City Winery co-founder Adam Penberthy is a believer in serendipity.
The serial entrepreneur’s latest venture – Brisbane’s first urban winery since 1860 – had its roots in a chance meeting with winemaker Dave Cush at the 2017 Game of Rhones event.
“I was there tasting with friends and … these guys had a little sign that said, ‘We make wine in a shipping container outside of Brisbane’,” Penberthy explains.
“I remember thinking, ‘Holy dooly’, so I pushed my way to the front and said, ‘Mate, tell me everything about what you’re doing.’”
Penberthy and his wife, whose parents are graziers at Ballandean, loved wine, and had considered purchasing a vineyard. Meeting Cush changed all that.
“Gone are the days where you need to be where the produce is,” Penberthy says. “Economically, it makes much more sense to make wine where the people are.”
It was 18 months from that fateful meeting before the City Winery opened its doors.
As barrels emitting earthy scents of oak and fermenting fruit attest, the venue sources grapes from selected Australian growers and transforms them into wine onsite and at secondary locations.
Up until COVID-19 hit, guests could join tours, tastings or workshops, or sign up for “vintage membership” to get their hands (and feet) dirty by picking fruit, stomping grapes, and blending, labelling and bottling wine.
But just as restrictions have hit others in the hospitality industry hard, overall business at the City Winery, at the time of interview, was down by 60 to 70 per cent.
“Trade’s hard, but at the same time, we’re making the most of it,” says Penberthy.
As soon as he noticed restaurant sales declining, Penberthy introduced an all-day grazing menu available for online ordering and pick-up or delivery.
Alternatively, customers could opt to have a four-course degustation food and wine box dropped off.
There’s also been a 400 per cent increase in demand for in-home wine blending, cheese and wine pairing and wine tasting experiences conducted via Skype or Zoom.
This experiential focus is the reason why Penberthy doesn’t consider himself to be in the hospitality business, despite the restaurant and function spaces.
“We see ourselves first and foremost as a tourism and experiences business,” he says.
“It just happens that the people who come in here have a wine experience and a food experience.
“Customers have a yearning to learn more about how stuff is made (and) the market is so ready for these types of executions.”
It’s an approach that aptly nails the millennial-led trend towards accumulating experiences rather than goods, as identified by futurist Blake Morgan in Forbes magazine.
Yet Penberthy finds it difficult to articulate how, exactly, he spots gaps in the market.
“I really don’t know,” he says, looking genuinely baffled. He suggests it comes from looking at problems through consumers’ eyes and “a bit of gut feel”.
Penberthy has been honing his business instincts since launching his first start-up at the age of 13.
Pembertec Computer World, in which he built computers from second hand parts, grew to the extent that by the time Penberthy was 15 years old, he had a full-time employee.
The experience taught him the importance of “hustling” and going all in.
“My website had a stock image photo of a woman with a headset,” he says. “The reality was that it was me and my dog, with a thermal fax machine beside my bed.”
This business petered out as the commoditisation of computers slashed margins, but it taught Penberthy the value of good advice – for example, by speaking to his mates’ fathers about tax and pricing.
“I’ve always felt comfortable finding and surrounding myself with the right people who are taking on calculated risks and doing different things,” he says.
Penberthy started Fresh Advertising in 2006, one of the country’s only youth advertising agencies. It saw him named one of B&T‘s 30 Under 30 winners in 2009.
“I deliberately threw myself in the deep end and took out a lease on a property – I pushed myself. Because I knew I had to sink or swim, or swim harder, those were my only options,” he says.
Penberthy recalls a “really grungy cool space” where his team worked, the office skateboard ramp, and cutting edge campaigns which featured flash mobs, or combi vans turned into recording studios.
But there were challenges too.
“Ad agencies are really hard beasts to run,” he says.
“You require a substantial head of staff which works really well when you’re winning and there’s lots of work on, but if you have a slowdown, it becomes pretty awful pretty quickly.”
To accommodate changing conditions, Fresh Advertising morphed into Fresh Digital, shifting its focus to software development and mobile applications, and expanded abroad.
This gave Penberthy a window into how big data can be used be used in business – even in industries founded on artisanal processes such as winemaking.
“Big data is a huge opportunity,” he says.
Get enough consumers to taste and rate different wine samples, for example, and you can start to capture shifting preferences that can be useful from a decision-making perspective.
Fresh Digital still exists under management, but he is now winding it down.
“I’ve lost my spark for that business and so I’m exiting,” he explains.
“I’ve been hanging on because it was bringing in money, but I’ve held onto that business for too long.
“I’m a firm believer you need to follow your interest and passion.”
In contrast to Fresh, Penberthy has had an exit strategy for City Winery from the get-go.
“I went into it with the view that City Winery must be saleable from day one,” he says. “The plan is to grow this business and put in multiple sites around the country, but with a view that it will have the ability to be sold at some time in the future.”
City Winery currently employs 33 staff members including a chef, waitstaff, and a part-time Chief Financial Officer (CFO).
Structured as a private company, its four shareholders, including Penberthy, Cush, a property developer and a tech whiz, meet on a monthly basis to discuss operational priorities.
“It’s not a formal board as such, but that’s something we will look towards doing, whether it be an advisory board, or something similar,” says Penberthy.
Having completed the AICD company directors’ course five years ago, Penberthy says he’s conscious of the need to temper entrepreneurial gumption with good governance.
“(The course) gave me a tremendous starting point for understanding and getting my head around corporate structure and understanding what good governance looks like,” he says.
Penberthy is adamant that everyone who yearns to start a business should “have a crack”.
“Just do it … the learnings you get from having a go put you in good stead for the rest of your life,” he says.
Established business people could boost innovation by developing mentorship programs for aspiring entrepreneurs.
“I was lucky I had a number of successful people around me as a young fella growing up that were instrumental in getting me to where we are today,” he says.
Studied: USQ (mass communication)
Worked: Fresh Digital, Hello Sunday Morning, Optus