 18 months. In October 2019 he shocked the brewing world when he announced he would relaunch Matilda Bay from his base in Healesville, partnering with the brand’s current owner, Carlton & United Breweries.

And in August 2019, he announced the sale of Giant Steps to US company Jackson Family Wines.

The deal follows his successful exits from Devil’s Lair, sold to Southcorp – now known as Treasury Wine Estates – in 1996; Little Creatures, which was floated on the stock exchange in 2005 before being wholly acquired by Lion; and Innocent Bystander, which he sold to Brown Brothers in 2016.

In a long overdue interview on the Drinks Adventures podcast, Phil updates us on the goings on at the reborn Matilda Bay, as well as Giant Steps, post the sale.

Phil Sexton wine and beer entrepreneur
Brewer Phil Sexton at the Giant Steps in Healesville.

We touch on some of the earlier chapters in his career and get his thoughts on recent industry developments such as the sale of Yarra Valley winery Oakridge to Woolworths subsidiary Endeavour Group, and the demise of his former employer in the US, Bridgeport Brewing Company.

And the conversation goes down a few other rabbit holes that I hope you enjoy exploring as much as I did.

There’s a few earlier episodes of Drinks Adventures that I recommend you listen to after today’s episode, if you haven’t already.

In Season 1, we met Janice McDonald, who worked alongside Phil at Matilda Bay, Devil’s Lair and Little Creatures, so that’s essential listening for another perspective on those early years.

And in Season 2, our documentary on Stone & Wood Brewing Company, whose co-founders Brad Rogers, Jamie Cook and Ross Jurisich were previously involved with Matilda Bay.

First off in today’s episode, I asked Phil how he came to the decision to sell Giant Steps, a company revered for its single vineyard expressions of pinot noir and chardonnay.

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Phil Sexton Interview: Full transcript

PHIL SEXTON: Yeah, well I’m looking at my screensaver at the moment, while I’m talking to you and there’s a picture of a sailboat there that I’ve sort of hard parked away in a marina for quite a few years.

JAMES ATKINSON: Whereabouts is that?

PHIL SEXTON: It’s in Airlie Beach. And I hardly ever get to go there and hardly ever get to sail her. And addressing turning 67 this year I’ve kind of gone you know, I am getting tired and maybe it’s time to slow down a little bit. In the meantime though we’d got into some discussions – that’s the Giant Steps wine business – got into some discussions about global distribution with a lovely family owned wine company out of the United States called Jackson Family Wines. And that conversation kind of went from global distribution to well, why don’t we… can we take an investment into eventually look, why don’t you run it Phil, run it like it’s your own and you can come into our fold. And really that all happened during COVID lockdown. So yeah, it happened pretty quickly and I’m still running it and also got more time to focus on the beer business and feeling a little bit more relaxed than I did 18 months ago.

JAMES ATKINSON: So you’d still have plenty to do though at the winery there, but without I suppose just the added pressure of being the owner?

PHIL SEXTON: Yeah and you know, I’ve always found that I actually run other people’s businesses better than I run my own because you know, I often don’t apply the same disciplines that I would expect professionally be applied to somebody else’s assets. So in a way I’m sort of enjoying it. Instead of sort of making decisions when it’s my own business and my own money, which are often not as disciplined as when I’m sort of responsible for someone else’s business.

JAMES ATKINSON: Phil says the Jackson Family Wines acquisition signifies broader interest in what he calls ‘new wave’ Australian cool climate wines. 

PHIL SEXTON: And when I say new wave, I guess it’s you know, Australia finally being comfortable in its own skin and making these wines according to where they were grown and how they were grown, rather than trying to make them look like wines from somewhere else. That was really the first interest that Jackson Family Wine expressed to us and that is just you know, how much they liked these wines and how they saw so much potential for them, particularly in the US and European markets. And we’d been experiencing that anyway, before those discussions started. You know, we were very encouraged by what was going on in what I would call the older style wine markets. We weren’t getting a lot of success in China for example. People often ask me, have the issues with China and our wine industry impacted you very much? And the answer is hardly at all because you know, apart from selling into some sort of five stars and very small specialised retailers, we weren’t selling much wine there at all. 

JAMES ATKINSON: Well that’s probably a bit of a relief then, as the way that things have turned out?

PHIL SEXTON: Yeah although of course it concerns us, because of the impacts on the bigger producing areas that are impacted by this and how firstly how that’s affecting them. But secondly how that’s changing our domestic market as more and more of that wine gets pushed into our domestic market and what does that mean?

JAMES ATKINSON: I asked Phil what sort of impact the pandemic had had on Giant Steps.

PHIL SEXTON: During all the lockdowns we weren’t selling huge amounts to the bigger, large format re-sellers. So you know, we had strong mail order sales and we were getting good, strong sales through our distributor into the independents. It was just that the on premise trade really dried up, but that’s come back pretty well now. But in the US we maintained very strong sales right through our lockdowns and they’ve still got them going over there. But because the e-trade or the online trade over there, with particularly specialised wines has been going very strongly. 

JAMES ATKINSON: Now what looks like from the outside, another very successful exit from a business that you founded, it’s not going to do anything to help with your reputation for being a shrewd businessman, which you seem a bit uneasy with?

