Pub portfolio helps Galway microbrewery craft stout growth

Niall Walsh and his business partner Jason O'Connell set up Galway Bay Brewery in 2009. The microbrewery, which produces a range of craft beers such as Stormy Port and Buried at Sea, employs five people. The group also owns 10 bars across Ireland which employ a further 60 people. These pubs include Against the Grain and the Black Sheep.

What distinguishes your business from competitors? We have an advantage in that as well as the brewery we have our own bars, so this gives us a direct route to market. The staff working for us are also passionate about our beer and so are very good at selling our produce.

Another thing that distinguishes us is that we're looking to export overseas. We've started sending our products to the North in the last few months and there are a couple of pallets going over to England as well. We're also looking at the Italian market and there are a number of Russians who are crying out for our beer and who are prepared to pay upfront for it, so there are huge opportunities for us there.

What was the biggest challenge you have had to face? The biggest by far is just trying to keep our costs down and our produce and service as high [quality] as you can possibly get. That's what we've tried to achieve and I think we've done a good job at it so far.

In this industry, price sensitivity is an issue and, while customers are prepared to pay a little more for our products, there’s only so far they’ll go. We do what we can but at the same time we’re buying the same produce as many as the best restaurants in the country and so have to work hard to ensure that we can balance out the costs.

What is the biggest mistake you've made in business? We have made a few mistakes along the way such as opening a business in the countryside which didn't really suit our business model but we react to things quickly and if we see something faltering, we'll work to sort it straight away. Right now, we have one business that isn't doing what we think it should and so we're planning to put more money and energy into it and hopefully turn it around.

And your biggest success to date? The brewery has grown significantly since we started it. In the first couple of years we didn't really have a full understanding of the business. A key move for us was taking on a brewer 2½ years ago who has taken the brewery from having an average product to one that is arguably the best in the country.

Who do you most admire in business and why? I wouldn't like to say his name but he's a man who has built up a big business and who has been very helpful to us over time. He liked that we were two Galway lads who were trying something different and so has been a great backer of ours.

What's the best bit of business advice you've ever received? Work hard and keep your eye on the ball. Also, give people the kind of service that you would expect if you walked into a place.

I think that’s what drove Jason and me to get started, because back then we felt there was a lack of good service and product and we wanted to do something about it. You’d see the same five or six brands in every bar you went into and that was it. It has all changed now and I like to think that guys like us helped lead the change.

What piece of advice would you give to the Government to stimulate the economy? To be honest, the Government has been good to our business. We get our tax rebate on the duty on beer, which works in our favour. I think they should do more to help people on lower income so that they aren't paying tax on earnings of €25,000 or less – tax should kick in after that so that people can have a life.

Do you think the banks are open for business at the moment? We have a great relationship with AIB and they've been very good to us. In fairness, we've been very good to them as well. They make a lot of money out of us, so they'll always listen to us when we approach them.

How do you see the short- term future for your business? In the bar industry we see good growth; and with the brewery we're forecasting a big boost as we start to export outside of Ireland. We're expecting to grow our brewery by 50 per cent again this year and we've done that for the last three or four years.

We’ve just opened our first beer-only bar near Christchurch and it’s an interesting experiment to see how a bar does when it doesn’t sell wine or spirits but it’s going well so far. A little bit quiet during the week but at the weekend it’s doing great and that’s what we expected.

What is your business worth and would you sell it? Our turnover is expected to be between €12 million and €13 million this year but there's a lot of expenses go with that. The business is worth nothing if you don't have a buyer but we're not looking for one right now. The brewery in particular is a really good business and we see that as our pension.