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Side Launch Brewing Company Continuing Case

Getting Beer into Hands

One step through the front door of Side Launch Brewing company, located on Mountain Road, just east of Blue Mountain resort in Collingwood, Ontario, will bring an assault to the senses. Immediately you are struck by the towering, shiny, metallic fermentation tanks in plain sight from the reception area and the din of the filling, canning, and packaging station, over the nonstop drone of a forklift relocating pallets of packaged beer. And then there’s the nose—perhaps the strongest indicator that you are now in a brewery. “It’s the wort boiling,” assures brewer Michael Hancock, as if to say, “What you’re smelling right now is normal.” For him and fellow beer aficionados, the sharp aroma is pure joy; to others it might be most diplomatically described as “a little strong.”

When building the brewery, Michael and founder Garnet Pratt wanted, among other things, to create a total integration of operations and administration into an open, living, breathing, exposed, and natural environment. In doing so, they reveal the central exchange area of the Side Launch supply chain. “Those two white pipes up there,” says Michael, pointing almost to the full height of the 26-foot ceiling of the facility, “are where the barley malt comes into the brewhouse.” His pointed finger then traces the extensive fixture across the ceiling until it reaches an elbow joint that directs the grains downward into one of four cavernous steel tanks from which the brewing process begins. Toward the end of Michael’s brewery tour, you find yourself in a 5 degree Celsius loading room where the meticulously crafted and packaged beer awaits its departure to any number of retailers scattered around Ontario and beyond, as far east as New Brunswick and as far west as British Columbia.

Several cans are pulled off each production run and steered to the tasting room and lab, where they undergo quality assurance testing. Several others are directed right to the front of the building, only metres from where their journey began, to a glass-faced refrigerator where they await purchase by locals, some of whom go out of their way to experience the brewery while picking up a supply of their favourite Side Launch flavour. To witness the meticulously sourced raw materials being converted into award-winning beer through state-of-the art-equipment—all envisioned by Michael—is to see engineering, machinery, entrepreneurship, and processes performing in a symphony of industrial precision. It is a supply chain within a supply chain.

An invisible, complex layer of regulations and taxation is placed overtop of the elegant process that brings grains, hops, yeast, and water, along with the packaging components, into the brewery, producing glossy, attractive cans containing the award-winning brew that is Side Launch. This layer, far too complicated to get into in any detail here, is there to ensure that every drop going out the door not only adheres to health and safety standards and legal guidelines but is also part of a physical accounting process from which tax revenue can be generated for provincial and federal coffers.

Side Launch Brewing Company, over the course of its first few years, has been the maker of its own largest challenge—keeping up with demand. “LCBO [Liquor Control Board of Ontario] is the main [off-premises] retailer of alcohol in Ontario,” explains VP Sales and Marketing Chuck Galea, “and you deal with them and their limited locations and limited shelf space in a fairly predictable manner. Our on-premises partners—bars, pubs, and restaurants—are different. They provide us with more opportunities to get our beer into customers’ hands due to the sheer number of them in the province.” That intensifying distribution, it turns out, continues to create a growing appetite for what comes out of the little craft brewery that could, on Mountain Road, Collingwood.

Questions:

1.      How would you classify the types of intermediaries identified by Chuck for the Side Launch Brewing Company?

2.      Given that provincial governments will place taxes on alcohol before it gets to the consumer, they become part of the marketing channel. Therefore, the alcohol marketing channel takes on more of an agency structure. Explain how governments would be considered agents in this structure.

3.      What are some of the inputs to production that Michael must manage within his supply chain?