Skip to main content

After five years of long hours and hard work, Beau's All Natural Brewing Co. has carved a solid foothold in Ontario's beer market.

So you might think that attracting investors to help finance growth would be a straightforward exercise.

But Steve Beauchesne, who started the Vankleek Hill, Ont.-based company with his father, Tim, said it hasn't been easy.

The biggest challenge facing the family-owned brewery: Potential investors want to tell them how to run the business. And they refuse to change for money.

For most companies, attracting strategic investors who could offer insights about operations would be a good thing. But the Beauchesnes want to run their business their own way.

For one thing, they don't want to go with formulaic recipes that mimic what the bigger guys do. Beau's refuses, for example, to make light beer, even though it's popular with consumers. Doing so would mean using corn syrup, which is not a natural ingredient for making beer.

Second, Beau's does not advertise, which goes completely against the grain of a business propelled by advertising.

Third, Beau's has a strong commitment to the community and the environment, which is why it makes organic beer.

And Beau's charges premium prices because it refuses to use inexpensive ingredients. A 600-ml bottle, for instance, goes for $4.35 - about 40 per cent higher than a beer sold by Molson Coors Brewing Co. or Labatt Brewing Co.

To get the business off the ground, the company raised $350,000, mostly from family. Over the past four years, it raised an additional $1.5-million from reinvesting profits, loans and the sale of common and preferred shares.

Now Beau's wants to raise another $5-million - $1-million in the short term and then another $4-million over the next five years - to continue expansion, he said.

But finding investors who want to put their money in and keep their hands off has been tough.

"The people who come with big cheques also come with ideas that would sacrifice what makes us cool," Mr. Beauchesne said in a recent interview. "I don't want to be a Molson junior. I like the fact we do things differently."

Another issue is that investors "want to put money in with a clear expectation of getting it back out, which inevitably leads to the discussion of going public - which I feel is the death knell for a small brewery," he said.

"Beyond that, when you tell an investor that making great beer and contributing to our community is more important than maximizing profits, most don't get it. I don't know how many times a potential investor has said, 'the way you've been running your business has worked up to now, but you have to change to more traditional business tactics to continue growing.' That's when we walk away."

While Beau's may be different, its approach has helped to make it a success on several fronts. Its beer has won numerous awards, attracted a growing army of loyal fans (aka Beau's Army) and established the company as one of the up-and-coming members of the Canadian and global craft-brewing marketplace.

Beau's is one of many craft brewers in Ontario attracting business away from major brewers such as Labatt and Molson. At the Liquor Control Board of Ontario , sales of Ontario craft beer climbed 46 per cent for the year ended Feb. 26, while overall beer sales rose a modest 4 per cent over the same period.

While Beau's may be different, it is not an overnight success story.

Mr. Beauchesne said the idea of starting a brewery began in 2004 when his father approached him about brainstorming new ideas for a business. At the time, the senior Mr. Beauchesne's textile business in Vankleek Hill, located about 100 kilometres east of Ottawa, was dying a slow death because of free trade and competition from overseas rivals.

After exploring the idea of moving the textile operations to Mexico or China, the senior Mr. Beauchesne suggested there was a real need for a brewery making high-quality beer in eastern Ontario. His son, a business planner with the Ontario government during the day and a member of a band at night, told his father that if he was really serious about the idea, he would quit his job, sell his house and move his family from Toronto.

Unlike many brainstorming ideas that never to see the light of day, the Beauchesnes worked on their business plan for two years, in the process, convincing family members to provide them with the financing to get started. In 2006, Beau's opened for business. Today, it sells about a dozen different types, including seasonal beers and its flagship Lug Tread Lagered Ale.

"Once we had beer into peoples' hands, investors came out of the woodwork," the younger Mr. Beauchesne said. "We were able to say 'no' to people who wanted to give us money. Once people could try it, it was no longer, 'this is the dumbest idea we ever had'; it was, 'this is really good beer.'"

Mr. Beauchesne said it took about three years before Beau's finally got to the point where he and his father could stop worrying about having enough money to keep the lights on and making payroll the next week.

"It allowed us to make decisions in a different way in a comfortable position," he said. "The way we approach what we do next is asking what will allow us to further our quest for creating a truly sustainable brewery. What will allow us to support the community more?"

Mr. Beauchesne said as much as he and his father would like to grow Beau's, they are not interested in growing for the sake of growth. Instead, he said it is more important to stay true to their goal of making great beer and being known around the world for what they do.

"We always wanted to be part of the world craft beer movement," he said. "In the past year, we were in France [for the Mondial de la Bière] Vancouver for the Olympics, and the Vermont Brewers Festival. We are working on projects with breweries around the world and we get to hang out with brewers around the world. We want to be known for what we are doing to help people to our province and show off."

Special to The Globe and Mail

Mark Evans is a principal with ME Consulting, a content and social media strategic and tactical consultancy that creates and delivers 'stories' for companies looking to capture the attention of customers, bloggers, the media, business partners, employees and investors. Mark has worked with three start-ups - Blanketware, b5Media and PlanetEye - so he understands how they operate and what they need to do to be successful. He was a technology reporter for more than a decade with The Globe and Mail, Bloomberg News and the Financial Post. Mark is also one of the co-organizers of the mesh, meshUniversity and meshmarketing conferences.