Canadians love craft beer. Small breweries bloomed in numbers from 310 in 2010, to 775 in 2016, and they continue to grow. Breaking into this booming market can be tough with so much competition.
We spoke to Steve Jennings from the Vancouver-based venue and event company Jennings Hospitality & Culture about his newest venture East Van Brewing Company. Find out how smart branding, a solid business plan, and our customizable app have all helped him to tap into the craft brewing market.
Why do you think craft breweries do so well in Vancouver? Is the industry reaching saturation point?
“People here in Vancouver are artists; whether they’re painters or musicians, there’s something special about people from Vancouver, such diversity. Craft beer is an attraction for them, they want something organic, new, flavoursome and local. The people here are the reason that craft breweries have been such a big success and have grown so quickly.
“East Vancouver (or ‘Yeast Van’) originally had breweries along Brewery Creek. Now there are two pockets. There are seven or eight craft breweries in that original area around Main Street and there’s also an area on the other side of 1st where we (East Van Brewing Company) are based near Strange Fellows Brewing, Parallel 49 Brewing, Bomber Brewing, Strathcona Beer Company and Off the Rail Brewing.
“The market is nearing saturation but there’s still room. We built knowing that we would have sales right out of the gate, we had a simple business plan. There are free houses and tied houses here in Vancouver, you are allowed a maximum of three tied houses. This was put in place to prevent the corporate giants from buying all the pubs and putting their own beer in them. I have six pubs but the law states that I can only supply three of them from our brewery.
“I’m in business to try and make money. I put everything I own on the line whenever I open a new place because I have a passion for the business I’m in. Part of my problem is the passion I have for the industry, that’s what gets me into trouble sometimes. To try and get our product out there and make some money while doing it, we wanted to create a loyalty program to encourage people to come back.
“With our new East Van Hospitality (EVH) app, customers can sign up at any of our venues and immediately put money on their app to purchase whatever they like — or they can send it to friends and family like a gift card. The goal is to get people to load money onto that app so they become a regular to our venue, like a loyalty program with rewards.
“And in return for that loyalty, we will offer incentives; i.e. come into any of our venues, load $100 on your app, and we will send you an email saying ‘Congrats, you can get a free growler at East Van Brewing Company.’ Of course, when they come to claim it we will offer the customer a 24oz tasting flight so they can choose what to fill the growler with. That’s $10 worth of beer, plus the $7 growler, but it’s free for them when they sign up and load credit onto the app.
“The new EVH app will let us contact customers and target people to offer them rewards. We can say ‘Come into East Van Brewing Company this weekend and get 10% off merchandise’ or ‘Head to Cafe Brixton this Saturday for free brunch’. It lets us give the rewards back to our loyal customers.”
“I started off working at Earl’s in Surrey as a waiter when I was 18; Earl’s was a new thing back then. I wasn’t old enough to bartend but I couldn’t wait to do it. Andy Agnesini, who is now my partner at EVBC, was one of the owners of the Ozone nightclub next door and he asked me to work for them as a bar back when I was 19. It was a big difference to go from floor service to a high-energy nightclub. It didn’t take long for me to think; ‘I’ve got this — I’m not picking up anyone’s ice anymore, I want to bartend’.
“I grew up in Surrey and had a big group of friends that always wanted to come to the bar, so I did well with tips and worked at Ozone for two years, moving up to management. I went on to manage a few bars with Andy in Maple Ridge, Kelowna and then back to Surrey. After eight years of managing, I had a taste of ownership but I was still pretty young and didn’t make a lot of money apart from my tips.
“I met Jeff Donnelly, who owns the Donnelly Group in Vancouver. We actually went to high school together. His dad was in the hospitality/hotel business and he went to the island, so we were separated for many years. At the time I had gone complete circle; at 26 years of age I was back at Ozone and was taking my pilot’s licence and wondering what to do with my life. Jeff came into the bar and it was amazing to see an old friend. He told me he had just bought Bimini’s on West 4th and when I asked if he needed help, he said he would love some.
“I left the Ozone and went to work with Jeff, he knew I was hungry and he and I went on to become business partners. We opened and managed another five locations together.”
How did you make the move from restaurants and nightclubs to owning your own bars?
“In about 2008 I left the Donnelly Group and went and did some consulting in the hospitality industry. I acquired a liquor store and then ended up buying my own pub, The London Pub, and opened it in late 2010.
“My parents are British and immigrated to Canada for work. So when I saw the (then) London Hotel was for lease, it was a no-brainer. My business partner had a daughter named Brixton, which is also a neighbourhood in London, UK, so we named our cafe after her. Then we continued on with the English names with the Manchester Public Eatery and Two Lions Pub.
“We expanded quickly and I had six locations; five being pubs and one being the cafe. By 2012 I knew the brewing industry was starting to warm up, and I could see it was starting to snowball and gain some traction. I was sitting at a table at the London Pub with a buddy of mine, Andrew Harris, and we started talking about names. East Van Brewing Company came up, and I instantly registered the name. I wanted to open a brewery but I didn’t know when or where or how.”
What kind of challenges did you face with the new opening?
“Andrew had been in the brewing business so he knew a lot about it, so I was always asking him questions. In 2015/16 we started contract brewing using a company out in Kelowna, and started using the London Lager brand.
“In late 2016/early 2017, we signed the lease on 1675 Venables Street and started construction on the brewery. James Labbe is our brewmaster. He found me; he had his ear to the ground and found out that we were opening a brewery. We had three meetings and hit it off every time. He is a fantastic guy and he comes from a beer background at Deep Cove Brewers and Steamworks. ”
“I thought, when I hired him, that we would be opening the brewery soon after. Well, he has been on my payroll almost one year before we opened, but in that year we did try a lot of homebrew beer. I would say to him ‘This tastes damn good but can you do it on a massive scale?’ Just joking, I had all the confidence in him.
“It took a long time to open up. We finally got our licence to start manufacturing in September 2017 and then we started right away with a brew or two a day to start to build up inventory, as we had to sit on it while it fermented. On November 6, 2017, we opened the doors to the public.”
Brewing up a business plan
How do you turn pints into profits? We’ve pulled some beer-based business stories to help you tap into the craft brewing market.
- Selling direct to consumers can help craft breweries to yield more profit per pint — bars might buy a keg for $200 but brewers can sell that keg in a tasting room for $700.
- Does size really matter? Innovation and authenticity are giving smaller breweries the upper hand when it comes to marketing themselves to consumers.
- How do you turn your hobby into a business? BC Business takes a look at the serious side of starting a craft brewery.
- Cheers! The Growler is a Vancouver-based print publication (and website) that acts as the ultimate guide to BC’s craft beer scene.