Nick Kozak for the Toronto Star
Case Studies

Craft brewery looking to build a dynasty lineup of beers

Vital Stats
Name:
Left Field Brewery
Owners:
Mark Murphy and Mandie Murphy
Address:
36 Wagstaff Drive, Toronto Ontario
Contact:
647-402-3449, mandie@leftfieldbrewery.ca
Field:
Microbrewery
Employees:
2
Active:
1 year
Offering:
A lineup of baseball-inspired brews, including Eephus Oatmeal Brown Ale, 6-4-3 Double IPA and Resin Bag IPA

Entering Ontario’s craft beer market is no day at the ballpark.

Coming up with the perfect recipe, a catchy name, an appealing logo, as well as the funds for a contract brewer to bring it to life, and then delivering it to local consumers is only just the beginning. From there it’s still a matter of testing the market, meeting minimum volume requirements and accessing highly competitive retail channels.

But that won’t stop industry newcomers Mark and Mandie Murphy, founders of Left Field Brewery.

“It goes without saying that the beverage alcohol industry is a very fun industry to work in,” says Mandie.

“I think it’s also fun to make a product where you make every decision that goes into it,” adds her husband, Mark.

The couple first met at Brock University while Mark was studying accounting and Mandie was pursuing a communications major with a specialization in media.

Mark went on to earn his CA designation and spent five years as an auditor before deciding he didn’t want to work behind a desk. He graduated from the Brewmaster and Brewery Operations Management program at Niagara College in 2012 and spent a year at Molson learning the tricks of the trade, before pursuing his dream of crafting his own product.

Mandie, meanwhile, worked in a number of marketing and communications roles, including managing a portfolio for a major wine and cider company. Eventually she had to switch into packaged goods, avoiding a conflict of interest as she helped her husband launch their own alcohol brand during evenings, weekends and the occasional vacation day.

Mandie eventually left her job in January to help Mark market and sell a lineup of baseball-inspired beers full time.

Her experience in the wine industry taught her the importance of branding for alcohol products, and the self-described “huge baseball fans” believed they knocked it out of the park.

“Really high quality beer is table stakes, that’s what everybody’s doing, so you need to set yourself apart and be iconic and memorable,” says Mandie.

That catchy theme has landed Left Field’s products on taps in more than 50 bars and restaurants in southwestern Ontario, primarily in downtown Toronto.

“Last month was our first month we could compare year over year sales, and we more than doubled them,” says Mark.

Yet in spite of the positive reception, the company is yet to turn a profit.

“At the end of the day beer is a volume-driven business, and we don’t have huge volume,” Mark says.

Turning a profit wasn’t the goal just yet, explains Mandie. Instead, Left Field was determined to build brand awareness before taking the next step: building their own brewery.

The couple signed a lease in February, using their own capital as well as outside financing, and plans to open a 6,000 square foot facility in the heart of Leslieville in early 2015.

Building a brewery is risky in any market, but craft brewers in Ontario are competing in a whole other league. That’s because there are only two distribution channels for packaged products — aside from building a retail store within the brewery itself — and one is hardly an option for industry newcomers.

The Beer Store charges a base listing fee of almost $3,000, plus an additional $230 for each product type. “You can imagine even doing distribution in 100 stores how quickly something like that would add up,” says Mandie, adding that there are service fees, bottle handling fees, and recycling fees as well.

Furthermore, since the Beer Store is owned by the three of the world’s largest, foreign-owned breweries, “you’re essentially paying your competitor to distribute your product for you,” says Mandie.

That makes the Beer Store largely inaccessible to craft brewers in Ontario, leaving the province’s roughly 60 microbreweries and their 300 brands competing for limited shelf space at the LCBO.

“Not every craft beer product can be on (LCBO) shelves,” says Mandie adding that they won’t know how much shelf space Left Field products will earn until the brewery is up and running.

“You only get one chance at a first impression with the LCBO, and we want to get off to the right start,” says Mark. “They track the sales and have certain targets for all brands, so the last thing you want is to launch a brand and it doesn’t move so you get de-listed.”

