In Episode 1 of Growth Decoder, Mahfuz meets John Toman and Brett Loree, two of the owners behind Odd Company Brewing. The home brewers turned business partners share how their team overcame production and pandemic constraints to expand to a second location in the brewing heart of Edmonton.
Here’s a sample of the insights you’ll take away from this episode:
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Mahfuz Chowdhury [00:00:13] Welcome to Growth Decoder, a podcast proudly brought to you by Canadian Western Bank. Together, we're going to meet businesses with a variety of different backgrounds. Some will be closer to the beginning of their trajectory as they experience rapid growth in revenue employees and customers and others. They will be further down the line where their growth has stabilized, and they have a mature business strategy. Some owners may even have a succession plan in place, or they've turned over the company to the next generation. But no matter how long each business has been operating, they've all experienced highs and lows. They experience challenges that are catalysts for change, where teams ask themselves if they have the fortitude to keep going. There are also opportunities that propel them forward when everything they put on the line pays off. On Growth Decoder We're going to unpack those moments of transition and learn how each business tackled what came next to get to where they are today. I'll be your host, Mahfuz Chowdhury. Today, we're joined by two of the partners behind Odd Company Brewing. The Edmonton-based brewery is all about experimentation and small batch beer, which speaks to where the founders got their start brewing as a hobby in the garage. Now they're about to open a second location and will ramp up production so they can branch into wholesale. John Toman and Brett Loree are two of six partners in Odd Company Brewing. Gentlemen, thank you so much for joining us today.
John Toman [00:01:41] Thanks for having us.
Brett Loree [00:01:42] Thank you.
Mahfuz [00:01:43] I found your story to be extremely inspirational and full of knowledge for someone that is maybe thinking about starting their business and the challenges that they may be approaching in the early stages of the business. Everybody loves a good origin story and I'd love to hear about yours. John, I'd love to start with you. Why did you start homebrewing and what did that look like?
John [00:02:03] I think I probably started homebrewing more for just cheapness during university, as a lot of university students do. We drink a lot of beer. Me and Jared, one of our other partners, we lived together at one point, and we were both in grad school for chemistry at the time and it’s kind of a natural segway. There's a certain amount of chemistry involved in brewing and yeah, we just started homebrewing together as a cheap way to drink more beer.
Mahfuz [00:02:31] I love the origin story and it's great that you started your passion. I think that's a fantastic way to kick off your business. You may think that the product is great and maybe your family does as well. How did you know that the rest of the market would love it just as much as you do?
John [00:02:45] Yeah. I think we just brewed a lot of batches and gave it to family and friends and had some people over and they tried it. Everyone seemed to like it kind of went from there.
Mahfuz [00:02:54] I think it's hard to say no to free beer, right? Yeah, I think that's one heck of an incentive. Brett, what about you? Why did you decide to make the leap to opening a production space and taproom? Where did that part of the conversation begin?
Brett [00:03:06] Kind of piggybacking on what John just said, one of the first memories that sticks out to me is we were brewing in one of our partners garages here in Edmonton, and we started to accumulate quite a variety and quite a collection of beer, and we decided to throw a couple parties, invite a bunch of friends, with the only caveat being you can drink as much as you want, but you have to give us an honest review on some beer. So, we put out little questionnaires, a little piece of paper, and we're like, you need to rate the beers as you try them. So, we had everything labeled and made sure that we got actual feedback from friends, from family. So, there was actually some neighbours that just stopped by to see what was going on. And to me, that was the first time that we're like, we might be on to something here. When we threw it a second time, we kind of got the same feedback where people are like, you know, this stuff's really good. And then it was at that point we looked at each other and we're like, you know, now's the time to do it. No one had any kids, and it was the right time to take the plunge into something that none of us really knew anything about. And we decided that, yeah, let's give it a shot and start searching.
Mahfuz [00:04:11] It really speaks to the level of creativity that was needed at the early stages. Right? Not throwing ad dollars out there or not launching a big campaign just to get some feedback but doing it locally with the community. And I think that's such a creative way to collect feedback. Talk to me a little bit about what the space look like. I'm a visual learner. People that are listening to this podcast are really trying to get a feel of what your environment and your taproom look like. Could you talk to me a little bit about what that space looks like?