PHIL SEXTON: Well I am really, you know. That kind of implies that I knew what was happening or knew what to expect, but I did not. I you know, as usual I sort of just career through life and business, and I guess I react quickly to things that… or opportunities that may come along. Maybe that helps. But you know, reacting quickly has also almost been my downfall at times. So, this on’es been driven by you know, to be really honest. I’m getting tired. You know, running businesses and running them from the front, is really hard work and anyone who’s listening to this who runs sort of small to medium businesses knows it’s seven days a week, and 24-hours a day. It’s you don’t clock off at five o’clock. And that’s really been my life for quite a long time now. 

JAMES ATKINSON: Going back to when you started your career at Matilda Bay and you know, prior to this I’ve done my homework and listened to some of the other podcast interviews that you’ve done previously. You really emphasised how little you know, business acumen you had when you started that business. Where have you picked up the sorts of necessary business skills that you need to be a wine maker and run your own businesses?

PHIL SEXTON: Well the technical aspects of it are pretty traditional. Education where I just did the University courses and then went on and did wine studies and brewing studies as well. So, that’s a pretty traditional background and career path of somebody that’s gone into either brewing or wine making. But when I first realised that I wanted to get out of large scale brewing, because of the way the market was back there in the early 80’s. And asked myself and some of my friends we started Matilda Bay with, you know, well why don’t we start a small brewery? And one of them had some business skills, he was an accountant and the others had none. So I brought my brewing skills and brought his sort of small business skills and then we realised we had a massive hole in marketing, where you know, we really didn’t understand where we were going or what we were trying to do. But you know, it was just one of those try this, try that and I guess we were young and fairly carefree. Although we had our… virtually everything we’d saved in our lives up until then, on the line. And we weren’t competing with others. That’s the other thing that people don’t recognise. It’s a very different playing field when you’re the only competitor on it. So if you go back to ’83-’84, that’s the first and only craft brewery starting up in Australia at that time. Although we were dealing with issues the majors were putting in front of us, we didn’t have other craft competitors to compete with. So, it was almost like whatever we tried was new and the first, and we had a pretty good playing field with it you know. By the time we got to the late 80’s and early 90’s, you know, it had become a very competitive place. But I guess on that journey from ’83 through to ’90, you know, we learned on the job. And for me, many of my reactions in business now are intuitive and instinctive, rather than carefree, thought three. It’s kind of like, I feel this is not right and I’m not sure why but it’s time to move. Or time to do this, or do that. I don’t know if that’s a good explanation, you know there’s not a lot of MBA study in the way I’m describing it. But you know, I often say to people that join me and some of the people that have joined me in Matilda Bay. And that is come and learn what it’s like working on the street. And some of these people have come from academic backgrounds and you know, it is eye opening transitioning from theory to you know, what it’s like out there all day long, every day, all night. Actually trying to survive and keep small businesses growing and running. 

JAMES ATKINSON: Well I was just wondering if you had any particular mentors or whether it was more sort of the you know, the benefit of hindsight for example from Matilda Bay, which obviously didn’t pan out as you wanted it to first time around?

PHIL SEXTON: Yeah I did. People I’ve actually worked with, people who have jointed me to work with me have brought skills and I’ve learned a lot from them. I mean, my partners in Little Creatures when we founded that, had been my employees in Matilda Bay. So one of them came in as an accountant, another came in as a marketing specialist and I learned a lot from them. And you know, we ended up pulling our resources with you know, and when I say resources you know, we didn’t have a lot of money. But we certainly had a lot of skills we could merge when we actually started Little Creatures. And I think that’s been how I’ve learned a lot. Actually learned a lot from one of our original shareholders in Matilda Bay, way back in 1983 who was the only person that was prepared to actually support us and invest in us. And this was after we’d gone all around town, all around Australia looking for someone to come in and invest with us in starting up Matilda Bay. And you know, we had a chance meeting with a lovely man, Peter Briggs, who had been in sort of mineral companies and he’d been a builder as well. Some people would know him as the owner of Hitchhiker, the Admiral’s Cup winner. And you know, he came in and literally taught us how to build a company. Him and some of his accountants and he did mentor us, mainly on what not to do. And also on how to actually go and raise money. Because we, you know, we had to raise money as we kept building Matilda Bay. We raised money through public offerings and also through various forms of debt facility. So, yeah that kind of mentoring was invaluable.

JAMES ATKINSON: Giant Steps is also expanding to make Tasmanian wines in recent years, how did that come about?

