Cracking the craft beer industry is tough. One Vancouver-based brewer wants to offer another way in.
Factory Brewing Ltd. is the first contract brewery of its kind to hit Vancouver, and it’s come at an opportune time. According to Statistics Canada, there are 102 craft breweries in British Columbia and 31% are less than a year old.
As competition stiffens and consumers demand more, microbreweries like the ones found in East Vancouver might need a crutch to lean on to keep up with production. That’s where Factory Brewing comes in.
The Factory brewery boasts an annual capacity of over 60,000 hectolitres (enough to fill more than 17 million bottles) for craft beer hopefuls to create and maintain their product out of house. The facility provides full packaging requirements, a quality control lab and a 50-hectolitre brewhouse from Newlands Systems Inc. (NSI), one of the leading providers of brewing equipment in North America.
Located at 1575 Vernon Street in Vancouver, the brewery is well placed in the city’s emerging craft beer scene.
“We provide all services for them and make the beer at a cost that is pretty close to what they can make for it at their own facility,” said Stephen Smysnuik, account manager at Factory Brewing and former editor of the Growler. “It’s almost the same cost without having to put up all the extra capital to buy more tanks, and [companies] can achieve a profit quicker than if they were doing it on their own.”
Facility expansions are often unobtainable for small-sized brewers.
“Ultimately, some people just want to keep it in house,” said Smysnuik. “There are a dozen ways to do business in this industry; we are just providing one option.”
Companies pay Factory Brewing an upfront cost for its services, dispersed through the production process. Factory Brewing does not charge a percentage of the finished product.
“The pricing is basically recipe-based, so whatever recipe they want to create, we put it into our pricing model,” said Andrew Harris, CEO of Factory Brewing and former owner of Russell Brewing Co. Factory Brewing also takes into consideration “whatever vehicle they want to put it into, whether it’s draft, cans, bottles, and then size, and then we come up with the price,” he said.
“Before the beer leaves the facility it is paid for.”
Harris has witnessed the many ups and downs of opening a brewery. After serving as owner of Russell Brewing, he worked as a consultant to fledgling brewers.
“Just in my observations, it was pretty clear that expansion for the little guys was almost impossible,” he said. “There was a need in the market for a facility that could be an extension of these craft breweries and help them through their growth phase.”
Harris jumped when he realized the market potential.
“On the contractual side of the business, there was an opportunity for us to fill capacity relatively quickly here in B.C.”
Brewing operations will be handled by head of operations Rick Dellow, who founded R&B Brewing and is a former NSI project brewer, and Andres Palma, former director of brewing at Vancouver’s Molson brewery.
Factory will open with 11 brewery partners, including Doan’s Craft Brewing Co., based in East Vancouver.
“Factory gives extra volume to local breweries,” said Doan’s owner Michael Doan. “This is a necessity to some pretty much nano-sized breweries like us but can be a huge benefit to larger breweries who choose to take part.”
“Vancouver has one of the best craft beer scenes in North America,” he added. “I see a bright future over the next several years with the breweries in Vancouver continuing to be trendsetters and innovators.”
Doan has signed a three-year contract with Factory Brewing and will begin brewing three different types of beer before year’s end.
“Doan is a great example of our clientele,” Harris said. “It is a small facility on Powell Street that has no footprint to expand without building a brand new brewery.”
Factory is set to launch later this spring. •
