Satya Sharma is the new CEO of Lark Distilling, the ASX-listed company behind Australia’s pioneering Lark Whisky brand.
Sash – as he prefers to be called – has only been on deck since May 2023. But already, he has put his stamp on the Lark business.
The frenzy of special releases that characterised the tenure of his predecessor, Geoff Bainbridge, has been dialled back in favour of a clearly defined core range.
Advertisement
- Click here to open episode in your podcast player
Export deals have been announced for several markets in South East Asia; 700ml bottles are on the cards; and the business has committed to greater transparency about the provenance of whiskies that carry the Lark name.
Sash joined Lark following ten years with William Grant & Sons, most recently in Singapore, where he played an integral role establishing export markets for its iconic brands including Glenfiddich and The Balvenie.
We’ll explore that career background and Sash’s vision for Lark in this extended interview that gets the Drinks Adventures podcast underway for 2024.
If you haven’t already, make sure you listen to the special episode I did for the 30th anniversary of Lark Distillery in 2022.
Satya Sharma of Lark Whisky: Full transcript
JAMES ATKINSON: Sash, thanks so much for joining us on the Drinks Adventures podcast.
SATYA SHARMA: Thanks James, great to be here and really looking forward to the conversation today.
JAMES ATKINSON: Yeah, I thought maybe just to start with, it might be interesting for people just to understand your career background a little bit better. So maybe tell us like how you first got into the whisky industry, because it was quite a good stint at Grant’s.
Were you already a whisky fan prior to that point?
SATYA SHARMA: Yeah, look, I did 10- odd years, a good decade with William Grant & Sons across the UK, Shanghai and then Singapore and how did I get into it? Well, I started off my career as an accountant working in audit and commercial across practice, but then moved to Campbell Soup Company where I worked across Asia-Pacific.
At some point I went back into corporate finance, looking after mergers and acquisitions on I suppose an advisory front. And we got to a point with my wife and I and sort of said, look, why don’t you If we don’t do this now, we’re not going to be able to do it later on in life. And we made the, made the choice to go to the UK as we always laugh now and say for a year or two.
And, you know, I, I happened to sort of land and get introduced through, through a mutual acquaintance, someone at William Grant’s, they were looking for a strategy and business development person, and they were looking for a short term cover, six months or so, which sounded perfect, allowed us to travel, but what a wonderful company.
And look, at the end of the day, I obviously spent 10 years there, you know, across a multitude of roles. I loved in terms of whisky, that’s what was my go-to drink, always has been, you know, single malts were something I acquired over time that, you know, it’s sort of… At home, the staple was Johnnie Walker, which I think is probably a common comment.
I grew up in the Fiji islands. That’s where family was. That’s where we used to go back to a lot. And Johnnie Walker was a household name, but Glenfiddich was the single malt, the first single malt I tried here in Australia you know, bygones ago. And it was it was very fitting to join William Grant and the owners of obviously Glenfiddich.
JAMES ATKINSON: Well, you obviously moved around a bit while you were with Grant’s and finished in Asia. So tell me about some of the highlights working with the business over that decade or so.
SATYA SHARMA: Yeah, look, it was an amazing sort of time with Grants as they, it sounds strange because for 140 -odd years, they were essentially a Scottish export company, which sort of focused everything out of Scotland, very few feet on the streets.
And, you know, my mandate at that time was towards the end of my time with William Grant was to effectively set up own distribution companies and proper, I suppose, a proper infrastructure for William Grant in Asia. In terms of the highlights, I’ll come back to that in a second, but I suppose in the, in the UK, I was you know, fortunate enough to lead the acquisition of Drambuie.
Again, a wonderful brand with incredible provenance and history. I was again able to head over to Asia and move our regional headquarters from Shanghai to, to Singapore, which was again, a wonderful experience. And, you know, a wonderful base for most, most companies to grow out into Asia.
Again, probably the reason why I did go to Asia… the lack of, I would sort of say control by being a Scottish export company meant that my job there was a clean-up, a turnaround. So we had a horrendous sort of history over there prior to me joining. And my mandate was to clean it up. Set the business on the right trajectory and to propel growth in what we believed and still continue to believe that that now is going to be the next growth geography in the, in the, for the foreseeable future.
Probably closer towards the end of my tenure with, with William Grant’s, we opened a thing called The Distillers Library across various markets. They were effectively really amazing standalone venues where it was for exploration. Where you could see the story of, I suppose, Grant’s, explore the whiskies that we had in a place that wasn’t 14 hours away.
So we used to be able to bring the distillery, the history, all of those beautiful sort of touch points that come with a, with an iconic brand into a setting that was in Ho Chi Minh and Singapore and Jakarta and Bangkok and China and soon to be in Korea. So an incredible project to have led. It came, it was built out of COVID at a time where again a company like William Grant’s continued to invest. The motto in that company was, we’ve seen every plague, we’ve seen every war and we’re still here right now.
So that long, long term thinking was, was testament to The Distillers Libraries coming to life.
JAMES ATKINSON: And you were based in Singapore for most of that time, wasn’t it?
SATYA SHARMA: Yeah, Singapore for about eight years. So, you know, again, a fantastic springboard to the rest of Asia.
JAMES ATKINSON: Yeah, for sure. And it sounds like the Asian business did sort of really get traction over that time.
SATYA SHARMA: Yeah, look, I, I won’t say there weren’t bumps along the way. We went through, as I said, that clean-up. So there was a, there was a dip, then a rise, as you sort of cleaned up the mess that was, that was there. But, you know, where it is right now, sustainable, long term. You know, but, but also underpinned by fantastic sort of let’s call it conditions, you know, young population, you know, a drinker that was, was very, very digitally connected and you consumer willing to explore all of those things that really made those markets dynamic, exciting, young and hungry.
