Starting your own brewery

is simple: buy some equipment,

hire a brewmaster, and within
weeks youve got a product to take to
market. The only barrier to entry?
Jumping through the bureaucratic
hoops of permitting and licensing

f
r
t
C
a

the

BREWING TREND:
Cdric Dauchot and
Karen Skadsheim in
the depths of Townsite
Brewery

60 BCBusiness June 2012

The unmistakable drone

and wail of a bagpipe erupts, masking the perpetual industrial hum from the Catalyst paper
mill that is background noise for residents of
Powell Rivers historic Townsite neighbourhood. The piper, a woman in Celtic garb, begins
a slow march starting at the old Federal Building. An eclectic procession follows, beginning
with a bicycle rickshaw bearing a bride and
groom, and in their laps a keg of beer.
Next comes a pair of decorated goats (a
nod to German tradition associated with bock
beer). A ragtag group of about 40 people falls
in behind, some in decorative costumes, others in cycling or hiking gear, all chuckling and
chatting excitedly. Its the first sunny spring
afternoon of the year, an auspicious sign for
the launch of Powell Rivers brand new craft
brewery, Townsite Brewing Inc.
The parade is a short one, just once around
the block to McKinneys Pub in the old Rodmay Hotel, where the groom hands over the
ceremonial keg. Everyone crowds into the
pool room for a chance to be the first to taste
Zunga golden blonde ale or Tin Hat IPA. The
first pitchers arrive and, soon enough, glasses
are raised in a toast. By the looks of appreciation and the speed at which the glasses are
emptied, its clear the beer is a winner.

of
Brewing
by JOE WIEBE
photography by NIK WEST
June 2012 BCBusiness 61

Karen Skadsheim cant refrain from

hopping up and down and letting out a
whoop. For the brewerys founder, the
launch has been a long time coming. Bad
Karen, as her friends affectionately call
her, is so well-known and well-connected
in Powtown that youd assume shes a local,
born and bred. But in fact, shes a transplant
from North Vancouver, part of a wave of
urban ex-pats who have fled the bustle and
real estate prices of Greater Vancouver for
the artsy-outdoorsy vibe that Powell River
now offers along with well-maintained
houses with ocean views that can be had
for less than $200,000.
Skadsheim landed in Powell River in
2007 after a year spent travelling abroad,
temporarily crashing with her brother
(who lives in a Townsite church he bought
for $17,000, but thats another story). She
kept her things in storage while she sorted
out her future, but after a year she finally
realized that her future lay in Powell River,
so she moved into the former rectory next
door.
The only thing missing for her was craft
beer. This brewery is all about me and my
needs, she explains with a laugh. While
rumours of new microbreweries opening
on the Sunshine Coast came and went,
she and her friends often talked about the
perfect building for such a brewery: an
architectural treasure that had sat empty
for a long time, it had been built in the
Streamline Moderne style by the federal

government in 1939, to house the post and

customs offices. One night, probably after
a couple of beers, she emailed the address
on the For Lease sign, saying she was looking into setting up a microbrewery in town
and wondered what the rent would be.
To her surprise, she received a response
immediately, and an enthusiastic one at
that. Oh my God, a brewery would be perfect, the landlord wrote. Do you need a
business plan? Do you need some money?
Because I have a business plan and I have
money.
Skadsheim formed a partnership with
the buildings landlord and incorporated
the brewery in May 2010. Money was the
main challenge she faced, but the fact that
her partner could make the federal building available at an extremely low lease rate
and leave it empty until they were ready
to go was crucial. It was already zoned
for industrial use, which is a must for production breweries. (A fish-packing plant
had previously operated at the site.)
Without any entrepreneurial experience herself, she enrolled in the federal
governments Community Futures program, which provided her with training
in setting up the business plan, and then
supported her with a modest salary during
the crucial startup phase when there are
many expenses but no revenue. The brewing equipment and necessary renovations
to the building cost about $500,000, and
the only other real hurdle she encountered

was when the brewer she intended to hire

took another job in Victoria. But in the end,
that challenge had a positive result, too.
Cdric Dauchot, Townsites brewer,
grew up in Belgium, where he graduated
from LInstitut Meurice in Brussels in 2004
with an engineering degree in the science
of brewing. He took a job with the French
chain Les Trois Brasseurs, which sent him
to Montreal to set up several brewpubs
in Quebec. There, he met and eventually
married Chloe Smith, a brewmaster herself.
After learning everything there is to know
about setting up breweries, they moved to
her hometown of Saskatoon with the intention of starting their own. But after chasing
our own tail for a year and a half, Dauchot
saw Townsites advertisement for a head
brewer and jumped at the opportunity.
Skadsheim was nervous about bringing the couple who were expecting
their first baby all the way to the remote
northern end of the Sunshine Coast. But
she neednt have worried; as Dauchot puts
it succinctly in accented but perfect English: Saskatoon to Powell River is less far
than Belgium to Canada. To seal the deal,
Skadsheims business partner offered the
couple a beautifully restored apartment in
the old Bank of Montreal building across
from the brewery at a discounted rate.
Most importantly, Dauchot says, I had
the freedom to put the brewery together
the way I wanted. Smith also hopes to
brew at Townsite, although the brewery