PHIL SEXTON: That actually started with Pinot down in Wanaka, in the south island of New Zealand. Central Otago. And that was through a relationship with Steve Flamsteed. Where we came across a small vineyard where they were prepared to lease it to us and then operate and manage it, under a management agreement. Fully organic, it was a beautiful vineyard. Very small, very difficult to make it work from a financial perspective. And also you know, it was kind of very climatically exposed. But in balance, it produced amazing fruit. So we were intrigued with this and we actually sort of partly identified it in Wanaka and then brought it across here in bladders and then finished it all – the oak work and the assembly here. And then eventually the owners of that vineyard just decided that they didn’t want to keep it. So, that relationship had to stop. So that then sent us looking in Southern Tasmania, because firstly we could bring the fruit to the winery, rather than have to partly vinify in New Zealand and then finish it here. And I don’t know if you realise, but because of the way the ship… the Empress of Tasmania runs. As long as we could get it to the ship late in the afternoon, from just outside of Hobart basically, it was on the ship. It came across Bass Strait, got chilled by the Bass Strait air and we had it at the winery by 08:30 the following morning. Which is almost as quick as getting fruit from some of our Yarra vineyards. So, we also realised that the season down there was nearly three weeks later than our season finishing here. So it actually gave us a production opportunity to have cleared vats from Yarra valley material and we could bring this material in from Southern Tasmania, without having to increase our physical production capacity. So that worked really well. But most importantly, our US importers at the time were really pressing for us to supply some Tasmanian pinot if we could. I think there’s a lot of interest in Tasmania, particularly in the US market. I think it’s that kind of sense of this pristine, beautiful place on the edge of the world. We just fell into doing this and you know, we’ve established some relationships with growers down there that are going very well. And we still aspire to establishing or finding some vineyards down there that we could operate ourselves. But whilst we’ve got good partners, we’re really happy. So and we’re finding it’s going really well, particularly in the overseas markets. You don’t have to talk a lot about a pinot noir from Southern Tasmania, not in those markets. People know a fair bit about it and there’s not a lot of Australian producers taking Tasmanian pinot to the overseas markets. Whereas you know, our established networks provide that platform for us. And certainly its been right from the moment we started discussing this with Jackson Family Wines, it was of great interest to them. They really liked that story, they liked the positioning of the vineyards and the particular style of fruit that they saw through what we were making and what they’d seen through other producers. So you know, we intend to keep going. I can’t say we’re going to expand production very much, it’s just you know, it’s not available the fruit and also you know, I think everyone’s canny enough not to start planting in areas that aren’t really suitable.

JAMES ATKINSON: Sure. Just a general industry question, what did you make of the sale of one of your neighbours Oakridge to Endeavour Group?

PHIL SEXTON: Wow. On the one hand, wow. On the other hand, how sensible. 

JAMES ATKINSON: For who? All concerned?

PHIL SEXTON: Probably all concerned. I actually know nothing about the Oakridge side of that, apart from being good friends with them. But I didn’t see it coming and I wasn’t privy to what was going on in their heads. But I’m a little bit familiar with Endeavour. There’s some executives there who were with at Fine Wine Partners when we were with them and you know, we knew each other pretty well. They’re very, very clever people and very clever operators, and working to obviously a very strong strategy. And you know, that is a terrific appellation and product to bring into their group. You know, I don’t know what they plan to do with it. I assume they’ll continue to make it available to open market, I’m sure they will. But you know, I mean looking at the majors, the major retailers. Small production, high end, cool climate producers in Australia don’t have the capacity to really be ranged in them for very long. And you know, this is an opportunity that you know, I’m sure they fully understand. And has driven that decision on you know, I often go out there trying to buy a bottle of Oakridge 864 Chardonnay and I love it. And I find it really hard to find it, and so I’m sure the majors sort of would like to be ranging that more than they can or more than they have been. Those sort of transactions are great votes of confidence for what we do in the Yarra I think, not unfortunate you know. How it plays out from here who knows. Probably really well. I’m pretty certain they won’t mess it up, I’m sure they won’t but you know, they will bring expertise, capital, access to market that will take it to the next level I’m sure. 

JAMES ATKINSON: Looking at the wine industry at the moment, how optimistic are you about the current conditions and the competition from other beverage categories that just wasn’t there a decade ago even?

PHIL SEXTON: Oh yeah, you know, there’s terms been bandied around ever since it was first phrased and that’s that share a throat term, which I believe came out of August Busch III who ran Anheuser Busch.

JAMES ATKINSON: It’s a horrible term isn’t it?

PHIL SEXTON: It is, but it’s a beautiful one because it just encapsulates it so well. You know, you just have to say it and everyone gets it. Not only do I think the share of throat’s really important, but there’s a constricting throat. To me I sense just a little bit more caution around the amount of alcohol we’re consuming, as everyday people. Do I want to have another drink? And that’s coming from lots of different angles – health, welfare, behaviour of people when they consume too much alcohol. I think it’s fascinating looking at the non-alcoholic beverage market. Particularly brewed non-alcoholic beverages. I’m sort of doing a little bit of work with some people who are doing it from the herbalists and producing some beautiful beverages which are completely brewed from herbs. No alcohol required. Stand around with something like that on the rocks, chatting with people who have got a scotch on the rocks feels completely normal. And I don’t think that’s been the case, you know. I think if you go back a few years you know, people would sometimes raise an eyebrow who was not having alcohol when you’re in a social environment where people were. That’s changed and for the better. But coming back to the question. You know, we’ve got a distillery business in Healesville that’s going great guns. I mean, they’re making it interesting for us running cellar doors in the Yarra. Because it’s one of the most exciting and interesting sort of cellar doors, but it’s a spirit-based cellar door in the valley. And you know, that’s been repeated through wine-producing areas all over Australia and overseas. So on the one hand, it makes a really interesting market. On the other hand it kind of means that we have to keep getting better with wine. Make it more interesting, keep it relevant. Particularly with the you know, new generation of consumers coming through. You know, some of them not wanting to do what their dad does. 

JAMES ATKINSON: Maybe we can move onto the latest with Matilda Bay. That would have been a little bit disrupted by the events of last year no doubt, but how have things gone overall?

