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A former cop, a model and a musician walk into a bar - and walk out with a huge craft brewery

The New Investors video series brought to you by Yahoo Finance reveals the secrets of the most successful entrepreneurs and business people in Australia today. This is the first episode of the second season.

It’s the brand with as much heart and character as the three men who founded it: Young Henrys.

And with roots buried deep in Sydney’s alternative inner-west, its origins are as quintessentially Newtown as you could imagine: good music, great company and even better beer.

It all started when Oscar McMahon poured his future business partner and co-founder Richard Adamson a glass of beer across the bar.

“Oscar was working at my local pub,” Adamson told New Investors: My Story host Sarah O’Carroll.

“I was with a company called Barron's Brewing, but I wanted to do something a little bit different. Oscar and I first got talking about music - Oscar plays in bands, I used to play in bands. We lamented the fact that we never made any money in rock ‘n’ roll. And we formed a beer club just to explore different beers with some of the punters around there and some of our friends.”

But their beer club, aptly named Beer Club, was the beginning of something much larger.

“At one point I said to Oscar it'd be great if we had a brewery that was in touch with the drinkers as this little beer club was, and that was kind of the genesis of Young Henrys,” Adamson said.

McMahon, who at the time was playing in a band, modelling and working the bar at the Roxbury Hotel in Glebe, says this was the starting point for their beer adventure.

“There was absolutely nothing in my past that made me think that I had the ability or skills to start a brewery but it just sounded like a great idea,” McMahon said. “And so we just sort of followed up on a drunken conversation and started meeting in cafes and pubs to work on the idea of what this brewing business was going to be.”

And Adamson said he was determined to make it work.

“It was something that I was going to do and had to do.I was just driven to make it happen.”

But it wasn’t until self-proclaimed “fake founder” Dan Hampton, who had been working for independent beer company Little Creatures after exiting the police force, entered the fold that sales took off.

“Little Creatures had just got bought by one of the big guys and I had a little bit of money - not much in my pocket - and I wanted to do something,” Hampton said. “These guys had just opened the doors and some beer was coming out. I'd heard about it, went and caught up with them and we all kind of clicked pretty soon after.”

The Young Henrys founders share their story. Source: Yahoo Finance
The Young Henrys founders share their story. Source: Yahoo Finance

From $800,000 in debt to a multi-million dollar business

There’s a reasonable amount of capital needed to start a brewery, Adamson admitted.

“I think we did it on the smell of an oily rag to start with and we’ve obviously invested a lot as we’ve gone along,” he said. “I think we probably did it at about $800 [thousand].”

That $800,000 bought them eight small tanks, which have since been replaced by 20 larger ones.

But small beginnings are what made the brand authentic, Hampton added.

“There’s a lot of authenticity that comes with just the bare minimum,” Hampton said. “See if it works, reinvest a bit when there’s enough people drinking it. Now you probably look back and think you’d do something differently, but I think it gave it [Young Henrys] a lot of that cred.”

But the debt was daunting, the boys said.

“I remember some of those nights while we were building the brewery, just waking up in the middle of the night just freaking out thinking how are we ever going to pay this back,” McMahon said.

And that meant failure wasn’t an option.

“We just had to get in it and get it done. We weren't able to pay ourselves. We weren't able to employ people initially. So if there was something that needed to be done we were doing it,” McMahon said.

“And that actually has created a really good basis for our work culture. We were kegging the beer, we were delivering the beer we were doing sales. If something went wrong we were fixing it.”

The rise of Young Henrys

The success of Young Henrys mirrored the rise in popularity of craft beer in Australia.

“Around the time when we started there was between 120 and 150 [craft] brewers in Australia. Now there’s 620,” McMahon said.

“We got in at a really lucky time where the hospitality industry, as well as heaps of people, were getting excited by craft beer and that let us get through those initial teething periods of getting production right.”

But credit will be given where it’s due: “No one had a brand quite like Young Henrys,” Hampton said.

“It was the beer was really important - the quality of the beer...the beers were a bit different.

“Doing a lager in those early days was a bit weird for people because craft beer was all about the bigger ales. So the style is a bit different, but they were well-made.”

And hiring the right people also made the brand more desirable.

“You've also got to have a bunch of people who communicate well and are all there, committed to work hard at the right time,” Hampton said.

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