Knook #12: Six Barrel Soda
I view Six Barrel Soda as a bit of an institution. Their little soda bar is something I remember from when I first started being in Wellington regularly, and I’ve kept an eye out as the company has grown.
Six Barrel Soda makes wonderful drinks for home and hospitality. Their syrups are great as ingredients or as the whole drink (with soda water) - and the sodas reflect those memorable flavours. From a hospo perspective, they make life simpler for bartenders, and from a home perspective… well, you get bar quality drinks at home.
I caught up with co-founder, Joe Slater, and heard about how they got started, lessons learned and where things are heading for the company.
I asked Joe for a Six Barrel Soda history lesson.
“I was a cocktail bartender, working in fancy bars overseas in Melbourne, Paris & London,” says Joe.
“I came back to New Zealand in 2008 and opened a cafe and then a bar in 2010. With the bar we were aiming to make simple but memorable drinks using independent producers where possible. This was pre the craft beer boom and there wasn’t much happening in the non-alcohol space either - Phoenix Drinks had just sold, and there was pretty much just the big guys.
“So I started making syrups for the bar for use in cocktails, as well as some weird non-alc drinks. People loved that we gave our non-alc drinks as much love as the boozy ones. We had customers asking to buy the syrups for home and other bartenders hitting us up for recipes so we thought we might be onto something.
“We opened the little Six Barrel Soda shop space on Eva St in 2012. We called it a ‘dinette’ - it was like a little American diner with about 20 seats. People could come and see us making the syrups, try the sodas and we could talk to every customer. It was a great space for creativity and getting live customer feedback but as the soda business grew, everything else was taking away from that part of the business growing.
“We also had people saying stuff like “Oh Six Barrel Soda! We really love your burgers!” And that wasn’t good - we were trying to build a soda business,” Joe laughs.
“We had to choose between prepping and making food for customers, or making sodas. It really just became too hard to build the soda and syrups business and run a hospo space.
“It was a tough decision because we loved the direct interaction with customers but it was the best decision for the future of the business, so we closed the space in 2017 and moved into our current factory space on Lukes Lane.”
I asked Joe what have been some key factors in their success.
“I think there’s a number of things,” Joe says.
“One would be our commitment to transparency - sodas are traditionally quite a murky business, in terms of understanding how they’re made and with what ingredients. That was part of the reason for the store - people loved seeing how we made the product and loved it being straight up.
“The second would be relationships - we work with good people and want to be good people in the way we carry ourselves. We’re not out here to screw anyone over. As we’ve grown that reputation, people want to work with us.
“And a third factor would be a focus on staying financially sustainable - I had a business mentor early on who stressed the importance of making the money work. You can have the coolest brand in the world but it needs to add up too. When you’re cash flow positive, you have control over your own decisions and that gives you a lot of power. That has meant saying no to things that are too risky but we also don’t have to spend half the year capital raising.”
I asked Joe what challenges they’ve faced over the 8 years they’ve been in operation.
“We’ve had to build our brand, and largely the premium soda syrup category, from scratch and get buy-in from customers for them to spend more for our product than cheap cordials. Changing customer behaviour is definitely more challenging than copycatting a successful idea.
“We’re also operating in two markets - one selling to hospitality venues and one to home users. In a bigger country, we could have laser focus on one or the other and even tighter market segments but the size of the NZ market means we need to cater to a wider consumer. So we’ve had to develop in a way that services both really well.”
I asked Joe what the hardest thing is about starting an FMCG (fast moving consumer goods) business.
“One of the hardest things is just margins. Supermarkets are always trying to drive the RRP down so you’re trying to meet their expectations while maintaining quality.
"There’s a constant battle between getting the numbers right so you can pay staff fairly, develop the business and use good ingredients, and just being as cheap as possible on shelf. I always use the line “there’s cheap wine and there’s good wine”. You don’t have to - and probably can’t - do both things.
“But running an FMCG business is also really interesting. It’s been a steep learning curve for me and that process has been really cool. We work with a lot of similar sized companies and I love learning about their businesses, finding weird products and seeing them progress.
“It’s also really interesting seeing changes and trends develop from inside the industry.”
Six Barrel Soda is currently exporting to Australia, Hong Kong, and their latest market, the United States. As the exporting side of their business is growing, I asked Joe how that experience has been.
“Yeah, the States is ramping up - it’s been mostly awesome,” Joe laughs.
“Honestly, it’s super weird to start from zero in a new market - you have no brand recognition, no relationships and you’re such a small player in that market. But it’s humbling to see that what we’ve created stacks up with the competition in the home of soda.
“In general though, exporting has meant we need to approach the business from a broader context. All our decision-making has to be evaluated on a global scale so there’s been some changes in the company’s decision-making processes. It gives us more scope for new product development and marketing campaigns knowing we can roll them out in a bigger way.”
I asked Joe what advice he’d give to entrepreneurs.
“Have fun! People approach business like it has to be a hard slog, pushing 18 hour days - but as much as possible, make it fun.
“When you’re getting started, you need to assess what you want out of the business. A lot of people are in it for the “lifestyle” but starting and running a business is super hard and most of the time you’ll make more money and be less stressed working for someone else. I usually recommend working out how long it will take to get to 80% of your current salary. And work out if the idea is interesting enough to scale to the point where the business isn’t totally reliant on you doing everything.
“For me, I wanted to get out of bartending. A lot of people go from the corporate world to doing stuff with their hands - I was kind of odd in the way that I went the opposite way. I wanted to work out how I could spend time with people and contribute to hospitality without still working until 3am.”
I asked Joe what’s next for Six Barrel Soda.
“We’re always developing new products, but as we’re launching in new markets, we want to develop new flavours for those markets.
“We’re also moving to controlling our channels more - we’re moving towards direct-to-consumer channels in our overseas markets through our online and physical stores.
“And we’re obviously focusing on exporting in a creative way on a limited budget. So at the moment, we’re really looking to challenge the status quo in the way we crack new markets, especially the US.”
For more info on Six Barrel Soda, and to get your hands on some product, visit: https://www.sixbarrelsoda.co/.