PHIL SEXTON: Disrupted would be an understatement. It’s been you know, I hesitate to say, a train wreck. But we actually opened the pub that is alongside the brewery, we opened it three weeks before the first Victorian lockdown started. So we’d trained teams and you know, put a huge amount of effort into it to then have to just shut the whole thing down. And that was really all of last year for us. That was you know, at various stages when we could we did a bit of takeout food, at huge cost and not getting very far. I think it was very demoralising for us all. You know, we tried our best and we managed in most cases to keep people engaged and employed, or on the payroll in some way. But you know, we did not get this pub opened properly until January this year. And then went into that February lockdown which completely threw us backwards again. But we’re open and trading now and frankly, finding it very hard to get staff. And I know that’s a common thing across Australia right now with hospitality. But back to the brewery, it was an enforced… last year was an enforced… because we bought the brewery on-stream in January as well, just before the lockdowns started. And so basically we had nearly 10-12 months of practice of making beers, trying to perfect them and putting it down the drain. Which sounds extravagant, but you know, it was just the raw materials that go down the drain when you’re doing that. So, but there’s also a lot of labour behind it. But we had no choice. There was nowhere to sell beer. So as we’ve got to January/February this year, we’ve just started putting it out on draft and in fact last Friday, we canned our first thousand cases of Matilda Bay original ale. Which will actually start to go onto retail sale probably next week once it’s gone through all the micro and QA checks that are really important to us. 

JAMES ATKINSON: And that was after 23 batches I believe?

PHIL SEXTON: You read the social media?

JAMES ATKINSON: I did, yes. 

PHIL SEXTON: You know, I think that was fudged downwards to be honest. 

JAMES ATKINSON: Oh really? Yeah, I went digging around for all the information I could find on what’s been happening at the brewery over the last year, but there’s really scarcely little out there. 

PHIL SEXTON: Yeah look, what I can tell you is we’ve got three of the Matilda Bay beers I was involved with, well one of them not entirely involved with. But the Matilda Bay beers we really wanted to work with and felt were really relevant for sort of getting Matilda Bay back to where it was or should be. And that’s Redback, Dogbolter and Alpha. And you know, Alpha actually came along in the Matilda Bay story after we’d left. It was a great beer and it had a great track record in the show system and also it was as brewers, a lot of us admired it. So, those three beers we’ve been working on very closely you know. Alpha for me looks very much look like Alpha I recall. Red Back’s looking very similar to Red Back that I recall but you know, there was some lessons that I wanted to apply there and that is to make it a little bit less sweeter and less Bavarian looking, and a little bit more sort of Belgian style. But still looking like Redback. So, we’ve been doing that. And Dog Bolter went through many iterations with us and also since… well after we left. Where it went from somewhere around 8-9% alcohol, down to sort of 5-5.5% and we’ve got it at about 5.5% but as a proper dark lager beer. And very happy putting you know, our hand on our heart on that one. And also finally developing a new Matilda Bay beer, but based around what was done with the Matilda Bay ale that was released at the very last stages of when we were there in the late 80’s and then went on to become quite successful in WA. But it never actually went outside the state. But it got to quite high volumes, but it got caught up at the time between CUB who then owned Matilda Bay, needing to brew their own beers for the west coast market in the brewery they’d acquired from us. And it kind of just sort of fizzled out, which always struck me as odd. Because it had done so well and made such incredible inroads into the West Australian market. So we’ve kind of brought that back, but made it a bit more in a traditional English style. So it’s a bit sort of fuller and richer, and a little bit more hop driven. But it’s 4.2% alcohol and that’s what we’ve started canning. And that’s what we’re going to start to see in the market fairly soon.

JAMES ATKINSON: Tell me about the beers that inspired the Matilda Bay Original Ale? You know, you talk about it being a European golden ale. 

PHIL SEXTON: Look, when people say English ale you know, I think people think of sort of slightly low carbonated, slightly fuller, maybe less bitter styles of ale. And although I love those beers and you know, some of the great crafted brewing is around making them. I kind of tend towards the Northern English beers, Northern Yorkshire. And you know, beers from John Smith’s. You know, the Tadcaster brewery beers and Timothy Taylor’s Landlord. Sort of the finer, more structured ale. A little bit firmer. Not relying on that kind of sort of lovely sort of sweetness you see in the sort of Burton-style beers. So taking a cue on that. Importantly trying to target about 4.2% alcohol. For me as a beer drinker, I really kind of enjoy beers in that range because I can have a few pints. But to keep it full flavoured and that’s the hard part, when you’re getting down to those alcohol levels. But that style works really well because of the pale malts that you use and sort of the English hops rather than the more modern hops that we see from New Zealand and places like that. So, I hesitate to call it an English ale. It’s not really. But it’s made in the style of the Northern English ales. 

JAMES ATKINSON: If you were to enter it into a beer contest, where do you think it would sit?