From Mash to Market

Unlike wine, beer is ready to drink within weeks

he brewing process typically takes two to four weeks, but can be

longer, depending on the style of beer. Lagers take longer than ales
because they ferment more slowly at a cooler temperature, but
some high-gravity (higher alcohol) ales can also take longer. One of the biggest challenges craft breweries face is the bottleneck caused by the fermentation process: you can brew a batch of beer every day (or two or three
if you work around the clock), but each batch will spend a few weeks in a
fermentation tank, so the brewing process is limited by how many fermentation and bright tanks you have. The flipside is starting with a large facility,
in which case you might have too much beer on your hands, which can lead
to spoilage or dumping a whole batch.
62 BCBusiness June 2012

Cdric Dauchot

BUILT TO LAST:
Karen Skadsheim caps
reusable growlers;
Townsite Brewings
historic location

cannot afford to put her on the payroll

yet. Maybe in a year or two, if things go
well, but, for now, the brewery has three
employees: Dauchot, Skadsheim and
Michelle Zutz, who handles sales.
For Townsite Brewing, the next few
months will be crucial: summer is beer season, so it represents the greatest opportunity to sign up restaurants and bars
and get its products out to the consumer.
In addition to its Zunga (which is Powell
River-ese for a rope swing over water) and
IPA, the brewery will also produce Powtown Porter and Sun Coast Pale Ale, which
will only be available on draft, and only on
the Sunshine Coast.

ownsite is only one of more

than a dozen new microbreweries or significant brewery
expansions in B.C. this year,
all part of the boom that craft
brewing has been enjoying here for more
than five years. B.C.s microbreweries have
BCBUSINESSONLINE.CA

enjoyed sustained growth of more than 20

per cent a year since 2006, with an amazing 142-per-cent increase over the past
five years (from $53.6 million for 16.8 million litres in 2006, to $130 million for 35
million litres last year).
Four breweries have opened in the past
year alone: Tofino Brewing Co. last spring;
followed by Hoyne Brewing Co. in Victoria
in December; Coal Harbour Brewing Co.
in Vancouver, in January; and Parallel 49
Brewing Co., also in Vancouver, last month.
Two nanobreweries are aiming to open
this summer North Vancouvers Bridge
Brewing Co. and Powell Street Craft Brewery Inc. in east Vancouver and three
other new breweries are in the planning
stage in Vancouver alone, including one
as part of the new student union building
at UBC, purportedly the first on-campus
brewery in North America.
Surreys Central City Brewing Co. is
building a new $20-million production
brewery on city land close to the Pattullo
Bridge, slated to open in 2013. Similarly,

Red Truck Brewing Co., an arm of the Mark

James Group, which also owns Yaletown
Brewing Co., is building a $15-million facility on First Avenue, just off Main Street
in Vancouver. Significant expansions are
already underway or slated for Howe
Sound Inn and Brewing Co. in Squamish,
Lighthouse Brewing Co. and Driftwood
Brewing Co. in Victoria and Nelson Brewing Co. Ltd. in the Kootenays, which celebrated its 20th anniversary last year. Even
Steamworks Brewing Ltd. in Gastown is
planning to grow, first by having its products bottled by a contract brewer, then by
expanding its own brewing facilities.
Opening a new brewery follows a standard template: lease or purchase a space
with industrial zoning; apply for a development permit with the local government;
apply for a brewing licence from the provincial government; order the brewing
equipment; endure numerous inspections
and hurdles as the space is prepared for use
as a brewery; install brewing equipment
(and undergo more inspections); apply to
June 2012 BCBusiness 63

Shopping List
What do you need
to start a brewery?

