Starting out as a family-owned operation in the 1960s, Bundaberg Brewed Drinks has turned into one of Australia’s most iconic brands of the past 50 years. And unlike a lot of brands that garner the term “iconic”, not only has the company not forgotten its roots, they are entrenched in its DNA just as much as it is in the town that shares its name.
Unlike its contemporary Bundaberg Rum that moved most of its bottling operations to the Sydney suburb of Huntingwood in 2014, Bundaberg Brewed Drinks has no plans on going anywhere. Up until COVID-19 hit, CEO John McLean and the rest of the executive team had done a lot of forward planning for the future of the company, including a new brewery being built in the eponymous Queensland town situated 350 kilometres north of Brisbane.
McLean will tell you one of the keys to the company’s success has not just been in his father-in-law’s Cliff Fleming’s spotting a great sales opportunity, but the people who ply their trade for the company, not just in Bundaberg, but around Australia and the world. There are generations of families who have worked for Bundaberg Brewed Drinks since the Fleming family bought it in 1968 when it was known as Electra Breweries. Back then, there were five soft drink factories in the area, which was no different to most Australian towns because there was no supply chain, and this meant distribution was localised. Bundaberg Brewed Drinks is now the last company standing in the town in terms of having a national presence.
“We’re a proud family business and what makes us happy is that it’s not just our family involved in the business,” he said. “It is great when we see our employees’ families in the business. We have many mothers and daughters, fathers and sons, fathers and daughters, uncles and aunties – there is a whole series of close relationships.”
Since March and the advent of the COVID-19 pandemic, the company has faced many challenges, but McLean, who was a school teacher before joining the business 25 years ago, takes it in his stride.
“Back in February, everything was hunky dory. We knew there were a few challenges coming out of China due to COVID, but we carried on,” he said. “We talked about our annual operation plans, and a week later it all came crashing down. In April, we knew it was going to take a lot longer so our operational plans became about optimising for 2021. Everything we are doing now is how can we get a foundation re-established, recommitted and really build the business so that it’s booming in the future.”
The company gets the majority of its ingredients from local sources, with the main exception being sarsaparilla, which has to be imported for the company’s root beer offerings. Most of the instrumentation, plant and sensors for its bottling operation comes from Germany, France and Italy, while the heavy machinery for its brewery is fabricated in Australia by ME Engineering.
While having local fabricators is good, it is the supply chain where most companies in the processing and manufacturing of products have found problems during the pandemic. And while, initially, the company did have issues, forward planning has been essential.
“At the beginning of COVID it was a bit more challenging because the ports were making boats wait for 14 days before docking,” said McLean. “That really did hamstring our international business and especially our Kiwi business. We’ve all gotten over that and we have worked out the situation so the supply chain is now very robust.
“However, we’ve worked very closely with our logistics team, and our planning and procurement team work very closely with our providers, both inbound and outbound. It probably comes as no shock that communication is key. We are constantly looking at our projections moving out and looking at short-, medium- and long-term forecasts and working with our suppliers so we don’t see ourselves embarrassed. We have had one situation where we had to fly in closures (grip caps) from Thailand. But that was it.”
McLean is a believer in the Stockdale Paradox, which at its heart is “hope for the best, prepare for the worst”. It is something that a lot of companies facing COVID-19 have put at the top of their list in terms of preparing for an uncertain future. While Bundaberg Brewed Drinks will see itself through the pandemic, McLean thinks that the event could possibly change how some businesses work forever.
“COVID has advanced a lot of technology,” he said. “We used to use Zoom occasionally but now we run entire weeks on the platform. The pandemic has advanced the business from a technological perspective. It has brought customers and suppliers a lot closer because we’ve all got a common environment to start a discussion from.
“It’s been really good in terms of connecting with people. Our business very much believes in relationships.
“I haven’t been on a plane since February, but I’m speaking to my customers and other partners more than I ever have by Zoom or telephone, catching up on the way to work, or on the way home from work. I’m also talking to my employees more than I ever have.”
McLean said it is important to be flexible and adaptive and adoptive. Bundaberg has done everything the government has asked of it. Most of its teams are now back in the offices, with the exception of those in Brisbane who are working from home for a few weeks to see if a COVID-19 hotspot comes under control. McLean said the company still runs its town hall meetings via Zoom.
“What is really good about that is usually they get to meet all the people from around the country once a year. Now once a month we get to see everybody on Zoom,” he said.
Even though the pandemic is the hot topic of the moment, McLean and his team still have their eyes on expanding the business into new territories, while consolidating the market share it has domestically and internationally.
“We’re the number one ginger beer in New Zealand; we’re number one in California, and hovering between number one and two in the US,” he said. “We export about 50 per cent of our product every year. We send a lot of product overseas but we are not trying to go into every single country. We are trying to grow the countries we are in. We have a great presence in the US, and we have a growing presence in both China and South Korea. It’s the same in Germany, the Netherlands, the UK and Romania.”
Along with sourcing most of its ingredients from Australia, Bundaberg Brewed Drinks acquires almost all of its packaging requirements from local sources. The only item it needs to import are the closures, which come from Thailand. Even then, it is out of necessity as the last closure manufacturer in Australia closed its doors just over a decade ago.
What about the future of the company? If it grows its market share in some of its current locations – especially China – might it be a case of having to build a brewery there? And if so, will it still be able to be a family-run enterprise? McLean doubts the former will ever happen, while the latter is already being planned.
“China is a rapidly growing market,” he said. “However, there is a certain thing about brand Australia – it’s a trust thing; there is a familiarity about it. Internationally it’s a brand that is strong. While we do bottle with partners in Germany and the United Kingdom, we’ll never change where we brew, every drop consumed around the world is crafted at our Bundaberg Brewery.”
And keeping it in the family?
“I have two daughters, one is at university and the other is going to join the company soon,” he said. “Who knows what happens in the future. Bundaberg is a great town. It has been really good to our company and we support Bundaberg where we can. COVID has slowed us down a bit but it hasn’t knocked us out. We have to make sure we build the facility and stay family owned. We don’t want to compromise that. We have a stewardship process in place where we can pass it on to the next generation.”