Some Sad News… No More Pretty Things for BC

Hello all,

Unfortunately RainCity Brands will no longer be distributing beer from Pretty Things Beer & Ale Project.

Dann and Martha, the owners at Pretty Things have decided that it no longer makes sense for them to send beer all the way to BC when they are so busy at home in Massachusetts, and their neighbouring states. They currently distribute to only MA, NY, PA, RI, so we were the only company west of Pennsylvania to be working with them, which was quite a nice little feather in our cap. It was pretty cool while it lasted, but they have simply grown too much and become too busy to be sending beer all the way to the West Coast.

Pretty Things was the first brand I got approval from when I started this company 2 years ago, so they are very special to me personally, and I owe Dann and Martha much thanks for helping me get started. I will miss having their beer in portfolio to say the least. St. Botolph’s Town is probably the perfect beer for me, so selfishly, I’m a bit pissed I can’t have that any more!

I know several of you have these beers on your menus, and will miss them just as much, or that you simply just enjoy picking them up at a bottle shop. My apologies for any inconvenience this may cause. I had expected this to occur one day, just not yet!

On a slightly more positive note, we will have some new and really exciting breweries joining our portfolio in the next few months, and I will be sure to keep you all posted on that.

Again, please join me in wishing Dann and Martha and the rest of the Pretty Things team all the best for their incredibly bright future.

-Adam

Finance Minister Kevin Falcon Presents the 2012 Budget

A recent Liquor Distribution Branch announcement told us all of the impending sale of the LDB’s Distribution Centers to the private sector. Of course this has caused much speculation about motives and about potential suitors. I’ve seen a lot of misinformation, and misunderstanding about what is happening and what it might mean. I’m not a journalist, I’m a business man, but my business is craft beer, so I feel like I know a thing or two.

First, let me be very clear that the Liberals aren’t talking about privatizing the LDB! This is simply about selling the two distribution warehouses that are in Vancouver, and Kamploops – these two facilities are huge and they are the point from which most alcohol moves around the province. Under the proposed budget, the LDB stores, and the oversight of liquor sales in BC would still remain under the control of the LDB.

I am proponent of privatization in the strictest sense, for just about everything. The main reason I feel this way is that a government’s role shouldn’t be to run businesses. It should be to govern. Secondarily, should the industry in question be in the benefit of society (and thus be allowed to exist at all) the free market is the best way to deliver fair value to the people in the most efficient way possible.

I do however have a sense of cautious optimism, perhaps even just straight up scepticism, towards this announcement. While you’d be right to think privatization would be a great thing, I feel that the benefits of a free market I’ve listed above are only realized when the industry is wholly privatized. This particular change is simply about taking components of a bureaucratic, highly-regulated, and far-from-private industry and outsourcing one of those parts to a private operator. This is not privatization of the industry, it’s just outsourcing and it could jeopardize the growth and possibly even the sustainability of the Craft Beer industry, because all other stakeholders are effected by this and they will have no choice but to work with these new partners.

Frankly, most BC wine and beer lovers don’t understand what these warehouses are. And the average consumer is completely uninformed.

These warehouses are a critical part of a distribution network that is actually relatively good for consumer choice, though far from perfect. It is good because under our current system (which I remind you, is NOT about to change), they allow agents like myself (we are the ones that actually import and market most of the cool shit you drink) to economically sell beer, wine or spirits hundreds of kilometers away from major urban centers, such as in small towns like Prince George. Because every licensed establishment, be it a bar or LRS store orders significant amounts of product through the LDB, agents can simply leverage these economies of scale and load our products onto consolidated pallets with other products through the LDB’s centralized warehouses in Kamloops and Vancouver – the warehouses in question. The existence of these facilities makes it feasible for an LRS in Vernon to order one case of Belgian Lambic, for example. I might make $5 dollars on such a transaction. I can’t speak for all agents, but if I had to drive that case out there from Vancouver myself it would not be cost effective.

If these warehouses get bought up by some larger firm, let’s call them XYZ Company, then XYZ company will expect to make a profit, as they should. But what leeway will XYZ have to determine how this profit is made? Will they be required to follow the LDB’s current rules, and operate the same way the warehouses do today?

Currently, I pay $0.10 a litre to have my beers sent anywhere in the Province. That’s a flat fee that every Agent pays. But if that changed significantly, it would seriously hurt consumer choice by negatively affecting the revenue models of importers and thus limiting what product can be sold in private stores. Further, what if XYZ company determined that they only want to deal with product that came packaged in a certain standardized formats such as 24 x 355ml cans, or 341ml bottles? Would they have the right to say “no” to agents that import beer in 6 x 750ml bottles? Would they have the right to charge agents minimum fees for delivery?

