Tag: alberta craft beer industry

An Alberta craft beer pioneer looks back on a rewarding but rarely easy career

Things change quickly in Alberta’s craft beer industry – or, it just takes a while to put together a book on the subject.

When I visited Edmonton’s Alley Kat Brewing on a frigid Friday afternoon in October 2018, Neil Herbst went to the bar in the busy taproom, grabbed two pints of double IPA and led me to the adjoining boardroom. We closed the door on the chatter and he sat down and started into his story to help me with research for my book, Tapping the West. It was a story he’d told a few times before, but he told it in a way that made you feel he hadn’t, patiently and openly.

Near the end, I asked him about his future plans. Retirement age might have been on the horizon but, at the time, he felt that change wasn’t. He sent me on my way with a couple of bombers from the beer cooler (those big bottles were still a thing at Alley Kat then), ignoring my half-hearted refusal. “I’ve given beer to worse people!” he joked.

By the time my book came out, in May 2020, Herbst no longer owned Alley Kat. In February 2019, he was approached by Zane Christensen and Cameron French, two young local entrepreneurs. By Feb 2020, the deal was done (though Herbst would stay on for about a year longer to help with the transition). An era had ended, in which the Hopfather, as Herbst has been known, spent 25 years building Edmonton’s most widely known craft brand.

For a story I have coming out this summer about Christensen and French taking it from there, I had a chance to talk with Herbst again. Just as he was about to officially step away from the brewery (not before brewing a smoked porter as a farewell), he looked back on Alley Kat through a different lens, telling me about things like why the time had come to move on, the beer that should never have been released, and his feelings about the mark his life’s work made on Alberta craft beer.

Messenger: When we spoke in 2018 you still owned Alley Kat. What happened and why?

Herbst: Lavonne [my wife and business partner] had retired. She was still involved but didn’t have an active day-to-day role in the brewery and was asking me to slow down. At our age, we needed an exit strategy, and we had none. And it just happened that these guys, Zane and Cam, came along. They were pretty persistent.

They first contacted us in February 2019 and then just kept at it. The deal didn’t close until February 2020, so it was a full 12 months to do it.

We were happy because they were local and had similar views to us about where to take the company, and we were at the point where [growing] it at that stage of our lives and career just didn’t make a lot of sense. Zane and Cam are pretty young. That gives them a great opportunity.

What do you feel is the nature of the company you were handing over to them?

They have a company that’s very well known. I think they have a brand that’s well respected. We were always very careful about protecting that, making sure we had really high-quality beers coming out. I can think of only one time that we put out a beer that we shouldn’t have.

What was that beer?

Oh dear. It was a fruited barrel-aged beer. It was … not good. It was something we thought would improve in the bottle and unfortunately it didn’t. That would have been 10 or 15 years ago.

It’s a different industry than when you started. Can you compare the times for me?

I think the market is much more mature now. In fact, just for a giggle I homebrewed the original wheat beer that we had. People just couldn’t get their heads around it. It was a very light beer in terms of flavour profile but it was, for the times, quite cloudy.

So when I rebrewed it recently, Lavonne and I were like, “Well it had to have been more cloudy than that.” It barely had a haze. But people were appalled and bars would send it back because there must be something wrong because it’s not crystal clear.

We had to create the market for craft.

We had to kind of create the market for craft. Alberta at that time still had lots of imports, but we were kind of stuck in a zone that people weren’t familiar with because we weren’t an import and we weren’t really a domestic, because domestics were Molson and Labatt, essentially. So we had to work to create that niche. I think we were reasonably successful but it took awhile.

There were a bunch of us that started at the same time: us, Bow Valley, Banff Brewing, Brewsters at roughly the same time, Wildrose shortly after, there was Taps brewpub here in town and [another] brewpub in Calgary. And Flanagan and Sons, of course [in Edmonton]. It was tough for everybody. Basically there were four of us that survived. It was a tough slog.

There's more to that story, and it's in this book I wrote.

The short of it is this: Alley Kat was one of the breweries that blazed the trail for #craftbeer as Alberta knows it today. (The longer version is better!)

Full Moon stands up beautifully as proof of that. 🍻 pic.twitter.com/lnkUjO0ygJ

— Scott Messenger (@scottlmessenger) December 9, 2020

There’s more acceptance from consumers but also a lot more competition.

There’s a lot more competition but I think there’s still room in the market. If you look at the numbers, the imports are struggling a little bit now, and I think it’s because people are accepting the fact that local beer is good.

That’s one of the things that we ran into, and most of the other breweries. When you said [beer] was locally made, it was like, ‘Eww.’ I don’t think people realized that Molson and Labatt’s were locally made. It was like, ‘Where do you make it? In your basement?’ I got asked that question so many times it was unbelievable. It didn’t have a good connotation.