PHIL SEXTON: I’ve always struggled with beer competitions and I’ve actually never been in the judging of them. And I’ve actually never been invited for that matter. That’s not an invitation to invite me. But coming back to it, you know, I’ve always struggled with trying to categorise styles. Particularly with beer, because with wine it’s much more straight forward because wines are so regional and the actual grape source is so important. But when it comes to beer you know, most breweries can churn out many different styles if they put their mind to it. And to then be sort of, just come back to this original ale. What category do I put it in? If there was a category called ale below 5% alcohol, that’s where I’d put it. But I don’t believe there is. I think everyone would want to call it a pale ale, but then what’s a pale ale? Got into this argument you know, around IPA when I was over in Portland. We were looking to brew a stronger, more defined version of what were the north west-style pale ales at the time. Such as Sierra Nevada and there was a bunch of others, but Sierra Nevada was certainly a meeting benchmark. Didn’t want to go into the same category if you like, as Sierra Nevada because we admired them too much. So we thought well could we make something sort of more overt and stronger and fuller? A little bit higher alcohol, it’s going to be more specialised. Obviously it’s not going to be as easy to cross over as something like Sierra Nevada and the other pales, so we made a beer like that. What the hell are we going to call it? And so I call it a pale ale? No one else is calling their beer a pale ale. As far as I recall, there might have been other ones in the history of US brewing or US craft brewing. But certainly there was nothing in the market that was called that, so we just called it that. And then we sort of realised as we went forward, that we’d defined into pale ale. Which for me as a traditional brewer was nonsensical because you know, I’d studied way back in England why and how, what the English called pale ales were all about. You know, we just coined a phrase. We didn’t actually set out and get a recipe for an English style IPA brewed 100 years before and stay true to the style. So coming back to your question, I’m sure there’s a pale ale category in Australia judging and people make a beer, or try to make a beer fit it. But you know, it just comes back to what is that style? And also you know, you take a product called beer and you end up breaking it down into so many categories that it gets confusing for the consumer. But it’s also confusing for the maker because you end up trying to make a beer to fit a category style defined by judging systems, rather than let’s just try and make a great beer. And then someone says well how do you categorise it? And I go, you know, ale probably made the English way but I’m careful about that because people have preconceived ideas about English ale. 

JAMES ATKINSON: So where are you packaging original ale? Have you got gear on site there or is it through the CUB network of facilities?

PHIL SEXTON: No, we are actually co-packing it in a friend’s craft brewery. So we’re tankering it there and I’m not sure I should name them, because I haven’t asked them. But I mean, they’re colleagues of ours. Professionals, it’s not CUB by the way, who are also friends and colleagues of ours. But you know, they don’t do this on the scale we want to. We’re trying to decide whether we should put a can line in or not. You know, I was initially not really a fan of canning craft beer, simply because of the technical issues and you know, just trying to get it exactly right. But you know, the market’s telling us very loudly and certainly retailers are telling us very loudly, they’d like to see cans. So we’re canning at the moment. We’re going to go to bottles later on this year. Are we going to put it in bottle on our side or not? We’ve actually got a filling line sitting back in reserve but we haven’t installed it yet. And we’re just trying to decide whether we’re going to keep on doing it with cans and stick to it, or do bottles as well. And that’s the beauty of being a craft brewery starting up, I want to learn as we go. I don’t necessarily want to follow what everyone’s doing. I’d rather just try it and see whether it’s working for us. I mean for me, cans work in some environments for beer. Bottles work in other environments. You know, and what market research have I got for that? None. As always, it’s just our instincts, my instincts. So if we’re being poured on premise, someone’s dinner table you know, I kind of expect it to be in a bottle. But that’s just me. Whereas if we’re at a bit more social, BBQ event or… I’m trying to think of the sort of environments… tend to work better you know. As someone who loves to sail, I don’t get to go much but I’d certainly only take cans for obvious reasons. And I certainly know when you go to events, glass isn’t available and I’d like Matilda Bay to be at events. So you know, I think there’s a place for both. Canning technology today, you can filter with the same precision as you can in a bottle. But you know, it’s like the arguments about corks and screw caps. Screw caps don’t necessarily push everyone’s buttons, but they work damn well. And you know, everyone likes a cork in certain occasions. So yeah, hedging my bets I guess. But you know, I don’t foresee or predict that beer will fade away from glass. I can’t see that happening, particularly in craft and specialised beer. But certainly, cans have surprised the heck out of me. I never thought it would go this far. 

JAMES ATKINSON: The relaunched Matilda Bay is going against the grain, with its core range of beers comprised of styles that are somewhat unfashionable in the current market.

JAMES ATKINSON: You are being in a way bold by standing behind these classic beer styles, because something that I just hear again and again, is that you can’t sell a wheat beer in Australia for example, or Australians don’t drink dark beers outside of you know, winter or all of these kinds of things. Is it too early to see whether your approach of backing those styles is working, when you see people coming into the pub?

PHIL SEXTON: There’s very large amount of recall, if I can use a marketing term. Most people we run into have heard of these beers, either… and have drunk them. Or certainly might have had a dad who drunk them, or a mum who drunk them. So the recall’s terrific. And secondly, you know, the beauty of having a bar is we’ve had these beers on the bar now for four or five months and you know, everyone’s trying them. We’re getting great feedback and you know, we get sort of wow is that a wheat beer? And we go well yeah it is, but you know, does it matter it’s called wheat beer? Well yeah, maybe you know. I’m worried about wheat. And I go well what about barley? So you can have interesting conversations around it. I’m a bit cautious about putting wheat beer on the label to be honest, but why be awkward about it if that’s what you’re making it from. So you know, we’re going to cross that bridge when we get to it. And the other thing is the wheat beers I’ve worked with have never been more than 50% wheat anyway. Usually a bit less, you know. The majority of the substrate is always barley or barley malt. And 100% wheat beers, I can’t recall I know one. And secondly, trying to make one would be terrifying because you don’t have any husks to filter it therefore, and you make a mess. You’d just make glue you know. And dark lager? Yeah, well you know, there’s some pretty successful dark lagers in the craft beer market overseas that don’t necessarily call themselves dark lagers. And you know, again are we going to put dark lager on the label? I don’t know, we’re yet to have that debate. But you know, the style is dark lager and it certainly has good demand in our pub and it had good demand when we used to make it. And it certainly has good demand in craft breweries I know, particularly in the US.