Hopefully I am clearly illustrating a point. It is this: This sale should not conclude until all stakeholders have the opportunity to provide feedback into how this company will be required to operate. They cannot be allowed to operate as a truly private firm because they are not part of a truly private system, and it is a system which has many stakeholders without other recourse. If I’m forced to work with these guys, they should be forced to recognize my concerns.

On a more optimistic note, we can use this feedback process to provide the LDB with ideas for new rules. For example, perhaps we could allow for ‘rush delivery’ options for licensee’s, or enhanced, realtime reporting for agents. Currently it takes 7-10 days for a spec product to be delivered. Sometimes that’s fine, but in other cases the products may be desired immediately, but there is no possibility to make that happen. And agents cannot see who has ordered product when it happens. So while I will know that I’ve sold something, I have to wait until month end to find out where it has gone.

I see many people commenting that privatization is great or that we should be all for this. As I said in my second paragraph, I love that idea. But the reality is that the rest of the system is so bureaucratic and inflexible that should these warehouses be allowed to squeeze the little guys, then we will have no other recourse. We need to act now, while we have a voice and before any damage is done.

If the whole industry was privatized then I could care less about who owned the biggest distribution warehouses. If it didn’t make sense for me to work with them I would deliver my own products as I saw fit, to whomever and where ever it made sense. I would sell my products to Whole Foods, and Organic grocers that want to support niche market products with a focus on sustainability, flavour and uniqueness (The LDB does not). I would leverage boutique shelf space in local delis and corner stores whose owners want to do something different than the big chains. But I cannot do those things, even with these proposed changes. That Utopia is far, far away, but it’s what we should really be striving for.

-Adam

Day 3 - Uneventful day in Bruges. No real beer business, just touring around (first time there), although I did have a few beers at the famous t’ Brugs Beertje. The most eventful thing that happened there was that I got offered a tour of the cellar. However, it wasn’t offered by the ownership, but rather a very ‘friendly’ local man.  And he didn’t want to show me beer.

De La Senne Beers

Day 4 - From Bruges, we booked a very cheap hotel near the Grand Place for our return to Brussels. Across the street is a building called Studio 2000 which I assumed immediately was most certainly a brothel. A brewer later confirmed this for me, but since I don’t know how he acquired that information I won’t name him.  Brussels, like any major city has it’s sore spots and it’s highlights. We were in the former.

This day we saw every brewery in Brussels. There are only two. Our first stop was De La Senne, to visit Yvan De Baets, and Bernard LeBoucq. This brewery is new, and fully functioning, but it has the unmistakable feeling of a place ‘in progress’. “The red paint on the floor is where the cafe will be” said, Bernard’s wife Rosanna. The barrels were yet unfilled and should be soon I’m told (with the brewery’s Saison and a Flanders style sour beer).

Taras Boulba was exceptional as always, and I had my first real glass (read, full glass) of Zinnebir today. I’ve only ever tried it previously at various tastings in the US and always tasting only a small amount. More interestingly, Yvan poured some Zinnebir from their custom fermenters (see pics). Still cloudy and uncarbonated, it was remarkably different than the bottled beer with much more hop flavour and aroma, and of course a little of that sulfur nose that unfinished and unlagered beer often has. The fermenters are built to mimic open fermenters, and while closed are made much wider than they are tall as not to stress the yeast.

In the afternoon we went to Cantillon to meet up with brewer Jean Van Roy. The neighbourhood, Anderlecht was once considered a suburb, but it is really now just part of the downtown, only about 15-20 minutes from the Grand Place. Anderlecht is an almost entirely a muslim neighbourhood. I mention that only because I don’t think most people envision Cantillon existing in such a neighbourhood. But frankly, most of Belgium is unlikely to be quite what you expect coming from North America. More on that in a later post…

Jean Pouring a year 2000 lambic for us!

It’s famously known that there is a cat at Cantillon, named Le Chat (the cat) who keeps the mice away. But there is also a cat there named Bloemponch who prefers to catch mice in the vacant, grass covered lot across the street and bring them back to the brewery. With all the grains mice might eat, and visitors they may scare, live rodents aren’t good for business, but nor are dead ones sitting at the front door.  Jean explained, “Bloempanch” means blood pudding and it’s a very typical Brussels dish. It is mostly black and differs from the english version in that it has large pieces of fat dotted throughout (approx1cm cubed). I like blood pudding very much, so when Jean told me this I made sure I ordered it that night when Yvan De Baets from Brasserie de La Senne and I went to the restaurant of Alain Fayt, Restobieres. The cat, is black with white spotting. Hence the name.

