We’ve featured a few different subscription based businesses in the past, supplying day to day necessities like toilet paper, underwear, socks, and pet food. Another necessity for some is beer! And not just any beer, but craft beer individually selected for your unique preferences. That’s where today’s founder comes in.
Andrew Reeve is a Kiwi with a UK passport who started out on the rite of passage taken by so many from the lands down under. After following his passion and his nose for a good brew, Andrew now runs a fast growing craft beer subscription business powered by WooCommerce. A little while back, he took the time to sit down and talk with me about the challenges and opportunities, along with the strategies for success in his entrepreneurial journey.
Ali: Could you tell me the story of how Honest Brew came to be… what was the inspiration?
Andrew: The original concept came from us running beer events, so we designed this brew kit that was controlled by an iPhone app, which was kind of like a fun project at the time.
We love craft beer, but at times, it’s not that accessible. So we would find a beer we really really love, but sometimes we can’t actually find that beer again, because the breweries are only serving a very local, regional area. At the same time, people were asking us, if I find a pale ale I really like, I don’t know what other beers to try that I can be certain of.
And we were like, well, this is something that we know really well, and something that we can actually solve online. So, right, let’s launch a personalised service that’s all about understanding what people do and don’t like in beer, and delivering them the best beers in the world. So kind of taking our expertise in beer and technology, and making a very personalised service around it… that’s when we really discovered this whole world of people wanting to enjoy good beer at home.
Ali: How did you find your brewers and select your beers?
Andrew: A lot of it is from industry knowledge, we are quite lucky in that sense. The team know beer inside and out. Cormac [is] what’s called “cicerone” trained, which basically means he’s a qualified beer taster so they know beers really well and [we] do a mixture of approaching breweries and breweries approaching us.
Ali: Ok, so that’s how you get your beers – how did you reach your first customers?
Andrew: I think it was largely social. Before we launched the eCommerce site we had a Twitter account and a Facebook account, with a small following, like a thousand people or something like that, so when we actually launched the eCommerce site there was a degree of community already. So we kind of leveraged that community to get our first few customers, which was, on the subscription side of the business, it would have been May of 2014.
Ali: So social media obviously helped you get your first customers, how has it helped you with your marketing?
Andrew: It’s really powerful when running a personalised business because interaction is really important. Paid social has become a very powerful tool for marketing now.
For us, and understanding the subscription model, it’s a thing that we call the dating game – where we understand the process of meeting the potential customer and the process of going right through to having a customer joining the service, and getting deliveries of beer from us, and actually feeling like, yeah this is awesome.
Ali: Do you have a social media manager, or do you guys do all that yourselves?
Andrew: We do the content creation ourselves and do all of our social advertising ourselves. You can’t outsource brand. It’s not something a business, especially a startup should outsource, [because] you need to understand the voice that you want to be, and just be really personable. So for us, our brand is somewhat cheeky, because we are all fun, kind of silly people, and we kind of want to make sure our business has that voice as well. So we don’t mind saying cheeky things on Twitter and Facebook, and people appreciate that, if you are personable, people will engage with you. That’s [been] the biggest learning for us, is that the best things we’ve ever done on social has been about us wanting to talk to people, rather than us wanting to promote something. So definitely letting the personality behind the people and the business shine through.
Ali: So speaking of the dating game, are you willing to tell me how many craft beer subscribers you have now on Honest Brew?
Andrew: We don’t publicly open that, but we literally just closed a funding round, so our numbers are quite publicly available, we have about 1200 – 1300 active subscribers at the moment, but we are growing quite rapidly now that we’ve closed another funding round.
Ali: I haven’t read anything to do with the funding round, so what kind of growth are you looking at?
Andrew: So we do on average 15-30% monthly growth and that’s been over the last 12 months.
Ali: That’s really good!
Andrew: Yeah, so now it’s about sustaining that, as the business grows. We’ve just closed a second funding round which enables us to basically continue to do that.
