Two Bays gluten-free beer was conceived by coeliac Richard Jeffares in Mornington Peninsula, Victoria, in late 2018.
Richard joins us this episode of the Drinks Adventures podcast having recently won a gold medal at the World Beer Cup 2024 for Two Bays Brewing Session Ale, a mid-strength gluten-free beer that you can find on tap at the Melbourne Cricket Ground.
The World Beer Cup is often referred to as ‘the Olympics of beer’. It’s held in America every two years and unlike most of the other drinks competitions around, there is only one gold, silver and bronze medal awarded in each beer category.
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It’s frightfully difficult to win a medal, especially for breweries on the other side of the world, which naturally face logistical challenges getting their beer in front of the judges in peak condition.
As such, there’s only been a handful of Australian breweries that have ever won medals in the World Beer Cup, with 9300 beers entered this year from 2060 breweries in 50 countries.
Two Bays founder Richard Jeffares and head brewer Kristian Martin were in Las Vegas to collect the award.
When I caught up with Richard on his return to Australia it was also a chance to hear about other developments at the company, which continues to impress with its mastery of beers made from a base of millet, buckwheat and rice.
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Two Bays gluten-free beer podcast: Full transcript
JAMES ATKINSON: You must be on cloud nine.
RICHARD JEFFARES: Absolutely. I mean, people say, ‘oh, you must have known. Is that why you went over there, because you knew?’ And I go, ‘no, actually, we had no idea at all’. It was just I hadn’t been to the States since 2019 and we went to CBC in Denver that year. You know, our, malt supplier is there and it’s always nice for us to catch up with her and just sort of see what equipment she’s put in. Kristian hadn’t been over and tested any other gluten-free brewers’ products either, so it’s kind of good to see what the others are doing in the industry and how that’s working. Or in the case of one brewery, not working, because we went there at midday and by that afternoon, he put out a note saying he was shutting up the following Saturday. So that was a bit of a dampener to the start of the trip. But, you know, it’s just as tough over there as it is over here. Thankfully, over here we can do direct-to-consumer sales and we can do direct to retailer and direct-to-venue sales, which, you know, over there. It’s just a nightmare.
JAMES ATKINSON: Yeah, for sure. But, I guess I should say congratulations. I was really excited when I saw that you won a gold medal in the World Beer Cup. I mean, to my knowledge, there’s only been two other, and you might be able to correct me if I’m wrong here, but there’s only two other gold medals that I know of won by Australian breweries – or brewery – because it was, James Squire Pilsner and also James Squire Porter have both won golds at the World Beer cup. Are there any others?
RICHARD JEFFARES: Burleigh Brewing, I believe.
JAMES ATKINSON: Okay.
RICHARD JEFFARES: Yeah, going back a few years. And Redoak, I mean, yeah, you remember Redoak? So I think they may have won one, possibly two medals.
JAMES ATKINSON: So I think now that you say that, both those ring a bell, but they’re a little bit further in the past.
RICHARD JEFFARES: They were… so ours was the fifth gold medal at the World Beer cup. So we went there with no expectations, nothing. And we were hanging out with some of the gluten-free breweries that were really on edge about whether they’d won or not. They’d been previous winners and previous place getters and we were, to be honest, fairly relaxed. The breweries that had got third and second, they’re not dedicated gluten-free breweries and I wasn’t really aware of them. And then they called us out and it was like the whole auditorium is 9500 people or something there. And when a brewery from Colorado wins, all the Colorado breweries get up and start cheering. And then somebody from California or wherever it might be, Peru or Japan had won, in a couple of the categories before us. So, you know, the place was starting to warm up and, yeah, it was really exciting and then it was actually a blur just walking up onto the stage and it’s unlike the AIBAs, it’s over and done with in about an hour and a half. And you literally, whenever you get to the stage is when you go up to collect your gold, silver or bronze, whatever, so they don’t wait around for everybody, congratulate themselves and the whole team walk up. I think we were behind the third place getter on the award behind us or something, so it’s kind of pretty weird. And then you get your gold medal thing, take your picture with, Bob Pease and hand it back on the bottom of the stairs and they give it to the next person. And that was the event. We came home with this sash, I’m told and I’m hopeful that there’s something a little bit more impressive that will be sent to us, for us to put on a trophy shelf. But, it was incredible. And then, I think, to be honest, I shed a couple of tears telling people about it, because it does sink in just how monumental it is.
