Having recently celebrated their second birthday, and the shoring up of a significant share of the Australasian market, Beer & Brewer sat down with keg rental company Konvoy’s managing director Adam Trippe-Smith (pictured second from the right) to discuss, among other things, their journey so far, the potential for sister company Katch and how he’s keen to bring a new dynamic to the alcoholic beverage industry’s culture.
For a company with major ties to the hospitality industry, that’s spent close to 80 per cent of its life navigating the ill-effects of COVID-19, Konvoy is doing well by any measure. With $47 million in capital raised since October 2019, two significant company acquisitions under its belt and a burgeoning customer base that boasts 450, or 70-odd per cent, of the trans-Tasman keg renting beer producers, Konvoy has had a remarkable bedding in period despite the factors counting against it. And with Katch, Konvoy’s keg tracking and monitoring IoT solution, readying to launch in the northern hemisphere with a second generation beacon, that’s cheaper to produce and has a smaller footprint than its predecessor, the company’s growth opportunities are about to extend far beyond a South Pacific horizon.
At a recent Konvoy business update event Adam, not surprisingly, told Beer & Brewer that despite continuing uncertainty across the industry there was every reason to feel confident that Konvoy, and its associated keg tracking, monitoring and servicing assets, would build on solid foundations.
“We’ve just come off a massive November and are expecting a huge December.
“And that’s Australia led and that’s due to the fact that all of the major capital cities are open. Even though people aren’t travelling in great numbers it shows that our portfolio of customers have jumped. We’ve added customers, but the volume we were expecting from a given sample of customers has jumped also.
“I think it’s just an indication we’ve come out of an era that we were troubled by but now we’re out spending again… And (with Auckland and other parts of New Zealand opening back up) we’ve seen the uptick in orders coming through from over there as well.
“We do talk about it and say ‘let’s focus on painting a city red’ and the team have led that and done really well. If you look at (the Independent Beer Awards on November 25), we did an analysis and I think all but two of the award winners were on red kegs. Which for us is a proud moment. You build that ecosystem and we like to think that our customers enjoy working with us.”
“The more (customers) we have the better we get because we’re getting more efficient.”
Explaining why he feels Konvoy has achieved what it has, Adam added: “People can pick up the phone and who they’re talking to are decision makers in the business. They’re not going back to head office, there are no board reports. If we’re talking to a customer and we need to agree on something, then ultimately someone in the team, or worst case me, can make that decision.
“We’ve been doing this a while also. A lot of us have (worked close to) breweries so we get it and I think we can understand what it’s like to run a small business or a big business that is running short on kegs.
“We try not to look over our shoulder, instead we’ve tried to say ‘this is what we want to do, this is our role in the industry’ and ‘how can we add a small amount of value to the beverage industry? So let’s do that and do it well’.
“It’s currently a two player (keg rental) market and customers ultimately decide market share. Our focus is to build our volume share. We’ve already got the majority in terms of customers and all of those are growing. The others that we don’t have, generally, is because they’re under some sort of agreement so we haven’t been able to touch them.
“In a funny way, the more (customers) we have the better we get because we’re getting more efficient. We can potentially reduce the costs of the whole industry as we get more and more customers and more and more volume.”
“One of them is well progressed around doing a significant trial.”
Konvoy is effectively Katch’s only customer currently, with the first generation beacon (pictured above) tracking location and the temperature of the liquid inside its own fleet of kegs on both sides of the Tasman Sea. But with Katch to launch in North America at the US Craft Brewers Conference in Minneapolis in May, followed by a European launch at Drinktec’s Trade Fair in Germany in September, that’s all set to change. There they will showcase their second generation tracking beacon that is 50 per cent cheaper to produce than the current ones being used on Konvoy’s fleet and, due to being smaller, will fit on the myriad of keg sizes used for different beverages globally.
“When it came to the device used to launch Katch globally, we thought for it to be an economic proposition we needed to get (the price) down to achieve that,” Adam said.
“I won’t name names, but we are already talking to three or four global breweries around what we do and they’re in various stages of conversation.
“One of them is well progressed around doing a significant trial, and their keg fleet is in the millions. Does that mean they will go and fit every keg? Probably not, but it might be one country or it might be one product type. We need a few dominoes to fall.
“During COVID it’s been bad if you’ve been a (keg) rental company. But if you’re in the keg tracking business it’s been good. Every keg in the world stopped moving last year. It was the first time it’s ever happened. So every keg owner went ‘actually, I have no idea where my kegs are’ and they’re hard things to get back.
“Now, had they all been tracked, imagine how easy it would be to get the kegs back and get them moving again. So that’s an amazing sort of advantage. Everyone’s busy restarting, so it’s not the right time to pound people with big CapEx Investments. But to seed it in over the next 12 months, and get some key people on board, that are kind of seen as influencers (in the industry), I think the dominoes will fall.
“We’ve done it with Konvoy. We said we were going to start a business. We said how we were going to do it and we went and did it. Katch is now at that stage. So now we’ve got to take a new business model and go and execute it.”
“Team culture can translate into industry culture.”
Monitoring kegs is one thing but Adam insists monitoring the wellbeing of himself and his team is equally as important when operating a successful business. It’s the, as he says, “selfish reason” Konvoy’s Sydney offices are above a gym, so that in between the rigours of running affairs the team have an outlet on tap that helps foster personal health and team culture.
“We see it as a competitive advantage to be brutally honest, by the fact that we can, as a team, go and work out.
“You don’t need to build a team culture by going to the pub. Now, clearly we’re in the beverage industry and that’s how we make our money. So we treat that with respect but we balance it with other things. You might go and have a beer afterwards but you’ve gone and done something that’s good for you.”
It’s a culture he’s hoping will translate further afield also, with plans next year to kick-start “The Konvoy Games” – a CrossFit-inspired event that will complement the likes of beer awards by pitting industry teams off against each other in a series of fitness challenges.
“Team culture can translate into industry culture… and it’s something we’ll develop with the 98 Gym Group and effectively get them to run it (along the lines of the CrossFit Games).
“It’ll be an event for breweries and suppliers to the beverage industry to submit a team and compete in a fun way around health and fitness. So there’ll be some body weight exercises and some (exercise machine) challenges.
“It’s something that you can take around the place. So if there’s a beer awards in a certain city, or if there’s a conference or whatever. It’ll be fun to bring that culture to the beverages industry and I firmly believe the time is right for it.”