Hellyers Road

Hellyers Road: From Burnie to the World

Along a winding road in the hills above the town of Burnie in northern Tasmania, the Hellyers Road whisky distillery seems an unlikely destination in countryside dominated by lush dairy farms. But the green pastures, pure water and quality of environment provide a perfect starting place for a premium single malt whisky that has won awards around the world. Even more amazing is the fact that Hellyers Road Distillery was started by a group of dairy farmers.

Hellyers Road Distillery is a fully owned subsidiary of Betta Milk. Betta Milk began as a milk production cooperative in 1956, and is now a public un-listed company. With distribution centres in Launceston, Hobart and Smithton, they are a small company and their market is limited to Tasmania. The continued success of both Betta Milk and the Hellyers Road Distillery is the result of the ownership’s desire to stay independent and protect the Tasmanian dairy industry. Their decision to creatively extend their business footprint and diversify into the single malt whisky business may have been fraught with risk, but the rewards speak for themselves.

The mid-1990s saw the onset of dairy industry deregulation in Tasmania. As a consequence, there was a huge excess of fresh milk in the market, and Betta Milk had to make some tough decisions about how best to face the future. Betta Milk produced only 10 million litres of the 1.4 billion litres of fresh milk consumed per year in Australia. Moreover, many good quality dairy products such as yogurt and cheese were already being produced in Tasmania, so they had to look for other opportunities.

Betta Milk’s milk production and processing skills were substantial, so they thought about how those skills could be applied in a new venture – wine, beer and water were all considered as potential new product lines before a decision was made to diversify into whisky. The distillery named after Henry Hellyer, a local cartographer and bush explorer, who carved out a bush trail in 1827 that eventually become known as ‘Hellyers Road’.

The first bottle of Hellyers Road whisky sold in September 2006. Bettamilk had to be very patient over the years in order to realise the potential of a product that takes 10 to 12 years to mature. Over the years, they have invested $10 million into the single malt whisky business, but the good news is that they now have money to reinvest in the business. Three key people guide the operations at Hellyers Road – Mark Littler, as Head Distiller and General Manager; Don Jennings, in a senior sales and marketing capacity, and Sharon Deane, who manages the distillery’s visitor centre.

The Hellyers Road range of products, including single malt whiskies, vodkas and liqueurs can be found at most major Australian liquor outlets and through independent distributors. They also export to over 25 countries overseas. In 2016, Hellyers Road won the Tasmanian Small Business Exporter of the Year Award and in 2017 was recognised as the overall Tasmanian Exporter of the Year. The most important export challenges for Hellyers Road have involved distribution, developing brand awareness and having the ability to re-invest in the market. As Mark points out, to stimulate growth in the market, you need partners with good distribution channels. Hellyers Road has a great story of ownership, and provenance sells whisky. Indeed, distribution has brought the company alive, and distribution forms a major focus of their export strategy. The key to export success with a small company means having the right overseas connections, and having the ability to attend whisky exhibits and trade shows around the world, which can be expensive.

But simply investing in the market is not enough. As Mark Littler points out, “there are companies out there with big marketing dollars - they can be successful even with a mediocre product.” So the question becomes one of how to compete successfully in a crowded market. Even though Hellyers Road Distillery is a small company, they have started to develop a sound imprint as a premium niche brand, and has a growing number of people making the pilgrimage from overseas to visit the distillery each year. Indeed, brand awareness has largely been created by building the Hellyers Road Visitors Centre in Burnie. Perched in the hills above Burnie, with sweeping views, the centre offers tastings and meals, as well as merchandise sales. Of the 40,000 visitors per year who visit the centre each year, up to 30% are tourists.

In terms of export, challenges have shifted with the journey. Since overseas distributors (such as Italians, French, German and Japanese) play an important role for the overseas supply chain, one challenge has been understanding cultural differences. Recognition of these differences can be an important factor in the success of the export supply chain. As Mark points out, export success is about the entire supply chain – if the product is not moving, the whole supply chain is affected. In terms of competitors, it is all about the whisky, and Hellyers Road is focused on taking a world class whisky business to the world – and this forms the essence of their business model.

Hellyers Road Distillery produces a range of single malt whiskies, as well as vodka and whisky-flavoured cream liqueurs. The single malt whisky products cost between $80-110 per bottle, so there needs to be a good story backing it up. At first, they had to convince people that Tasmania could make good quality whisky. Even though their single malt whisky was competing against other Tasmanian whiskies, it was felt that consumers look more at regions than individual whisky producers. So selling Tasmania as a whisky producing region was important to all stakeholders. The provenance relating to Tasmanian whisky – the pristine countryside with iconic destinations such as Cradle Mountain, Stanley near the Hellyers Road Distillery, has developed an emotional attachment with consumers. Brand awareness was largely created through the visitors’ facility in the first 4 to 5 years, but more recently, export of their products and participating in whisky tastings and competitions overseas.