Brett [00:04:37] Sure. So, it's actually kind of an interesting story, and I'll take one step further back. We actually were turned down for a space. We initially had planned to do a very traditional warehouse space, tiny little, kind of rough taproom. No real plans for a retail bay like it was kind of we were going to go into that wholesale tiny taproom space. The landlord, actually, after we'd signed an intent letter with them, actually came back to us and said they don't want to work with us. So, we had to completely change what we were doing, change our business model because we found this building where we're at now and I will give credit to the developer. They did a fantastic job of redoing an old bone exchange building that was built in phases over the last hundred years. And we found this very odd corner space with some street frontage and just kind of fell in love with it right away. So, we actually were one of the first people to sign in that building. So, we demised the space in a way that kind of worked for the vision that we had while also trying to be cost conscious because we had no idea if this was going to work. And then we did the design ourselves. We did a lot of the build out ourselves. So, it's a lot of things that the six of us really kind of like and fell in love with. So, some warm woods while still integrating some of that which is more rustic, though maybe that’s not the right word, but more steel and like harder surface because yeah, industrial because it is in a kind of industrial buildings. There is a lot of concrete and we used to use a lot of wood to warm up the space and it just became something that was kind of a labor of love for us because we were there a whole lot. But as I said, we didn't know, we'd never done this before. We didn't want to have it too big. We didn't want to bite off more than we could chew because we had no idea if the community or the city would be receptive to a little brewery. And honestly, we were scared. We had no clue what people were going to say to us.
Mahfuz [00:06:26] But the type of uncertainties that are very understandable in situations like those, what made you decide to go ahead with these decisions that you have?
Brett [00:06:34] We just thought that at the time of our lives, the feedback we were getting from family, friends, and neighbors, we just said, you know what, let's give this a try. This could be fun. This could be interesting. We had nothing to lose and decided that at that stage of our lives, we needed to give this a shot. And we kind of sat down before there was money involved and are like, hey, guys look like here are our expectations. Here's what we think we should do. What does everyone think? What does everyone think that they can contribute in terms of time, in terms of finances? And that was a great a couple of heated conversations. But as we've kind of grown through this over the last five or six years, it's always been important to have those tough conversations because it's a lot easier to have them upfront than to wait until there's kind of something a little bit more monumental in the way.
Mahfuz [00:07:26] It truly sounds like the collaboration between the six of you worked out right. Everyone's input allowed it to be almost the output of different opinions and passions coming together. What about wholesale as an option? I think a lot of businesses in this situation would look at that as a potential solution, especially when the early stages of their business maybe weren’t producing the type of impact that they wanted. Was wholesale in consideration at all, John, and how did that impact the maximum capacity that you had in your space?
John [00:07:53] With our current space, it's never really been like a big consideration, just the limitations of the space that we're currently in. It's very small open spaces in a basement for producing large volumes. It's not really conducive to that.
Mahfuz [00:08:06] I have a good visual now.
John [00:08:07] Yeah, so it's tough. Yeah. When we decided to move into that space, the business was definitely geared towards like on premise sales. Everything we're doing, we're trying to sell beer out of our door. We do sell a little bit wholesale to some certain accounts, but it's never really been the focus of our business. And a lot of breweries do contract brewing and stuff where they get another bigger brewery to make it and kind of go into that market. But the margins on it aren't great. It's more of really just a marketing thing, and I've never really liked the idea of it. You're not really making it anymore and it kind of takes away some of the craft of the whole endeavor to me.
Mahfuz [00:08:43] So yeah, it's, it's like an ongoing battle of profit versus exposure at the very beginning, especially, right? I think holding on to that passion in the way that you've done it and the pride behind it must have helped with that decision a lot as well. What about when we looked at the transitions that you were making? So, you're receiving a lot of inquiries about wholesalers that want to partner with you. And maybe it didn't make sense at that time because a production space didn't give you the capacity that you needed to make it work. But then we got the right swing hook that the pandemic gave every single one of us in March 2020. Can you talk a little bit about how you adjusted when you had the challenges that approached as a result of the pandemic?
Brett [00:09:22] Immediately we sat down and looked at each other and like, we need to figure out something now or we will not be able to pay rent. It was actually John and I who sat down and started this delivery system that kind of kept us afloat for the first little bit. John and I took our old brewery van, wrote on the side of it with our hands in dirt, took a picture of John hanging out the window with gloves and a mask on and just said, hey, you guys can't leave your house, but we'll come to you. We didn't know if we were allowed to do it. We didn't know if people would be receptive to having beer from a little brewery show up on their doorstep. And John and I kind of worked a lot those first couple of weeks because we were delivering around the city in a truck that is not appropriate for doing a lot of deliveries. It's just a little old Chevy pickup truck that we used for hauling concrete, and it became our delivery vessel.
Mahfuz [00:10:21] I absolutely admire the resilience guys. It's fantastic that no matter what the circumstances that were thrown at you, you've always found a way to work around it. And you were flexing that creative muscle, right? What I found the most outstanding part of your story is that even with all those challenges that were happening, you guys decided to move forward to secure a second spot, which I thought was a bold and an audacious move for businesses to do under the circumstances. John, can you talk a little bit about the thought process, why you decided to open up a second spot?