And so we were, we were really able to tap into that and that growth will come and continue to come for years to come. Even now, it’s going to be an amazing ride and, and one that I’m sure Lark is you know, on its, on its journey to sort of tapping into also.
JAMES ATKINSON: Well, we’ll get onto that a little bit later, but maybe tell us like, when did the Lark Whisky opportunity first came up?
Were you looking to come home or did this role sort of tempt you home?
SATYA SHARMA: Yeah, look, a little from column A, a little bit from column B. I think from my perspective, there was always going to be a desire or want to be home. I’ve got, obviously, aging parents, my family, et cetera, out here.
But what usually sort of limits that desire or opportunity is, Australia is generally a subsidiary market. In a large multinational, it’s a small market in the grand scheme of things. The idea of being able to grow something outside of Australia, really springboard and create an Australian icon and hero, was the thing that really caught my attention.
The other part that I think is really important to call out is, I also already knew of Lark. It was one of probably three brands that I had really good association with. I obviously sat on the Australian board for William Grant’s, so hence had a fairly good look into the market. And Lark was the one brand that you looked at and said, that’s a real gem.
It’s got an amazing history, wonderful provenance. It’s got all of the things, all of the little tick boxes that you look for in what a wonderful brand DNA is. And hence Lark was, was the one that was there, to answer your question about when, probably about late 2022.
When I was approached and if you do the maths, I, I resigned from William Grant in, yeah, late 22. I started in early May 23.
JAMES ATKINSON: Yeah. So, I mean, obviously you being originally from Australia and having the connection through the Grant’s business to the market, you sort of had a little bit of a knowledge of Australian whisky.
And as you said, Lark was one of the brands that you knew. How well known do you think generally, or well understood is Australian whisky outside of Australia? You know, when you sort of told people that you’re going to join this business in Tasmania, what was the reaction that you got from people?
SATYA SHARMA: Yeah, look, I think there was obviously within a, the broader context of the globe less known, right? Awareness is an issue that all of us in, in Australia need to, need to face into.
JAMES ATKINSON: But you probably have a better read on that than we would, you know, I suppose when you’re in the market, you think everything revolves around you.
SATYA SHARMA: Yeah, I think the things that have. really propelled Australia. I think that a lot of credit goes to Lark to start with, but also Sullivans Cove. Sullivans Cove did a great job in terms of winning the best whisky sort of award that was written about actually. And I think when you, when you look back at that, that was probably the first point where there was a bit of traction, a bit of knowledge, a bit of curiosity.
And so, you know, What that created was a little bit of intrigue into the category. ‘What are you guys doing down there?’, as Bill likes to say. And I think when you look back at it and say, ‘what’s the job to do?’, it’s really to play on the things that make Australia slash Tasmania really stand out.
And that’s the environment. It’s the, it’s the pure water and air and the climate, which is frankly unique to Tasmania, not just Australia. The bit that I think I’ve said to you before, James, is my, my concern over time is Tasmania can age whisky, therefore mature and really make sure that we’ve got the right complexity and balance. In hot climates, not isolated to Australia or mainland Australia, you don’t generally get that because of the angel’s share, right? So getting too much whisky out. I don’t want everyone to be painted with is the same brush because I think quality is something that we need to all hold hands on to say if we’re going to all succeed overseas, we’re going to have to succeed with quality first.
The product has to speak for itself.
JAMES ATKINSON: And did you come out and meet the team and have a look around before you accepted the job?
SATYA SHARMA: Yeah, I did. I mean, I obviously walked around on my own and wanted to make sure that I ticked my own boxes in due diligence.
JAMES ATKINSON: Incognito?
SATYA SHARMA: Incognito, which is the only way to do it, I think, you know, walked into the cellar doors and asked them what they thought and all of those kind of good things, which I think was probably one of the reasons why I did join.
There’s an incredible sense of community in Tasmania. There is a incredible sense of. pride about what’s being built out of this wee little island at the bottom of the world. There’s a real belief about, Hey, we have a right to be on the same pedestal as, as Scotch and Japanese. And we have every right to be in the same conversation as some of the great brands out there of, you know, your Macallans and your Balvenies and your Dalmores or your Yamazakis, for Japanese.
There’s a true belief in, we have, let’s call it the great environmental conditions. So we should be able to make fantastic whisky. We’ve got something that’s very, very special, which started with, with Bill’s sort of provocation of why doesn’t anyone make whisky down here? If you take that into what it now exists and what, what that looks like in our business, it’s an entrepreneurial flair.
It’s an ability to want to push boundaries. It’s an ability to sort of be respectful for all of the things that we’ve, we’ve learned from Scotch, but be very, very clear that we’ve got our own, own sort of story to write. And, and that’s the exciting part. That story to write is frankly, we’re writing it now and the steps we’re going to take into international, the steps we’re going to take in terms of building our brand architecture or hierarchy is going to be a really exciting chapter.
JAMES ATKINSON: You’ve talked about sort of all the positive attributes that Lark Whisky had. What were the challenges, the biggest challenges that you saw confronting you when you started?
SATYA SHARMA: Yeah, look, the, the biggest challenge for me, I think, I think if I, if I sort of cast my mind back was patience. You know, we aren’t a family company with hundreds of years of, I suppose, balance sheet to sort of fund us for the back next 10 years to et cetera.
