An upstart Ottawa contract brewing firm is purchasing the city’s only commercial brewery as it prepares to expand into the retail market, company officials say.
Kichesippi Beer Co.'s Paul Meek. (Photo by Mark Holleron)
In a purchase expected to close Tuesday, Kichesippi Beer Co. is buying the majority stake of ten-year-old Heritage Brewing from Don Moir and Donna Warner.
Kichesippi began selling its beer in kegs to restaurants and bars in April. The company avoided high upfront capital costs by contracting its brewing to Heritage, located in an industrial park near Carling and Clyde avenues, but said having its own brewery was always in the plans.
“Owning our own facility allows us to be a local company and represent ourselves locally,” Kichesippi co-owner Paul Meek told OBJ.
“We want to maximize this hidden gem in terms of the retail presence, tours and eduction.”
Mr. Meek declined to discuss the purchase price.
Mr. Moir and Ms. Warner started Heritage in 2000 after determining the Ottawa market was underserved by craft breweries. They invested approximately $600,000 constructing a brewery on Canotek Road in Gloucester before moving to Carleton Place in 2004.
Mr. Moir admits Heritage lost considerable sums of money in the early years and jokingly calls the business “the worst investment I’ve ever made.”
“I don’t need to worry about capital gains” on the sale of the brewery, he says.
Heritage’s two lagers are more bitter than most beers, which prevented them from finding earlier commercial success, says Mr. Moir. However, consumer tastes has evolved considerably over the past decade, as more beer drinkers look for products that are local and different from the mainstream ales, lagers and pilsners brewed by multinational companies.
The LCBO says sales of Ontario craft beers are up 55 per cent, year-over-year, and have grown by more than 40 per cent for the past three years.
Heritage returned to Ottawa in April 2009. Mr. Moir says business has been good of late - its Traditional Dark Lager was slated to go into 30 LCBO stores in and around the Greater Toronto Area this month - but the company hasn’t been growing as fast as he’d like.
“We haven’t been able to bring it to the next level and (Kichesippi’s Paul Meek) brings the marketing expertise,” he says.
Mr. Moir, 65, and Ms. Warner recently became grandparents for the second time and say babysitting duties will keep them busy for the foreseeable future.
However, they remain majority owners of Scotch Irish Brewing, which they purchased in 2006 and is a contract brewer of five ales. Mr. Moir says it will be business as usual for Scotch Irish, which also uses Heritage’s facilities.
And, when pressed, Mr. Moir concedes that he already has a business plan for a distillery, but says he has no intention to immediately pursue it.
“The kids are hoping I don’t start another business,” says the former software company owner, adding he’s optimistic about the future of Heritage.
“The brewery is in the hands of someone who wants to build a regional Ottawa brewery. That was one of our objectives, and it’s nice to see that vision continue.”
Indeed, Mr. Meek previously told OBJ his focus is on the local market, and doesn’t foresee a time when Kichesippi would be sold outside the National Capital Region.
He says his short-term plans are to stay the course, and start meeting with Heritage customers and employees.
Mr. Meek is also praising Heritage’s founders.
“They deserve a lot of credit. Ten years ago, there wasn’t a lot going on in the Ottawa beer world.”