Big deal brewing: Beau's sold to Toronto-based Steam Whistle

Steve and Greg
Steam Whistle co-founder and CEO Greg Taylor (left) and Beau's co-founder Steve Beauchesne. Photo courtesy Beau's Brewing Co.

Beau’s Brewing Co. has been sold to Toronto-based Steam Whistle Brewing in a deal the Vankleek Hill enterprise hopes will help it return to its frothy pre-pandemic heights.

The brewery with the instantly recognizable green tractor logo said Monday that its 129 shareholders – including a mix of original investors and employees who’ve purchased shares in the company over the last five years – voted almost unanimously to approve the acquisition. Terms of the deal, which is expected to close shortly, were not disclosed.

Steve Beauchesne, who launched Beau’s with his father Tim in 2006, said joining forces with the southern Ontario brewery known for its pilsner-style beer will give his company a new lease on life after a tough two years during the pandemic.

“It really puts wind back in our sails and gets us back into a position of strength, which is really nice,” he said. 

Beau’s has long been a mainstay of the Eastern Ontario craft beer scene thanks to brands such as its signature Lug Tread Lagered Ale and other styles such as its Wag the Wolf IPA and Kissmeyer Nordic Pale Ale.

"It really puts wind back in our sails and gets us back into a position of strength, which is really nice."

But Beauchesne said widespread business shutdowns aimed at curbing the spread of COVID-19 have wreaked havoc on the brewing industry. Half of Beau’s $30 million in annual sales before the pandemic came from bars and restaurants, and he said his brewery saw those revenues “disappear overnight” early in the health crisis.

Beau’s tried to recoup some of the lost sales by introducing new product lines, such as a hand sanitizer it produced in partnership with Dunrobin Distillery. 

While the sanitizer sales helped, the brewery still had to lay off a third of its employees as it struggled to make ends meet. Last summer, Beau’s signed an agreement to become the exclusive beer provider for Toronto-based Porter Airlines in a bid to tap into new revenue streams.

Monday’s deal builds on a distribution agreement the two breweries signed last November that saw Steam Whistle take over the Vankleek Hill brewer’s warehousing and delivery throughout Ontario.

“The partnership is working incredibly well and that gave us the confidence to kind of move forward with the next part of the evolution,” Beauchesne said.

'Frustrating, difficult time'

“We’ve been really trying to get stuff done without having the proper resources to do it and it’s been a frustrating, difficult time for all of our staff. We’re hopeful that this (acquisition) is going to allow us to really take advantage of having resources to really get the job done well.”

Beauchesne said Beau’s, which now has 58 employees, hopes to keep its production facilities in Vankleek Hill and eventually expects to introduce more products that could include wild sour beers and other recipes.

“We are going to take a very organized approach to it,” he said, adding the brewery has also signed a letter of intent to expand to a new location in Ottawa-Gatineau where it plans to open a taproom.

“There’s more than one concept that we’re looking at,” he said. “We want to make something really cool there.”

Steam Whistle co-founder and CEO Greg Taylor said the merger will help the two brewers sell and distribute their products in “the most efficient, effective way that we can so that we can survive” the pandemic.

Taylor said he believes Steam Whistle’s pilsner and Beau’s Lug Tread ale are the top two craft beer brands in Canada. He said bringing the products under one roof gives the combined company’s sales and marketing reps more clout when dealing with bar owners and retailers.

“One person comes in the door and has both those brands, it really means something,” he said.

University of Ottawa marketing professor Michael Mulvey said the sale opens the door to new opportunities for Beau’s thanks to its Toronto-based partner’s larger sales and distribution networks. At the same time, he added, Steam Whistle gains a devoted base of loyal customers.

“They have a great brand,” Mulvey said of Beau’s, citing the popularity of the company’s tractor logo and its creative marketing tie-ins such as its Tom Green Beer. “That’s really part of the value.”

'A beautiful story'

As long as Beau’s stays true to its roots, Mulvey said he doesn’t think the sale will spark a backlash among die-hard fans.

“There’s always going to be dissenters and people grumbling, but, at the core, the heritage is the heritage and that’s not changing,” Mulvey said. “It’s a beautiful story – it’s a family business, it’s a father-son passion play of sorts, locally owned, local ingredients, local employees. That’s not the sort of thing that will be soon forgotten.”

Beauchesne, who will remain in a senior leadership role, said he wouldn’t have done the deal if he thought his company would have to compromise its values under new ownership.

“It keeps our legacy intact,” he said. “Obviously, Beau’s is my baby and it just wouldn’t feel right to leave it in just anybody’s hands.”

Taylor agreed.

“Fundamentally, we cannot change Beau’s,” he said. “It needs to stay the same.”

Beauchesne said he’s looking forward to better days ahead for his company and its employees.

“The last few years have really felt like we’ve been stagnant. So being able to kind of spread our wings again is really exciting for me.”