We’re a public company. And with that comes the trials and tribulations of being a public company, which is reporting every quarter, talking about every half, as I said to you today. Multiple investors with various opinions.
JAMES ATKINSON: And patience is in short supply on the stock exchange, I would generally think.
SATYA SHARMA: It is. And I, and I try to remind people. So I’ve, I’ve been here give or take, let’s call it nine months in my nine months under my tenure. We haven’t made whisky. whisky takes two years, right? So we’ve made some new make spirit, but I’ve gone out to the market and talk to them every quarter, three times.
Right. So, and, and talked about halves, done an AGM, done all of those things, patience, and then resource. So the, the, the second part is obviously as you’re doing all of these things, you, you need to also make sure that you’ve got enough resources to go out and build this amazing business that you’re after.
And that’s people and that’s capital to, to go out and you know, spend and grow equity in the brand. Thankfully, as a listed company, that’s one thing that we do have. We have access to capital, which is something that I take really with a great amount of responsibility because we’re, we’re investing shareholders money.
You know, we’re trying to drive investment gains for them, but I think the investors we now have, and we’ve got a really good pool of investors, people that have, yes, they’re there for the investment that they’ve made. But equally, some, some of our early stage investors, none of them have left that register.
They’re there because of the pride that they see in, in Lark and they see what it can do on the global stage. And they’re along for the ride. Now, again, that’s not to be taken for granted. And I think you go back to the question, which is what are the most difficult things? It’s managing all of those expectations, not just one family, which is what I used to work for to thousands of shareholders who I have you know, I’m accountable to.
JAMES ATKINSON: What did you mean by that? That you haven’t made whisky since you’ve joined, but you’ve made new make.
SATYA SHARMA: So whisky takes two years, right? So technically. Right. It is not whisky yet. It’s gone into barrel.
JAMES ATKINSON: It’s gone into barrel.
SATYA SHARMA: Of course it has.
JAMES ATKINSON: Yeah. I understand what you mean. So you haven’t been there for the minimum aging period yet.
SATYA SHARMA: Correct. Correct.
JAMES ATKINSON: Right. Yeah. Okay. But I think, you know, before you joined, there were decisions had been made to set up production at Pontville. There was even a government grant awarded for that project, I believe, but one of the big decisions I think you made was to delay that decision, or if not, have you walked away from it entirely, or?
SATYA SHARMA: No, we haven’t walked away from it. I think the decisions that we made, so again, just for the benefit of everyone on, on your podcast, I think is we own three, three sites. Yeah, we own Bothwell. We own Pontville and we own Cambridge. They are three distinct distilleries. Cambridge is the heart, the guts, that’s, that’s where Lark started.
That’s Lark’s distillery. Pontville is the future.
JAMES ATKINSON: Amazing site. I was down at the 30th anniversary and it was just an unbelievable event.
SATYA SHARMA: Yeah. It’s a beautiful, beautiful site and one that we are worthy of. But I think we’re, as I’ve sort of said to the market and everyone else, our job first is to prove that we’ve got the run rates and the momentum in order to be able to go out and justify… capital is not free, right? And I talked about the responsibility I’ve got to shareholders and, and also the business. This is not the right time for us to be saying, right, today’s the day we go out and go out and build Pontville because frankly, we’ve got enough capacity right now in Cambridge that we don’t need to turn that on.
Is it there for the future? Absolutely. The short to medium term or, you know, what we’re doing is we’re, we’re building at Cambridge in the medium term and longer or further out, we are definitely going to look to, to, to Pontville and think about what is the right sort of combination of sales momentum and then therefore efficiencies, which we would definitely get on a greenfield site; capacity, which would then underwrite that growth for the future.
Those things are questions that we need to answer in due course. You talked about government grants. Absolutely, we’ve been, as you can imagine, we’ve had very, very honest and ongoing conversations with, with the government. They are fully backed. They’re fully aware of what our timelines, et cetera, will be.
And all, and the things that we’ve been talking about, you know, it’s a very, very strong ongoing conversation and they want us to invest, right? This is, this is about the future, and building manufacturing capability on our little island.
JAMES ATKINSON: So the grant is still there should you decide to go ahead in the future…
SATYA SHARMA: Absolutely.
JAMES ATKINSON: And I guess looking at the events surrounding some of your listed peers in, in the drinks space, a couple of them have kind of got themselves in trouble with the levels of debt that they’ve had in the business. Is that sort of something that is instructive for, for Lark in terms of, I think I did see that you haven’t drawn down on the debt facility that you have.
SATYA SHARMA: Yeah, I think there’s debt and then there’s the quality of debt, right? And debt for debt’s sake is, is, is another, is another point that I’d make. So what we have is a working capital facility. We don’t have it with a second, third, fourth tier lender. We have it with the National Australia Bank. They are absolutely into our business.
We’ve made sure that we’ve taken them through the nuts and bolts of our business. We’ve made sure that they’ve understood the intricacies in our business cycle, etc, etc. There is a $15 million facility. Not one cent of that has been drawn, but it is there for us to be very cognisant that it’s a working capital facility.
It’s there as our, let’s call it our safety net for timing differences until we get to that cashflow positive, which we’ve gone out to the market and said, we’ll be in ’26, ’27.
JAMES ATKINSON: Right. So what was the reaction you got from investors when you said that to them? Were they expecting a quicker timeline than that?
SATYA SHARMA: No, I think, as I said to you, the investors that we’ve got, everyone wants to be cashflow positive faster. And if we wanted it to be, we could be. But there are compromises you need to make and those compromises would be investing less in the brand and the investors that we have on our books and I’d like to think who, who listen in on our, on our results, et cetera, understand that we’ve got three strategic priorities. The first being build brand equity, right? The second build international momentum and cash and capital discipline, i.e. we will look after your money and we’ll do it the right way. Those are the three things that are going to be the ethos of our business.
