Brewing up some entrepreneurial success

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[00:00] SPEAKER_02: Welcome to Canada's Entrepreneur, where we talk to the entrepreneurs who are making it happen
[00:05] SPEAKER_02: across Canada and deliver the news, trends, knowledge and opinions from entrepreneurs and business
[00:13] SPEAKER_00: influences across the country. Hello, I'm Mario Toneguzi managing editor of Canada's Entrepreneur.
[00:21] SPEAKER_00: Joining me today on Calgary's podcast is Andrew Bullied, who is co-founder and co-owner of
[00:27] SPEAKER_00: Annex, Ailed and Soda Manufacturing, based here in Calgary. Thanks to Alex for joining us today.
[00:33] SPEAKER_00: Miranda, sorry. Thanks so much for having me, Mayor. Thanks for joining us, Andrew.
[00:40] SPEAKER_00: No problem, happy to be on. Okay, so where does the name come from, Annex, first of all?
[00:46] SPEAKER_01: So when we first started Annex, we were looking for something that was going to be kind of an
[00:50] SPEAKER_01: addition to the whole of craft you're seeing without necessarily trying to take over the whole
[00:54] SPEAKER_01: thing. We're not aspiring to be the next Bolsonaro about here. We just kind of want to carve out
[00:59] SPEAKER_01: a little piece of the city for ourselves. And yeah, I think we've done quite well. Okay, let's take
[01:04] SPEAKER_00: us back a little bit and tell us how Annex began and more importantly, I guess the why behind it.
[01:14] SPEAKER_01: So Annex began in, I mean, in 2015, I've been working in craft beer since about 2010, which is
[01:21] SPEAKER_01: really when it started exploding in Western Canada. I'd been through a couple breweries that helped
[01:25] SPEAKER_01: them started a few that one of them actually went off to go sell off to a little about, which
[01:31] SPEAKER_01: was really interesting. But what we were doing that, my partner and myself, just we were really
[01:35] SPEAKER_01: becoming enamored with the process of small businesses. We had been, you know, I'd started with
[01:41] SPEAKER_01: village brewery and I was with them from their inception. I got to watch them start their business
[01:46] SPEAKER_01: and grow and my partner was with a small ice cream shop that has turned into a pretty big deal
[01:51] SPEAKER_01: in Calgary as well. And yeah, we both got to see the startup process from the get go and we decided
[01:59] SPEAKER_01: you know, the time was right, the opportunity was there. And that's when we decided that we could
[02:04] SPEAKER_01: make a tangible impact on the the beer and food scene in Calgary. So yeah, from the get go, we had
[02:12] SPEAKER_01: the vision, the purpose to say that we want to try to tangibly change how people are are
[02:18] SPEAKER_00: drinking in those province. Now, you know, you didn't mention, you know, I mentioned how, you know,
[02:25] SPEAKER_00: few years ago it was kind of just starting to boom and all that. How would you describe what that
[02:32] SPEAKER_00: craft industry is like today? Many, many, just see so many places pop up everywhere, right?
[02:41] SPEAKER_01: It's funny because that's a conversation that we always inevitably have, you know,
[02:45] SPEAKER_01: we inevitably have. People are very curious to find out what the next thing is going to be in craft
[02:49] SPEAKER_01: beer. It was the sort of thing that there were a couple, you know, a couple of real leaders back
[02:57] SPEAKER_01: in the 90s that had the vision to see that beer can be made differently. But very few people
[03:04] SPEAKER_01: are trying their hands at it. There were a lot of regulatory, regulatory hurdles that craft beer
[03:09] SPEAKER_01: had to overcome both nationally and provincially. And the laws started to change to allow for
[03:16] SPEAKER_01: smaller producers to be able to start off with just my house next. So that's, you know, a couple
[03:20] SPEAKER_01: changes in the government is what helped craft beer get its beach head through the early, you
[03:27] SPEAKER_01: know, 2010s and beyond. You know, we're in a position now where things kind of start to switch
[03:33] SPEAKER_01: COVID, a little bit of post COVID recovery. And now we're in a position that we're seeing a little
[03:38] SPEAKER_01: bit of a correction in craft beer. You know, a lot of people are saying craft beer is saturated.
