Canadian Shipper

Feature

Draft Kings


B.C. entrepreneurs Dan Wainwright and Garett Senez turned their love of craft beer into a thriving business that ships the nectar of the gods around the globe 

It all started with some very expensive beer.

Three years ago, while visiting friends in Manilla, Philippines, Garett Senez was gob smacked to see American craft beer selling for upwards of US$50 a bottle. While he wasn’t thrilled to pay so much for a pint, the timing of his discovery couldn’t have been better.

Just before his jaunt across the Pacific, Senez and Dan Wainwright, a friend and co-worker at beer conglomerate SAB Miller Canada in Vancouver, had been musing about their futures after the announcement that their employer was merging with the world’s largest brewer, AB InBev.

“Looking a year out, we knew we were probably going to be out of job, so we put our heads together and we both knew we wanted to go the entrepreneurial route,” recalls Wainwright.

The pair looked at the craft beer space in British Columbia and asked themselves, “How can we add value?”

“Neither one of us wanted to go the route of a brewery,” says Wainwright. “It’s a saturated market and besides, we couldn’t brew as well as a lot of the guys already out there.”

Fresh off his trip, Senez remembers the moment when Pacific Rim (PACRIM) Distributors was born. “I came back, walked into Dan’s office and said, ‘I know what we’re going to do.’”

What they did is create a company to bring the beers of the Pacific Northwest region (Oregon and Washington states and B.C.) to a broader global beer community, something they felt local brewers weren’t able to do.

As popular as craft beer is locally, the B.C. market is both limited and saturated, says Wainwright. Brewers are focused on what they do best—brewing great beer—which leaves international markets rife with opportunity.

That is where PACRIM comes in.

They help local brewers find foreign markets for their product. “We handle essential aspects of the export process, as well as identifying and securing the right partnerships with national and regional distributors in Asia,” says Wainwright. “We then work closely with local breweries to ensure we launch the right strategy and support local-market activities.”

“We have a differentiator in the quality of our beer as well as advantages versus the U.S. dollar in terms of Canadian exchange rates and there is a lot of support our brewers are looking to give because there is not a lot of capacity in the Vancouver beer market,” says Senez, who is PACRIM’s VP marketing. “So exporting makes complete sense for them, they’re making them heavily invested in our business model.”

Dan Wainwright (left) and Garett Senez founded PACRIM Distributors in 2016 with the goal of helping local craft brewers find foreign markets for their product. Photo: Ryan McLeod

Crafting rebellion

Wainwright, who is president, looks after logistics and brewery operations, while Senez, who also worked for L’Oreal Canada in marketing, hunts for new craft beer hotspots.

“We don’t operate in North America,” he says. “We took a look at the U.S. market, but it’s extremely complicated; going into five different states is like going into five different countries.

“Our model is based on going into markets where the saturation of craft beer is very low.”

This is what made Thailand an attractive option for their first foray.

“Craft beer is basically illegal in Thailand,” says Wainwright, adding that lobbying from larger brewers has made it nearly impossible for anyone to start brewery from scratch.

“Craft beer in Thailand is rebellious,” he continues. “If you’re young and successful it is very cool to be seen drinking craft beer. The government, in trying to hinder the market, has in fact made it a wonderful market for craft beer.

“So it made complete sense to start there because it’s predominantly an import market.”

Finding the right distribution partner was essential, says Wainwright.

“We started by looking at craft beers that were doing well and were being handled and represented the way that craft beer should. We noticed a Japanese beer that was being represented well, through social media and consumer education, so we tracked down the distributor and were able to strike a deal where they were able to take on all of our brands.”

First come, first serve

The beer comes first. According to Wainwright and Senez, when it comes to choosing a brewery to work with, there are two things required: great beer and the ability to fill orders.

“For three of our brewers—Phillips, Central City and Parallel 49—inventory is not an issue,” says Wainwright. “They’re among the largest craft brewers in western Canada. Our other three brewers [Off The Rail, Coal Harbour and Postmark] are boutique artesian breweries.”

While PACRIM is still looking for new markets, it’s not looking to take on any new brewers right now. “We want to make sure that we fulfill the volumes that our current partners want to achieve overseas, then we can take on new breweries,” says Wainwright.

After establishing a presence Thailand, the duo quickly expanded in the Asian market to Hong Kong, Singapore, Taiwan and more recently China.

“Once we proved our model in Asia, the brewers said, ‘Let’s go global,’” says Senez. “It kind of took off from there.”

Now the company ships beer to Spain, France, Portugal, Germany, as well as Australia. Philippines and Malaysia are moving forward soon, and negotiations are underway with a distributor that could see them enter the Mexican market later this year.

Senez expects PACRIM to be in as many as 25 markets across the globe by the end of 2019.

“We’re scaling up as quickly as we can.”

They’re always on the lookout for the next great craft beer outpost, even when they’re on vacation or in Senez’s case, his honeymoon.

“I went to Peru and Columbia for my honeymoon and the craft beer scene there is booming. South America is a market no one is talking about.”

