Season 3, Episode 10: Laurence Kain Talks Business (Transcript only)
Laurence Kain- Capital Brewing
Laurence is a co-founder and Managing Director of Capital Brewing Co, one of Australia's fastest growing beer brands.
Capital Brewing recently obtained B Corp certification and in this interview Laurence talks to us about why he sees it as important and how the process has influenced Capital Brewing’s decisions around its supply chain.
We particularly loved Laurence’s view on water management and on the need for incentives to be in place so that businesses do the right thing.
“I guess what drives me is delivering a really cool experience to people, which is, [what] I think we do at the tap room…and being able to offer like a slightly more environmentally responsible choice to people: if they are choosing to consume beer then they can choose to consume a locally produced beer.”
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Unfortunately, there was a glitch with CEC’s recording equipment and the interview with Laurence has not cut it sound wise! But, we have provided you with a transcript of the amazing chat we had with Laurence and we think it is well worth a read.
Fiona
All right. Here we are in the Canberra Environment Centre with Laurence Kain, the founder of Capital Brewing. I'm Fiona and it's great to have you [here] Laurence.
Laurence
Thanks for having me.
Julie
We've been wanting to have you on for ages, like a couple of series ago when we were talking about people doing amazing different things like brewing beer. It's done in lots of places and there's lots of microbreweries and there's lots of really, really big brewing brewers [but] we wanted to talk to you because we know that Capital Brewing is trying to do things differently [and] we're really keen to hear about what it is that you're doing differently when it comes to beer.
Laurence
Firstly, we've got an industry in Canberra that didn't exist here. You don't even seven years ago. We [now] employ about 75 people. I come from a background of having gone to a Steiner school [and] I’ve been really interested in permaculture. I've done the permaculture design course and set up my home [related to those principles] to grow food. And…I guess that kind of cast a different lens when [it came] to producing beer. When you see a resource going down the drain, which is a really easy place for it to go, you think, well, what else could we do with that resource? That led us to [bring in] the compost farms…and we made a…deal with them where they take all of our grain for free. It's a valuable stock feed…still full of fiber and protein for their…organic cattle…So they're running about 10 tons of grain a week. Maybe six tons of compost material a week. That's huge. And…that's just an example of like one thing. Try and just take a different lens of looking at. How do we solve…environmental or ethical responsibility challenges in a bit of a lateral way….We haven't solved all of the challenges but that was a really cool one that I thought worked well…because it involved working with another entity on a fairly large commercial scale. [It requires] some different equipment and facilities to handle the waste and different processes in the brewery. But…we're diverting six to seven tonnes a week of liquid waste from sewage treatment that [would otherwise] end up in the Molongo River to an organic compost that gets sold to organic market gardens or to household gardens. I think that's actually one of the coolest things that we've done.
The other thing that we're [done is to get] B Corp certification….[This is] ESG certification. It looks at…people, planet and purpose….
People: it looks at…[if] you're paying out or above award wage or you, [have] job descriptions, contracts, safety management systems [and] are…treating people fairly.
Planet looks at your environmental management practices.
Purpose looks at your supply chain and choices within that supply chain.
…One of the coolest things that came out of the [process] that I'm most into…is… our supply chain.
There's a lot of agriculture in [brewing]…Essentially [beer has] four ingredients: water, malt, hops and yeast and nothing else…So you've got those four things to work with…what we learned through the B-Corp was that there's a massive difference between traditionally farmed input…and regeneratively farmed...so what we’re working out now is changing [to regenerative farming inputs].
Julie
Just talk to us a little bit more about what regenerative farmed malt is…at its core. What is it about?
Laurence
Well…at its core…it's looking after the land…it might be sewing crops into the land between your crops…it's like a less of a monocultural focus [and] more of a focus on fixing nutrients back into the soil…our supply chain team are really engrossed with [regenerative farming]…It's pretty local [too]…
Julie
And so you learned this going through the B Corp process?
Laurence
Yeah, as part of the B Corp process,,,we had an environmental management plan and Dan Waters, who was [working with us and is an] absolute legend…he was really integral in getting the B Corp certification. [He was very] passionate about it…cans are another issue…[do you put beer] in a can or glass bottles? Sometimes…you could just look at the [issue in terms of] glass versus aluminium and not think about all of those extra things…like how you ship it, the wait, how long it lasts - all of those considerations form part of a really detailed life cycle assessment [and] you actually need to consider all of these factors…So when people say, well, just become sustainable, it’s…[about the whole system that sits around that.
Julie
What about the role of water in production?