[03:44] SPEAKER_01: There's so many out there. It's hard to pick and choose. I think like any other business that sees
[03:50] SPEAKER_01: a, you know, a rapid expansion. There's always a correction that follows that. But, you know,
[03:57] SPEAKER_01: for the most part, these sort of industries end up better off than they would have been,
[04:02] SPEAKER_00: you know, before the sort of expansion. So what would be, you know, in a market that
[04:08] SPEAKER_00: that, you know, could could be saturated or close to being saturated? What's the key to success?
[04:15] SPEAKER_00: How do you, how do you differentiate yourself from all the others?
[04:19] SPEAKER_01: I think going in there with a really good vision of exactly why you're doing this in the first
[04:24] SPEAKER_01: place is really important. A lot of people caught into this just because because it was exploding.
[04:30] SPEAKER_01: Like there's opportunity I'm doing this. You know, like anything else, that vision combined with
[04:37] SPEAKER_01: good amount of experience and so know how I'm hiring the right people. Always important things.
[04:43] SPEAKER_01: But, you know, for us, it's just about being able to differentiate ourselves both on a product
[04:48] SPEAKER_01: and an experiential level. And that's been really key to our success.
[04:53] SPEAKER_00: Yeah. Think us back in time. Like how did you, like, how did you first get involved or passionate
[05:02] SPEAKER_01: about craft beer? Well, I've got a bit of a funny story. So when I was going through university,
[05:10] SPEAKER_01: my partner, I actually met there. So we were going to school out in Nova Scotia, small little
[05:15] SPEAKER_01: university town. And I started getting into home brewing then. And, you know, I was a student,
[05:23] SPEAKER_01: I was broke. It was partly about the economics for me, but I was really starting to enjoy the craft
[05:28] SPEAKER_01: of it all. And I was making beer and it was all turning out really well. And, you know, God knows I
[05:34] SPEAKER_01: was enjoying the fruits of my labor, but I couldn't, I couldn't afford to do it properly. So I started
[05:40] SPEAKER_01: making it for other people. So I was, you know, effectively boot lagging for a lot of the guys with
[05:44] SPEAKER_01: the rugby team. So, you know, I'm getting weird phone calls all hours the night for guys looking
[05:49] SPEAKER_01: for beer and wine. And, you know, if I was running my own little brewery. So as I was finishing up my
[05:55] SPEAKER_01: degree in small business management, I decided I'm going to take a crack at this crap brewing thing.
[06:00] SPEAKER_01: There was Canada's first brewing school was opening up just after I graduated university. So that
[06:07] SPEAKER_01: was Niagara College. And I went to go be part of their first class. So I went through their
[06:13] SPEAKER_01: class and, yeah, immediately got hired on with village brewing powder, which was just starting off.
[06:18] SPEAKER_01: So I don't know, there's probably a lot of a lot of luck that happened with me just then in terms
[06:23] SPEAKER_01: of hitting the timing really well and all of these things that were opening.
[06:27] SPEAKER_00: What did you get hired as? What did you get hired as at village?
[06:34] SPEAKER_01: I was, I got hired as a brewer and I worked my way up to their head brewer. So I spent five
[06:39] SPEAKER_01: years there. Then I lucked at it's consulting while we were starting Annux. And while I was consulting,
[06:46] SPEAKER_01: again, you know, most of these places are younger people that are starting up. Like, you know, I was,
[06:51] SPEAKER_01: I was 30. My partner was 28 when we started. So you start these things on a shoe strength.