Other markets in Asia may also be opened up when the recently signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) comes into effect. Vietnam, for example, currently has a 120 per cent duty on alcohol.

No reefer, big problem

With the brewers taking care of producing some of the world’s best beers, it’s left to Wainwright and Senez to ensure the orders and the beer keep flowing.

On any given day PACRIM has approximately 100 different beers in its portfolio, which they consolidate with the help of Direct Tap, a B.C.-based delivery and logistics company, which handles distribution for much of the craft beer and wine industry in the province, including all six of the breweries that PACRIM work with.

“Direct Tap are great partners for us, all of our product is consolidated and cold warehoused and ready to go,” says Wainwright.

It isn’t until PACRIM’s overseas distributors place an order that the process is put into motion. That’s to ensure the beer is as fresh as possible, says Wainwright.

“We have a deal with our breweries—they don’t brew it until we order it.

“This is where it can get tricky because craft beer is unpasteurized. All of the beer that we ship overseas in containers is anywhere from two days to two weeks freshly brewed.”

Wainwright says PACRIM uses only reefer containers, and on the other end, “we only work with distributors that do A to Z cold chain logistics—from delivery to warehousing and in between.”

While some might worry that a perishable such as beer won’t be handled properly at its final destination, Wainwright points out the opposite is true because of the nature of craft beer in Asia. “It’s so expensive for the distributor and the consumer, we find with the right partners it is well taken care of at the other end.”

Senez hits the nail on the head: “Craft beer needs to be treated properly, and our partners understand this. You need to manage your investment. It’s like buying a Ferrari and filling it up with regular gasoline, it doesn’t make sense.”

From Direct Tap’s warehouse, the beer is shipped to PACRIM’s distributors by Cargo Dynamics, a Richmond, B.C. third party logistics company.

“There are occasions where [distributors] want to use their own shipper, which is fine, but we will not put it in a container that is not a reefer,” asserts Wainwright.

Depending on the amount, 20 or 40-foot refrigerated containers or reefers are used, although sometimes they can be hard to find, according to Senez.

“There is no LCL reefer container service out of Vancouver, so it’s cheaper to buy a 20-foot reefer container and fill it with six pallets instead of 10 because it’s cheaper than air-freighting it.”

He says their break-even between buying a 20-foot reefer container and shipping it by air is four pallets. If their distributor orders more than three pallets a 20-foot reefer is booked.

“Finding a 20-foot reefer container in Vancouver is like finding a unicorn,” says Wainwright.

Air freight is used occasionally to ship to China and Europe. “Our issue with air freight is that you have to amortize the cost by bottle, so it increases the cost,” says Senez. “We usually use air freight to ship samples.”

For example, says Wainwright, a customer in China who owns a chain of restaurants wanted samples—about 15 different brands—so because it was only three pallets, “he air-shipped them at $1,500 per pallet because there’s no middleman.”

Kegger’s better

To get product to European destinations, PACRIM ships the beer by rail to Montreal where it is consolidated by their distributor partner JF Hillebrand. Currently, the ocean containers head for Spain, but Senez says Hillebrand is working on secondary warehousing space in the Netherlands.

Inside the reefer containers are a mixture of kegs and packaged beer (cans or bottles). According to Wainwright, about 30 per cent of the beer destined for Asia is in kegs, while to Europe it is about a 50-50 split.

“I like sending kegs,” he says. “The KeyKeg one-way system we work with is very good for the beer. It has a bladder system inside so air and light never touch the beer.”

Beer is sent to Asia in 20-litre kegs because space is at a premium, with many of the places selling the beer being very small. “Our distributor in Thailand owns a chain of places that are all under 20 seats per establishment with six taps—and that’s it.”

The partners see a bright future for the company with many more markets to conquer, despite the fact that currently they ship a relatively low volume.

“2018 will be a good year, 2019 will be a great year,” says Senez, pointing to the fact that PACRIM has signed forward contracts, including one in China for 25 containers a year for six different beer brands.

“Our big bet is China,” he continues. “We are doing three trade shows there this year alone. We partner with the Canadian government’s agriculture marketing program [Agri-Food] and bring the brewers with us to help build the brand.”

He likens it to planting seeds.

“Our value-add to breweries is that our vision is not one year, but rather a five-year vision. You have to invest heavily in the brands to gain traction.

“We’re helping them to build Canadian beer from nothing.”

To that end, Senez and Wainwright are also behind a second company—Canadian Craft Beer Collective (www.canadiancraftbeercollective.com), a B2C (business-to-consumer) business, that complements PACRIM, which is business-to-business (B2B).

“All of our marketing efforts are done through that, where we market all the things that make Canadian craft beer so great, points of differentiation that are meaningful to a consumer versus a distributor,” says Senez.

“In China one of our biggest selling points is the fact that we’re using Canadian water.”

Thanks to a great product and strong export capacity B.C. craft beer can now be enjoyed from a Granville Island patio to a beach in Thailand.

Although, it might cost you a bit more on the beach.