But that equity requires funding to be able to spend in A&P, advertising and promotional spend. Now, I could cut that and be cashflow positive. Is that the right thing for the brand in the long term? Absolutely not. So the journey is very clear. It’s invest in the brand, build that momentum, and together, it’s a self-fulfilling prophecy that cashflow should come.
Now, am I going to burden this company with debt? Absolutely not, right? Because you’ve talked about some other companies that are, that are in the alcohol industry that have done a I suppose things to, to, to take on too much debt in my, in my view, that’s not a stance that I’ll take. I think that’s a little bit irresponsible, but at the end of the day, you’ve got to be able to understand where your trajectory is going as a company.
JAMES ATKINSON: What about some of the other key strategic decisions that you’ve made since joining the business? I think I saw in the investor briefing that you did last year that you talked about transitioning to 700ml bottles in, in some cases, is that going to be across the whole range or just certain SKUs?
SATYA SHARMA: Yeah, so I’ll answer the first question was strategic decisions. Since we’ve walked in, we’ve consolidated our distilling operations to Cambridge. First decision. Second was we, you know, not a pleasant thing, but we undertook a restructure in order to right size the organization to the, to the revenues of the underlying business, the bit around future direction about where we’re going in terms of restaging our brand.
700ml bottles is something in our consideration. Is it all things? Is it some of them? That’s a decision for end of FY25. I’d like to think there is a place for, you know, limited editions potentially in 500mls or, you know, the iconic bottle, at least ensuring that we, we pay the appropriate amount of respect to that bottle because it’s got us this far.
It’s a brand asset, but equally, I’m not blind to the fact that we need to lead with the consumer, right? And we were talking just earlier about going into international markets in Asia. As an example, one of the biggest consumption occasions is a meal occasion over dinner. So we open a bottle of wine. We might have a bottle of whisky that we all bring.
It’s really important to understand that ‘face’ is an important sort of concept in Asia and indeed over the world, right? It’s important to have that consideration.
JAMES ATKINSON: Size matters.
SATYA SHARMA: Size, well, equality matters, I think. If someone’s bringing a 700ml bottle and I bring a 500ml, what’s that say about me?
Yeah. There’s a flip side to say, look at this really rare and scarce product that I’ve bought that only comes in 500ml, and there’s a bit which says, here’s a 700ml and we’re going to share it together. So, there’s a balance, there always will be are we transitioning all of, all of our range tomorrow? No, we’re not.
JAMES ATKINSON: Let’s talk about the export markets for Lark Whisky. That sounds like, you know, diversifying your exposure to, you know, obviously being so reliant on Australia. Was that sort of a key driver for the decision to very quickly find some export markets?
SATYA SHARMA: Yeah, and, and quick. Quickly find them, but also find the right ones.
If you look at our business, we are definitely overweight Australia, right? That goes without saying it’s our home market. To be successful as a global brand, we need to be successful outside of Australia as well as at home. So, which markets have we talked about? So, first and foremost, Singapore. Singapore is the epicentre of Southeast Asia and indeed Asia.
It’s a small island state one that I love and know really well. It’s a melting pot. It’s got people in there for days for business. They’ve got people transiting to go for the next holiday destination. There’s, you know, all of the things that make Singapore really, really important for business and tourism, et cetera, make it really important for us as a good springboard.
That also is reflective of the higher sort of GDP per capita and all of those good sort of macro or demographic trends as well, right? So it’s a dense urban population. It’s easy to get to precincts, et cetera, et cetera. So that hence, Singapore and eventually we’ll get into global travel retail, I’m sure at some point, but Changi Airport, probably one of the most important airports in the world in order to be able to access global consumers.
The second market is Malaysia. Malaysia is the biggest single malt market in Southeast Asia. That sounds strange, but it’s, it’s quite a big market. In that market exploration, you know, having, having a look and discovering through single malt is a really big part of that sort of market sort of trend, which is why we believe Lark has a place to call home in Malaysia.
The next market is Indonesia and Indonesia is a big country, right? It’s, it’s got islands everywhere. It’s geographically sparse. We’re not going after Indonesia. We’re going after Jakarta and Bali, right? And why Bali? I think it should be obvious, but Bali, the connection into Australia is obviously quite important, but equally over COVID what you’ve seen is the wealthy sort of population of Jakarta has realised actually, they’ve got this beautiful island just up the road and you’re starting to see a lot more tourism take place domestically. So building in Jakarta and Bali, it sort of serves a dual purpose. One is for the Australian market to, to again, reinforce that we’ve got two wonderful products, Lark and Forty Spotted Gin.
You know, I’d love to be able to pick up a Forty Spotted Sonic on a beach bar in Bali at some point, but also Lark, which again is, is probably more skewed towards Jakarta.
And then finally the Philippines. Now, the Philippines is the single biggest gin market in the world, right? I say that, then I say, just hold on a sec, James, it’s a dollar a bottle, right?
JAMES ATKINSON: So volume, not value.
SATYA SHARMA: Correct. But that being said, there is a hell of a lot of premiumisation. There’s, there’s a lot of wonderful little bar precincts, et cetera, where I think Forty Spotted can have a play, but also Lark in terms of particularly an area called [inaudible], which is a Chinese business community, is going to be a an initial play for us.
Again, when I, you’ll hear a common theme here, which is we’re not going after countries. We’re going after cities and states and precincts and streets because that’s the way it is. That’s where we have to get to that level of granularity to in order to be able to be successful.