Hellyers Road Distillery has won many awards in overseas whisky competitions, including first place in a blind tasting of new world whiskies at Whisky Live Paris and being recognised as a Master Whisky at the Global Whisky Master Awards. Their products have been rated in the Top Ten Value for Money whiskies in the world. These awards are important, as they build awareness of the brand, and also of the potential of Tasmania as a single malt whisky producing region. Participating in overseas trade shows also pays dividends in terms of building awareness – for instance, 150,000 whisky devotees from across Europe attend the Whisky Live- Paris annual event over a weekend. As such, Mark travels overseas four times a year, mostly to Europe and Japan, giving him an opportunity to talk extensively with consumers, meet with distributors and undertake distillery tours in various places such as Scotland. Mark feels that a personal touch and physical presence are paramount in supporting the brand, particularly when it comes to the export market, where consumers tend to think Australian first, Tasmanian second. Indeed, the personal touch means everything – having the Head Distiller at the whisky show in person, is not so much a marketing and sales strategy; it is more about shoring up brand and provenance. For a boutique place, you have to do it yourself. People are interested in the ‘DNA’ of the product – they want to see and touch the product and its creator, so having the distiller there in person is precious.

In terms of distribution within Australia, Hellyers Road works with local companies and major buying chains. At first, the whisky was only available at cellar door and on the internet. Then in 2010 large retail chain Dan Murphy’s started to submit substantial orders each week

Then the chain of Duty Free stores came on board, followed by Vintage Cellars and First Choice. Hellyers Road participated in various trademarking activities, both in Australia and overseas, conducting ‘health checks’ to see where the product sold well. Then independent retailers started to show interest, with the distillery getting 15-20 calls per week. Growth in the popularity of the product has led to many rounds of repeat sales, and Hellyers Road now does exclusive bottlings for discerning customers.

Product quality is Hellyers Road number one selling point. It is important to note that they are not aggressively chasing the market. Indeed, in terms of supply and demand, Mark points out that the distillery held 200 years’ worth of stock in the first 4-5 years of starting the business. At present, a 3-5% growth annual growth rate can be accommodated. Consistency and continuity is important at Hellyers Road, and they won’t take on new markets unless they know they can supply them.

When asked about risk factors in the export supply chain, Mark says there are a few. Not having the ability to invest sufficiently can be a serious risk element, especially when there is a long wait for returns to be realised. Even when the whisky has matured, they must be able to invest in distribution because essentially, without strong distributors, Hellyers Road has no control over the supply chain. One significant indicator of export success is having an office overseas and someone on the ground, and therefore relationships are incredibly important in terms of building interest, connections and trust in the product.

In terms of tips for would-be exporters, Mark says “don’t be afraid to ask for advice”. With export, Austrade may be helpful in providing advice and opening doors. You must have an appetite for risk – especially since export adds another level/dimension to the business. Would-be exporters also need good systems and structures in order to be successful. Beyond that, Mark is keen to point out “what makes your business is your people”, and in this regard, relationships are so important. Hellyers Road recognizes the important contributions of its people. For example, in the Visitors Centre there are 25 or so employees. Recognising the critical role played by these front-line ambassadors at the Centre, senior management holds a monthly meeting where employees can share information, get updates, ask questions and build enthusiasm. Regular on-the-job training is also provided, and is all done in house.

Committed to a philosophy of continuous learning and improvement, Mark participates in a variety of executive training programs, includes business coaching on strategic thinking. These activities aid the senior management team in their commitment to learning and innovation across all areas of the business. Strategic plans guide the development of the business. Senior management team meetings take place on a monthly basis, with an extended meeting being held every quarter. Each senior manager provides a report on developments across four or five predetermined metrics, then highlights three achievements attained over the past month. In addition, three key learnings are identified. Finally, each senior manager identifies one items that they are ‘stuck on’, in the hopes that discussion and awareness will go a long way to finding shared solutions.

It seems that all the hard work is paying off. Hellyers Road was named Tasmanian Exporter of the Year for 2017, and the distillery won three awards – one silver and two golds – at the most recent World Whisky Awards in London. One of the gold awards was for the Henry’s Legacy range, which has now won gold for three years running. The annual single cask releases are named after a different North West Tasmanian landmark each year. This limited release product makes it a good prospect for whisky collectors and also helps to publicise the brand around the world. The future seems bright indeed for Hellyers Road.