Michael Burton’s love affair with beer started when his wife Brooke put him onto the ‘good stuff’. Since then, the Wollongong duo have made it their mission to protect the bottom lines – and reputations – of local and international brewers.
Their technology startup, Binary Beer, has developed an Internet of Things (IoT) platform that enables breweries to not only keep track of their kegs throughout the supply chain but also monitor the freshness of their contents. Since incorporating insights from a recent trial involving their local brewery Five Barrel Brewing Co, the founders have attracted investment from the iAccelerate seed fund, bringing Binary Beer’s valuation to $1 million.
Burton, Binary Beer’s CEO and a computer scientist by trade, spoke to Dynamic Business about the problem his startup is solving for brewers the world over, enjoying the ‘rollercoaster ride’ with his wife, their vision to transform tens of millions of beer kegs into ‘smart’ kegs, and Wollongong’s transformation into the ‘Silicon Valley’ of IoT.
DB: What is the elevator pitch for Binary Beer?
Burton: Brewers lose control over their kegs the moment they go out the brewery door. With kegs typically ‘disappearing’ for months at a time, they can only hope their kegs are stored in cool conditions, with the beer served fresh to customers, and that they are returned in a timely manner.
The reality, however, is that 10% of the world’s kegs go missing each year and one in 20 will never come back. Now, a keg costs around $200 after its it’s fitted with a spear, delivered to a brewery, embellished with branding and cleaned for service. On top of that, it may – over the next decade – carry over $10,000 worth of beer. So, when a keg goes missing, it can hurt the brewer’s bottom line as well as their ability to grow their business and keep up with demand during the all-important summer months.
Further, beer stales around seven times faster when the keg isn’t properly refrigerated by the retailer or distributor; however, consumers tend to blame the brewer. Given that breweries pin their reputations to the quality of their beer, it makes sense for them to want to not only track their kegs but monitor their contents.
At Binary Beer, we’ve developed an Internet of Things (IoT) platform for tracking kegs, using wireless sensors, throughout the draught beer supply chain to ensure that kegs keep moving, the beer remains fresh and that taps never run dry.
DB: Why do so many kegs go missing each year?
Burton: They go missing due to loss, theft and damage. When kegs sit for weeks in unattended carparks, seemingly “free to good home”, it’s easy for people to overlook the fact that they are still the legal property of the brewer. Just take a look on Gumtree – you’ll find no shortage of kegs chopped up into furnaces, furniture, BBQs and smokers.
Another common cause of loss is from unscheduled deliveries and pickups. Often when kegs are not picked up by the brewer in a timely fashion, retailers can be more than happy to see them taken away by the next available delivery guy, regardless of their destination – they just want to save space. In this case, it can take the brewer months or even years to recover kegs.
DB: How do you keep tabs on a beer’s freshness?
Burton: By monitoring the temperature of beer through the use of sensors attached to the kegs. We apply an algorithm to estimate the rate at which the beer is going stale, calculate its freshness and alert the brewer when it’s time to replace a keg, sparing them any risk of reputational damage.
DB: What circumstances led to Binary Beer’s creation?
Burton: Brooke is to blame for our journey into the brewing scene! She introduced me to ‘beer that tastes good’, which led to a home brewing hobby, which led to us starting a home brewing technology business called Digital Homebrew. Last year, we were one of ten Australian startups selected to attend Bridge to MassChallenge in Boston, where we pitched our idea for a home brewer’s keg monitoring system and sought the expertise of local craft brewers. Owing to useful feedback, including from Jobs for NSW CEO Karen Borg, we came to realise our prototype could have a greater impact in the global commercial brewing market. From there we pivoted away from the home brewing market and founded Binary Beer, determined to make the world’s beer kegs smart!
DB: What is it like running a startup with your wife?
Burton: Before embarking on this journey of entrepreneurship, Brooke and I worked in the same office for one employer. I can understand how seeing so much of each other would be hard for some couples, but I think we’re lucky that we both think very analytically and come to agreements quite easily. Having two children along the way has been a delightful challenge and I think that if we didn’t share the same vision and aspirations from the beginning I’d probably have been back in a day job long ago, wondering what could have been. The way I see it, running a startup can take over a lot of your life, so if your spouse isn’t a part of your team there’s probably going to be a lot of conflict. Instead, we enjoy the rollercoaster ride together, knowing that the challenges of the journey are half the fun.
DB: To what do you owe the startup’s progress?
Burton: We owe much of it to our connection with University of Wollongong (UoW) through their startup incubator iAccelerate. We initially contracted UoW’s SMART Infrastructure Facility to carry out some R&D for our wireless technology but our relationship with the university also gave rise to other opportunities.
We’ve formed close links with researchers at the UoW Digital Living Lab and received introductions to high-profile industry players. In addition, we’ve been assisted with our technology by a team of final year Computer Science students – for their efforts, they won last year’s UoW Computer Science Trade Fair!
Further, the iAccelerate Seed Fund, which is managed by Artesian Capital, has agreed to take a 15% stake in Binary Beer. This funding has helped us hire our first staff member, a software developer, and it will also seek commercial contracts with major brewers in Australia and overseas.
In my view, Wollongong is making a strong push to become the “Silicon Valley” of IoT and we’ve been very fortunate to immerse our startup in the tech culture that’s evolving here.
DB: How useful was the Five Barrel Brewing trial?
Burton: The Five Barrel Brewing trial, which was made possible by a $25,000 Minimum Viable Product (MVP) grant from Jobs for NSW, was our first attempt at getting an MVP into the field. It helped us iron-out problems such as tracking the kegs in cool rooms that are surrounded by metal, which block electromagnetic waves.
There’s just so much you learn out in the field that you would never pick up in the office. In the first five minutes of frantically attaching sensors to kegs before they rolled out the door, I’d already built up a sweat. Whoever ends up attaching thousands of sensors to kegs is going to require some quality tools! The more we learn and test with brewers, the more we’re learning about the value we can unlock with this technology.
DB: How will you look to measure Binary Beer’s success?
Burton: Moving forward, we’ll there will be a number of measures including how many sensors we can deploy in the field and the relationships we can build with brewers to support the rapid rollout of this new technology. There are tens of millions of beer kegs out there and we envision that in the coming years almost every beer keg will be a smart keg. Success to us looks like a world where we connect those kegs and deliver value to brewers, distributors, retailers and customers to improve the enjoyment of beer for everyone.
DB: What are your current priorities for the startup?
Burton: Our immediate focus is on a proof-of-concept trial with an international telco and multinational brewer. Upon successful trial we’ll be aiming to create a healthy relationship with that brewer and raising the funding to replicate that process as a faster pace.
DB: I have to ask, what are your favourite beers?
Burton: I can’t fault Five Barrel Brewing’s pale ale, it’s fantastic! I’m also enjoying iStout, which is an imperial stout brewed by 8 Wired in New Zealand.