JAMES ATKINSON: Yeah, absolutely. And it was, I believe, the Session Ale. Is that right? I mean, that’s not a beer that I would have tried or it’s not a core range beer, is it?
RICHARD JEFFARES: It’s a core range beer. It’s really interesting. We released it two and a half, three years ago, I think, as a mid-strength beer. You know, Kristian and the brew crew have been in love with that beer since they first put it together. And it was a beer that, you know, we’re not diluting it down to make it into mid-strength. You know, it was designed around a three and a half percent ABV space. We thought, you know, there’s certain markets where the mid-strength category works really well. We know consumers are looking for less alcohol, but it’s been a beer that, to be honest, has been really challenging to get broad distribution on in retail, it is the beer that goes into the MCG, so it’s a really good seller for us, but it’s on the back of one or two major accounts. We haven’t been successful with the big retailers with it, and we’re waiting on one of them to come back to us. But I don’t think we will be successful with getting it distributed, even though it is the world’s best gluten-free beer. So it’s kind of frustrating from that perspective. Online, it’s our best selling SKU. So we know consumers are looking for it. We know, if they can’t find it at bottle shops, they’ll come and buy it direct from us. So it’s really interesting, that dynamic. But, you know, hopefully on the back of this, as people are looking for more and more that mid-strength category space, it will get more distribution, and we’re picking up a couple of tap distributions as part of it. So, you know, it’s a great beer, it’s a really tasty product. So we just hope continues to grow for us.
JAMES ATKINSON: Did you have a feeling of, you know, entering beers into the contest, ‘gee, that Session Ale that we’ve put in is tasting splendid at the moment’. Or, I suppose it’s hard to know when you’ve got cellar palate like everyone does. Like everyone probably has a high opinion of their own beer.
RICHARD JEFFARES: Yeah, I think so. You know, the brewers love it and their palates are much better than mine. I love it too. But, you know, they really like it. Obviously, it won te the trophy for the Best Specialty Beer in The Indies last year. So in that category, it came up against, I think there were 29 gold medals, and I think 26 of them were what we refer to as ‘barley beers’. So we knew quality-wise, it stood up well, not just in the gluten-free beer category, but against all beers. So that was the reason we put it into the World Beer Cup then, to see how it stood up against the American breweries and others that enter into those awards. So we kind of knew it was a good beer. It was just a question of, there are lots of good beers and everybody’s putting up their best beers that they think they got the best chance of winning with. But, you know, it’s pretty amazing to sit back and be able to say, you know, that kind of beer, that’s what we do. It’s all about providing the best beer we can to the consumers so that our customers are not getting an inferior product, which was often associated with gluten-free products in the past. You know, it helps put that sort of story to bed in that the products absolutely stack up against barley beers. They stack up against the world’s best beers. So as a consumer, you are getting the best that our brew crew can make for you and that stacks up well.
JAMES ATKINSON: And does it carry a pretty good load of hops for a mid-strength?
RICHARD JEFFARES: You know, it’s really solid from a hop profile perspective. Nice colouring, great foam. You know, gluten-free is always challenged with foam creation and retention, but it holds up really well through the product and it’s not overly hop-forward, but it’s certainly up there with a more traditional pale ale as well. And that was some of the judges’ comments, was the amount of hop profile that was there, but also the quality of it.
JAMES ATKINSON: And you and I haven’t spoken in a while. when you launched, it was pale ale that was kind of the flagship and the focus and, I mean, I was really impressed with that beer. How has things kind of evolved? Because you did sort of bring out the GFB Draught, which seemed like a little bit of a change in direction, I suppose, from what you’d originally set out to do with the business.
