Most small businesses looking for $2 million in venture capital wouldn’t turn away a rich investor who offered to plunk down the whole amount. But Calgary’s Village Brewing did. Why? The founders felt he wasn’t the right kind of investor.
Village Brewing was created a year ago to tap into Alberta’s growing thirst for premium suds. Right from the start, the seven beer-loving founders (including four ex–Big Rock Brewery execs) were as crafty about choosing investors as they have about making beer. For starters, says co-founder Jim Button (formerly vice-president of community and corporate affairs at Big Rock), only “beer barons” need apply.
Button was actually sitting in a pub when the concept first hit him. “I had this vision that if we are going to build a brewery around community, then I want more than just us founders involved in it,” he says. Originally, he thought about seeking 1,000 local investors or “beer barons,” but scaled that down to 50 for manageability.
The brewery produced its very first batch of Village Blonde—poured into brown, jug-like, two-litre “growlers”—just last December. Since then, it has managed to get its product stocked in 22 liquor stores and 55 restaurants. The owners plan to restrict distribution to Calgary and keep production limited to 20,000 hectolitres (compared to 230,000 hectolitres at Big Rock, Alberta’s largest craft brewer). Most important, they have committed to live by the brewery’s slogan: “It takes a village to raise a beer.”
That means all beer barons must be people known for engagement in the arts, music, entertainment and charitable scenes in Calgary. “We went out and hand-picked people,” says Button, adding that the founders spurned offers from banks, financiers and oilmen solely interested in the venture’s financial prospects. They ended up selling limited partnerships representing 40% of the equity in Village Brewing to 50 barons at $40,000 a pop.
Cam Brander, 43, a paramedic, was one who got the call about becoming a beer baron. Passing around bottles of Village Wit and Village Blacksmith at a backyard party, Brander says he noticed Calgarians were developing a taste for lovingly and locally made craft lagers, ales and hefeweizens. “I think it’s a trend that’s about to blossom here.”
Button is confident it will, especially considering Alberta, with just four companies that could properly be called craft breweries compared to around 40 in British Columbia, has plenty of untapped market share to slake. He predicts that in three years the beer barons should be getting double-digit returns on their investments.
That doesn’t include another tasty dividend: a guaranteed 48 free beers a month. But there’s a catch; barons are expected to share at least half those beers with friends and colleagues in neighbourly bottle-to-mouth promotion. “They are also our test marketers, our ambassadors,” Button says.