JAMES ATKINSON: Well, that probably partly answers my next question, which is, you know, how do you build brand awareness when you don’t have the marketing budgets that multinational companies do?
SATYA SHARMA: Yeah. So be targeted. Yeah. It’s probably the main thing, but I think also, work out what is different and what will cut through. Now we are by definition and by nature of our, of our budgets, we will be a digital-first company, right? Or a digital-first brand. Are we the type that’s going to stick out huge billboards outside?
No, we’re not, right. Therefore, what is, what is our path to success? Our path to success is start with advocacy. Right, build, build a connoisseur community, build the aficionados, the whisky communities in, in terms of Lark Whisky, build trial again… you asked me what’s the sort of the recce I did before I started with, with Lark, first thing I did was open a few bottles. When I did that I was blown away at the quality of the whisky and look, I, I’ve got a, an incredible bias because of, of scotch. And I, I think scotch is fantastic, but when I opened a bottle of Chinotto Citrus Cask, right? That to me was, this is something no one else can do. And to me, that is going to be an amazing sort of opportunity to experiment and play and do those things and really cut through.
Now, we will be respectful, as I said, of tradition and all those good things, but I think it’s important to put that little fingerprint of Lark and Tasmania on those bottles. So, you know, go back to that question around, how do you do it? Liquid on lips advocacy and then build with the distribution, i. e. make sure it’s available and rate of sale comes from activating the brand, building equity in the brand and awareness in the brand. So people come back to it and say, I know Lark, I’d like a bottle of Lark. Look, it’s a tried and tested method. It’s not something I’ve created. But, but I think when you do all of those things, you go Sash, that sounds probably right.
I think the important part is we will do it with partners. Right. So distributors first, that’s who we will work with. We’re not trying to put feet on the street. This is their markets. They understand them. They understand the right bars, the right customers, the right consumers. Let’s be respectful of the fact that we’re working with really, really Tier One, A-Class distributors.
So we should definitely sweat their knowledge and expertise.
JAMES ATKINSON: Lark Whisky kind of consolidated a new core range, I think it was before you actually arrived. And you mentioned Chinotto and that became part of that new range. Would it be fair to say you had a bit of input into that process?
SATYA SHARMA: I had a bit of input into saying that we needed a core range in terms of the products. No, the guys did that. They created that. They own that and they’ve done a fantastic job, right? I think if you look at the core range, there is a practicality to why I’m so insistent on that, right? There’s, there’s some number, don’t quote me on what the number is, but it was like 40…
JAMES ATKINSON: Forty-something
SATYA SHARMA: Forty-something, it’s in the rounding at that point.
JAMES ATKINSON: It’s not far off one a week, right? It just does my head in when I think about it like that. It makes me feel tired.
SATYA SHARMA: Well if it makes you feel tired, imagine the production team. I think, I think when you look at that, you go, wow, what an amazing sort of ability to experiment and be entrepreneurial and do all those great things, which I think was absolutely the right thing during COVID.
Right? I think it was absolutely the right decision. But we’ve just talked about export markets. If you think about, taking that outside of your little patch of Australia, when you start thinking about the practicalities of what that looks like overseas, where you have to register every product, you have to put the labels on and you want speed to market.
It is nigh on impossible to be able to do those type of small limited editions, right? At the pace that we can do them in Australia. Is it the right thing to have done at that time? Look, we’re cycling some of those limited releases, et cetera, et cetera, but the can-do attitude and the belief in the team and what they created…I mean, some of those limited editions are fantastic. You know, I look at them and say, what an absolute sort of testament to the fact that we get stuff done right? At that period of time, if you think about the world was sort of saying the sky’s falling down and Lark was like going, ‘Hey, we’re living our best life’, right?
I think again, is it’s a time and a place decisions are made in, they’re not made in a vortex. They’re made with context. And I think as we transition to, and this is no disrespect to previous management and boards, et cetera, we’re maturing as a business. Right. We’re growing up and saying, if we want to be really a true player on the global stage, there’s the stuff we want to do and can do.
And there’s stuff we have to do and solidifying a core range to be able to take to the world is paramount.
JAMES ATKINSON: And what does the special release strategy sort of look like now? Is it kind of just settling on a few key periods of the year. And then that way, that issue of cycling that you referred to, you know, everything stabilises, it becomes less of an issue.
SATYA SHARMA: It does, mate. I think, there is purpose, right? Purpose of why you’re doing what you’re doing. If you look at some of the stuff that Lark’s done over the time the beautiful Christmas cask, Dark Lark, we’ve just done Lunar New Year this year.
JAMES ATKINSON: That’s the first Lunar New Year whisky, is it, for Lark?
SATYA SHARMA: It is, yeah.
JAMES ATKINSON: And that must have been an initiative of yours, I would assume.
SATYA SHARMA: Yeah, look, I think occasions and times are important and I think tapping into those right occasions are really important and ensuring that we have the right offering, that’s credible to take to market is really important. So, yes, the fewer, bigger, better. It’s probably the easiest way to describe that.
Then there’s the really, really exciting ones that you’re not looking to really make commercial returns on. These are, these are fame drivers, PR, talkability. You know, we did, we did a release with Baxter Inn. World renowned whisky bar, more importantly, fantastic people, right?
They’ve come in and said, look, we will partner with Lark. We want to. Your bar series is credible. It’s real. It’s allowing us to be part of a tapestry that we believe we belong in. I look at those and we go, right, is that the biggest commercial return? No, it’s like 200 something bottles, right? So what are you doing that for?