Day 5 – In a town called Rebecq, about 25 minutes from Brussels is the only Gueuzerie in the French speaking part of Belgium in Wallonia. As you might know Gueuze is traditionally, or perhaps famously, Flemish. Pierre Tilquin is the proprietor and this year is the first year he has had any product in bottles. His Gueuze was actually the first thing I tried in Belgium, at Moeder Lambic Fontainas and it was exceptional. Technically the beer I had was different than the bottled version, which is 6%. The draft version contains March beer from Boon, which is a lighter wort (3.5% after fermentation, I think) and thus a lighter Gueuze is produced. But it’s basically the same thing as the Gueuze. The complexity on the Gueuze could be rounded out a little with the addition of 3 year old lambic, which is absent in this years version because Pierre simply doesn’t have enough 3 year old lambic to have used it. Pierre is using lambic from Boon, Lindeman’s, Girardin and Cantillon. It is the Cantillon that will differentiate his product, as it’s not used in a similar blend. Omitting the Cantillon would essentially make his blend the same as 3 Fonteinen. Pierre used to work at Cantillon and 3 Fonteinen.

That’s it for now… more pictures below…

Day One: We arrived in Brussels on Saturday morning,  9am local time, and were lucky to get situated in our hotel right away. After a quick shower we stopped first at a touristy coffee shop near the Grand Place for a cappuccino and a croque madame, which aside from being Sarah’s first taste of anything in Europe, were unfortunately nothing special at all. Then it started to rain, which is fine except it was already quite cold and all we’ve packed are t-shirts and sundresses. The sundresses are Sarah’s… not that you should be judging either way…

After breakfast we took a much needed two hour nap that turned into a four and a half hour nap, woke up, and headed out to Moeder Lambic. I’d been dying to go here because it was recommended highly, mostly by Belgian brewers that I work with. The menu consists mainly of De La Senne, Cantillon, and De Ranke beers – fine by me!

Moeder Lambic Fontainas

Moeder was fantastic, I highly recommend it and I will return again when we’re back in Brussels – there are two locations, by the way, and we went to the one nearest that Grand Place, Moeder Lambic Fontainas. Moeder has several Cantillon beers on tap, served very appropriately at cellar temp. The Rose de Gambrinus was spectacularly fresh and  in a way that imported Cantillon can probably never quite be. Of course, I am drinking this 10 minutes from the source. The raspberry flavour is so fresh and pure that I expected to feel the crunch of little raspberry seeds every time I took a sip.

Sarah’s favourite beer of the night was Bink Bloesem, which is basically a dubbel with some pear juice, made by Brouwerij Kerkon from St Truiden. A fantastically made beer, as was the Kerkom Adelardus Dubbel. I also had my first taste from the new Gueuzerie Tilquin, which was terrific. And just because, we also sampled a Cantillon Lambic (unblended), Taras Boulba, Cazeau Saison, and Troubadour Magma.

Day Two: An early rise to catch the train to Bruges, were we met Nino Bacelle of De Ranke, and his wife Christine for lunch at De Halve Maan in Bruges. We followed this with a tour of De Dolle Brouwers, a short drive from Bruges. Everything in Belgium is a short drive away.

De Halve Maan is a gorgeous place, right in the center of Bruges, it’s a much bigger facility than I imagined, and it must do a tremendous amount of business; Bruges itself is packed with tourists and the brewpub was one of the busiest places I saw in the town. We tried the Brugse Zot, a Belgian blonde ale, which was rather spicy, clean, typical, and not very hoppy. Apparently the bottled versions are filtered and pasteurized and thus not quite as good, but this was certainly a very nice beer.