[06:55] SPEAKER_01: The guys that I was working with doing the same thing. So I was consulting with them on the
[07:00] SPEAKER_01: agreement that I could use their equipment to start making our sodas while we were building our
[07:05] SPEAKER_00: brewery as well. So when you come up with the, I guess the formulas or whatever, for each of the
[07:14] SPEAKER_00: different tastes like, how does that process work in your mind? I think a lot of it in the
[07:21] SPEAKER_01: early days for me was, you know, we were traveling a lot. We spent a lot of time going to places like
[07:28] SPEAKER_01: Vancouver, Seattle, Portland. I'm checking out these mecca's of North American style beer and
[07:33] SPEAKER_01: finding a lot of inspiration from those guys down there. We're meeting brewerers or meeting brewery
[07:39] SPEAKER_01: owners talking about their process. You know, the states and particularly in that area of the
[07:45] SPEAKER_01: states is probably four or five years ahead of anyone that was doing this in Western Canada.
[07:51] SPEAKER_01: So we had the advantage of going down to get to talk to these people and experience what they
[07:55] SPEAKER_01: were doing. And we were bringing that up. So from the get go, we were trying to really bring the
[08:00] SPEAKER_01: feel of the Pacific Northwest over to Calgary and have the bar culture that follows.
[08:05] SPEAKER_00: Interesting. So when you started annex, you know, from an entrepreneurial standpoint,
[08:13] SPEAKER_00: what was the biggest challenge of starting a company?
[08:19] SPEAKER_01: I think the, I mean, one of the biggest things was just like not knowing what we did now,
[08:27] SPEAKER_01: like this being in this state of unconscious incompetence and having to grow and learn a lot of
[08:34] SPEAKER_01: hard lessons that way. You know, we started on with very little money, but with some really great
[08:41] SPEAKER_01: support from friends and family and banks. You know, we're two young people. As I mentioned, I was
[08:47] SPEAKER_01: 30. My partner was 28. We're convincing landlords that, you know, we could be viable tenants.
[08:55] SPEAKER_01: So a lot of that was very difficult. We're approaching lawyers, real estate agents,
[09:00] SPEAKER_01: and a bunch of working professionals that we've never necessarily worked with before.
[09:04] SPEAKER_01: Putting to business plans and having all this vetted and questioned and, you know, the process of
[09:09] SPEAKER_01: raising capital with so little experience, but energy behind it was really interesting.
[09:19] SPEAKER_01: I believe I took a lot of our early believers were in this because they kind of saw the passion
[09:25] SPEAKER_01: and the drive. You know, like, you know, we can give these kids a chance. So, yeah, what about Jeff,
[09:32] SPEAKER_00: having a business in Calgary? You know, what advantages do you think you had and maybe still have
[09:43] SPEAKER_00: by operating a business not only in Calgary, but in the province? You know, we're both born and
[09:49] SPEAKER_01: raised in Calgary. Some of the few, you don't run into very many people in Calgary that are born
[09:54] SPEAKER_01: and raised here. So, you know, we've got a, we've got a network already. We understood the city,
[09:59] SPEAKER_01: we, a big part of what we do is our taproom, the experience, the location. That was always a really
[10:07] SPEAKER_01: big thing for us. So finding the right spot to be able to, to actually get our vision,
[10:12] SPEAKER_01: our vision was a big thing. And, you know, we love, we always love Calgary. And it was,
[10:19] SPEAKER_01: nice to jump in to serve this community because it's done so much to support us back.
[10:25] SPEAKER_00: Yeah, you know, what about from a business standpoint, whether it's, I don't know,
[10:31] SPEAKER_00: the taxes and stuff like that, good place to run a business?
[10:39] SPEAKER_01: I think it's interesting. You know, we've had, we've had a few different changes in government
[10:44] SPEAKER_01: and whatever reason, pretty much every government comes in, takes a look at
[10:49] SPEAKER_01: beer and excise taxes. And it's like, it's one of those taxes that just gets revisited all the time.
[10:55] SPEAKER_01: So it's, you know, it's kind of just whichever way the wind is blowing now. You know, beer
[11:01] SPEAKER_01: requires a lot of advocacy. We work pretty closely with the Alberta Small Brewers Association.
[11:07] SPEAKER_01: And, you know, we've been together as an industry to speak with both provincial and federal
[11:14] SPEAKER_01: governments to tell them what we need as an industry and what can help us flourish.
