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Mountain Crest - brewing feud


  Mountain Crest
brewing feud
by Renée Alexander
August 22, 2005

Manjit and Ravinder Minhas set out with the goal of selling low-cost suds and ended up in the crosshairs of Canada's largest beer producers.

The Calgary-based siblings incorporated Mountain Crest Brewing Co. three-and-a-half years ago in response to what they and their university buddies considered to be excessively high prices set by the country's virtual duopoly in the beer market, Labatt Breweries of Canada and Molson Inc. (now Molson Coors Brewing Co.).

Manjit, the company's vice-president, says the brand image she and her brother have been trying to convey is one of high quality at a fair price.

 
 

"The price of beer was getting quite high in (the province of) Alberta at the time," she recalls. "The big boys had been taking a walk in the park and increasing prices quite often. We also thought the quality wasn't very high for the price they were charging. For CND 10 for a six-pack, I expected some good-tasting beer."

Mountain Crest first burst on to the beer scene with a cans-only offering; Labatt and Molson paid little attention. But as it carved out a significant niche with price-conscious beer drinkers (said to be about ten percent of the Alberta market), it quickly got the attention of the two national breweries.

When Mountain Crest moved two provinces east into Manitoba late last year with a subsidiary called Minhas Creek Brewing Co., Labatt and Molson were lying in wait. Just as Minhas Creek Classic Lager received the licensing green light to list for CND 6.95 per six-pack (three dollars cheaper than the industry norm) Labatt Lucky Lager, Molson Dry and Molson Black Label Ice were immediately discounted to CND 6.90 for six-packs of cans only, not bottles.

Arguably the biggest controversy surrounding Mountain Crest/Minhas Creek involves where its beer is produced. The company makes no secret that it contracts out the brewing of its recipes to two Wisconsin-based breweries, City Brewery in Lacrosse and Joseph Huber Brewery in Monroe. But critics have countered that Mountain Crest/Minhas Creek, with its cans liberally decorated with the most Canadian of symbols, the maple leaf, was misleading consumers that it made a "Canadian-style" beer. Plus, they added, no jobs were created on the north side of the border in the production of the product.

Labatt went so far as to take out a full-page ad in four Manitoba daily newspapers in June preying on local patriotism by accusing Minhas Creek of producing an American beer masquerading as a Canadian one. This is a serious insult in a country that prides itself on its high quality beer and where one of the national pastimes is mocking watered-down American brew.

The ad read: "This beer's pretending to be Canadian by slapping the maple leaf on the label. That's cheap, alright. Minhas Creek Lager isn't made in Canada. The beer's made out of a facility in Wisconsin, USA. So why are they posing as a domestic brew? Must be they think Canadians are easily fooled. (Signed) A message from Lucky Lager. Good, honest Canadian beer."

Minhas says the attack ads proved the old adage that any advertising is good advertising.

"That was great for our awareness and market share. A lot of consumers were angry; they were asking ‘why would somebody who had 70 percent of the market want to trample on somebody with just a few percentage points of market share?' " she says.

Robert Warren, director of the Asper Centre for Entrepreneurship at the University of Manitoba, says Mountain Crest/Minhas Creek has expanded the discount beer segment pioneered by others such as Great Western Brewing Co. and Fort Garry Brewing Co. with two-litre plastic bottles, by offering single servings.

Warren says there's no question Mountain Crest/Minhas Creek has had considerable success in implanting its brand in both the minds of consumers and its competitors. He says unlike Coca-Cola, which doesn't mention Pepsi in its advertisements, Labatt made a branding error by singling out Minhas Creek by name.

"You don't want to elevate your competition to the same level as you. It's a bad move because it can upset your consumers, your shareholders and your employees," he says.

Even though the company doesn't have multi-million dollar marketing budgets, it marked its arrival in both Manitoba and Alberta with a series of low-cost television commercials. (Minhas says she plans to expand into Canada's most populous province, Ontario, shortly, once some regulatory hurdles have been cleared.)

Several of the spots called for an end to high beer prices while another extolled the benefits of cans over bottles by pointing out how every can is brand new and not previously used as an ashtray before being washed and filled with beer.

Minhas credits the firm's "guerilla-style" marketing and public relations in helping to create the brand. Last year, Mountain Crest gave away a car and more recently, it's given away t-shirts and chips with 24-packs of beer. Minas says its television commercials are different from most of its competitors in that they aren't lifestyle-focused and don't show bikini-clad girls and hunky guys living it up on the beach.

"It's the actual product and the quality that we stress. It's the product we're selling, not the image. That differentiates us from the big guys. Women especially appreciate that we take the higher road," she says.

Minhas says not having to worry about bottling beer contributes to Mountain Crest's price-conscious branding because cans are lighter and therefore less costly to transport. As well, cans only have to be shipped one-way because consumers take care of the recycling once the can is empty. Cans are also slightly bigger than bottles, 355 ml versus 341 ml, so consumers essentially receive one extra beer with each 24-pack of cans, Minhas says.

Furthering her sales pitch, Minhas points out that bottles require two-way shipping and the detergent and hot water required to wash them, which isn't very economical or environmentally friendly. For sun-drenched beer drinkers, she adds one extra attribute. "Can get cold quicker."

 
     
  

Renée Alexander is a freelance business and lifestyle writer based in Winnipeg, Canada.

  
     
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