Laurence
The role of water is huge…part of the Environmental Management Plan that Dan put together…was setting a target on water reduction per litre of finished beer…Taking it back a step, the first step in improvement is measurement…and then the second step is setting a target, a strategy and a plan for reducing it. So we have got the target and we have been reducing it…through a number of different measures…We're constantly finding new things every day on how we can improve…The biggest thing that we could do right now is to install an automated cleaning scheme…to recapture the rinse water and reduce the [use of ]caustic…we have [had] to pull the brakes on it because…we've seen insane rising costs [due to] a reduction in consumer spending.
Julie
How do you manage that trade off? Coming from the Canberra Environment Centre we’re Environment First but what about people first? How do you reconcile the two?
Laurence
We've got a pretty simple way of reconciling that…we've got a decision-making matrix in the business that stems from our board of directors all the way through to the field: …safety, quality, service, environment, commercial. And…you make decisions in that order…Safety always has to come first in a manufacturing plant that's a pretty high risk environment and then quality, which is pretty critical. Service [is where] the people…fit in. In both quality and service, because if you're not nailing the people's side of it…the rest can stuff up…so…in a commercial operation like ours, environmental factors are a consideration, but they're not everything… it's like just balancing all of those things.
Julie
That's interesting that money is last.
Laurence
Yeah. But if you take care of all the other things first then money will flow.
Julie
Yeah. I love that. Love that.
Laurence
If you just focus on money…safety will suffer, quality will suffer…but if all of those things are focused on…you're [more likely] trying to get the best commercial outcome along the way. Going back to your question. It's also like if you're making a commercial decision to buy some equipment, it's going to improve your environmental performance. But you might be also having a redundancy conversation in three weeks time…It's [a] terrible thing to have to do that…we've had to do it twice in the last three years…and it's the worst part of running a business. But it would be even worse if you had been throwing money into equipment and then…a person is then out the door because you …put in cash in the wrong spot…I guess the point I'm trying to make [is that]… we've had to make some sacrifices to our environmental performance. In this weird economy… costs have gone crazy.
Fiona
Something we've been thinking a lot about is food priorities and how tricky it is…[is it about] the packaging or the food miles or the environmental impact? And so it's really cool to hear about that people priority…when you're making those decisions and [using] that decision making matrix.
Laurence
The ethics of environmental responsibility.
Julie
So talk to us about your role, how you see Capital Brewing fitting within the whole Canberra food system. What is Capital Brewing doing or playing a role in the way the whole system is working?
Laurence
That's an interesting question…One other way to look at it is how we're managing the food system within our own environment…We get probably 8,000 people through there a week or thereabouts on a busy day [for Broad Burger]. [That’s] a couple of thousand burgers. There's a reasonable amount of kitchen waste…and a reasonable amount of waste that comes off the floor. And so we've…engaged Goterra [about] four years ago [to] come and pick up all of the food waste. The thing to say about that is [that] it's not free. [Putting] it in a landfill [would be] way cheaper…so you've got to have the appetite [for it] and it requires all of us doing the right thing…it requires all of us turning the dial two degrees in the right direction every day. That's just something that we choose to do. Hopefully other businesses choose to do it as well, but it’d be awesome if the government incentivized this…if you had that incentive in place, it would force everyone and then it becomes an even playing field…part of it comes down to incentivizing and, maybe more than incentivizing, forcing everyone to take part. Getting everyone on board and saying, actually, this is what needs to happen because we know this is better.
Julie
I was really intrigued again with your Molongo comment - that it would have been totally fine for you just to let the water go down the drain and out into the Molongo.
Laurence
We still put a lot of waste down the drain…everyone does…but we're trying to reduce…the ratio…Some of that waste is actually beneficial to the treatment plant because it provides sugars for the microbes to consume.
Julie
I read an article recently about how you're working with Batlow. Can you talk to us a little bit about that? Because there are local apples.
Laurence
Batlow apples [are] I think the oldest apple growing region in Australia, a couple of hours up the road in the mountains. Batlow cider was started by some friends about 10 years ago…[But they were facing] difficult economic times and consumer spending going down. We've got a team of staff and we needed to sustain our business and [so we were] looking at different ways of putting more volume into our manufacturing facility. And we got chatting with the Batlow guys and they were like, actually, wait, we'd be interested in selling the business…We liked that because our sales team can sell [the cider] alongside our beer products and non-alcoholic beer products - our production team can make it in our facility…we're massively reducing the supply chain…from a tanker to a winery then to a packaging plant….now it is one tank, it comes to Capital, gets fermented and…it gets blended together, packaged and distributed from that. It's just wild how much, right, we've knocked down…the [other] thing that I like about this is we've got a much bigger sales team than Batlow [and we can put it] into our supply channels in the East Coast…and sell a lot more cider…I want to get to the point where we produce more cider than the shed has waste apples…[stopping]…having to pay farmers to take the waste apples away…I was worried about bringing it into our production plant cause our team are professional brewers, they're all really passionate about brewing…but I've actually been really stoked about learning this new…process…we've had to get a bit of new lab equipment and…upskilling and learning.
