Business Innovation In Times Of Crisis

Small Business Canada

Justin McKellar is the general manager and brewmaster at Equals Brewing Company – a London-based contract brewing operation that creates craft beer, spirits-based ready-to-drink products, cider, non-alcoholic beer, and the newly launched Bangarang hard seltzer. Justin brings a vast amount of experience to the position, having worked at both Molson and Labatt Breweries while earning his Bachelors in Biochemistry from the University of Waterloo.

From there he traveled to Edinburgh to obtain a Masters in Brewing and Distilling from Heriot-Watt University where he developed a focus on quality and productivity. Upon completing his education, Justin spent the next decade working in multiple Canadian breweries in both packaging and distilling capacities. Today, Justin works to deliver high-quality products and build repeatable processes that ensure Equals Brewing Company is a world-class brewing facility.

Throughout your professional career, you’ve worked with several different breweries. In your expert opinion, what would you say is the number one selling factor that many brewers have in common?

I wouldn’t say I’m an expert at anything, but I have been lucky enough to work in a great industry for over 12 years. Most of my experience stems from the operations and brewing side of the business. It’s the sales and marketing side that bring different aspects of the brand story life and connects with the target customers. At the end of the day, beer has been enjoyed for millennia, and there is a rich history of the craft and art of brewing. The beer culture in Canada means that people are interested in knowing where their beer is made, where the ingredients came from and more recently, the name of the brewer who made their beer. Leveraging these factors in the brand story is a common factor I see across many breweries. 

What sets Equals Brewing Co. apart from other brewers? What gives them a competitive edge?

We are a contract brewing manufacturer – that means we provide high quality, reliable brewing for our Canadian and international craft brewing partners. We do everything from contract and partner brewing to co-packaging. Thanks to our experienced management, brewing team and state-of-the-art equipment, we have the capabilities to brew any beer style as well as match recipes from a client’s current brewery. 

What would you say is the biggest challenge that many brewers face and how can they overcome these challenges?

One of the biggest challenges is keeping up with the changing tastes and demands of consumers. Like anything else, the beverage industry goes through periods where certain styles of beer become more popular than others.

To keep your brand top of mind, breweries need to adapt their offerings to appease changing tastes. Many do this by innovating constantly and being able to scale successful seasonal brands into flagships. We support our brewing partners by utilizing our 3.5hL Pilot system to help customers create unique seasonal offerings. 

Recent studies have determined that beers sales are seeing a decline as the consumer is now leaning more towards low carb, low sugar and low-calorie drinks as they are now more health conscious. How is Equals Brewing Co. responding to this new change in the consumer market?

We have definitely noticed a shift when it comes to the types of beverages consumers are drinking. The younger generations (Millennials and Gen Z) are the ones driving the surge in demand for ready-to-drink alternatives to beer. In seeing the potential in this market segment, Equals Brewing Company decided to launch our own hard seltzer called Bangarang. 

The brewing process for Bangarang involves an ultra-purification step that separates the alcohol produced during the brewing process, then mixes it with seltzer and all-natural flavourings, resulting in a premium hard craft seltzer with a clean finish. 

Currently, Bangarang is available exclusively at the Beer Store in three flavours – Mango, Lemon Lime and Blue Raspberry. 

Beer alternatives such as ciders, coolers and seltzers have seen a huge increase compared to previous years. Do you believe this new change in the consumer market will last or will beers come back on top once again?

Beer alternatives like hard seltzer aren’t going anywhere anytime soon. The LCBO has reported a 42 per cent increase from last summer to this summer. Millennials, who we know are one of the main demographics driving sales of hard seltzer, make up 27 per cent of Canada’s population. So, with a strong demand from one the largest generations in Canada, it makes sense that hard seltzer is here to stay. I expect every large craft brewer and national brewer to have a portfolio of ready to drink beverages by 2021, including hard seltzers, teas, and other ready to drink options.

We’re excited to have Bangarang as part of our portfolio and have seen a very positive response from consumers. Since we’re local to London, ON, the community has been very supportive, and we’ve been gaining traction as we expand across the province. We are now available in 350 Beer Stores across the province.

On a final note, how do you see the brewery industry evolving within the next five years? What are some of the changes that we should be on the lookout for?

As millennials mature and Gen Z comes of age, I would not be surprised to see overall beer numbers to remain stable or fall slightly, but within the segment the craft category will continue to see a slight growth. Quality (taste AND consistency) will win in the end, and those that can combine quality products with a compelling and authentic brand will still have the opportunity to break through a highly competitive space. Expect brewers to launch into adjacent categories with spirits or malt based RTDs (ready to drink beverages) in addition to ciders and non-alcoholic options.  E-commerce has also become important. Since COVID most brewers now offer direct delivery or curbside pickup, and scalable service providers like Boozer and TheBeerGuy are mobilizing to do your alcohol shopping for you and delivering it to your door. Anecdotally, this exploded during lockdown but has fizzled slightly. However, I do expect it to grow steadily as a retail channel that brewers of any size will ignore at their peril. 

The beverage retail space in Ontario will be a very interesting one to watch. There are currently 450 “liquor convenience outlets” which is a half step away from moving towards private retail. The current Master Framework Agreement is the main hurdle to preventing further private outlets. Many brewers have challenges with the LCBO as they find it cumbersome to apply for shelf space 1 year in advance and increased competition makes the likelihood of even getting a listing far less than guaranteed.  

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