The tour at De Dolle was something I had wanted to do for over a year, since Nino first suggested it to me. Nino tells me that De Dolle is essentially the first craft brewery in modern day Belgium, with brewer Kris Herteleer and his brother Jo having got their start as homebrewers in the late 70′s and opening De Dolle in 1980. Jo moved to South America to practice medicine and Kris now brews on Friday’s and Saturday’s, making some 40 batches a year, or about 1,000 hL.  They are open for tours only on Sundays, the English tour is at 2pm and the Dutch/Flemish tour at 3pm. The tour is conducted by the 92 or 93 year old mother of the brewer Kris Herteleer, which is in and of itself amazing. She whisks herself up and down the breweries staircases as she goes from room to room, always landing at a well placed stool, even once using the brew kettle’s ladder as perch for her next sermon. And she does preach; extolling the virtues of natural beer, the health benefits of hops, and the rationale behind the traditional methods used at the brewery.  For example, they still use a koelschip to bring the beer to 70C after boiling, and then using a baudelot chiller for the rest of the chilling. This is a type of heat exchanger that sends cold water through a curtain of pipes while beer is run OUTSIDE of the pipes, exposed to the air. (see a picture in the gallery at the bottom)

"Mom" by the Koelschip

This was my first time drinking the beers from De Dolle. All were good, some exceptional. My favourite was the Arabier, which is basically a dry hopped blond ale, superb in it’s simplicity and execution, followed by a 2008 barrel aged “Stille Nacht” which was complex, very strong, but purely delightful. We were also lucky enough to do a tasting of the Oerbier Reserva from 2005, and 2006. This is a barrel aged version of the Oerbier at 13% ABV, which is aged on wine barrels (Chateauneuf du Pape I think) for at least one year.

So far, Belgium is treating us very well!

Oh and, here are few more pictures:

With my trip to Belgium approaching I will be posting more about the breweries I visit, especially those that will be joining the portfolio.  Sometimes people ask about how why we have the beers in our portfolio that we do. So at the risk of explaining our incredibly top secret selection process (aka fortune, serendipity, divine intervention and dumb luck) I will do that. I think I’ll follow this up by posting a little more info about my (mis)adventures in running a company, as beer itself is one blog worthy topic, but the “Beer Business” is another altogether.

How we got our brands:

Cantillon: Cantillon was our first brewery. Technically, you need two suppliers to get an agent license, so that’s somewhat meaningless, but there’s something I like about the fact that Cantillon was the first brewery that said “yes” to RainCity Brands. When I was doing research about starting RainCity Brands I talked with Chester Carey at Brewery Creek, and he told me that Jean Van Roy was open to the idea of selling into BC when Chester had asked him previously. So I followed up via email. Done deal. Pretty damn simple, the rest is history, yadda yadda. It also helped that Gerry Erith, the manager at Brewery Creek committed to half my order on the spot.

Pretty Things: I was actually looking into starting a brewery, and it’s no secret that this is my long term plan. I wasn’t researching beers this particular day, as much as I was researching business models for breweries and I found Dann Paquette and Pretty Things. I called Dann and asked him about his business model (click here for that). He was amazingly helpful and he told me everything I wanted to know – he even told me his actual sales and expenses, and since I’ve seen him share those publicly at conferences. A month or three passed and I realized I couldn’t start a brewery yet, but I could start an import agency. I phoned Dann back, knowing that his beers weren’t distributed west of Pennsylvania and asked if I could bring them to BC. He said ‘yes’ too. Done deal. Pretty damn simple, the rest is history, yadda yadda.

So now I’m thinking “This is going to be easy. I call a brewery, and they agree to work with me (why wouldn’t they sell me product, right?)” This thought is hilarious to me today, but keep in mind, at this point I’d yet to actually import anything and I’d never sold a case of beer in my life, so I didn’t know what the hell was going on.

The fact is there are lots of reasons to say “No” to and importer in a foreign market. More on that later. But this means I got a lot of politely worded ‘No thank you’s’….are you sensing a segue????

Upright Brewing: My rebound brand. I got rejected by a brand that I really wanted as part of the portfolio, and it was one that I thought I was going to get (it went to another agent). I’ve since recovered, but in the depths of my rejected state I played on the internet for a few hours looking for a brewery that offered promise. I found Upright and called owner Alex Ganum. He was open to importing to BC so I drove to Portland that weekend to meet him and taste his beers. They were fantastic, and I’ve never looked backed. For the record I’m much happier that I got Upright than the other brand, and I wouldn’t ever trade it out for anything. But that’s how it happened, rebound style.

De Ranke and De la Senne*: These are grouped, here’s why. I was in Chicago for CBC 2010 and I was at The Bluebird with Dann and Martha from Pretty Things. I asked Dann to recommend a beer, and he said ‘Taras Boulba’. I loved it, and I made a quip 5 minutes later that I’d love to import this beer when someone from their US Importer, the Shelton Brothers, pointed to the Yvan de Baets and said “Go talk to him”. Same thing happened with De Ranke and brewer Nino Bacelle, I was drinking the XX Bitter at the next bar we went to and he was right there. Turns out Nino and Yvan are friends, and I spent much of the week with them.  Great beer, dumb luck.

