‘You’ve got to think big but also win at home’

Grant Caunter gave up alcohol but that didn’t mean he wanted to give up beer. This wasn’t an issue in Europe where there was a wide selection of non-alcoholic craft beers on offer, but proved to be more problematic when the family moved back to New Zealand. Having seen the growth in the global non-alcoholic market and seeing a similar opportunity in New Zealand Grant set about launching State of Play – the country’s first non alcoholic brewery.

Grant had plenty of experience running a multi billion Euro beer category with a team of people and a powerful brand behind him, but when it came to starting a small business he had a lot of learning to do. 

“I had to be open and honest where I needed help, then go out and find it and then accept that help. Growth for a New Zealand small business owner is all about connection and networks. In Amsterdam I would present the growth strategy simplified to a plan on a page, I would get it signed off, and off we went. As a start-up in New Zealand the network had to be built from the ground up,  connecting directly at every stage from supply and manufacturing to the consumer.  The story and purpose of State of Play was picked up early and a few favours given to build brand momentum. I have a lot to thank those suppliers, store owners and webstore shoppers that took a punt early.” 

Grant says he also experienced the challenge of keeping costs in check while being competitive and growing distribution fast in the market. In the beginning he had his eyes on scale, so the value chain just didn’t work. Especially with a few unexpected challenges – the brewery which brews his beer is based in the Hawkes Bay could not operate after the cyclone meaning shipping costs went up 50%, all while New Zealand continues to suffer a CO2 shortage. 

“In the past 12 months I have bootstrapped the operation myself so that’s been a big learning curve in managing cash flow, especially with the weather events and resulting supply chain issues. I have survived the first year, grown each month and launched a new variant every 6 months. The good news is the non-alcoholic market is growing faster than even I expected.”

Despite having to learn the small business lessons from scratch Grant says there are plenty of global learnings he has taken from his time at Heineken that have helped him navigate the past 12 months.

“The great gift I got from working for Heineken is to have the consumer needs at the centre of all  brand decisions. If I had put supply chain at the centre of all my decisions, I wouldn’t have gone past the first brew because it wouldn’t have made any sense. Other markets also give a window to the future. There are patterns that each market follows depending on the growth stage of each category, so I totally believe the growth will come, the only question is how fast.”

“The other thing Heinkein focuses on is building brand trust and being top of mind for the category as it grows. The work done early will pay off when a wider audience is entering this new beer segment. I am the only brewery exclusively making only non-alcoholic beer, and a lot of craft breweries are bringing out non-alcoholic options, because the market growth in New Zealand is so strong right now. So I am always thinking how do I stay visible and connect? How do I stay at the top of this category, how do I make myself stand out?”

His advice to those at the beginning of their journey is to think big and focus on what makes you famous in your markets. 

“My whole business model was to skip the ‘small business’ part and act big from the word go. So I am always juggling things but being agile is one of the benefits of being a small business, my supply agreements need a month’s notice. The brewing is a month’s notice, so that allows me to juggle my cash flow and grow according to demand.”

“I have a master plan to grow outside New Zealand, but I need to win at home first. New Zealand is the perfect market size and maturity to innovate and learn fast, and get to enough scale that the value chain works and affords the cash to enter a new market that will require even greater investment as an import with no brand awareness.  When I export I already know the consumer in that market will be different, the competitor landscape will be different and they will be at a different stage of category maturity.  

All going well Grant is eyeing the Australian market later this year but says he still has some things to work through with local partners and export costs. Long term he believes the New Zealand non-alcoholic beer category will become around 6% of the New Zealand beer market – it’s currently sitting at 2% and will really kick off this summer as the social value of a good zero arrives at every backyard bbq. Grant is already planning on how his business will adjust and who will help him to keep up with these rapid category growth phases. 

My biggest advice is to use New Zealand’s best asset – clever Kiwi with a growth mindset.  A brand with a solid DNA, rich in purpose and story requires people who know their stuff and can share their knowledge of the next growth phase and challenges to keep you focused. Bringing in the right people at the right stages of growth, not only will help you, they will also open you up to all sorts of other amazing connections. New Zealanders willingness to connect and share wisdom is the most valuable part of being a Kiwi business owner. 

If you would like to hear lessons from more global Kiwi about advice for your export business make sure you join Kea in Auckland on July 5th 2023 for our ‘Global lessons for Kiwi businesses‘ event.