That’s again for PR and advocacy. That’s trade. Then there’s single cask, because we have our D2C platform, we have an e-commerce platform. Can we do a single cask through there to drive hype? To drive, again, loyalty with our consumers who are looking for more stories and all of those kind of good things.
Yes, we can. We can do those. Are they going to be the biggest commercial return? No. And then we’ve launched the 1911 Para, which to me, blown away by that whisky. Again, hand on heart, one of the best whiskies I’ve ever had. And that there is 130-odd bottles, 135 bottles. You look at that and you say, what’s the point of that?
Is that like sell out tomorrow? No, it’s a halo product. It’s there to show the credibility of the range from top tier, i. e. halo product, aspirational products through to your signature collection. I think going back to your point about what’s innovation look like, it’s innovation in channel, one. Innovation for purpose. So whether that’s scale and commercial returns or whether that’s PR talkability, et cetera, now they can be a bit of both. And then again, it’s, what does it do to add to Lark’s overall brand equity, one of our first strategic pillar? So hopefully that, that answers a little bit of your, about where we’re going with our limited release schedule.
JAMES ATKINSON: It does. Oh, maybe let’s just quickly cover off on the results that you delivered yesterday. It didn’t look like there were any surprises following the update that I think you gave maybe in January. But yeah, net sales revenue of $7.4 million, which is $2.2 million down on the same time last year, which I think would just be a product of that the cycling, some of those limited releases that you mentioned, and there was also some commentary in there about a slowdown ‘in the Chinese indirect export channel’. What’s that all about?
SATYA SHARMA: That channel is a legacy channel. It was effectively a sales made to an Australian based company that sends stock to China, like a re-export customer. Now, traditionally that’s been a massive channel for wine. And so as wine tariffs increased, there was a shift towards other products. Lark was one of them along with others. But as you know there’s some, there’s some strong rumours around the fact that those tariffs are coming down. So there’s a big shift back to wine. So great business in terms of being able to do, you know, cash, P&L, all those good things. But one that eventually, you’ll obviously know based on my history, I think we need a distributor in China, looking after China.
So was it ever going to be something we did forever in our long term plans, you know, Probably not. It’s great to supplement because it still accesses high net worth consumers. But I think it’s something that, you know, we had well in our thinking, we knew that we’d be picking up distribution in China.
We’d be working through a distributor to more than just sell. It was more than that, but to build brands and build equity again. I’ll keep coming back to this point. We’re not trying to access China. We’re actually accessing only one area, which is the southeast of China in that area is, you know, give or take 80 percent of our relevant volume.
So those kind of nuances are going to be really important as we pick our distribution partners going forward.
That’s something you’re exploring at the moment? Yeah, look, I got asked this yesterday and I think, we’re not trying to throw paint at the wall, right? We’re trying to embed and work out what works and then replicate and use those learnings as we go to new markets.
It would be, obviously you’d expect me to be saying, we’re talking to lots of people around the world about distribution. Do we want to open all of those distribution channels in one day? Absolutely not. Because we don’t have the resources. to do it justice. So you know, get it right, particularly in the markets we’ve picked first.
The other bit of news that I think has maybe come out of the results this week was a proposal to sell the Bothwell site, which has kind of had a chequered history, I think we can probably say, prior to becoming a part of Lark. And also I think since becoming part of Lark, it’s kind of been a little bit controversial the way that the Bothwell stocks have sort of been folded under the Lark brand.
What’s, what’s your view on that? And then you can maybe talk to the decision to divest the site.
SATYA SHARMA: I went to the investor base, I’m aware of the past. I went to the investor base in October, I did an investor day and made it very clear That a single malt whisky comes from a single distillery.
JAMES ATKINSON: Regardless of what the Australian laws allow.
SATYA SHARMA: Doesn’t matter. Yep.
JAMES ATKINSON: Okay.
SATYA SHARMA: Yep. And the reason for that is. If we’re going to be really true to all the things I’ve just said, you’ve got to be, you’ve got to have the integrity about being proud of where your products have come from. What does that mean inside of our results? You would have seen Lark single malt, you know, the crown jewels. You’ll see a thing that says House Of Lark and those House Of Lark whiskies would include things that come from Sheen Estate. They would include things that come from Bothwell and they include anything that would be a blend. Right. So Symphony. And on the right hand side, you’ll see Forty Spotted Gin. That’s our, let’s call it our ‘House Of’ products.
The decisions of the past, look, I’m not going to try and work out why they were made, but I think the logic was, for me, as I walked in was, I was very clear that that is what the stance will be with Lark. I think credibility, integrity, all of those things are vital. And I think we should be proud of where our products come from.
Just to be abundantly clear, those Bothwell whiskies are amazing, right? They’re different. They’re a different house style. They’re a different understanding. They give you a blank canvas to paint with, but you want to be signing off each of them with pride. And with that, I think, look…
JAMES ATKINSON: We’re not kind of hiding from the history, which is a little bit what it felt like when it, when all of a sudden these Bothwell whiskies started to be mysteriously released under Lark and people are asking themselves, well is this Bothwell or is it Cambridge? And it just kind of created a little bit of scepticism around the brand, I think.
SATYA SHARMA: Yeah. And I think, look, I talked to you about how do you grow brands overseas? It’s just as important to grow those brands here the right way. The connoisseur community, then the whisky community, they should know where their whisky is coming from.
They should be clear about where it’s created. Now, if it’s a single malt, it should say that, you know, I’ll give you an example. You, you talked about our limited releases not long ago, and we will release. From the House Of Lark, that the House Of Lark whisky is that bottom corner, Dark Lark will come from the Bothwell distillery.