n Grain Mill: grinds the malted barley grains

prior to mashing
n Mash Tun: a large kettle that heats and
stirs the grains to a precise temperature,
which converts starch into the sugars necessary for the brewing process
n Lauter Tun: sometimes combined with
the mash tun, this is where the grains are
removed from the liquid (now called wort)
after the mashing process
n Brew Kettle: the vessel where the wort
is boiled for a certain amount of time, with
hops added at various stages of the process
n Wort Chiller/Heat Exchanger: cools the
wort quickly to the right temperature for fermenting, keeping it sterile at the same time
n Fermentation Tank: yeast is added to the
cooled wort in this tank and fermentation
begins
n Aging Tank: once the fermentation is
complete, the beer is moved to this tank,
where it ages for a couple of weeks or more,
usually at a cold temperature
n Bright Tank: the beer is then moved
(sometimes through a filter) to this tank
where it sits until it is kegged or bottled
n Kegs and Kegging System
n Canning/Bottling Line and Cans/Bottles:
some breweries only keg their beer, but most
like to sell their products in cans or bottles
n Delivery Vehicle: to deliver kegs to restaurants and bars, as well as bottles/cans to the
LDB warehouse or private liquor stores
Townsites
Dauchot

64 BCBusiness June 2012

the Liquor Distribution Branch for listings they have been completely approved, even
for your beers once the brewery has been if they have customers who are interested
fully approved; and, finally, begin brew- in pre-ordering. It can take weeks for a
ing beer and hope that the listings will be listing to be approved by the LDB, even
approved and, thus, that you will be able though the process could be as simple as
to sell the beer when it is ready. Once the submitting the beers name and informabeer is ready, the biggest challenge is to tion through an online database.
sell it, either to restaurants and bars willEven once a brewery is allowed to sell
ing to serve your beer
its own beer, all the money
to their clients or to
that comes in whether from
individual customers
ONLINE EXCLUSIVE
a keg delivered to a local reswho are ready to fork
Is there a new brewery near taurant or a bottle sold in its
over their cash at a
you? Check out our map of own tasting room must be
liquor store or at the
breweries around B.C.
sent to the Liquor Distribubrewery.
bcbusinessonline.ca/
tion Branch. There, the largThe permit-applibcbreweries
est portion is retained as
cation system is a
taxes and distribution fees
bureaucratic obstacle
and, a month or two later, the
course. Brewers complain that municipal brewery will finally receive its portion of
development offices rarely seem prepared the sale, which is well less than half of the
to handle applications from breweries, or sale price.
that municipalities have limiting rules that
At Hoyne Brewing, Victorias newest
make operating a brewery especially dif- craft brewery, owner and brewer Sean
ficult. Local officials often react as if the Hoyne explains that though he started
brewer were applying to build a chemical selling 650 ml bomber bottles and
plant or smelter. The modern craft-brew- growlers (two-litre refillable jugs) at the
ing process is a very green operation, with brewery in December, the revenue was
little pollution or odour other than perhaps just starting to trickle in by mid-March.
the sweet, malty smell of the beer being As well, in February, Hoyne Brewing
boiled during the fermentation process. applied for approval to sell its beer in govNone of the tourists on Granville Island ernment liquor stores, but it would not
seem to mind when brewer Vern Lam- receive that approval until mid-April and,
bourne is boiling a batch of his Pumpkin even then, only for one of its four core
Ale or Fresh-Hopped ESB.
brands, Hoyner Pilsner. Another brand,
Brewpubs, in which beer is brewed and Down Easy Pale Ale, was given a seasonal
sold in the same building along with food, brew listing only, which means it will not
are notoriously difficult to open because be sold year-round. The other two brands
unlike normal restaurants, which only will only be available at the brewery or
require a food-primary liquor licence, from private liquor stores.
brewpubs require a liquor-primary
These are the facts of doing business
licence. The multi-step application pro- with the B.C. Liquor Distribution Branch.
cess includes posting site signage, dis- Most brewers complain about the LDB
tributing flyers in the neighbourhood off the record but few will say anything
and, likely, a public meeting where local negative publicly for fear of encountering
residents can voice concerns. Sometimes problems in the future.
an expensive telephone survey may even
Hoyne wont go on the record about the
be required. Each of these stages has LDB either. Still, its easy to understand how
a price tag: the City of Vancouver, for an entrepreneur who has spent at least
instance, charges from $801 to a maxi- half a million dollars to open his brewery
mum of $4,327, depending on how many might be frustrated at being stalled just
steps are required.
as hes finally ready to sell his beer to an
The provincial government adds fur- eager market.
ther layers of regulation through the
But Hoyne isnt complaining. Quite the
Liquor Control and Licensing Branch, and opposite; he couldnt be happier. Openthe Liquor Distribution Branch, through ing his own brewery has been his dream
which all alcohol sales in B.C. flow. A com- going back more than 20 years. Although
mon complaint from new breweries is that he studied graduate-level literature at
they cant begin to sell their products until UVic and still likes to bone up on the latest

The Godfathers

The origins of B.C.s microbrew movement

Frank Appleton and John Mitchell are widely credited with kick-starting B.C.s modern
craft-brewing movement when they founded the Horseshoe Bay Brewery in 1982.
Although that operation did not survive, several of the B.C.s oldest breweries and brewpubs have a direct connection to either Appleton or Mitchell, including Spinnakers in
Victoria, which was Canadas first modern-day brewpub when it opened in 1984. Many
of the brewers Appleton and Mitchell trained have gone on to open their own operations.

