John Vellinga knows something isn't quite right with his business. According to the most recent census data, about one million people of Ukrainian descent live in Canadian - but since 2001, he has managed to sell them only 88,500 cases of beer from their homeland.
"If it only had to do with the value of the product and the quality, this should already be a top-five seller," says Mr. Vellinga, who runs his importing business from Oakville, Ont. "But that's not what it's about - it's about marketing and the tastes that people have gotten used to. They've gotten used to hamburger, and they aren't sure they like steak any more."
Mr. Vellinga started Multiculture BEVCO in 2001, when he and his wife, Katherine, returned to Canada after living in Ukraine for five years. As the owner of a management consultancy in the Ukraine, he had met with some executives at Baltic Beverage Holdings AB (BBH Ukraine), the country's No. 3 brewer, and worked out a deal to import Slavutich beer to Canada, in a bid to capitalize on our large Ukrainian population. In 2004, he added the brewery's Lvivske brand to his list of imports.
Along with the beer, Mr. Vellinga markets Ukrainian arts and crafts and other goods for expatriates -everything from handcrafted Ukrainian eggs to computer keyboards with Cyrillic keys - through his website, ukiestore.com. But his imported Ukrainian beer - Multiculture's main attraction - can be found on store shelves in Ontario, Manitoba and Alberta.
Ontario consumers guzzled by far the largest portion of his brew last year, downing about 65 per cent of the 16,750 cases he sold, or some 167,500 litres.
While Ontario may be leading the pack, overall sales of Ukrainian beer in Canada are paltry in comparison with the numbers racked up by imports from other countries. In the No. 1 position sits the Netherlands; Canadians bought 46 million litres of Dutch brew in 2003, according to Statistics Canada's most recent survey. The United States was in the No. 2 position, at 45.9 million litres, while Mexico was third, at 44.2 million litres.
Even Polish beer, No. 10 on the Statscan list, with 2.9 million litres sold, outranks the Ukrainian product. "There are roughly the same number of Poles in Ontario as there are Ukrainians. But the Poles drank about 350,000 cases of Polish beer," Mr. Vellinga says. "We look at that number and we think, 'Wow, if we could do anywhere close to that, we should sell at least 150,000 cases a year across the country.' And that's just on the ethnic side, without even thinking of the average Canadian."
What our experts say
Shih-Fen Chen, an associate professor of international business at the University of Western Ontario's Richard Ivey School of Business, knows a thing or two about the international beer trade. After reviewing Mr. Vellinga's plan to sell Ukrainian beer in Canadian stores, he wasn't very upbeat about the prospects.
"If you look at the selection in any beer store, you are going to see more than 100 different brands," he says. "Even getting displayed in a store is a challenge. And even if you do convince them to carry your beer, you still need to convince the consumer to buy that product. If you have 100 brands in a store, the chance of being picked by a consumer is one in 100 if they are picking randomly."
Prof. Chen says that Mr. Vellinga's most promising customers are Ukrainian-Canadians who already know about the beer, and there is little sense in engaging in an expensive advertising campaign to persuade other Canadians to give it a try. "The Ukrainians were already customers [of the beer] at home, and when they move overseas you can follow them," he says. "You can see that in Toronto's Chinatown, with Chinese beer. But if they want to sell to [other] Canadians, I see big problems."