JAMES ATKINSON: I was a bit surprised and you just touched on this earlier, when I was on the website and I saw that Redback was described as a witbier style, when I thought it was a hefeweizen originally and I think you touched on that?

PHIL SEXTON: It was originally yeah, a German hefeweizen and you know, what does that mean? Well the German translation is sort of yeast and wheat. It still is yeast and wheat, so the German term I think is a difficult one to put on an Australian label I think. But you know, having said that, when I turned up in Portland in 1994 the biggest selling craft beer by a country mile was Widmer Brewing Hefe and it was a very cloudy, soupy wheat beer. And it was a massive seller and you know, I was stunned. You know, I don’t think the brewery’s doing that well anymore, but certainly for 15 years they were a dominant player in the north-west market. And calling it a wheat beer. I think Redback as the brand is what people recall and you know, if you start explaining to them you know, it’s got wheat in it, it’s got this and it’s got that in it. You kind of lose them. Because they just come back and go well I love it. Or no I don’t like it. So I’m confident in Redback and the recall of that and secondly, we describe how we make it but do we need to define it as a wheat beer? That’s something that… I’m trying not to pre-empt that conversation yet.

JAMES ATKINSON: But people won’t be shocked if they pick up a Redback and compare it to how they remember it?

PHIL SEXTON: No. No, I think that’s important and you know, we have been messing around with some saison yeasts. At this stage the way we’re making it is a very complicated fermentation process. But involves re-fermentation and we’re getting great characters out of it and we’re hopefully going to avoid going into that slightly sweeter, more sort of intense characters that you know, the original Redback had. Which you know, we knew at the time that was pushing the envelope a bit and you know, that was great to have maybe two of them and the third was starting to get very filling. When we eventually were taken over in the late 80s, you know, we were still working on refining Redback to where we really wanted it. 

JAMES ATKINSON: And so it’s only 1,000 cases of Original Ale that you’ve got at your disposal this time around. Where’s that going to be going and what’s the timeline for a bigger roll out?

PHIL SEXTON: We’re going to pick up to about 1,000 cases a week fairly quickly. At this stage look, again we’ve got the benefit of time on our side. We haven’t set out to go fast and so the first 1,000 cases we’re only going to sell across the pub counters and you know, we want to stay really close to our market. And you know, I’m not silly enough – none of us are – to believe we’ve got it right, just because we think it’s right. You know, and if you go back to the early days of Matilda Bay, we worked for years, working with our customers across the bars, refining our beers and never succumbed to the pressure to stop refining it. You know, just do it. No, craft’s all about keep refining. You know, it’s a craft, it’s not a production environment firstly. It’s a craft. So, I make no apologies for keeping on trying to refine beer. 

JAMES ATKINSON: What about, have you had many other beers on the taps there other than the core range of four?

PHIL SEXTON: We sure have, yeah we have. We’ve had a really broad cross-section of craft beers that our team love. And when I say our team, the people running the bar and staff working in the restaurant part of it. They’ve been in many cases competitor beers. Well I don’t call them competitor beers, but some people might call them competitor beers. We put them on because we love them and you know, I won’t mention all the names, but it’s a broad cross section of craft from Melbourne. A particular brewery that started in Byron Bay who are friends of ours. We go way back, but we love their beer. So we’re a bit of a beachhead for them here, and we’re going to keep doing that. I mean, do you expect to see CUB’s beers on our bar? No. Unless it’s really good. We’ve had Balter Brewing on, which is a great story there. We’ve had a few of the other craft beers there. But by no means is there any preference for CUB beers. It’s whatever beers that we think are really good representations of craft and also you know, we don’t want to force our own beer down our customers’ throats. We’d rather give them a choice. 

JAMES ATKINSON: I actually meant were you brewing other beers outside of the four main ones?

PHIL SEXTON: Okay, I went down the wrong road there. No, we have been. We’ve been… we’ve actually brewed some straight saisons and we had one on the bar, which was amazing. Really I told the guys, including my son who’s kind of running the brewery at the moment, I don’t want to do that. You know, I find them quite tricky yeast to work with. Well they went ahead and did it anyway and then showed it to me, and I’m going… that’s great! But then that’s the sort of thing I used to do too. We’ve messed around with some barrel ferments with… where we’ve allowed lactic fermentations to kick off and go quite a long way and really enjoying them. And we, you know, I’ve really put the brakes on our guys to do too much with oak at the moment. But we’ve sort of got a wall of oak that we’ve inherited from the winery that we certainly intend to start doing some, particularly some fruit driven sort of sour beers through the winter in oak. But you know, our first priority is to just get our core Matilda Bay beers where we really want them.

JAMES ATKINSON: You haven’t had people coming into the pub and asking you for milkshake IPAs and these types of things?