It will say on the back of the bottle, Bothwell, right? And it should, because it’s a light, you know, floral, beautiful whisky, which is distinctly different to our house style, which is, you know, viscous and, and, and again, rich depth of palate, et cetera. So as a consumer, you know what you’re getting. So Cambridge will only make Lark single malt, full stop, anything from the House Of Lark, which will say Dark Lark as an example is from the House Of Lark, it will say Bothwell or House Of Lark new product, it will say Sheen or Pontville, but it’s going to be very clear about it’s a Pontville product or a Cambridge product, but it’s not going to be labelled Lark, which is, you know, from Cambridge, like our signature range.
JAMES ATKINSON: So Dark Lark, obviously being vastly different branding.
SATYA SHARMA: Yeah. And, you know, watch this space. I think the most exciting branding we’ve done with it. So, you know, with those shackles removed, it lets you really push boundaries. And I think it’ll be exciting to see what comes out of it.
And yeah, the plans though to divest the Bothwell site, this will all be sort of a transitional period anyway then.
JAMES ATKINSON: I mean it’s a shame to let that beautiful site go, because it’s something else if you’ve been there, which I did in, back in the Nant era and got the grand tour from none other than Keith Batt.
SATYA SHARMA: But yeah, there’s nothing like that site. So it’s kind of sad to see it go.
JAMES ATKINSON: But do you expect that it will be another distillery that will be there?
SATYA SHARMA: Yeah. So look, we’re looking at options. It’s, I mean, you’re absolutely right. 76 beautiful hectares you know, 81 kilometres out of Hobart. It is a gorgeous, gorgeous site, but I think we go back to our priorities, our focus. I suppose it’s surplus to our requirements, right? I look at it and say, it’s a wonderful site. How could it be sold? It can be sold as a distillery. It can be sold as farmland. It’s got various uses as you know, 76 hectares is a lot of space, but we’re looking at that.
We haven’t made any firm decisions on it, but we just know it’s surplus to what we’re looking at. Over the last nine months, we’ve been very clear about let’s put the house on Lark, excuse the pun, but yeah, it’s definitely making sure that we are putting our focus and time and effort against the Lark brand out of Cambridge.
JAMES ATKINSON: And that would give you a chunk of capital to, to redeploy elsewhere as well, I guess.
SATYA SHARMA: Yes. And again, what would that be on? You’ve got a range of options. You’ve got increasing production, you’ve got spending on marketing, you’ve got hospitality, et cetera, et cetera. There’s a variety of options, but look, at the end of the day, go back to what I’ve said… what accretes the most value to the equity of Lark is where we would start.
JAMES ATKINSON: Now, as you said earlier on, your exposure to Australian whisky was kind of limited to a few key brands before you came back, but I imagine that, you know…
SATYA SHARMA: A few more since then.
JAMES ATKINSON: Yeah. You’ve probably gone around and got a bit of a feel for other distilleries in Tasmania. We’ve been to Archie Rose together. What’s your impressions of the Australian whisky industry generally since, since getting back?
SATYA SHARMA: Yeah, I mean, blown away by Archie Rose, you know, we were there and, not doing things by halves, that’s for sure. But you know, having been down to Tasmania and seen… Again, purpose, what is the reason why people are doing it? Some of them are hobbies and that’s great, right? And that’s fine. But if I sort of stick my attention to the ones that are looking to be commercially driven and be a large part of the whisky conversation globally. I think there’s a real belief that there is a tide of Australian whisky that has a right to be, that has the next sort of epicentre of growth, you know, in my mind, Tasmania is that.
Right. And within Australia, I think, not trying to be disparaging to anyone else, is the environment allows us to make superior whisky. That is my firm belief. What we choose to do with that environment is, is ensure that as long as we’ve got the right patience and we build the brands properly, and we build enough of cut through to say, why is Tasmania different?
I think we’ve got a really, really rich future and there will be some that come along for that ride. And there’ll be some that’ll say, look, I’m really happy opening my cellar door on a weekend or going to a farmer’s market and doing all those kind of things. And that’s fine.
It depends on who you want to be. But the quality of the whisky that I’ve seen has been fantastic. And I think a lot of that has to be credited to the wine industry that we’ve got here. You know, we have an incredible relationship with Sepplesfield. That 1911 Tawny that I referred to earlier mate, I look at those and go, ‘Oh my God’, I look at some of these casks and say, ‘you’ve got what?’ Like a 50-year-old, a 100-year-old Para. It blows me away walking through Seppeltsfield and other wineries here. We’ve just got so many rich assets that we can use in whisky making.
JAMES ATKINSON: Well, what are your thoughts on the proposed geographical indication for Tasmanian whisky, which is something I discussed on the podcast last year with, with Cam Brett when he was president of the TWSA.
SATYA SHARMA: Yeah, look, I think it has a place. It’s a need, but I think you’ve got to take a step back and say, ‘what are you trying to achieve?’ For me, ensuring that we’re protecting the right things without stifling innovation and experimentation is really important. You know, I’ve been very vocal on the fact that bottling in Tasmania is, you know, without sounding too harsh, a bit of a nonsense, right?
JAMES ATKINSON: In terms of defining what a Tasmanian whisky is?
SATYA SHARMA: Absolutely. Yeah, absolutely. Does it add value? In my view, no. And, in fact, it, it stifles the ability to create. scale in any, any form of industry, looking at sort of the, the key attributes of, yes, be respectful of some of the traditional parts, but make sure there’s enough of a window for us to be able to go out and do the Chinotto citrus casks and those kinds of things, beause that sets us aside.