RICHARD JEFFARES: To be honest, when I had the concept of Two Bays and what we might do, I really thought we might have two beers in our range and that was kind of it. But what we found is the consumers, have absolutely been asking for more flavour, more variety, more choice. And so that led us to expand Two Bays and we added the IPA, because you can’t be a craft brewery without an IPA. And then we added an XPA, not because I wanted to be like Balter, but I wanted to taste what Balter XPA drinkers could have. And then you need a lager in the range. And then we went into the mid-strength. So that sort of rounded out the Two Bays range with five beers. But we also realised, you know, we’re very focused on the whole gluten-free consumer market. What we knew is we’re marketing to 100% of the gluten-free consumer set. But like everything in beer, 85% of people really just want a nice, easy drinking, low bitterness, good value product. They don’t necessarily want all the florals and the flavour that you get in a craft beer. And we didn’t have a product for that consumer and yet we were talking to them and we were offering them a range of products, but they really just wanted that easy drinking beer. So GFB was devised and brewed. It’s a different formula, it’s a slightly different, it’s a full 24-can pack size, six packs instead of four packs. And it’s an extract beer rather than all grain beer. And it allowed us, by creating the second brand, to differentiate the offer and who we were potentially targeting from a drinker set with that. But for us, it’s about really making sure that the gluten-free consumer, wherever they go, can get a beer offer. And that meant that for a lot of venues, the price point of an all-grain, gluten-free beer was a bit intimidating from a ranging perspective. Surprisingly, actually, most of our distribution for GFB is actually off-premise and the on-premise accounts have stayed with the Two Bays beers in the vast majority. But the timing has turned out to be perfect because with cost of living, you know, it’s been very useful for us to have in our range a cheaper value product. And what we see is a lot of consumers will buy a Two Bays product for the weekend and a GFB product for the week and when we do a lot of our online sales it’ll be the same thing, in that they’ll buy a stout and a GFB draught carton as a way of giving them that flavour profile but not all the time. And price point wise it wasn’t necessarily a change of direction, but it certainly wasn’t part of our original plans. But as we started to realise that to get value for our marketing dollar as well, we may as well offer the best product we could in that price point category as well. And it’s gone really well. So pale ale is still our flagship beer and it’s well over 50% of sales in our Two Bays range. But GFB has come in, it’s now 30 odd percent of our sales and we’ve been looking to try and grow GFB as a standalone, not necessarily a standalone brand, but a strong brand in its own right, recognised for the style of beers that it is there that are easy drinking, low bitterness, that side of things. So literally Wednesday, we released the second GFB core range beer, which is an Aussie ale. And we released it online and it’s now rolling out through bottle shops and that kind of helps us to, you know, from a marketing perspective you’ve got two beers in the range so you’re helping to build a brand around GFB. We think draught being the lager, having an easy drinking ale in there, there really isn’t too much in that space. It’s a four percenter, so slightly lower ABV and our online sales went nuts on Wednesday. So we know there’s a lot of demand out there for people wanting to try it. So we’re now kind of sit back and get the product reviews and see what people think and tell us. Certainly the early indications have been really good for people who come to the brewery and pick some up and then take it home and started to do some social media around it. So we’re really happy with that and that’ll do us for the next little while with GFB. But it’s an important brand for us and we think it’s an important brand for the broader market as well.
JAMES ATKINSON: And business has kind of been growing year on year over the last… I mean this is six years, I think, that you’ve been around now?
RICHARD JEFFARES: Yeah, we’re coming up to six years this December. So we sort of had five years last year. It’s definitely tightened. So the days of rampant growth, we’re not seeing that at all. But you know, craft beer is hitting turbulent times and you don’t need me talking about that too much. But we’ve been able to hold our own, which is good. So we haven’t lost volume out of the Two Bays brands. So even though it’s sort of ultra premium price point wise, that volume has still stayed high. And where it has been, it hasn’t grown too much over the last couple of years. But GFB has come in as the growth engine for the business and given us additional volume through the GFB side of things. But when our beers are priced 30% above our closest competitor, let alone above a barley beer, it is a price point that is challenging in this current market. But surprisingly, when we put out a new limited release, it goes nuts at $95 and everybody seems to buy two cartons at a time. So we’re doing $180-odd orders. So people will open their wallets. And Taylor Swift is a classic example where if the right offer’s there and it’s something that’s attractive, people will open their wallets to spend on that. And then in between, they might not, spend as much. So we’re happy with where we’re sitting at the market. We would clearly love interest rates to drop and for everyone to have more disposable income and feel more confident. But we think that’s coming. I think we’re close to, from a consumer set perspective, I think we’re close to the turning point. And I think certainly from the 1 July, people are looking forward to tax relief. Whether they spend that on beer or whether they save it, time will tell. but it does mean that they can at least spend a little bit more on beer if they want to.