[11:17] SPEAKER_01: Yeah.
[11:19] SPEAKER_01: Craft breweries employ disproportionately more people than macro breweries do.
[11:24] SPEAKER_00: Uh-huh.
[11:27] SPEAKER_01: You know, whether there are, there are thousands of people that either directly or indirectly work for the
[11:31] SPEAKER_01: Alberta Small Brewers in the small brewing industry.
[11:36] SPEAKER_00: Yeah. When you go to a pub, say, for example, you start seeing the caps, right?
[11:44] SPEAKER_00: And, you know, it was like 10, 20 years ago, you just have your standards, right?
[11:50] SPEAKER_00: The mollons, the buzzwisers, whatever, right? And now you're seeing all these different
[11:55] SPEAKER_00: crafts there. Like, what do you think about the industry in its future when you see that?
[12:05] SPEAKER_01: Well, I think it's really interesting. Like, bars and restaurants have to invest a lot of money
[12:11] SPEAKER_01: to make sure that that make caps are available. So they understand the importance of choice
[12:16] SPEAKER_01: for their customers. Um, and there are so many of us making so many different things. It's,
[12:23] SPEAKER_01: you know, ultimately it's, it's just such a great thing for the customer to be able to go and have
[12:27] SPEAKER_01: so much choice. Like, the, the standard North American style longer and whatever variation you
[12:33] SPEAKER_01: might be looking at, that's not the only choice anymore. Yeah. Yeah. Exactly. Yeah.
[12:38] SPEAKER_00: What do you think? So we stand as a country compared to, you know, place, you know, you mentioned
[12:46] SPEAKER_00: like the, you know, the Portlands of the world and, uh, and the West Coast. What do you think we are?
[12:53] SPEAKER_01: So per capita, we have more breweries than even the United States does. Yeah.
[12:58] SPEAKER_01: Which is interesting. Um, some of the provinces have far more like BC, um, Nova Scotia, um, Ontario,
[13:06] SPEAKER_01: they, they've got a lot of breweries per capita. Um, you start to see fewer of that as you get
[13:10] SPEAKER_01: in the prairies and the territories and stuff like that. But, uh, it's really interesting to see.
[13:15] SPEAKER_01: You know, we're, we're at a point now where, I mean, depending on who you ask, we could be anywhere
[13:20] SPEAKER_01: between kind of 10 and, uh, 10 and 15% market share, um, in terms of, um, beer that's brewed in,
[13:27] SPEAKER_01: I'll, that's about 15% for beer that's brewed in Alberta being consumed in Alberta.
[13:31] SPEAKER_01: Um, it's affecting a lot of the importers because consumers are starting to, I don't want to,
[13:37] SPEAKER_01: they're continuing to, uh, shift their preferences toward local product.
[13:41] SPEAKER_01: Mm-hmm. Yeah. I think a lot of consumers just understand them value and having their,
[13:45] SPEAKER_01: the, the dollars they spend stay in, in their province.
[13:49] SPEAKER_00: True. You know, yeah. What about the consumers? Like, have you seen a ship there in the,
[13:55] SPEAKER_00: the type of, uh, a person that is drinking a craft beer now compared to five, 10 years ago?
