Relaxing with a beer with friends is ingrained in Australian culture. Alcohol is a way of life. So breaking down the stigma of socialising sober is no small task. But Sobah was the first of its kind to show Aussie’s you can enjoy a unique tasting non-alcoholic craft beer while out with mates, without the hangover.
Launched by Gold Coast entrepreneur Lozen McDiarmid and her husband Dr Clinton Schultz in 2017, Sobah is a purpose-led business promotes healthy lifestyle choices and wellness, social equity, sustainability, smashes stereotypes and unites people. The brand exists to raise positive awareness and promote First Nations’ culture, arts, language and history, ethically sourcing ingredients and knowledge.
And it’s a concept that has been embraced by a growing number of Australians no longer needing alcohol to have a good time. Australians have embraced what the Sobah brand stands for, resulting in significant growth. The brand is now considered to be in the growth phase, scaling into a larger business, which brings with it a number of new challenges.
Indeed, growing a business costs money, so Lozen turned to Birchal in October 2021, running a successful campaign to raise $1 million from 569 investors to push for further growth.
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First Australian non-alcoholic craft beer
$1 million raised from 569 investors
New facility set to launch soon
Pushing to UK & North American markets
“The funds we obtained through the capital raise was to purchase equipment, invest in human resources and undertake further marketing, and we’ve done that. We’re about to bring on a further three people, and we have an incredible new facility in the works, which will allow people to come and immerse themselves in the brand,” Lozen explains.
A new space is being built when we spoke, which will open in the near future. While it has been frustrating that the development progress has been a drawn out process, Lozen knows that good things come to those who wait.
“We acquired this property as part of a new development as an industry space, which will include a café that enables us to showcase the Sobah brand,” she says.
The brand experienced a surge in sales during the Birchal campaign as brand awareness grew alongside the market efforts as the brand cheer squad helped organically spread the word about the virtues of the brand.
“Interestingly enough, a decent number of people who invested in Sobah who had never tried our product before, but they’re investing in us because they’re actually attracted to the story and the brand.”
SOBAH FOUNDER LOZEN MCDIARMID
“People were investing in us because they were attracted to the story and the brand, even though they hadn’t tasted our products. Now that the focus and momentum is there, it’s about continuing and maintaining that momentum,” she says.
And while the summer months always yield stronger sales for the Sobah brand, “We’re in an industry where sales can really fluctuate from season to season and quarter to quarter.
The start of last year was quite tough. Not just on us, but for the beverage industry as a whole, particularly against the backdrop of floods and other natural disasters and a worsening economy, plus the rising cost of fuel,” Lozen says.
“Everything is more expensive, and the cost of distribution and the margins are much narrower than they were 18 months ago. So it’s definitely been a tough year for lifestyle brands like ours.”
Covid presented plenty of obstacles as shuttered hospitality operators forced her to reconsider her distribution strategy early on. “We have a lot of customers who lost their businesses or had to close because of the pandemic. In the scheme of things, we’re lucky that it wasn’t us,” she admits.
Maintaining momentum against that current economic backdrop is certainly challenging, but she has a number of export projects in the pipelines and goals she’s determined to reach, including a push in the UK and North America. These days, Lozen considers Sobah more as a lifestyle brand than a beverage brand.
The good news is the broader non-alcoholic beverage category has continued to grow, though there has been some saturation of brands in the market. “Australia is certainly ahead of the game when it comes to the variety of what we can offer compared to other large markets. And because we’ve been around for five years, we initially had the luxury of 100 per cent market share in those early days.”
However, that gift also came with the cumbersome task of educating the market about the benefits of non-alcoholic beer. “We have helped raise awareness of the space.
“We’ve taught the market that it’s on trend to offer these sorts of drinks in venues, with people announcing that they’re having a year off alcohol and then deciding that they want to make it a lifestyle choice and stick with it,” Lozen says.
“We had to explain to top tier venues around the country that they needed to have these non-alcoholic beverages in their fridge, because otherwise they would only be able to offer someone who came in and isn’t drinking alcohol a soft drink, juice or water. That’s not really acceptable these days. Consumers want variety and choice.”
About a quarter of adult Australians don’t drink alcohol, which is a large segment of the market, she says. “There’s so many people out there with different dietary requirements and it’s exactly the same when it comes to beverages.”
Lozen’s advice on raising for founders
Don’t reinvent the wheel
Extra assistance in the form of a financial planner was important, along with assistance to create a flashy offer document. “My advice to people is don’t reinvent the wheel. There are many offer documents out there available as templates and you can just find one that suits your business needs and you can tailor it and personalise it so that it’s not a huge, crazy task that you’ve got to create from scratch. We then handed it onto a graphic designer to make it look beautiful,” she says.
Get the right people in your team
You’re also going to need a lawyer and an accountant to ensure your business structure is set up properly to go through the crowd fundraise process. And if you’re not up to scratch with marketing, and you don’t have a strong list of contacts, it’s worth considering working with a PR person, even just for a period, she recommends.
Time your run to ensure success
Lozen likened the equity crowdfunding process to nearly a full time job in itself through the 16 week period of the campaign from start to finish. “It’s worth considering how many team members you’re going to need at the start of the process. You need to give yourself the time to get through the work that it takes to raise capital. It’s a lot of preparation and a lot of writing.”
Communicate with your shareholders
“The offer document has formed part of the business plan, with parts of those pages featuring diagrams and business growth information that we’ve been able to evolve and continue using.” Regularly communicating about progress with investors has been a critical part of the process. “I enjoy the contact with investors, but you do also have a whole bunch of people to keep happy and it's another task on my to do list,” she says.
But the hard work has paid off for Lozen, so watch this space!
About the Founders
Lozen McDiarmid-Schultz
Lozen is a former secondary school teacher with a Master of Education in Guidance and Counselling and a Creative Arts Degree with majors in Writing and Theatre. Previously Lozen worked in the hospitality industry and had a successful independent beauty business for 12 years. A mother of three active boys, Lozen manages Sobah Beverages, a business founded alongside her husband, Clinton in 2017. Lozen's key activities in Sobah are operations management, supply chain coordination, sales and marketing.
Dr Clinton Schultz
Clint is a Gamilaraay man and registered psychologist with a keen interest in holistic wellness. In 2018, Clinton won Griffith University's Most Outstanding First Nations Alumnus Award. Clinton was awarded the 2019 IAHA (Indigenous Allied Health Australia) Health Professional of the Year and in 2020 he obtained his PhD and was awarded the Chancellor's Medal for PhD Excellence. Until recently, Clinton was Assistant Professor with Bond University Medical School. He now focuses his time as Director of Marumali Consultations and Sobah Beverages. Clinton's experience as a chef, knowledge of Australian native food and passion for First Nation's culture and health is the driving force of Sobah.