PHIL SEXTON: No, we haven’t. And you know, I think probably a lot of people might of heard our views on that. But you know, having said that we’ve had a couple of sort of quite extreme sort of hoppy beers on the bar from local craft breweries where you know, they’re incredible. Not necessarily what we want to make, but we put them on and they go very well.

JAMES ATKINSON: Alpha is a beer that… as you mentioned it sort of came after your time at Matilda Bay. But it strikes me as a real missed opportunity in that it was a bit ahead of its time?

PHIL SEXTON: Yeah. I remember the first time I saw it was at the… one of the beer awards dinners where I was on a Little Creatures table. And it was kind of wow, I love this. And it had taken out some awards and you know, initially it was Alpha pale ale. And then I realised it was from Matilda Bay. You know, they really nailed that. So really one of the first things I wanted when I got re-involved here was I went and spoke with the guys who made that. And you know, asked them to work with us. Some of them are still working within the CUB system and I asked them to work with us on re-formulating and also not messing with what they had done there. Because there was nothing that I could do with that beer. But it doesn’t fit the… that kind of Pacific North-West style, which is still pretty dominant. When you say pale ale in Australia, everyone’s expecting to see that. For me it’s more in the English style. And you know, as a traditional brewer, I prefer to work with that. You know, I think we often forget how wonderful those sort of traditional European hops are. Even though they don’t have the bittering capability of some of the more modern varieties.

JAMES ATKINSON: So what are the hops that are in Alpha, because I thought it would be an American hop bill?

PHIL SEXTON: No, it’s a mixture of European and American. And you know, we’re quite careful not to overpower it with that… well you know, it’s almost Little Creatures character. Where we didn’t hold back. And you know, everyone’s gone a lot further and I love those hops. But sometimes they sort of take away from the… for me, they take away from just the beauty of a really well balanced pale style, where you know, you’re relying on the really nice bitterness balance of malt and sort of a dusting or sprinkling of spiciness on the notes. Anyway, that’s how I recall seeing it when I first saw it and that’s really what kind of got my attention. You know, they’ve really nailed what I would imagine a pale ale is, rather than a Pacific North-West style pale ale.

JAMES ATKINSON: When you say you spoke to the guys who made it, and they were still at CUB… I thought it was Brad Rogers’ recipe originally?

PHIL SEXTON: Brad was part of it. But there was… there was other brewers involved. You know, Brad – we’re great friends and have been for a very long time. So you know, there’s a lot of interchange that goes on between them and us. You know, again we don’t see them as competitors, we see them as colleagues. 

JAMES ATKINSON: Dogbolter has been through quite an evolution hasn’t it, over the years? Tell me how it’s managed to change so significantly and still be called Dogbolter?

PHIL SEXTON: Yeah well, look we were responsible for taking it from an extreme style to a sort of a more I guess easy to consume style at my time at Matilda Bay, first time round. So we originally started out with as high in alcohol as we could possibly get to and trying to balance it with malt and hops. So you know, it was a very strong beer. And it very quickly became notorious for you know, can you drink a pint and so on? And you know, right from the very start that started to unsettle us because we were trying to make a great strong beer, rather than a beer that became a bit of a contest. And secondly, you know, we just found such traction with the concept and name, that you know, we just started tweaking it down. I mean for me, once a beer goes past about 6.5% I struggle with it. Because you know, the alcohol just starts to drive the palate. So, you know, we were just steadily getting it down to 6.5%, which is for me still a strong beer. And you know, when we got to about the 6.5% point we still had the quite intense characters, but it was being made more in a dark lager style, than in an ale style. And that just evolved in the way we made it, to try and get the best characters out of it. And then we re-branded it. We went to a label where we actually went to some people in San Francisco to redesign it, to try and get it out of the esoteric market, into the more established craft market. So at that point we came… we sort of came out and called it dark lager. You know, was that smart? No, probably not you know, but we were just doing what we thought was right and we felt that our consumers would go with us. And generally they did. We were selling more that way. I think you know, then during the CUB years they kind of lost interest in it frankly. And it kind of drifted around to doing different sorts of things and then I think it disappear altogether. It was one of the things that I wanted to kick off on again because I just felt like it was unfinished business. So you know, we’ve come back in, we’re just under 6.5%. Making it like a dark lager. So pretty well as we were making it in the late 80’s.

JAMES ATKINSON: It’s a pretty unique arrangement that you’ve managed to arrive at with CUB. How did you structure such a unique deal?