[14:03] SPEAKER_01: Absolutely. Um, and we, we noticed that a lot in our tap room, um, you know, a lot of craft beer
[14:09] SPEAKER_01: consumers are my age or older. Um, so we're starting to, you know, as the links are setting this,
[14:14] SPEAKER_01: laying down, the, I mean, a little bit more of a family space. Um, we get a lot more younger kids
[14:19] SPEAKER_01: in our tap room, which is fun to see. Um, you know, everyone's talking, and you hear a lot of
[14:24] SPEAKER_01: less about the media, but, you know, Gen Z isn't drinking. Um, from what I'm reading, that is,
[14:30] SPEAKER_01: uh, starting to become less and less true. Um, but, you know, there's, there's demographic shifts
[14:34] SPEAKER_01: that are happening. Um, and we're not just competing with other beer manufacturers. Now,
[14:39] SPEAKER_01: we're competing with, um, all different sorts of beverage alcohol producers because there's,
[14:44] SPEAKER_01: as much of, um, um, boom, this has been craft beer, boom, this, yeah. Ready to drink cocktails and
[14:50] SPEAKER_01: spirits and like, um, even, you know, your THC beverages, like all of these things are wrapped
[14:55] SPEAKER_01: together. So when we're considering who we have to sell to and how we have to sell the people,
[15:00] SPEAKER_01: it's really about convincing people that they're, their opportunity to go out there, whatever they're
[15:06] SPEAKER_01: drinking opportunity is, that has to be a craft beer-drinking opportunity versus other forms of
[15:10] SPEAKER_01: a beverage. Yeah. You have a zero beer? We don't do a zero beer, but, um, we do, uh, we, we specialise
[15:17] SPEAKER_01: in zero alcohol. Um, we make, um, not alcohol, so does. Oh, yeah. So we have a full soda line.
[15:25] SPEAKER_01: It's about pretty presentive reproduction. And we are focusing on, um, really applying the craft
[15:31] SPEAKER_01: beer echos to soda. So we are some of the only people in Canada that are making premium sodas.
[15:37] SPEAKER_01: And it's our fastest growing product. Well, yeah, it's been growing 15% of year for, uh,
[15:45] SPEAKER_01: since we started, which is great to see. So, uh, we're, we're hoping to have this what we can
[15:48] SPEAKER_00: get out of wide. Yeah. What do you think, sir? Forms of the beer itself, uh, what's the
[15:53] SPEAKER_01: speech in terms of, uh, uh, uh, where you can get it? Uh, we stay mostly Alberta, uh, 95% of what we
[16:02] SPEAKER_01: sell is Alberta. We have summons to schedule and some of Manitoba, a little bit BC, Northwest
[16:07] SPEAKER_01: territories, um, just small amounts, though, um, fundamentally like, where of the belief that
[16:13] SPEAKER_01: beer should be drank fresh, beer should be drank local. So we try not to push too far out. Yeah.
[16:21] SPEAKER_00: Now, on your, uh, being an entrepreneur, like, who would you say, or, or what
[16:28] SPEAKER_00: kind of helped you on that journey? Like, there's, or any, any people that you'd looked up to, uh,
[16:34] SPEAKER_00: or, you know, whether they were like people like you, personally, or just like people out there
[16:41] SPEAKER_00: in the business world that you kind of admired and inspired you. Um, we get,
[16:47] SPEAKER_01: we get a lot of inspiration from local business owners here. And, um, once you start becoming,
[16:53] SPEAKER_01: you know, self-employed entrepreneur, like, however you want to identify, um,
[16:59] SPEAKER_01: you end up kind of part of the special club. And there's a certain understanding between, um,
[17:03] SPEAKER_01: people who are running their own businesses. Um, we end up like a lot of the people that we surround
[17:09] SPEAKER_01: ourselves with, or now, um, they're also entrepreneurs. Um, it's funny how you just kind of,
[17:14] SPEAKER_01: you fall into this identity with a lot of other people because it's, uh, you know, it's not as glamorous
[17:20] SPEAKER_01: as a lot of people. A lot of people like to talk about. Um, it's, it's a difficult lifestyle. And,
[17:27] SPEAKER_01: you know, you really do need to commiserate with some of the difficulties that a lot of other
[17:30] SPEAKER_00: entrepreneurs go go to. Yeah. Now, and you mentioned the, you know, obviously there's a lot of time
[17:36] SPEAKER_00: involved, uh, no matter what business, uh, you have as an entrepreneur, like, what do you do, uh,
[17:43] SPEAKER_00: or, uh, to, I get, get that quote unquote, work-life balance, uh, uh, what kind of things are you?
[17:51] SPEAKER_01: Are you? It's, uh, you know, we're, we're a big fan of trying to get out there and, you know,
[17:56] SPEAKER_01: punch grass, uh, get back with our friends and family. I try to get away from the business, but like,
[18:03] SPEAKER_01: it's about, sometimes it's, it's, it's more about like a long, a large-scale physical distance for
[18:09] SPEAKER_01: us because if we're close, if we're in town, we will end up responding to whatever comes up.