Ali: You have a referral system on the website, do you think that is helping with your growth?
Andrew: Yeah, it’s a portion of our growth, we are looking to activate it more, the best kind of referrals are word of mouth, I always trust what other people recommend to me, based on how I know them. [For example], I’ve got friends who know music really really well, so I trust their recommendation.
Ali: There’s a panic button on the website for when people desperately need a craft beer, how do you manage logistics when people hit the panic button?
Andrew: So it’s something we’ve put in to kind of see the use of it. We’re just about to change the UX, essentially if someone hits the panic button and gets it dispatched straight away, their order goes to the front of the queue for that day. When someone hits the panic button early in the morning, their box of craft beer should be with them the next day or the day after. And we deliver on Saturdays as well, so we’ve got very good at getting beers out to people when they need them. Quite often we find people will be like, oh man, we don’t have any beers for the weekend, hit ship ASAP and get their box delivered.
Ali: Do you do the deliveries yourself, or is that something that you have outsourced?
Andrew: We work with carriers, like FedEx or something like that you have in Canada or in the States. We have UK carriers that do all the distribution in the UK. They pick up from our warehouse, and deliver to the customers. We use two different carriers and we split depending on customer preference, location (so whoever is closest at the time)… (and) we’ve worked quite seriously on our packaging … which has greatly reduced our breakage rate.
Ali: Can you tell me a little bit about your experience using WooCommerce Subscriptions to power the recurring payments?
Andrew: Yeah, I mean it has been interesting, it has grown with us and the business as well. Subscriptions 1.0 was quite different to what 2.0 is now, and we’ve been kind of hanging out, waiting for that next stage of where it’s going, so we’ve been really really excited to see Subscriptions 2.0 coming along. We’ve got a lot of customisation that we’ve built on top of it, like the ability to give customers ship ASAP, and we’re just about to release a calendar picker feature, which allows the customer to pick their delivery/dispatch date. With the structure of 2.0 we’ve been able to build the customisation we need for our business.
There’s a lot more custom tech with our business as well, no customer gets the same delivery, or the same beer twice – all of our 1200-1500 customers get an individualised selection of craft beer. They tell us what they do and don’t like and rate each beer, and that feedback allows us to better understand their tastes. So when we send them 12 beers – 12 different beers – they are 12 beers we know they are going to enjoy. And that’s custom code that we’ve built on top of Woo, to allow us to get like a personalised service.
Ali: That’s incredible, that must have been a lot of work to set up.
Andrew: Yeah and there’s still a lot of ongoing work, we’ve taken it from, essentially when we first started the business, about 15 minutes was the average time that one of us had to spend on a customer’s order. We’re down to about 3 minutes, and we’re going to get that even lower with additional automation we’ve got coming. We’ve got custom account pages where people can see all the beers we’ve got in deliveries and rate them, see the story behind the beer, and the brewer, so we’ve got a lot of customisation to Woo.
Ali: That’s amazing, the level of information customers are given about the story of the brewer and the beer, also control over the rankings on the beers that they have had in the past… do you have some sort of learning algorithm or something?
Andrew: Yeah, essentially what we are building is a recommendation engine that helps to select craft beer for each customer based on their previous ratings; [and this] is being enabled by the API that didn’t exist when we first started on Woo.
Ali: Yeah it’s just incredible, I’m thinking about craft beers, and small brewers, and things you don’t think about being so highly tech, and then you are talking about a recommendation engine in order to get these kind of very small batch, small brewer beers into people’s hands – it’s cool!
Andrew: Yeah, well the objective for us is that you get sent 12 beers that you love. There’s nothing worse than paying the money to only enjoy 8 of the 12 beers. The idea is that you get 12 craft beers that you absolutely love. And that’s huge for retention as well, people want a standard of service, we want to be delivering what they want and when they want it, that’s why we go with flexible frequencies, flexible dates, the objective of our service is to merge a traditional eCommerce shop with a subscription model. You’ve got the flexibility of a shop, but the convenience a subscription model offers, and our objective is to merge those two even closer together.