John [00:10:50] Yeah, I think things kind of settled, and not that COVID was over, but when we decided to do this, things had settled and we'd kind of gotten into a steady business and just kind of looking at it. I think we'd kind of realized that in the current space, we've we're basically at the limit of production there. We run, I think, a good small local business. But if we want to grow and kind of serve a bigger market, I think we needed to expand. And it was either kind of a decision of, do we just stay a small business or do we grow and expand. And I think we decided to obviously grow.
Brett [00:11:26] So yeah, if I may jump in, we'd kind of hit our ceiling, like you said, and we'd become like a local watering hole. But there's so much density around us that we were unable to even discuss with stores and other restaurants to carry our stuff, because just the people around us were keeping us busy enough that we had no choice, that we could not sell to other people, or we wouldn't have anything to have a taproom anymore. And that's also kind of what lit a fire under us to search for something to allow us to grow.
Mahfuz [00:11:55] Yeah, this this is a very difficult chapter to sometimes even talk about, especially with maybe a lot of the frustrations that you and the business owners have been experiencing. Can you talk a little bit about what those internal conversations look like? I think about a lot of listeners that are maybe struggling in these types of circumstances, and they're just not sure. They're not sure about how to think about the thought processes that result in these creative solutions. Can you talk a little bit about what those conversations look like internally and who said what that sparked that idea inside of you guys to start making some bigger decisions?
John [00:12:26] I mean, I think I was probably the driving force behind expanding just because I am the only one of the partners that works there. So, I mean, it's very beneficial to me if we become a bigger business with bigger revenue. So, I think that was kind of my impetus. But right now, everything's very manual, very hands on. And, you know, I think at a certain point you have nothing wrong with that, but you kind of want to move away from it and, you know, focus more on like growing the business and not just kind of dealing with the day-to-day stuff.
Brett [00:12:57] And yeah, and I remember John sat us down and kind of explained to us a bunch of the inefficiencies of our current space. We had a storage facility across the river about 15, 20 minutes away, and the amount of time that he was spending going back and forth to be able to get stuff doesn't seem like much in a small sense. But when you look at it over six, seven months, it was a lot of time that was being wasted just because we didn't have any space in our current location to house extra growlers, extra product, extra anything. So John kind of showed us like, look, if we obviously if we make this plunge is going to be a big financial burden upfront, but it is going to make everything much more efficient in the long run and allow us to kind of reach a broader market because we'd kind of like I said before, we kind of hit our ceiling. And that was John who pushed us to consider something bigger.
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In the spirit of the growth of opening the second location. Were there any challenges, meaning that expansion tends to be a challenging in the world of getting financing or location. What were some challenges that might have happened when you were trying to secure your second spot?
John [00:14:38] We're still going through the challenges. We're currently building it out. And I think anyone that has built anything in probably the last two years knows that procurement is very challenging right now. There are delays on everything. And I think, you know, stuff that you used to be able to literally pick up off the shelf is now month-long lead times or if you can even get it right. So, you're dealing with that, the increased cost of everything right now, inflation, that's obviously big when you're building a big new project. And that's kind of been like the major challenge. I'd say we got lucky. We found a building that we really liked, and we wanted to pursue.
Mahfuz [00:15:16] You've done such a good job describing what that first location looks like. What were you looking for specifically in the second spot to make sure it met the requirements that you needed for this expansion?
John [00:15:25] Definitely more space, more functional space, especially in the current space. Everything's stacked on top of top of everything else and it's just yeah, very inefficient. But I think we're looking to be a much larger brewery and get a lot more space for raw materials finished product in the new space. We're also opening up a new taproom, so we want to have a space for that too. So, it's just kind of trying to combine the taproom part of the business and then the wholesale production part of the business.
Brett [00:15:56] Yeah. And part of what drew us to the space, obviously the availability of it, we looked at a bunch of buildings in this one, checked a lot of boxes, but it's a very unique part of Edmonton that worked for us. One, it was across the river. So, you're reaching a totally different crowd than what we currently have coming through the brewery to. It's an industrial space, but it has residential nearby. So, it's not like in a lot of cities where there's these breweries in heavy industrial areas and it becomes like a really big destination. Like we have houses 250 meters away from us. We have people, there's a community, there's more of a sense of community being in the Ritchie area now than if in some of the other spaces where we were just in the middle of tire shops.
Mahfuz [00:16:40] Yeah. And how challenging was it to secure financing for this second operation, especially considering what was happening in that time of the world?
Brett [00:16:47] We reached out to the original financier of our first space. They had no appetite for us. We didn't have a ton of options. I think it came down to three different options and we were interviewing them all and trying to figure out like some rates would be better than others. Some people offered a little bit more flexibility, some people offered a little bit more guidance and support on the back end. And we had to ultimately figure out what made the most sense for us. CWB was the one that we decided to go with for a multitude of reasons, the main one being they were able to offer the most competitive rate. They also had some support on the back end that the other operators couldn’t offer us, and that was that was huge for us.