PHIL SEXTON: Well, you know, CUB’s not run by the same people it was being run by in 1990. There’s been several… quite a few iterations and it’s a very different company as well. And maybe four or five years ago, it was probably longer, I was approached by them. Not the current management, but the management sort of in the I don’t know, 2010 around then. And they didn’t know any of the history of Matilda Bay. It just didn’t carry through. They knew they had this brand, that it had a lot invested in. But there was no history, there was no thread to the stories. But at the time the particular marketing… head of marketing there, sort of started going well what is the background of this Matilda Bay? And sort of eventually someone said well you know, the guy that founded it is out in Healesville making wine. And he rang me up and asked if I’d like lunch? And you know, he sat down and eventually he sort of said you know, the reason I’m here is I want to ask you what to do with Matilda Bay. So I just launched into a bit of a diatribe and that is well, set it free. Set it free. Give it to the guys running it, cut a deal with them. Which I mean, I’m not talking out of school there. It was being run by Brad. And he loved the idea, but of course I think they found it very hard to sell into the organisation at the time. And the rest is history because they’ve now got a significant competitor in those guys. That’s just one of the lovely stories of craft brewing in Australia I think. But coming back to it, I stayed in contact with CUB whereas I hadn’t been in contact before this. When the company was taken over, we sort of got our marching orders pretty quickly. So we marched and didn’t look back. Whereas you know, a bit of a relationship re-established itself, we stayed in touch. And then more recently again, a complete new set of management, under AB InBev at the time, we started actually talking about this again. And they were much more interested in doing something, but I was equally adamant that I was only interested in doing this if I could drive it. And that you know, I was more than happy to meet fiduciary requirements and the… I mean I’ve chaired public companies. So I consider myself a safe pair of hands to corporates. Providing I can run it, you know, really happy to work with you and use the resources and share the resources that you offer. And you know, they have incredible resources. Get you know, available the lab facilities if and when we need them. Access to market data. And also you know, being able to talk directly with their incredible distribution system. So that’s how it came together and you know, so far we’re getting on great. We have our moments. We have frank exchanges and you know, I remind them… and that is well you know, if you ran this you will end up where it ended up before and you know that. And they go, ‘of course we do’. Because at the end of the day, craft is different to commercial brewing. And I think this time around with the major brewers in Australia involved quite heavily in craft, so far I think they’re doing it really well. Because they recognise that they’ve got to work together. You can’t just sort of wade in there, take the keys and change the way everything is done. And you know, I haven’t spoken with the other craft breweries involved with CUB directly about this. We’re all too busy. But you know, the founders are all still there powering on and you know, I think so far they’re doing pretty well. 

JAMES ATKINSON: So what’s the likely evolution we’ll see with Matilda Bay over the next few years? Will I be able to find Original Ale in Sydney in pack at some stage?

PHIL SEXTON: Yeah, you will. I don’t think you’ll see it this year. One part of our relationship with CUB is to hold it back and go no, you know. Let’s do this step-by-step. Let’s make sure we’ve established ourselves as a local brewer out here, you know, around the Yarra Valley and we’re on tap and you know, we’re engaged in the community and doing what small brewers do. And then let’s look at a little bit more distribution into our Victorian market and our WA market of course, because you know, the moment we started this, we started getting a lot of enquiries from WA because of the connections there. Once we’ve established sort of our place in the market, yeah of course we’ll start looking at taking some beer up to Sydney. But you know, we are small. It’s really small. And we’re also going about making beer properly and traditionally, which takes more time. Ingredients are more specialised, a lot more hand work. But you know, that’s what made Matilda Bay good before and it’s the basis of what we’re doing now. 

JAMES ATKINSON: I took the opportunity to ask whether Phil had had any further opportunity to reflect on the 2019 closure of BridgePort Brewing Company, where he worked in the late 80s.

PHIL SEXTON: The Pacific North-West market changed massively between the mid-90’s when I was there with Bridgeport. And Bridgeport two years ago where I don’t know, I’m plucking these numbers out of my hat here. But I recall numbers like 50% of all beer sold in the greater Portland area, that covered sort of Beaverton and all around there, Vancouver… Vancouver, Washington. Not Vancouver B.C.. So it was a population spread of about three or four million. 50% of all beer sold was craft beer brewed in that area. That’s incredible. I can’t think of anywhere else in the world where that happens. So it was ferocious competition and you know, I think Bridgeport stuck very traditionally to what it did. And there were sound reasons for that, but in moving quickly with all the rapid style changes and naming styles and positioning, I think things overtook them a bit. Also you know, highly… I used to go up there quite a bit. Highly competitive, small on tap only craft brewers all over the area. It was frightening. Because there was so many of them doing such great business, making such great beer. And they didn’t even go to package or they didn’t go to distribution. They just, they had good, strong, loyal followings. Presented ferocious competition for the quite substantial pub at Bridgeport. And also, you know, Bridgeport sort of had a sort of an English type of position around it. Which you know, had very good reasons to it. But that can also sort of… I’m a little bit, you know. If you go back in sort of beer in Australia, sort of the whole English pub/Irish pub thing was very sort of specifically positioned and created certain sort of views as to what sort of experience you’re going to have in that place. Whereas you know, other places were much more flexible in what they’re offering. And I think you know, that didn’t help the pub for Bridgeport. It wasn’t nimble and quick, and part of it was because it was so big. And you know, Portland Brewing… you probably recall them. I mean, Portland brewing were masters at their game with a wonderful pub. So you know, a lot of the very successful Portland breweries were overtaken by this incredible rush to 50% of the market.

JAMES ATKINSON: Well Phil, thank you so much for your time. It’s been a really interesting, wide-ranging chat and it’s nice to yeah, to have you on a podcast where we can talk expansively about wine and beer. 

PHIL SEXTON: Yeah, you know, I really do consider myself a creature of both industries. So you know, if you asked me which one I prefer? I don’t know. I love it, I just love it all. Fermentation and what you can do, it never ceases to completely intrigue me. 

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Author: James Atkinson

Journalist specialising in the food, drink, travel and hospitality arenas. Australian International Beer Awards 2017 Media Award Winner and Certified Cicerone®.

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