Otherwise we’re just Scotland at the bottom of Australia. Your last stop to Antarctica. So that’s kind of, you know, I think it has a place, it has to galvanise, but equally it’s got to have some teeth, right? So at this point, I think what you’ve got is a lot of great ideas, a lot of opinions, but it’s got to be very, very clear that we are trying to protect and raise the bar of creating the right appellations, et cetera.
So I do think it’s there to create credibility, belief, trust. Is it doing all of those things without number one, stifling the innovation and experimentation, but also without stifling the commercial realities of where we make our whisky.
JAMES ATKINSON: What about Australian whisky? I mean, do you think it needs stricter standards and definitions? You’ve talked about the advantages of our current labelling regime, I guess. Do you think it’s a double-edged sword, are there some threats?
SATYA SHARMA: There are some threats. There always will be. The wider you cast the net, the greater the threats. Is there a happy medium? Probably. I’d use the same words that I use for the Tasmanian [GI]. You’ve got to pick the things that you’re trying to protect and the credibility you’re trying to drive. Now, the wider you leave it, you know, what you’re going to see is people challenge or people sort of skirt around some things. We talked about that at Spirits & Cocktails [Australia] as well, but some of the, ‘you can make a whisky in a day’ kind of logic. Those things will come, but they’ll go through industry bodies. We’ll go through this cycle and we’ll end up at a happy medium, but it will take time.
JAMES ATKINSON: And I think, yeah, you were quoted as talking about, because it’s new world whisky, it should be able to push the boundaries a little bit, something along those lines.
SATYA SHARMA: Yes, and it should absolutely push boundaries. It shouldn’t be, excuse me, but taking the piss right. It needs to be able to do the things that we want to be going out to market and saying, here’s a really important reason why we can do things in this part of the world that no one else can.
That’s a really cool thing to be able to say without ensuring that we aren’t `going down a path of being misleading or misrepresenting what we’re, what we’re doing. Those are the things I think if you put your consumer hat on, ensuring that we’re protecting the consumer is key as well.
JAMES ATKINSON: Now, a big announcement in recent weeks, a new partnership with none other than Peter Gilmore of Quay Restaurant and Bennelong in Sydney. Tell me about that partnership. What’s the background of that?
SATYA SHARMA: Go back to brand, right? So brand, credibility, ethos, all the things that you look at Peter Gilmore and you say, ‘wow, what a fit’, right? An authority on flavour. I think he’s spent more time in Tassie… in his words, he’s bought a shack, I highly doubt it’s a shack, down in Hobart. Look, he’s got the right sort of, I suppose, attitude, the broader consumer appeal as we cast our net wider in terms of Lark.
He’s passionate about Australia, passionate about Tassie, he’s passionate about food and flavours and gastronomy and an authority as you know, so putting those two things together, i.e. Peter and Lark, a bit of a match made in heaven, a bit of a coup for us, if I’m being truthful, and a lot of hard work in the background by our marketing team.
There was a lot of interrogation around, is this right for both of us? Because it has to be a two-way street.
JAMES ATKINSON: Was he a whisky enthusiast already?
SATYA SHARMA: Yes, he is. And I think when you have a look at, you know, the concepts of flavour. I think he’s got a lot to add for us in sort of breaking down palate and breaking down sort of, what a consumer or a potential punter sees.
So hopefully that that’s a wonderful partnership, you know, we’ll go out and create some incredible once-in-a-lifetime activations, et cetera. And, you know, if the launch with him was anything to go by, it’s going to be a truly rewarding partnership.
JAMES ATKINSON: Anything else coming up this year that you want to share with us?
SATYA SHARMA: Mate, there’s a lot coming up. There’s never a quiet day at Lark. In terms of what’s coming up, the one that I, I’d probably say to you is, is most exciting is probably Dark Lark. I’m absolutely thrilled by what it looks like. I’d love to be able to show you a bottle and take you through it. And we’ll do that at a particular time, but I’m over the moon by what the team’s been able to achieve.
So I think when you look at that, I think that’s about May. It’ll come to market May or June. That’s what’s coming up. I think in terms of the other things that are on our minds and what we’re doing, it’s incredibly important that we go out and nail these export markets. That’s, the bit that I think is, you know, let’s call it the brick in the wall for Lark.
It’s another brick, another brick as we build that, build it, build this business up. I can’t wait to go out and start executing that journey with our team. And the other part is obviously Global Travel Retail. Global Travel Retail has been an absolute revelation for the company. We’ve engaged with consumers who are the right consumers, they can afford to fly, they can do all of those things, they interact with our products. We’re Australia’s number one luxury single malt, you know, what better claim as you go to a to a business meeting in wherever, Singapore or China or the US, you’re gifting that to a colleague or a friend or a loved one.
You know, our retailers in Lotte and Heinemann are over the moon with what we’re doing and they want to do more and more and more. So hopefully as you I’m sure will fly and get out of Oz at some point, we’ll see those activations come to life. You know, we don’t want to just stick bottles on shelves, we want to make sure that we tell our story. It’s a brilliant story to tell. And we try and put that story far and wide and Global Travel Retail is the other exciting part for us.
JAMES ATKINSON: Excellent, Sash. Well, all sounds very positive and exciting. So yeah, congratulations on what you’ve achieved so far and best of luck for the future at Lark.
SATYA SHARMA: Thank you, mate. Thank you for the time in this obviously busy period for you as well, so appreciate it.
JAMES ATKINSON: No worries.
SATYA SHARMA: Cheers.