Ali: What features have you found in Subscriptions 2.0 that have been the best for your business – have you been able to use any of the new magic in what you are doing?
Andrew: What’s been the single biggest change, is probably just how it’s structured – from a technical perspective – it’s given us a lot more confidence in scalability.
Before, we knew that potentially Subscriptions couldn’t handle 10 000 customers. Whereas now we’re confident that Subs 2.0 can. For us the biggest feature that came out with 2.0 was the redevelopment of the product and splitting the subscription from the order.
Ali: Yes, that makes sense; definitely knowing that you can totally scale as big as you want – as many customers you get – it can grow with you.
Andrew: Whereas we already had a few little workarounds in place to allow 1.5 to operate, [and] we had to put in a few little bits of code that will allow us to run a big site. Search essentially wouldn’t work any more because it was just too slow and cumbersome to do the database queries. Now that 2.0 has got a far more streamlined architecture it makes it a lot easier to do the most basic thing which is good.
Ali: I don’t know if you know, but at Prospress we are pretty keen on cryptocurrencies. We’re just wondering about your experience selling beer in bitcoin.
Andrew: Yes. (Laughs) We used to accept Bitcoin and we don’t at the moment purely from an accounting limitation. We had a great community of people that were excited they could actually spend bitcoins and buy beers with them. Part of the reason was our Head of Digital had bitcoins, and he knew the cryptocurrency really well, so it was, hey this is a really cool concept and he wanted us to be able to accept it. The problem we got is as we got bigger that we had to make a call that we could only accept two payment platforms from an accounting perspective or else it just got really cumbersome to manually organise all of the foreign currencies. We had to make the call between either PayPal or crypto. So at this stage we had to say let’s park crypto and hopefully get one back in the future. Maybe we’ll just get rid of PayPal and bring Bitcoin back.
Ali: Funny. Do you have any advice for other entrepreneurs?
Andrew: The biggest one would be, be passionate at what you’re doing. It’s so much easier… if you’re going to start a business it needs to be something that you’ve got passion for. You’re going to commit a lot of time and a lot of energy into the business, but it needs to be something that you’re going to really enjoy doing and get satisfaction from. The second one would be, find really good people to work with. HonestBrew has done so well because of the team that we’ve got. That’s a key to success to the business: making sure you’ve got a really good founding team that’s diverse and wanting to give everything a go. The last one would probably be understanding metrics. Understand the metrics that drive the levers of your business. Understand those as quickly and as fast as you can… the levers that you can change and understand, especially for subscriptions.
Ali: One final question – what are your plans for the future at HonestBrew?
Andrew: Our big mission is to make craft beer more accessible. We want to be at the forefront of that, getting more people drinking good beer. In the UK it’s a key focus for us at the moment. It’s a huge and fast growing market here. The US is a very very interesting market as well. We want to work closely with more US breweries. We’ve got about ten at the moment. I think for us it’s kind of about growing with the global craft beer revolution.
Ali: That’s awesome, the global craft beer revolution.
Andrew: It’s very interesting … we’re working with a bit over 70 different breweries from around the world. We’ve got five from New Zealand, one from Australia, we’re at ten from the US, one from Japan, all across Europe, UK. We’ve even got three from Ireland now as well. The global brewing scene is amazing. There’s certainly more brewers that we’d love to work with, it’s just getting the scale.
Conclusion
What a fantastic business and story. It was great talking to Andrew about Honest Brew’s role in the global craft beer revolution, as well as how they manage their business and marketing. Andrew assures me that he can find a beer to suit everyone, even this coeliac non-drinker, so I’ll be hitting him up for a gluten free selection next time I’m in the UK. Sláinte, Cheers, Proost, Skål, Salud!