There have been lots of questions and talk around the recent sale of Edmonton’s Alley Kat to a pair of St. Albert entrepreneurs. You can read the story of the sale here, and my analysis of what it might mean for the industry here. Many people are curious, and possibly a bit nervous, about what the future holds for the brewery

Recently I had an opportunity to sit down with Zane Christensen and Cameron French, the new owners of Alley Kat to learn about their backgrounds and find out what their plans are for the mainstay brewery.

French and Christensen are friends who have known each other as far back as junior high school in St. Albert. They remained friends through university, where both studied business and both eventually become accountants. The two, who appear to be in their early 30s (I didn’t ask their age), have been interested in operating local businesses for a long time.

“At the beginning of university if you had of told me I would end up as an accountant I wouldn’t have believed you”, says Christenen. He adds that their interest was always more in creating and building a small business than just accounting itself.

The two admit they have no previous experience in the beer industry. “Our interest in beer started as consumers, exploring the growing range of Alberta craft beer”, notes Christensen. French did dabble in homebrewing for a while with another friend, but admits it was a bit of a failure. “Once we made possibly one of the worst beer ever made, I couldn’t drink it”, he admits.

But their new interest in craft beer and their longstanding interest in business started to merge. “Opening a brewery started to enter our conversations when we talked about business ideas”, says Christensen. A year or so ago, the two reached out Neil Herbst to seek out his insights about the beer industry, initially with the idea of opening a new brewery in mind.

The conversations eventually shifted to the possibility of purchasing Alley Kat. “It arose organically”, says Christensen. “At one point we asked Neil what he and Lavonne’s succession plan was, at first out of curiousity”.

On his part, Herbst, says he didn’t have any specific plans when they started talking. “When you hit my age people start asking what is your succession plan, and so I realized I maybe should have one”.

The deal came together fairly quickly after that. Neither party was willing to disclose the financial aspects of the deal (fair enough – I didn’t push very hard). They did acknowledge that a commitment to keeping the brewery local and independent was a deal breaker for Herbst, and the pair had no trouble agreeing to that condition “Our plans from the beginning have been about building a strong local business”, says French.

I asked them about their reasons for buying Alley Kat rather than starting their own brewery, noting that there is a big price premium for buying an existing operation with a well-established brand, longtime staff and other features. In short, they could have started up new for much cheaper. Christensen and French agreed and said it is a trade off.

“Two things you can’t buy with a start-up are the Alley Kat name and the experienced staff that come with it”, observes French. He says that start-ups face enormous challenges in creating balance, building a brand, juggling regulation, all on a shoe-string.

Christensen adds that the start-up business model isn’t really what they wanted. “For many new guys it is about the tap room experience, that is how they make money. For us, we are more interested in the wholesale model. It is much harder to start the Alley Kat model from scratch”. He adds that the money needed for marketing and distribution of a production-focused brewery would bring start-up costs much higher.

I then move to the question that is on everyone’s minds these days. What are their plans for the brewery? The first response is a fairly routine “business” response: “We want to maintain quality and ensure that the Alley Kat brand remains relevant and grows over time”, says French. So I push a bit.

The pair acknowledge they “don’t have any firm plans” at the moment, recognizing that they are new to the industry and have much to learn. “Right now we are learning all aspects of the business, that is the first step”, says French. They say they have been shadowing all aspects of the operation, going along on deliveries, making sales calls, observing the brewing process (“we didn’t really do anything but watch the brewers do their work”, says Christensen), helping with packaging.

When I ask them about the future, they talk mostly in broad strokes. They envision a path of slow and sustainable growth but have no plans to stretch into other markets. “There is still room to grow in the province”, says Christensen. “Our first focus is to gain market share in Alberta, to capitalize on the growing pressure to provide local options”. “We want to refresh the brand but are committed to staying Alley Kat”, adds French.

They foresee no immediate changes to the brewery’s core beer, seeing it as a successful line-up, and they want to learn more about the industry and where it is going before making decisions about the future of the product.

One of the big changes people will see at Alley Kat in the coming weeks is their shift from bottles to cans. They are abandoning their longtime commitment to the industry standard bottle and moving to exclusively canned packaging, using both 355 ml and 473 ml formats. This change, however, has nothing to do with the new ownership as it has been in the works for months and was well underway when the transfer took place.

The new owners are affable and approachable. I appreciate their willingness to acknowledge they have a lot to learn about the beer industry and thus will be going slow in terms of making their own mark on the company (and will be keeping Herbst on as an advisor for the next year or so). I also think they recognize that they have just taken control of an admired and popular brand, which comes with many expectations and opportunities – to fail and to succeed.

Where will they take Alley Kat in the next five to ten years? I don’t know. But the good thing is that they don’t know either (yet). So I guess we will all just have to see how it plays out. And quaff a Full Moon or two while we wait.