John Hay, president of Ontario Craft Brewers, a trade association of which Left Field is a member, says that retail access is a common obstacle for craft brewers in Ontario.

“(The Beer Store) is not really designed, nor is the LCBO to some extent, for the starting brewery, and there’s an awful lot of them right now,” he says. “There’s a lot of people who want to sell in that system, so the competition is tough.”

As the Murphys move forward on construction of the Left Field Brewery, Hay advises them to continue making appearances at festivals, signing contracts with local bars and restaurants, and building their brand presence.

“They need to keep their beer in front of the consumer as much as possible and stay visible,” he says. “They’re good at doing that, and I expect it will continue.”

EXPERT VIEWS

As Interviewed by: Rosemary Westwood

Left Field Brewery has challenges ahead in this saturated market. As with any consumer brand, success comes from location, location, location. This can prove difficult when the two main distribution channels are owned by powerful players: The Beer Store (a foreign-owned partnership between three mega brewers) and the LCBO. That aside, many craft brewers have gained enough market share to turn a profit. Taste is a factor, but success still comes down to branding and distribution. Being listed at the Beer Store is a must. Left Field needs to pay the price and then contend with new challenges: the top 10 sellers displayed at the front of the store are owned by those three international breweries; the wall of smaller labels requires that your label stand out. The baseball theme works as an innovative graphic but needs to be more dynamic as a beer label. The firm's website is its main promotional tool. It needs to be more distinctive, exciting. Videos of people enjoying the beer at the restaurants would help, as would an ability to search pubs "by geography.” The restaurants may even partner up for cross-promotions. Drinking is about excitement, and the current excitement is the World Cup. Is the Left Field strategy too niche focused? Time will tell.

by Steve Tissenbaum

Microbreweries are all over the place. Everyone’s drinking them, they’re huge in all the pubs. And distribution is a big problem for every microbrewery, so Left Field Brewery is not alone in that. It’s also a major step to open their own brewery. That’s going to be a huge shift, and a huge capital expenditure for the first year or two. Once their volume is up, the LCBO is a better possibility for sales than the Beer Store, but you do need to build brand awareness first. You want to pinpoint your entry when you’re selling enough volume to impress the LCBO. The good thing is they’re setting up the brewery in trendy Leslieville. So concentrate on that neighbourhood to build the brand, have Left Field Brewery associated with Leslieville. Sign contracts with the local pubs, start sponsoring pub crawls, donating T-shirts or a free pint. That gives Left Field access to customers and to pubs that don’t carry them yet. They’ll also be building the brand with people working in Leslieville, especially the film industry. On the baseball side, sponsor a local Leslieville team. It’s a long shot, but maybe they can support a Blue Jays charity, or team up with an individual player. Once they exploit those branding opportunities, that should help boost sales and get them on store shelves.

by Deirdre Fitzpatrick

As Mark and Mandie know, the beer industry is very competitive. It is also capital intensive. Building a proper brewery that is scalable is expensive and you also need plenty of working capital to absorb unknowns and seize good opportunities when they arise. Left Field Brewery is doing a good job of getting on tap at bars and restaurants, and getting in front of customers at local festivals and events. Once people try the beer they need to be able to access it conveniently. That means penetrating local LCBO and Beer Stores. For sure it is problematic that the Beer Store is owned by three foreign-owned breweries. Nonetheless, that’s where the majority of beer in Ontario is still sold. While listing fees feel expensive, listing in a handful of local stores might make really good sense. Do the numbers here. LCBO is a strong supporter of craft beer and they want to work with breweries that have a good plan and are willing to support their brand growth. Be proactive and learn how the LCBO works. Also bring retail staff to the brewery. They love meeting the makers. Ontario craft brewers have just 4 per cent of the market. There is plenty of room for growth, but the competition is real. The winners will have a good plan, be well capitalized, and be in it for the long term.

by Gary McMullen

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