Julie
What's driving you to think about and make all of these changes and improvements.
Laurence
That's an interesting question….I got into this industry sideways through hospitality…I started in hospitality when I was 16 and I just really love the social element that our taproom and our product helps facilitate…I guess what drives me is delivering a really cool experience to people, which is, [what] I think we do at the tap room…and being able to offer like a slightly more environmentally responsible choice to people: if they are choosing to consume beer then they can choose to consume a locally produced beer.
I'm also…very commercially motivated. Like, you know, I want to do well out of this, and I’ve taken a lot of risks into doing this so you've got to balance those things. I'm studying an MBA. I'm commercially minded. And that's fine. There's nothing wrong with that…the world needs more commercially motivated people.
Julie
Well, in fact, some people would argue that being commercially motivated and doing good for the planet and that's, what's going to drive the biggest change.
Laurence
That's exactly what has to happen. I guess getting back to what we were discussing before, which is like the incentivization to use…I was discussing with my wife the other night what is the solution to the bigger problem? And the only way it can work is incentivization…There's a lot of food businesses in the ACT [but] there's no disincentive or incentive to manage that food waste more responsibly than throwing it in a landfill right now…But if you look at it from my perspective, by engaging GOTERRA, I'm just putting an attacks on our business…I didn't have to do that…What needs to happen is the carrot and the stick on those important issues…I'm doing it because I care about it. And not that many people care enough about it to pay for it.
Julie
Or they care about it, but they care about it to a point.
Laurence
Exactly. Yeah. And it's not that difficult to implement into your business…I can engage GOTERRA and deal with my food waste ethically...or I can pay a penalty for dumping…either way you've got paid for it. And you just build it into your price, and it might be a 2% uplift in price and your food waste is dealt with responsibly. It doesn't seem that hard to me.
Julie
Two questions in one or maybe two different questions. Do you use this as a selling point for people, for consumers who are coming to buy your beer? Are you saying, look, you want to drink happy then drink this and/or do you find consumers are choosing to drink your beer because they know about the environmental impact or are you just going, we're going to do it anyway and we'll educate consumers along the way as to why we're doing this?
Laurence
Yeah. So that's a really interesting question because it's very, very hard to measure. And I think that there's a real intention action gap at the supermarket shelf. People [want] to buy more environmentally but ultimately what wins? Price. And then…advertising and [product] recognition…I even find when I go to a supermarket I'm influenced by that…promoting it as an environmentally friendly product and people actually buying it because of that - I'm not convinced that we get a lot of uplift because of it [but we] might get a little bit. Then there’s how much do they [consumers] know and how much do they need to know? Because really brands should just be making the change. [But] you get other things from B Corp certification: you attract a higher calibre of staff because they know that there's a certain level of corporate governance in place…You might retain people because they're passionate about working on some of those projects alongside their regular job.
Fiona
Laurence, we've got three final questions…and the first one is who are your environmental heroes?
Laurence
Well…that's a good question. Probably, my Uncle is one of them down at Kabaka. He's really involved in the community [and] community food…and he got me interested in food, I guess, in little ways. And I've drunk the Kool-Aid from Patagonia [and its founder] Yvon Chouinard…I’m…really into what he's done and I guess some of his business philosophy. I'm trying to dissect how much is a marketing truth.
Looking to 2030, what's the change that you want to see in Canberra? If you could just pick one change that you think would put Canberra on an awesome path by 2030. What would it be?
Laurence
I think like more people using bikes…it’s…such a flat city, so easy to ride around…you can ride to…the brewery not much longer than it takes to drive. So incentivize bikes [and have] less cars on the road. The light rail [is] awesome. My wife, daughter and I [took light rail] to a new Ramen [restaurant] in Gungahlin…we're sitting there in the window and [the] light rail [is] coming in every 10 minutes and it's just packed. Every single train that came in was packed…I think the more mass transit the better.
Fiona
And finally, do you have a favourite quote or mantra or any kind of key message you'd like to leave our listeners with?
Laurence
There's no beer on a dead planet. I borrowed that one from Bermagui...where I saw a sticker No jobs on a dead planet. I was like, that's pretty good…It stuck with me.
Julie
That's awesome. All right. Well, thank you so much, Laurence. It's been such a pleasure to hear all about what's been going on.
Laurence
Awesome.