Sydney seltzer startup Fellr scores NSW-wide deal with Coles Group

Sydney seltzer startup Fellr scores NSW-wide deal with Coles Group

Will Morgan (pictured right) and Andy Skora (pictured left) may have had cushy careers at alcoholic drinks behemoth Pernod Ricard, but with the spirit of entrepreneurship brewing they quit their jobs in January 2020 to found Fellr, a craft seltzer company based in North Bondi.

Morgan jokes about the timing of Fellr's launch - right before the arrival of COVID-19 and pub lockdowns - but the pair have made the most of what 2020 threw at them, executing their vision to brew and market malt-based seltzers rather than the usual spirit-based pre-mixes.

Fellr recently secured a NSW-wide distribution deal across Coles Group's (ASX: COL) bottle shops Liquorland and First Choice, has run trials with Woolworths Group's (ASX: WOW) liquor division including BWS and Dan Murphy's, and is increasingly stocked in more bars around the country amidst a nationwide push.

It is a rapid rise that helped earn Morgan and Skora the Australian Young Entrepreneur Award 2020 in the Startup category, but they could have just as easily pushed through last year with steady employment.

"For me personally Pernod was an awesome experience. It's such a great company with amazing brands - it really is one of those companies you could be comfortable in for a long time," Morgan tells Business News Australia.

"I always wanted to do my own thing though, and we saw this opportunity coming with the sessionable RTD (ready-to-drink) trend and seltzfers. It really was going to change the booze industry."

Skora says he and Morgan had always spoken about doing their own thing - they both had the entrepreneurial mindset.

"When you work for a large company like that, there's a lot of advantages. But there's also disadvantages," he says.

"I think one of those disadvantages at a large company is just being able to create something and be fluid; being able to kind of change on the wind and do something that you actually want without having to get it signed off.

"The idea was really exciting for us. We knew we could do it, so we said let's just go for it."

Morgan explains the pair developed their own new alcohol base for Fellr, in a market where the "lines have been blurred a little bit" between what he believes are real seltzer and simple vodka-based pre-mixes.

"Rather than distilling it like a vodka, we beer-brew it with yeast and hops," he says.

"We blend that with sparkling water and it creates a kind of really clean, fresh alcohol base with a little bit more body and viscosity than a distilled spirit, and we blend that with natural flavours."

Skora believes the malt-based approach has given Fellr an edge in the marketplace.

"That's really what's helped us stand apart from our competitors, especially with that spirit-based, using just either cheap neutral grain spirit or vodka, and that doesn't leave much for that mouth feel or bodiness to it," he says.

"Drinking a seltzer can be like just drinking a soda water, whereas when you drink one of ours it has a bit more complexity and body to it.

"I think when people try it, they actually notice the difference, and we've gotten a lot of compliments, and a lot of reviews have been favourable to us."

From their time at Pernod Ricard, Morgan and Skora knew just how important it was to be on the good side of wholesalers, and that product would have to perform highly against tight competition in order to stay on the shelf.

"There are so many good wholesalers nowadays and we've got good relationships with them, and they really believed in us in the beginning," says Skora.

"They don't let everyone into their distribution network, because if the stock doesn't move, they move you out right away.

"We definitely had to back ourselves, but being in the industry and kind of knowing what works and what doesn't, we were quite confident in the product."

Skora notes Fellr had a few wins early on and popularity took off once the warm weather came, followed by massive gains as soon as on-premise sales were allowed in bars.

There are currently range reviews taking place at the country's leading supermarket and bottle shop chains, but in late December Fellr had a breakthrough with Coles which effectively tripled its reach.

Morgan says it has been a "mad sprint" nonetheless, taking on the competitors with significant economies of scale.

"The big craft beer brewers, they've got big sales teams but here it's just Andy and me at the moment," he says.

"We're hitting the phones a lot, on the road a lot...just cutting the pavement.

"We wanted to build a brand that we were proud to work with every day, and we are so excited with how the trajectory has gone so far."

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