critical perspectives on Joyces Ulysses, he

found his true calling when he responded
to an ad seeking a brewer at Victorias
newly opened Swans Brewpub in 1989.
Hoyne brought a six-pack of his homebrew to the interview with Frank Appleton, who designed and built the brewery.
Hoyne says he and Appleton sampled his
homebrews and chatted, and by the time
the bottles were empty, hed been offered
the job. He spent several years at Swans
before moving on to the Canoe Brewpub
just down the street, where he worked for
the next 13 years.
The recent craft-beer boom in B.C.
played a part in Hoynes decision to finally
open his own operation. If the marketplace was showing signs of the reverse,
where craft breweries were struggling and
people werent supporting them, would I
have started up a microbrewery? Hoyne
asks rhetorically as he leans on a pallet of
his just-bottled beer. I would definitely
have thought twice about it. But it does
seem like a great time.
The people behind Vancouvers newest brewery, Parallel 49, definitely agree
that the time is right for microbrewing in
B.C. The more-than-$1-million operation
is owned by the same team of businesspeople as St. Augustines, the Commercial
Drive restaurant specializing in craft beer.
Co-owner Anthony Frustagli says that St.
Augustines was originally intended to be
a brewpub: We went to City Hall to find
out what we needed to do to open one.
When the clerk answered, What the hell
is a brewpub? I knew it wasnt going to
happen.
The owners settled for opening St.
Augustines as a restaurant instead, but
focused on serving the best beer they
could find. With more than 40 taps pouring
BCBUSINESSONLINE.CA

craft beer from B.C., the U.S. and Belgium,

the pub has become a hub for craft-beer
lovers in Vancouver, along with the Alibi
Room in Gastown. St. Augustines is like
R&D for Parallel 49, Frustagli says. We
know what people like to drink.
Ironically, due to the arcane provincial Tied Houses laws, Frustagli and his
partners will not be allowed to serve Parallel 49 products at St. Augustines. The
consensus among industry insiders is that
the rule will be changed soon, and while
Frustagli hopes it will, he shrugs and
says, Our business model requires us to
sell our beer to a lot more places than St.
Augustines anyway.
Parallel 49 is on Triumph Street in east
Vancouver, across from the citys other
newest brewery, Coal Harbour Brewing.
But while Coal Harbour took two years
to open, Parallel 49 has managed to do it
in nine months. Were pushing the limits
of how quickly you can open a brewery
in B.C., says brewmaster Graham With,
who trained as a chemical and biological engineer at UBC while perfecting his
brewing skills as a DIY home brewer. Basically, whatever the engineers recommend,
we do. That way we avoid delays, With
emphasizes. The sooner we get product
out, the better, because no money is coming in until then.
One big decision Frustagli and his
partners made to avoid delays was to
order their brewhouse equipment from
a manufacturer in China in order to circumvent a backlog of orders for North
American-made brewing systems. While
part of that decision was cost-based, they
also knew they could get the equipment
much more quickly, even factoring the
extra four weeks it would take to ship it
from China.

Last fall, the owners and With flew to

China and visited the factory, where they
were impressed with the professionalism
of the staff and the quality of the equipment. The brewing equipment arrived on
January 31 Withs 30th birthday but,
unfortunately, the two Chinese engineers
that the company sent over to help set
it up were denied entry by Immigration
Canada. Frustagli enlisted local MP Libby
Daviess assistance in writing a letter on
their behalf, citing that these men are
professional engineers with families and
mortgages in China. Eventually, they were
approved entry.
Overall, With says the most important
choice he and his partners made had to do
with the floor. Having worked at a couple
of other breweries, he knew how important it was to have a proper, slanted floor
so that spilled liquids flow naturally to
drains (there is a reason why brewers tend
to wear rubber boots). It also needed to
be reinforced to support the heavy brewing equipment. The pre-existing floor was
completely dug up and re-poured, with a
high-tech environmental buffering system
installed to handle the chemicals used for
cleaning the tanks or in case of a large spill
of yeasty beer, which can be hard on the
sewer system. The price tag for the floor
alone was about $200,000.
Parallel 49 intends to open a public tasting room at the brewery in 2013, and with
Coal Harbour Brewing across the street
and another long-standing city brewery,
Storm Brewing Ltd., a couple of blocks
away, the area is on the way to becoming
Vancouvers brewery district. The way the
craft beer business is booming in B.C. right
now, there might be a few more before too
long. Its not quite Portland of the north, but
its getting closer.
June 2012 BCBusiness 65