Stone Axe: A world-leader in luxury beef production

With over 50,000 head of cattle, Stone Axe Pastoral Company is one of the world’s largest vertically integrated wagyu beef enterprises. This award winning company has herds located in hand-selected, resource rich regions across four states in Australia. Hear from Stone Axe Managing Director, Scott Richardson about the companies growth journey to leadership in their category.

Brad Mytton: Welcome, Scott. Thanks for joining us today. Scott, you've been on the journey with us for Stone Axe for six years now. Maybe just to get going, if you could introduce Stone Axe and give people a sense for the size and scale.

Scott Richardson: Thanks, Brad. You know, Stone Axe started from two properties on each side of the country and a handful of cattle to where we are now with sort of 19 properties operating in four states with upwards of 50,000 head of cattle, predominantly full blood Wagyu and Wagyu cross cattle. So it's been a very, very big journey.

We're fortunate to have some of the best genetics outside Japan in our herd, which is now being seen and served across the globe, basically in some of the best restaurants around the world.

Brad Mytton: And I think that was always part of the original thesis, right, was to capture those exceptional genetics. I think with genetics it's one of those things you need to continue to expand, continue to optimise, otherwise I think we've been tremendously successful with some of the awards that Stone Axe has achieved, recently. I think that's a testament to both the genetics and the environment of the cattle that your team puts us through.

Scott Richardson: As you know, nothing happens overnight with these businesses and, you know, to have that success really is a testament to the genetics, the management cause it's not just one thing, it's a whole package and you know, you have a good team behind you. We see Roc as part of that team and we're very fortunate to have Roc as a major shareholder for the business.

Brad Mytton: That probably leads us to one of the things we wanted to talk about today, which was the impact of climate change and climate volatility coming through. I think Stone Axe is clearly impacted by that. I think, again, one of the underlying drivers along with the genetics, when we started this journey was that we are well placed to actually manage through those very dry periods, or wet periods.

Can you talk us through sort of the investment that was made during the recent East Coast drought?

Scott Richardson: Yeah. Look, we obviously like a lot of other cattle growers experience that severe drought. We are very fortunate, as you mentioned, to have Roc, and the financial backing that they have with us for that period. I mean, we had to make a decision on whether we sell or feed. Fortunately, the board agreed to take the latter, we went about feeding. I think the business it's cost us six odd million dollars, but that put us in a very different position coming out of the drought.

We took opportunities to relocate genetics from other people who couldn't afford the feed. So rather than see those very limited and unique genetics go to waste, we've put them in our herd, which was very fortunate for us. Roll the dice forward, it's rained and we've now got a herd grow, whereas others have shrunk and we've actually got cattle that we can place into the market, which is experiencing some just phenomenal growth for us.

Brad Mytton: Yeah. And the plan was always to get this business to a scale where we had that geographic diversification and, as you've mentioned, covering four states now, which sort of objective delivered on that, but what else has there been from your perspective in terms of what we've actually had to create from scratch, from sort of six years ago, to where we're today?

Scott Richardson: Yeah, sure. The business is, as you point out, it's quite young. I think it started in 2016 Roc purchased it in July 2017. So, relatively speaking its a young business in the pastoral industry, starting from scratch everything, work health and safety policies, procedures in environmental policies, obviously over the last couple of years that's become more and more important with this carbon measurement. Methane emissions, particularly our industry, we've undertaken a number of initiatives, our carbon measurements, soil measurements that are happening. Tree planting, pasture improvement, regenerative grazing practices, all those things contribute to that final measurement, which we're still working on.

But we are certainly on that trajectory to having that the industry's required carbon neutral by 2030.

Brad Mytton: And I think Stone Axe has been working with the Wagyu Association of Australia, just around advancing some of those carbon related and emissions related projects as well.

Scott Richardson: So yeah, we've got a number of initiatives going in the methane reduction that obviously the IWA as you mentioned are having a number of trials, more on the methane and also the performance improvement in the weight gain. We are undertaking our own, with our investment in sea forests.

We've got our asparagopsis trial going on in WA, where we're not taking the science approach with the methane measurements, but more of the productivity uplift.

Brad Mytton: And in terms of international sales, the team is doing a wonderful job at marketing the product to the world. Can you sort of talk us through what's going on there?

Scott Richardson: Yeah, look, we started with obviously very small packages of meat going to, we started domestically actually, but internationally with our awards that we won early, has sort of gained us a fair bit of interest in these international markets. So we're in the Middle East, we're in Europe, we're in through China, North and South Asia, and more recently into the US, the US market for the premium meat just seems to be undeliverable. We just can't match what they want.

And the Stone Axe and our Margaret River brand, is attracting a lot of interest. It's quite a consistent product and particularly with Stone Axe, the premium end, that high marble score, luxury beef is just something that the timing is great for us and the demand is just growing.

Brad Mytton: It's really been pretty impressive to watch going from a concentration to certain markets to be able to spread it around. I think Roc as a business and you've probably heard us laboring this point, customer diversity is a big part of what we focus on and, to build that customer base you need to have the product, right?

So as the product is ramped up, you and the team have successfully delivered it and we've now got a very diverse and impressive customer list.

Scott Richardson: Yeah, and look, we're dealing with a lot directly with chefs. Social media's very big part of our whole marketing strategy. Some of the world renowned chefs in the best restaurants around the globe are using our, our beef and just wanting more. So it's, I think the future looks pretty bright for us.

Brad Mytton: Alright, well thanks Scott. It's been great to have you here in the office and, get some of your thoughts on the business and the journey.

Thank you for your contribution, which has been immense to the growth of the Stone Axe business. We look forward to continued growth and