JAMES ATKINSON: We’ve heard a lot about, the rising cost of goods for brewers in this country. And not far from me in Marrickville, there’s a gluten-free bakery that recently closed down and created a new concept because they were saying that the cost of gluten-free ingredients had absolutely gone through the roof. So are there sort of cost pressures that are even higher on your ingredients, which are already more expensive to begin with? Has inflation really had an impact there as well?
RICHARD JEFFARES: Not so much on the raw ingredients. It’s kind of been interesting. Obviously we import it, therefore we’re at the mercy of the dollar. We’re around 64c, 65c now. I think when we first started it was 74c so that probably has been the biggest impact, but also shipping. So through COVID the shipping rates went up enormously. So whilst the actual raw grain malt cost stayed the same, the cost to get it landed increased dramatically. That’s shifted now. So the cost of shipping is going down. So actually we’re probably in a strange sort of perverse way, slightly better off because the dollar is starting to move in our favour a little bit and the shipping costs have definitely gone down. So probably, peak cost per kilo was about two years ago and we’re a little better off. I mean obviously in the barley world the global scene places a much bigger demand on barley products and therefore will influence the price more, whereas with our ingredients it’s been not so bad. Having said that, can prices every now and again I kind of forget. And then my business manager said since she started, which was two years ago or three years ago, our can prices have gone up 30%. And then they went up a little bit more. Transport is ridiculous. And you know, what’s happening is that all the suppliers to the breweries are not shy about passing on the cost increases. Whereas obviously we can’t pass it on to consumers. We’ve done one price increase in four years. We’re just working very hard on trying to get our productivity as good as possible because that’s where we’re going to be able to keep trying to preserve our margin rather than lose that margin. So between excise and all the other costs… packaging, cardboard, the price increases generally start at 6% every year. I think we just got some insurance that went up 30% and they don’t bat an eyelid… so all those incremental costs of the business, that are provided by governments or by bigger companies, they just pass it straight on and your choices are limited because there’s only two of them and the other one’s just done the same thing. So you know, those things have been really difficult for us. The ingredient cost has actually been possibly in our favour a little bit the last couple of years.
JAMES ATKINSON: Fortunately there’s not too many… I’m not aware of a groundswell of gluten-free specialist breweries opening since you guys did. Are there any others?
RICHARD JEFFARES: No, no. Hahn obviously came into the market since we started and that I think has been really good for the gluten free consumer and it’s been really good for us as a category. We still really play very hard around category growth. We want every liquor licence in Australia to offer their customer a gluten-free beer, just like you can get a cider or whatever. We think that there’s enough consumers out there to make sure there’s one in your fridge or one on tap even. So, you know, we think there’s plenty there. Hahn has really proven that you can come in and the category is significant. Hahn’s gluten-free beer is certainly a Top 50 SKU in retail across all beers, so it’s a significant volume single SKU. And that means the consumer is already out there enjoying a gluten-free product. Our challenge now is to convince them to spend a little bit more and get them into GFB and have what we think is a better quality beer with slightly more flavour and whatever. And then once we get them to GFB, then we like to try and tease them with the beauty of a craft beer and then let their taste buds go wild. So that’s kind of the plan, but otherwise, no, the industry… Holgate Brewing has come out with one as part of their range.
JAMES ATKINSON: Can they say it’s gluten-free though, if it’s made in a facility where they also make barley beers?
