How's It Going Eh From Canadia

[strangebrew]

Evening All

A partner and I are writing a business plan to start a production distillery in Western Canada for export purposes. While we absolutely adore and respect the craft of artisanal distilling and have pet projects we'd like to work on later we are approaching this as a business that sells alcohol. We have proven track records in operations, business development and marketing in the brewing industry so hopefully that counts for something. I've read (over and over) the warnings of starting up a distillery on ADI and have taken those generous offerings of sage advice to heart so thank you to the members for sharing those words of wisdom.The information and support provided by members in this community is very much appreciated. We have made no formal investment decision as we are part way through the research process but we expect to have clarity once our business plan is complete and has been reviewed.

StrangeBrew (SB)

[Hudson bay distillers]

Hello where in western Canada are you planing your set up , were in Saskatchewan if there is anything we can help you with just ask . Hope your planing a actual distillery not a gns /Ngs  outfit . 

Tim 

[strangebrew]

Hi Tim

Thank you kindly for reaching out. We would likely set up in Edmonton and be an actual distillery working with grain. There is one product where we would consider using GNS and are discussing the pros and cons of that with a consultant now. My comments on the business side of things were based on our export strategy as my partner and I have 25 years combined experience working overseas in Asian with business connections there. We would also be interested in working with AB/SK farmers in the future to produce single malt/single farm whiskey but we haven't yet researched that. We are also interested in working with landrace heirloom grains but haven't had time to look in to that either. Lots of good stuff to learn which is making the journey thus far satisfying.

SB

[Hudson bay distillers]

Good stuff glad to hear your going to be a real distillery . We're not far from Edmonton let us know  if ya need anything . 

Tim

[et1883]

best of luck Strangebrew, hope you have a smooth and easy process from lease/purchase to build out and production/sales/export.  It's a long road with no shortage of adventures along the way!   Give a shout if you want to pose questions or sound out ideas. 

[strangebrew]

et1883 will do for sure. Mom's in Nanaimo as that's where I grew up (along with Powell River) so I should be around at least once by next summer. 3rd generation to Alberta but grew up from 4 + in BC. Friends and family in both provinces.

 

 

[Glenlyon]

It sounds great. But - let me pose a question. If indeed you do have extensive international connections and you can build markets in these places - why bother spending two million bucks building a distillery, which will gobble up loads of monthly overhead? Instead, here in BC we are awash in craft booze. Much of it is probably not the world's greatest, however there are enough who have produced seriously competitive beverages, yet the vast majority of them probably know nothing about how to shift them outside of BC.

You'd make way more money, way faster brokering existing booze with way less risk, debt, labour and their associated headaches! 

[strangebrew]

Glenlyon. A very good question indeed. We have thought about that somewhat, perhaps not enough. Better for a private conversation I'd say though so I'll send you a PM.

[Glenlyon]

Looking forward to such a conversation. Look us up if you even make it back to the Sunshine Coast!

[et1883]

48 minutes ago, strangebrew said:

Glenlyon. A very good question indeed. We have thought about that somewhat, perhaps not enough. Better for a private conversation I'd say though so I'll send you a PM.

yet without the larger financial risk there's not as much fear!  :-)   also with some 15 years abroad, export seems such a natural option to pursue.  a colleague of mine used to escort his company's "piano shipment" each month to the warehouse when it arrived in the islamic country he lived in, so it would not leak.  I'm sure the local country wondered why they wanted a piano each month. 

[Glenlyon]

Here are some Canadian distillery numbers according to statscan - 42% of distilleries operating in Canada today are profitable. So 57% aren't or aren't yet. 70% of the cash flows to the largest commercial distilleries and everyone else lives on the scraps. An overall margin of 48% is the average.

[Hudson bay distillers]

That's interesting stats I wonder when were those stats made is it current numbers

[et1883]

was that also self-reported or data from public (?) companies?

[Glenlyon]

This information is the latest on the statscan website so I would assume 2018 numbers. I would also assume most of this information is collected through the tax department. Although based on these metrics, I'm pretty pleased - as we're beating the numbers by a wide margin,  we were profitable in our first year and we are trending to even better results as we wind up our second year. Yep, I'm liking this business!  

[strangebrew]

Thank you for the input everyone. I'd like to see clarity on exactly what the 48% refers to. Overall the numbers makes sense as it's a new industry in which the average is 3+ yrs to be profitable so the overall profitability average will be low. A more accurate number would be what % of companies are profitable after 3 years. Then there's the provincial regulation component (looking at you BC you've gone backwards) that can hinder profitability as well as the reality that a certain percentage of upstarts are more focused on craft excellence over business planning. We are open to the idea of contract production in either AB or BC and will begin making those calls to see what the costs and options and are.

[strangebrew]

And hey Glenlyon I grew up on the Sunshine Coast (Lund, Powell River) on the beaches as a little squid bait sailing, beach combing, fishing and cruising through Molly's Reach on the way to Van so thems my old stomping grounds. Relic Lives. Good on you for making a go of it there well done.

[Glenlyon]

Statscan say they have reviewed 95% of all distilleries in Canada - so, I guess that means the aggregate of everything including big commercial operations right down to us small fry.

[strangebrew]

Does Stats Can break this data down by province and segment of the industry? 

[Glenlyon]

I didn't look that deeply. I would suspect though for those numbers you would have to pay.

You can also pay the liquor board for very detailed market and sales information in your market area.

[Visna1]

Hey SB we run Krang Spirits in Cochrane. If you haven't been through, call us and come visit. We can give you a clear picture of the market here in AB.

[strangebrew]

Hey that would be great would love to come for a visit. I should be through Calgary around spring and will reach out.