Thai Latte please

A few months back I made some noise on here about the scope for Australia to leverage a barista advantage internationally.

The argument was that our wide brown land was at the cutting edge of the ‘third wave’ of fancy coffee-making (and by fancy, I’m not talking about the Franken-coffees dreamed up by Starbucks for people who like whipping cream, flavoured syrup and milk rather than roasted bean-infused goodness).

Having spent the last fortnight in Bangkok, I can say there may well be considerable competitive advantage for the Aussie approach a few steps back from the leading edge also.

After enduring the overpriced faux coffee of the aforementioned US giant out of desperation, and the abomination that is my hotel’s brew, I followed a tip from an Aussie and headed to a little café run by some locals who’d lived and worked in Melbourne (reportedly).

Café Ohana is doing no more than what your standard Melbourne coffee vendors does, i.e. latte, macchiato etc. They deliver it in a slick Scando-decored venue, with tasty sandwiches and a mix of cakes, but it’s not anything amazingly groundbreaking.  But it felt like an oasis to me, and seemed to be a happy haunt for numerous Japanese ladies who lunch.

It must being doing well, as the firm is about to open another branch (according to their Facebook page).

It’s a reminder that international  transfer of competitive advantages doesn’t always have to be lead with the fanciest, most innovative version of your product.  Indeed, sometime it pays to tone down the radicalness so as to find a receptive audience.

Now if only I could find a purveyor of quality craft beers around here too…

Advertisement

Why Melbourne live music venues should embrace change

Good strategy oftens requires undoing old habits and embracing new.  Firms who think outside the industry norm can often find themselves at a better place competitively.  External factors that look like threats  might actually be opportunities.

Take the current dramas in the Melbourne live music scene.  In the past week two long-running pub venues have hit the newspages with the tales of woe.  First, the Tote and now the Arthouse, have announced they will close their doors to bands and music fans, in the face on recently imposed laws regarding security requirements and opening hours.

Here’s a summary:

“The Arthouse’s manager, Melanie Bodiam, said Liquor Licensing Victoria had given the venue two options: close at 1am instead of 3am, or stay open until 3am at a reduced capacity of 90, instead of 300. She said both options were financially unworkable.

”Once our bands finish playing, musicians and patrons want to sit around, have a beer and a chat,” she said. ”We don’t want to have to usher them straight out the door.””

Now I have been a big gig-attendee over the years and love the sweaty confines of said venues (and numerous others), but it strikes me that there is a real opportunity to respond in a way that will be ‘punter-friendly’: start the bands earlier. Have the headline act on by 9.30.  That way you can still get the post-gig drinking bucks, while potentially also tapping into the come straight afterwork and have a meal beforehand market.  It works in UK extremely well.

It is too easy to get stuck in the well-worn groove of the firms/products around you.  But when faced with a challenge, think beyond the norm.  You might find there is a much bigger market over there…

Come see Ben & Jerry in Melbourne

You may recall that a few months back I heralded the arrival of Ben & Jerry’s icecream to our shores. Next week (on my birthday no less) the founders of said icecream purveyors will be in my building discussing their experiences.

The public lecture is billed as
Doing well by doing good – a seminar about sustainable and community friendly business practices.

Here’s the blurb:

Back in 1978, close friends Ben Cohen and Jerry Greenfield, armed with a $5 correspondence course in ice cream making, opened their first Scoop Shop in a dilapidated gas station in Burlington, Vermont. Whilst they occasionally disagreed on the size of the chunks going into the ice cream, one thing they did agree on was having fun. As Jerry put it, “ if it’s not fun, why do it?”. They also decided from the start that business has a responsibility to give back to the community in which it operates, a philosophy that is still important to the business today. 30 years on, with a continued focus on sourcing the finest ingredients to create euphoric chunks & swirls, Ben & Jerry’s now operates in over 30 countries, spreading joy for the belly and soul across the globe with a mission to make the best possible ice cream in the nicest possible way, using business as a tool for social and environmental change.

The seminar is open to the public and on 25 November, 12 – 1pm, Level 5, The Spot (198 Berkeley St, Parkville, Victoria).

I’ll be there to report back for all of you blog readers.

Little white rabbits – the logic of multiple brands

Western Australian craft/micro brewer Little World Beverages (LWB) has announced that its adding another line of beers to its stable. The listed firm, which currently brews several beers under the Little Creatures label, is opening a new brewery just outside Melbourne, and the beers out of this new location will be called White Rabbit. This raises a few strategic management questions:

Scale: Is there a maximum efficient scale for microbrew brands? To clarify, Little Creatures is a very successful boutique beer, priced above the mainstream Aussie faves and around the same as imports. It gets reasonable shelf (or tap) space in most decent pubs and bottle shops. There are currently a few different variations in the Little Creatures range (Pale Ale, Pilsner, Bright Ale and lower alcohol Rogers), all of which maintain consistent branding, with the usual shifts in label colours.

It appears White Rabbit will be run as a distinct brand (hopefully looking much niftier than my effort to the left). Presumably this an attempt by LWB to achieve more shelf (or tap) space, i.e. they can have two pale ales on the shelf (for example), thus doubling their chance of grabbing consumer attention. Had the firm hit diminishing returns from the Little Creatures marque?

Segments: Traditionally craft or micro-brewing has been seen as a bit of an “us against them” situation. The bad guys were the big brewers (i.e. Fosters and Lion Nathan), and beer aficionados have often bemoaned the instrusions into the craft segment by pseudo-brands such as James Squire (a Lion Nathan effort), Matilda Bay and Redback (both from Fosters’).

The legitimacy of such brands is questioned, in particular if they are seen as simply copy-cat or as shutting out more honourable or real microbrewers. The strategic question is has this segment matured (or segmented further) such that this effort by Little Creatures is not seen as selling out? Or alternatively, is the choice to run multiple brands a deliberate attempt to dodge such a bullet (i.e. stay legitimate in this fussy segment)?

Photo by: avlxyz

The Value Chain: This aspect is a bit more complex. LWB has traditionally shipped beer in bottles and kegs over 3000 kilometres from Perth to Melbourne (and beyond). It appears they are going to continue to do so, while scaling up the White Rabbit operations over time.

It is unclear how any economies of scope advantage can be developed here, as the firm presumably will need to bottle, label, package etc on site in Victoria (i.e. away from the Perth operations). Any gains in terms of delivery costs would seem pretty marginal as it may necessitate more movement to end up with centralised warehousing… but then the current delivery truck (see photo above) doesn’t seem overly cutting edge either 🙂

All in all, it is a very interesting move. Taking my strategic management hat off, I am, of course, excited by some more beer choices and wish White Rabbit many happy years to come…