RICHARD JEFFARES: Yes, I believe it’s an extract beer, so therefore it’s separate. But you want to be very careful about your cleaning protocols. I mean, ultimately Hahn Ultra Crisp is made in the same place where XXXX is made. So you’ve got to make sure your cleaning protocols are right on and that your testing is right on. And we always think that if you are doing that, you want to be making sure you’re testing every product because the consequences for somebody getting sick are quite high and therefore the brand damage if you get it wrong will be quite extensive. But Tribe do one and have done one for many years in Wilde, so there’s a few. Wilde was around before us, but to be honest, I hadn’t heard about it. O’Brien’s was the only one that we’d heard about. But since then, you know, Wilde has had a bit more of a distribution path. It seems to be coming back a little bit at the moment, now that they’ve sort of restructured the business. Hahn is still doing pretty strongly, we believe, but then outside of that, it’s not there. I mean, there’s been a number of breweries that have gone out with ‘gluten reduced’ and sort of played that card a little bit. My opinion is, it’s a dangerous card to play unless you’re testing every single batch to make sure that your use of Brewers Clarex is actually doing what you say it’s doing. And I certainly know that that’s not the case for nearly every brewery that does claim gluten-reduced, they’re not testing every batch, whereas say, Stone Brewing Delicious IPA in the States, they will do that, and they do claim gluten reduced, but they do test every batch, as does Omission, which is another large gluten reduced brewery over there. But generally we see a bit of a flurry about it, and then that brewery will go back to doing what it does well, which is focusing on making really good quality beers for the barley beer drinker. Because unless you’re talking to the market all the time – it’s expensive to communicate with them and let them know your products and your offering – it’s a tough nut to crack. So gluten reduced is there, but I’m not sure it’s having a huge impact for us. There are certainly some cases, and certainly some sales reps are maybe a little bit optimistic about their gluten-free-ness, rather than gluten reduced-ness, and the slightly frustrating thing is, it’s only in beer that we talk about ‘gluten reduced’. There’s no other product in the world, to the best of my knowledge, that’s ‘gluten reduced’. It’s either gluten free or it’s not. So, you know, beer is sort of playing in this unique space.
JAMES ATKINSON: I mean, for a celiac, that doesn’t really cut it, does it?
RICHARD JEFFARES: Gluten reduced, it doesn’t. You know, you got to be very confident or cautious with it all. But, you know, gluten reduced rules are the same as in Europe. So Europe, all their gluten free beers are made out of barley, just with clarex. So it’s only in America, Canada, well everywhere else but Europe has the same rules as us. So you know, it’s just a case where being very cautious and careful… Again, I actually think it’s a real positive… some of these breweries are very large craft breweries in the craft scale. They’re important members of the industry and what I’d call senior members of our industry. And they’ve recognised through their taprooms and through discussions with their customers that there are a lot of gluten-free people out there looking for a gluten-free beer. So we think that’s good.
JAMES ATKINSON: But you would just say, ‘you should stick to your knitting and put Two Bays on tap instead’.
RICHARD JEFFARES: That’s what we do do. And we’re happy to sell our beer in, I think, 120-130 breweries now in their taprooms as their gluten-free offering to the customer. Because, you know, I was in Las Vegas, I tell you, I couldn’t find a gluten-free beer. You know, I found one bar where I could find some Stones Delicious IPA. it was the only place I felt safe enough to drink out of a can, because I know Stones doesn’t impact me. You know, I went back every single day for the five days I was in Vegas, and I brought Kristian, poor bloke… there was 120 other beers on for him to drink, and anybody else we met with, we all went there. And that place probably got $US2500 from us in that timeframe because they did that. It would have been nice if they’d had a 100% gluten free because they had plenty of taps and plenty of ability to choose one of the really good gluten-free beers in the US, which would have been next level. And that’s where Australian venues and things are doing… Certainly there’s a very large pub group, I won’t mention it here, but one of the larger ones is mandating a gluten-free beer to be there in all its venues, you know. That’s a really positive step. And I think it’s only a matter of time that all pub groups will get on board and go, ‘you know what? We get it with food. We put enough food on in the menu that’s gluten free. The cost of us putting a couple of beers in the fridge is negligible and it means that that person’s getting a better offer and then they’re going to be able to stick around longer, bring their friends and have the same experience’. When we went to Las Vegas, we went to Brewdog, you know, and I’m drinking a gin and tonic at Brewdog, because I couldn’t have a beer. I said, ‘I’m getting out of here’. You know, we stayed for one drink and it was just such a horrible experience to be sitting in a beer bar when there’s a whole lot of craft beer people in the bar drinking beers, and you’re drinking a gin and tonic. It’s just not the same. So you know, we hope that that experience will change and that’s kind of what we’re all about and we’re proving that it can happen. The MCG for example down here has done it. We sell quite a lot of beer through there. They’re very happy with the rate of sale. The consumers are… they are delighted with the feedback they’ve given them. But you know, we haven’t been able to connect with Merivale up there in Sydney to put it on it at the Sydney stadiums or the other venue operators. So there’s still lots of challenges and opportunities like that because people do want that experience the same in those sort of places are where beer really is the drink of choice.