Mahfuz [00:17:31] That's exciting. And I want to go back to what you said a moment ago about opening the second taproom while at the same time being able to offer wholesale options as well. Can you talk a little bit about how you're able to differentiate the two and why was still important to keep bringing people into the taproom?
Brett [00:17:47] For us, that's kind of the exciting part. Not that the production stuff isn't exciting, but it's really cool to see people sitting having a good time in your space. The production is going to be the main focus of this new space, which is why we need it. But for me specifically, as someone who's not there every day, there's a huge amount of pride and excitement to be able to come in and see a tap room full of people who are having a good time with their friends, whether it's by a small group or a large group. It's really cool and that's kind of what we like. We've gone on a bunch of trips to kind of check out other cities and other venues, and that was always something that we kept circling back to, is what made a taproom a more fun. And it was just being able to have like a sense of community and a big group in there having a good time. And that's what kind of drove us to this space.
Mahfuz [00:18:43] I love that you brought up the word community because that's something that's been ringing in the back of my head in every part of your story today, John, as someone that works very heavily in the day-to-day operations, what does community look like at these taproom locations?
John [00:18:58] Just speaking of the current location, I think we've had a really good relationship with all of our community neighborhoods, giving us a ton of support. That's probably where, you know, probably 90% of our customers are people that live in the neighborhood. It's the densest neighborhood in the city. That's why we originally went there. But you see the same people every week and the community, the local community, has been really supportive of us and it helps us out.
Mahfuz [00:19:21] Your story is incredibly inspiring, and you thank the community a lot for keeping you guys going. But I think what you're doing today is giving back to that community, especially businesses that have similar aspirations and want to get there. What have you learned in the first few years of the business? You've gone through a lot of ups and downs, pandemic, some difficult decisions around the expansion, the second location. I'd love to hear from both of you. Brett, maybe we'll start with you. What have you learned of the early years of your business?
Brett [00:19:49] Main thing for me is just to remain flexible. We've had so many ideas kind of rattle around in our heads and if we would have just stuck with the first note, we need to be in an industrial space near downtown. We wouldn't have made it, like we got thrown a curveball right off the bat when we got our first lease torn up. And that's kind of continued over the following five years, is just always remain flexible and communicate with each other. Because if we don't talk and we're rigid, things are not going to go well. And being able to kind of work collaboratively with each other - our group of six has been so vital to staying open and being able to do this expansion. Because, yeah, if we had stuck to our original plan, like we wouldn't be here anymore. We wouldn't have made it through the first year, let alone the last four years of being open.
Mahfuz [00:20:46] John, you're going to have to top that. So, I'm going to put you on the hot seat here and the key takeaways for the listeners to take home.
John [00:20:52] You need to have confidence in yourself, like in what you're doing. You're going to go through a lot of ups and downs, and you need to have, you know, faith that what you're doing is good and the right way to do things. Yes, you need to be adaptable, but you're going to have adversity. And I think you need to have faith in whatever your product or whatever service you're trying to sell.
Mahfuz [00:21:14] On behalf of the community and Growth Decoder, I want to thank you both for coming out and sharing your stories, not only your stories, but your takeaways and the boldness of some of the most difficult parts of your business. We really appreciate your time, and we can't wait to share this story with the world.
Brett [00:21:28] Thanks for having us. Thank you.
Mahfuz [00:21:30] That was a fantastic conversation from John and Brett. I think we learned a lot from their incredible story. My key takeaways are, first and foremost, the ability to be creative without the requirement for funding. Where most people are out there using that as a reason to not start and not make some key moves in their business, they decided to be creative. For example, requesting surveys to be completed as a caveat for participating in their parties and trying their beverages. The second one I thought was interesting, that was especially demonstrated during the pandemic era, was their audacious, yet calculated moves that they made when they had to make some tough decisions. They decided to open a second location, but at the same time allowed themselves to manage growth every step of the way. This included in determining where to open the location, how much funding was required, and how much space that they would be using every step of the way to ensure that they were still maximizing on the profit. The final one that I loved, that really stood out to me, was their passion for building with their community. It was very evident in the very beginning when they collected feedback from the group of individuals that were trying the product, but they continued doing that every step of the way with every part of their initiatives. And it was very true where it came full circle when the community came back and supported them when they needed them the most.
In the next episode, we'll meet a husband-and-wife duo whose custom home business experienced 1,000% growth after they open their first show home. If you haven't already, make sure to subscribe so you don't miss upcoming episodes of Growth Decoder. You can also visit www.cwbank.com/podcast for videos and a story about Odd Company, as well as the other businesses that will be featured on Growth Decoder. I'm your host, Mahfuz Chowdhury. Thank you for listening. Growth Decoder is brought to you by Canadian Western Bank with production by Strategic Content Labs.