[18:16] SPEAKER_01: But, you know, we're open all the time. There's always going to be something. Um, it takes,
[18:19] SPEAKER_01: it takes a level of discipline to be able to enjoy yourself and take time off.
[18:25] SPEAKER_00: Yeah, that's true. Do you think it's important to have the, how important is that to, uh,
[18:30] SPEAKER_00: to take some of that time away from the, uh, from the, oh, right. It's absolutely critical. It's, uh,
[18:37] SPEAKER_01: if you're not doing it on a regular basis, and, you know, you're not taking care of yourself in
[18:42] SPEAKER_01: general, um, it's really easy to, um, you know, absorb a little problems. It's really easy to keep, um,
[18:49] SPEAKER_01: throwing yourself, um, at your business and just kind of giving it your all the time. But,
[18:55] SPEAKER_01: you know, we're, we're finite people. Um, it's, I, I just, I think time off is as important as,
[19:02] SPEAKER_01: you know, eating well, sleeping well, getting exercise. It's like, it's kind of a full maintenance
[19:07] SPEAKER_01: routine that has to go into this because the job itself is so demanding. Yeah, yeah, exactly.
[19:13] SPEAKER_00: What does it, you, when you look into, you know, the future, where do you think
[19:16] SPEAKER_00: that annex is going to be in the next five, 10 years? You know, what we're really trying to do,
[19:23] SPEAKER_01: we want to obviously keep expanding our beer, but at a certain point, we will be able to make
[19:28] SPEAKER_01: as much beer in this facility as we possibly can. And that's a good level for us for beer.
[19:33] SPEAKER_01: What we're really going to be focusing on in the coming years is expanding our sodas.
[19:38] SPEAKER_01: Um, we've got a, like, a remarkable product. It's growing quickly. We just went through a full
[19:43] SPEAKER_01: rebrand on it. Um, and yeah, it's, it's growing quicker than we, we could have imagined. So we're,
[19:49] SPEAKER_01: we're hoping that we can continue on this trend. Um, and I'd love to see annex, uh, as a natural
[19:54] SPEAKER_01: brand, uh, you know, by, by 2030. Yeah. And why do you think the, you see that growth in the,
[20:01] SPEAKER_01: in the soda? You know, um, I think there's, there's a mirror to factors. Um, one of which is that
[20:09] SPEAKER_01: some people are moving away from alcohol, maybe not completely. Um, but people are looking for
[20:15] SPEAKER_01: non-alcoholic options that are, um, different from the mainstream. So they can still enjoy social
[20:22] SPEAKER_01: activities. They can still enjoy the lifestyle that they formerly used to. But now in a different way.
[20:28] SPEAKER_01: Um, we've got that, that the trend we see a lot, um, which is why we're often asked about, you know,
[20:34] SPEAKER_01: non-alcoholic here, non-alcoholic wine, hold on to stuff. Um, people are just looking after themselves
[20:40] SPEAKER_01: in different ways. And it's not an all or nothing for many consumers. Um, I'd say three quarters of
[20:45] SPEAKER_01: people that are looking at non-alcoholic drinks, they still consume alcohol. They just choose to do
[20:52] SPEAKER_00: it in a smaller regard. Yeah, exactly. All righty. I think that basically covers it. Andrew,
[20:59] SPEAKER_00: is there anything you wanted to mention that I didn't ask you? No, I think that's about it.
[21:04] SPEAKER_01: Appreciate your time. And, uh, yeah, I look forward to seeing where this goes. All right, thanks so
[21:09] SPEAKER_00: much. That was Andrew Bullied, who is co-founder and co-owner of Annex, Alain, Soda,
[21:17] SPEAKER_00: Manufacturing, based here in Calgary, Alberta. I'm Mario Tonigusi, managing editor of Canada's
[21:24] SPEAKER_00: Entrepreneur. Thanks for joining us today.