JAMES ATKINSON: How has your production methodology evolved since you started? I remember you telling me about some of the headaches that you had when you were figuring things out in the early days. Have you kind of perfected the craft and sort of settled on some standard sort of operating procedures that have just made things a little bit more I suppose a bit more efficient and consistent?
RICHARD JEFFARES: Yeah, I mean that’s nothing to do with me. That’s an area that you know AG [Andrew Gow] started for us and he, if he’d had any hair, was ready to pull it out and I’m sure ready to quit on many occasions. And as soon as Matt Bebe got back, Tar Barrel his new venue, AG was back brewing brew pub stuff on barley. But he got us a really good start with pale ale. Kristian has just taken it to the next level and it’s now to the point that if we want to do a new beer, it’s almost a one-time trial. We’ve got a 300 litre brew house that we do some kegs on. We’ll do a few like that. But it is generally nailed first time. So the Aussie ale, you know, he nailed that first time through any of our limited releases. So he and now Grant and Stephen have really nailed some of the intricacies of the grains and what you need in the way of enzymes and things to help get the right attenuation and all those things that brewers focus on. But, you know, we’ve still got challenges. We’d like our foam to present better. So that’s a protein issue. What causes it? Nobody knows. Drinking a lot of gluten-free beers in the US recently, it’s a challenge that they have too, with the millet and the buckwheat and the rice that we use.
JAMES ATKINSON: And do any of the process aids that work in barley beers for head retention… can they be used with your beers as well?
RICHARD JEFFARES: Yeah, we use a bit of tetrahop in some of them, so yeah, absolutely. But they don’t seem to work the same in barley beers. And that’s the scientific challenge that the guys kind of mull over when they get a chance to sort of contemplate what might be causing it and work well with the novozyme people and others to try and sort of really understand what it could be. I mean, there probably needs a bit more scientific research into malt itself, but our malthouse is looking into testing as well to look at the typical foam levels and other levels that the brewers need to get a good beer going. That’s probably the holy grail. I think if we can nail the presentation side, I think the feedback we get consistently is that the flavour and the aroma and those metrics are really good. Presentation probably is the next challenge. It’s always going to be a lighter mouth feel, but that’s inherent and that’s fine I think. It’s just like Pinot Noir is to Shiraz. It doesn’t all have to taste exactly the same. So, you know, that I think keeps the team a little bit focused and motivated to see, can they be the first brewery in the world to sort of crack this nut. When we look at the presentation on our GFB range, it’s really tight bubbles, nice foam, good lacing. So it’s there. It’s just trying to work out how to do that with the all-grain side. But if it was just producing the same thing with no challenges, it probably loses its fun a bit.
JAMES ATKINSON: Awesome. Well, mate, congratulations again. Really happy for you. Great to see Australian breweries, regardless of whether they’re gluten-free or not, kicking goals on the world stage like that. Where’s the best place for people to get their hands on, Two Bays.. the website, obviously? Or, maybe a plug for the taproom?
RICHARD JEFFARES: Yeah. So if you’re in Melbourne and you want to head down the beautiful Mornington Peninsula, or you’re heading down to Melbourne, this will be a bit contentious, but we actually have more breweries per capita down here than the Sunshine Coast. So I think we’re up to 13 breweries in the Mornington Peninsula. We’re down there in Dromana, we’re probably an hour out of Melbourne and otherwise, great independent bottleshops. And if you can’t find it, then we always say, ‘demand your right to beer’ and ask the venue or the bottle shop to get some in for you. It’s tongue in cheek, but good fun as we try and keep selling the message and getting it out there.
JAMES ATKINSON: Great stuff. Well, thanks for the chat.
RICHARD JEFFARES: Thanks, James. Thanks for inviting me.