The taproom is a relatively new development at Alley Kat. And an opportunity for Zane and Cam?

We got the patio approved in 2019. So we had it open for one summer [before the pandemic]. We were slow getting into it, to a large degree because of AGLC regulations.

[Initially,] we were uncomfortable with where the [AGLC was] going with it because they didn’t seem to have a good idea of what we could and couldn’t do. We’d ask if we could do x, y and z and they would say, “Sure.” And then you’d say, “Well if we can do x, y and z, that means that a and b also work.” And they would say, “Oh no, no, not that.” So we waited for clear direction, because we’d been burned by the AGLC a few times.

For instance, Alley Kat is located where it is because we were told there was absolutely no opportunity of ever having a taproom. That was a nonstarter and would never change. And within two years they let Big Rock open a taproom. We just wanted to make sure that we didn’t invest a whole bunch into something that wasn’t going to go.

[Now,] there’s an immense amount of room for growth in that area and it should help out with the wholesale side as well.

Tell me more about the opportunities for growth at Alley Kat in the next couple years.

I still think the wholesale side is huge, and selling packaged. But I think the taproom has a huge amount of opportunity, too. So I think there’s twin opportunities.

I think there’s some opportunities for export now that Alberta beer has a little more traction – people understand now that there’s actually good beer coming out of Alberta. I think for a long time we were just seen as a place to sell beer into.

Cam was telling me there was beer going to Sweden?

Yeah, a little test of the Swedish market. I think there’s a lot of opportunities like that. The problem is now that I think most markets across Canada are getting saturated and there’s more of an interest in local as well.

What are the new owners’ strengths going into this?

I think a lot of times people get into the brewing industry thinking it’s a cash cow, but really it’s a nickel-and-dime business. Maybe a penny-and-nickel business! So you have to be really conscientious about costs and maintaining margins and they certainly understand that.

It’s a nickel-and-dime business. Maybe a penny-and-nickel business!

I think they have a really great team at Alley Kat that will help them along in any area that they aren’t well versed in. They don’t have brewing backgrounds but they have some great folks in production that can help them along.

When Lavonne and I started this, I homebrewed but I certainly hadn’t run a production brewery. I’d never done sales in my life. My background isn’t in brewing and we did quite well, I think. My background was in political science.

Is there any mistake you made that you would like them not to make?

Certainly, we made tons of mistakes. But you learn from your mistakes. If you’re not making mistakes you’re probably not going to grow. I guess as long as the mistake doesn’t kill you, it’s all good.

How are you feeling about it being done?

I feel good because Zane and Cam are a couple of good guys. I think they’ll run the brewery similarly to the way Lavonne and I did. We tried to be good corporate citizens and tried to help the industry along as much as we could. I think that they will be similarly inclined.

You’ve been essential to growing this industry. What does it mean to you to look back on that work?

We probably had an impact largely because we were early in. I think one of the legacies that we will have is trying to create craft brewing associations.

Alberta Small Brewers Association is the second one we started. We had the Alberta Craft Brewers Guild that we started in ’95 or ’96. It worked to get a tiered markup system. It was reasonably successful. It wasn’t a great tiered system but it was better than what it had been. Big Rock worked on that separately from us. But we worked very closely on it with [Brewsters founder] Mike Lanigan.

And then ASBA, [former Big Rock president and CEO] Bob Sartor and I got that going initially. [Former Big Rock CFO] Barb Feit was instrumental in that. And of course we were super lucky to bring in [Blind Enthusiasm founder] Greg Zeschuk.

He just showed up at Alley Kat one day and said, “Is there any opportunity to get involved in Alberta brewing?” And I said, “As a matter of fact there is!” I told him that as long as he was happy to work for free he was hired.

What do you feel Alberta craft beer has given to you? What has it meant to your life up to this point?

So much. I’ve met and become friends with so many great people – those who were and are part of building the industry and those who are consumers. It has given me a lot of satisfaction to know that Lavonne and I were early into the industry and so we got to make our own path, and to some small extent [blaze] the path of craft beer in Alberta.

We saw the whole scope of brewing, all the way from creating recipes to selling the resulting beer to working with others in the industry and government to make Alberta a friendly place for craft beer. It has been a great industry to be part of.

Are you going to keep homebrewing?

Oh yeah, for sure. I’m just renovating the basement right now to get back to homebrewing in a bigger way.

That’s a lovely bit of irony, given that people used to ask you if you made your beer in your basement, and how that wasn’t good.

Yup. Started in my basement and I’m ending in my basement. The big difference is that I started homebrewing because there just wasn’t much variety available [in Alberta]. Brewing soon became a passion and then the beginning of an idea for a business that would provide Albertans with a wider variety of interesting beers.

Now I’m brewing in my basement purely for the passion.