Thursday, July 7, 2011

Paddock Wood Brewing Co.

how not to start a business – and yet still be wildly popular

Starting a business is rarely straightforward, but even I was surprised by how many unexpected events have shaped the history of Paddock Wood Brewing Co.

I’ll have to make my own
In 1992, Steve Cavan and his wife, Kathleen James-Cavan, moved to Saskatchewan from Ontario. Kathleen had been hired as an English professor at the University of Saskatchewan and Steve was hired as a lecturer in Classics and History. Things were looking bright for the two former graduate students, but Steve had one big problem – there was no good craft beer in Saskatchewan. The only solution was to brew his own.

Using his well-honed research skills, Steve applied himself to learning how to brew beer. And that’s when he ran into the next dead end. He needed to buy malt, hops and yeast, but they weren’t available locally. Steve’s current favourite was British ale, so he contacted Paddock Wood, England, hoping to buy hops directly from the local cooperatives. But the smallest order they’d accept was for 1000 pounds, and Steve was only using about 5 pounds a year at that time.

Steve eventually found a US supplier who would sell to him – as a home-based business. So, in 1995, Steve set up a mail-order business supplying other home brewers with supplies.

Mail order business
Business was slow at first, but it really took off in 2000. By 2005, Steve was selling $12,000 a month in grains and Canada Post was doing daily pickups. But then the bottom fell out of the market. Large wholesale companies, such as Cargill in Western Canada, started selling oats, grains and malt directly to the public. By 2007, Steve’s sales of grains had dropped to $1200 a month and Canada Post was no longer doing pickups.

Steve pulled the plug on the mail order business, but Paddock Wood was still alive and well under a different format.

Home brewing kits
Steve had considered closing the business in 1999 when sales were slow, but a local customer didn’t want to see that happen. They became partners and opened a storefront in the Avalon Shopping Centre in 2000.

Steve purchased a secondhand 10-gallon brewing kit and began experimenting with recreating beers from around the world.

Steve decided to cater to the thousands of customers who make beer from kits. Customers could name any beer in the world. Steve would source the ingredients, research how to make it, and put together a kit. Customers could now make any beer they wanted, and the kits became popular.

But Paddock Wood had such a small brewing unit that they could only make 2 kits at a time. They were working triple shifts, but it was crazy. They needed to move to a bigger space with bigger equipment. But they didn’t have the money.

Again, Paddock Wood turned to its supporters. The company incorporated and raised enough money to move to a larger facility in Sutherland. They purchased a 300-litre system and could now make 12 kits at a time. But that’s when they hit the next roadblock.

Rules and regulations
Steve phoned Revenue Canada on an unrelated matter and discovered that it didn’t make a difference whether you were making wort (unfermented beer) or brewing beer. You needed a license.

If that was the case, Steve decided he might as well start bottling and selling beer. But that was easier said than done. The Saskatchewan Liquor and Gaming Authority (SLGA) had no regulations covering micro breweries. You could set up a brew pub, but brew pubs could only sell from their own location – the beer couldn’t be distributed through SLGA.

Finally, in December 2004, Paddock Wood obtained permission to sell their beer through SLGA. But could they keep up with demand?

Let’s make more beer
Paddock Wood invited more shareholders on board and bought a bigger brewing system. In 2007, they installed a bottling line. Before that, the operation had been completely manual, bottling a maximum of 24 bottles an hour.

Over the past few years, Paddock Wood beers have begun retailing in Alberta, British Columbia and Ontario, but distribution continues to be challenging. Each province has different regulations. SLGA is government-regulated, providing a level playing field for breweries of all sizes, but they make arbitrary decisions as to which beers they will carry.

Bottling beer is extremely labour intensive, but it’s hard to get Paddock Wood’s beer on tap in bars and restaurants as the large breweries have cornered the market. Small kegs have proven popular, however, for house parties and weddings.

Looking ahead
Paddock Wood is once again finding it difficult to keep up with demand. Last year, a single batch of Mai Bock sold out locally in 6 weeks. This year, a triple batch sold out in a little over a month. SLGA asked for more, but there was none left.

Steve believes that 2011 is the year that Paddock Wood will really take off. By this time next year, he hopes to be building a new brewery with a much larger system and a separate bottling room. And he’ll retain the current facility and use it to make lambic beers (a Belgian style of beer that undergoes secondary fermentation providing a very distinctive flavour).

Research and experimentation
Craft beers, such as Paddock Wood’s, are a combination of 4 essential ingredients – malt, hops, yeast and water. The art of brewing lies in finding the right balance between the hops and the malt and the right temperature. You can tweak the taste and the mouth feel of the beer by using different kinds of malt, yeast and water.

Steve loves experimenting and reproducing beers from other countries and past centuries.

Kolsch is a light summer ale from Cologne, Germany. Cal Soloway, a local home brewer, has studied and won awards for his Kolsch beer, and he gave Paddock Wood the low down on every detail, from the water to the temperature. Paddock Wood purchased the same yeast that is used by a Cologne brewery and a computerized program replicated Cologne water.

In the 1700s, brewers in England roasted the malt over an open fire. When he was developing the Black Friars ale, Steve replicated this process by putting a tray on his barbecue at home. When the grains started to pop, he knew it was roasted.

Sherbrooke Liquor Store in Edmonton has commissioned a series of 12 beers dedicated to 12 gods and has commissioned a famous cartoon artist to design the labels. The first beer in the series is the Baltic Porter. Steve plans to introduce the second in the series for Christmas. It will be a Belgian triple ale. He plans to add some grape juice to the mix and thinks it will work well as Belgian yeast tends to be fruity.

Try something different
There are many stereotypes surrounding beer: it’s a man’s drink; it’s only good in the summer to quench your thirst – taste doesn’t really matter.

But the stereotypes don’t apply to craft beer. There are so many distinctive flavours, and they need to be tasted before you can tell whether you will like it or not. I really enjoy London Porter, which was a complete surprise as I thought I would only like light beers.

Drop by the Paddock Wood store at B1, 116 – 103rd Street East and pick up a variety of different beers. Email Steve at paddockwood@paddockwood.com if you would like to participate in the home brewing and tasting club, which meets monthly (except during the summer). Or sign up for a tour of the brewery.

And, above all, enjoy the flavour of natural, locally-brewed beer.

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