*Brasserie De La Senne won’t be available in BC until the Fall/Winter due to the recent construction of their brewery.

Boundary Bay Brewery: Dustin Sepkowski. Dustin, long time craft beer/single malt-whisky slinger introduced me to Ed Bennett and Janet Lightner from Boundary Bay because he really wanted to get a cask up here for a festival at Central City Brewing, his current employer.  I was all over it because it’s not very often you get to import a local beer from another country (Bellingham is closer to Vancouver than Victoria is). Their beer is very well known up here, and very good to boot. Believe it or not, the Boundary Bay IPA is the first, and currently the only IPA in our portfolio.

We have a few other brands that we plan to add this year, so I may be able to add some more to this shortly.

The BC Government and the LCLB (Liquor Control and Licensing Board) have proposed some changes to the “Tied House” and “Trade Practices” policies that currently govern booze sales in BC. http://www.pssg.gov.bc.ca/legislation/docs/2011-lclb-tied-house-and-trade-practices.pdf

I’m not sure what most people will think of these proposed amendments. However, the status-quo seems not to be an option, and I’m very happy about this. I started RainCity Brands because I wanted to enter an industry I love, and ultimately earn the money to start a brewery (For those who might wonder about that: It’s WAY cheaper to start and agency than to start a brewery)

Essentially Tied House policies limit a bar/brewery/restaurant/agency owner from promoting their goods in another bar/brewery/restaurant/agency that they also have a financial interest in. This post prohibition holdover is intended to prevent giants such as Molson from buying bars and stocking only their beer. But it also prevents me from opening a restaurant that sells my own beer, and from opening my own brewery.

The “Trade Practices” policies essentially limit or prohibit breweries or agents from providing financial or other inducements to licensed establishments to promote their goods. For example, these prevent Labatt from buying taps and draft lines for a bar in order to get their products on tap. However, these prohibited actions occur all the time anyway.

The LCLB has issued a document (here) that outlines some options. They want our feedback. I am certain I don’t understand the issue as well as I could, but there are likely to be strong opinions on each side, and while most of my colleagues are likely for the changes, I’m not sure if we all agree on what options or what structure is best. In fact, I’m prone to believe that our respective self-interests will guide such decisions. But that’s the point, I suppose.

The tied house options are all feasible. I prefer Option 1 (hit the link above) which relaxes all restrictions on tied houses, basically fully allowing them in all cases. I feel this is in the best interests of consumers and business owners. While choices may be impacted as a result of corporate ‘muscle’ being flexed, the free market should indicate what if any ventures are successful. I would much rather not have the government telling me what businesses I can and cannot operate, and from my perspective as a consumer also, what I can and cannot drink. If Molson wants to open 100 restaurants or bars with cheap shitty beer on tap at a discount, please let them. My customers will not be affected, as they’ll never walk in the door. Conversely, such changes would allow me to open my dream bar, which would not offer shitty beer at a discount, but rather incredible beer at a premium, because that’s my prerogative and I believe there is a market for it. Neither is currently allowed, and I feel that’s a shame.

I certainly respect the opposing view, which is that such legislative change might cause large companies to dominate the market. However, this is already happening, and unless the laws are changed it is difficult for passionate small business owners like myself cannot step in and offer our alternatives. I suppose the point is this; if a large brewery or distributor can open a restaurant and sell their own beer so too can a small operator. It’s freer and it’s much fairer. If you can’t throw dollars around to compete, do something different and do something better.

I am an importer, so I’m lucky if I make a few dollars on each case of beer or wine I sell. I cannot go toe-to-toe with the marketing budgets of “the big guys” – their economies of scale are too great and they earned that advantage (I wish I sold billions a year). I cannot buy a bar new draft lines and I cannot offer a bar $10 for each case of my beer they sell. I don’t even make that much myself.

While I’m concerned that a limit on trade practices will initially cause licensees to ask me for more incentives, it won’t matter in the long run. I simply don’t have to compete in their game. Freeing the market and relaxing the rules opens up the field. I can blaze my own trail. I offer better products. I offer great wine and beer, and they offer mediocre wine and beer, sometimes down-right crappy wine and beer.

Such changes WILL make it harder to win in this business. But ‘harder’ encourages innovation. ‘Harder’ makes us better. If the big guys want to slug it out with marketing, the small guys can pick up the slack by making better product and exporting it to other areas too. There is always a way. I just hope that we pave a path that is mostly free of government-imposed obstacles. I can deal with the rest of it.