How the Tough New Dragon on Dragons’ Den Built Her Booming Business

Former W100 winner Manjit Minhas runs a huge brewery, but she and her company aren’t widely known—yet

 
Written by Joanna Pachner

The Minhas family has taken over the Dragons’ Den green room. Manjit Minhas’s mom, dad, husband and two young daughters are arrayed on couches around a large TV, watching her decide the fate of the day’s batch of hopeful entrepreneurs. The 34-year-old beer baroness from Calgary is one of three new dragons joining the hit CBC show this year, and her kin have turned out in force. The previous week, her younger brother and business partner, Ravinder, was by her side; her dad even accompanied her to the screen test in mid-March.

Photo: Raina + Wilson

It’s not just clan loyalty—this is a family of entrepreneurs that has followed the show with star-struck excitement for years. While Manjit and Ravinder run Minhas Breweries and Distillery, Manjit’s dad, Moni, owns oil wells; her husband, Harvey, operates a construction company. They have hardly missed an episode and proudly flaunt behind-the-scenes trivia to prove it. When someone asks how CBC crews get big props into their downtown studio, mom offers that those pitches always happen early in the morning so the gear loading doesn’t block traffic.

Halfway through the filming of Season 10, the dynamics in the new den are starting to emerge. Joe Mimran is the mentor, generous with advice. Mike Wekerle is the clown. Jim Treliving, the retail veteran, drills down into the business models, while tech entrepreneur Michele Romanow is the creative sparkplug, quick with impromptu ideas.

MORE WEKERLE: Inside the Brilliantly Weird Mind of CBC’s Newest Dragon »

Then there is Manjit, the woman in red (a dress carefully chosen, as she has to wear it the entire season). Poised and regal, she plays the straight woman to Wekerle: When his mugging around with a pair of sunglasses starts to hold up taping, she shoots him a scolding look like a mother to a naughty child. (“I sometimes have to tell him to be appropriate and calm down,” she says lightly.) As the tapings progress, a consensus emerges that she’s the tough one, in the vein of sharp-tongued Kevin O’Leary. Her verdicts can be blunt: “You need to get control of your expenses,” she tells a couple pitching an upscale health food store. “I can’t see how or when I’d get my money back.”

Ruthlessly controlling expenses is something Manjit Minhas knows well. Her company, which started out selling deeply discounted spirits to Calgary-area bars and restaurants, now has two breweries and a distillery producing 160 varieties of beer and 90 spirits, as well as subsidiaries in everything from TV production to trucking, bringing in a total of $155 million in revenues. But even as the Minhas siblings expanded into different categories and markets, they have stuck to the same formula: offering the lowest-cost option. “It could be 10-times-distilled premium vodka, but we’ll be the best priced,” says Manjit.

Minhas is now one of the largest Canadian-owned breweries, but it’s hardly a household name. While the business sells throughout western Canada, Ontario and the U.S., few of its products reference the company moniker. Which means that when viewers tune in to Dragons’ Den to see Manjit school spendthrift CEOs, it will be the first time many will be hearing of her—or her business.

The new visibility could be an important boost at a time when consumers are turning away from beer. Industry growth has flatlined, and the craft beer revolution has shifted sales toward specialty brews, where trends and brand status play a bigger role than the cost of a six-pack. Those aren’t favourable trends for a company whose core business is peddling value-priced lagers and ales. What better way to attract consumers than with a big dose of celebrity?

Manjit Minhas loves beer. Ales are her favourite, particularly wheat and red. And she knows her stuff: Before launching the brewing operation, she went to “beer school” at Chicago’s Siebel Institute of Technology. Whenever she goes out, she samples what’s on offer, wondering whether she can get that restaurant or bar to switch to her product. It drives her husband crazy. “Can’t you just enjoy it without analyzing everything?” he asks her. “Have water!”

Once you get Manjit talking about beer mouth feel and sweetness levels, her somewhat intimidating demeanour quickly warms up. Over dinner at an upscale Toronto restaurant (she opts for a cosmopolitan, perhaps to avoid beer comparisons), she cheerfully chatters away, her voice sometimes rising into girlish squeals and teen-speak.

MORE CANADIAN BREWERIES: The Collective Approach to Financing Setbacks »

The family has Alberta Premier Ralph Klein to thank for starting them in business. When he privatized the province’s liquor stores, Manjit’s dad, who had just been laid off from Encana, decided to open one. His approach was high volume, low price—really low, as in margins 20 percentage points below those of most competitors. Soon there were three stores, and as teenagers, Manjit and Ravinder worked weekends and summers stocking shelves and sweeping floors.

Manjit was 19 and doing an undergraduate degree in petroleum engineering when she saw an opportunity to start a private label for the stores’ hospitality clients. Using $10,000 from the sale of her car, the siblings launched Mountain Crest Spirits and began setting up a supply chain. At one distillers’ conference, a tablemate offered to help her. “I’m like, I don’t know who this guy is, is he pulling my chain?” she recalls. So she asked her brother to look him up. “He says, €˜Oh my god, talk to him! He runs one of the biggest distilleries in the U.S.!'”

MORE CONFERENCE WINS: 8 Ways to Stand Out at a Trade Show »

It was a big break. With the distiller’s help, they pulled together a line of basic bar stock: rum, rye, gin and vodka. Mexico’s sudden shortage of blue agave (the main ingredient in tequila) turned into another stroke of luck, when the siblings secured a supply of tequila before prices skyrocketed. In 1999, abandoning plans for careers in the oilpatch, Manjit and Ravinder took a leap: Instead of just selling to their bar and restaurant clients, they decided to hit the road on evenings and weekends to pitch their spirits to liquor stores around the province.

The siblings don’t look much alike—he’s six-foot-two with the body of a linebacker; she’s a delicate five-foot-four—but they’ve always been uncommonly close. Matt Embry, president of the Minhas subsidiary Spotlight Productions and Ravinder’s best friend, has known the pair since he made their first commercials. “They’re both strong-willed and aggressive in the workplace,” he says. “There are times that they will disagree, but there are not a lot of hard feelings left over.” The Minhases share the ownership of every venture—both of their titles are co-founder and co-owner—and the running of the business: Manjit is the organizational whiz who oversees finance, logistics and much of the marketing; Ravinder is the gregarious pitchman who handles HR, government relations and the sales team.

MORE AGREEABLE SIBLINGS: The 4 Cs of Conflict-Free Family Businesses »

In 2002, the pair branched out into beer, confident they could undercut existing value brands with better-quality offerings. The Mountain Crest Classic Lager was Alberta’s entry in the buck-a-beer craze started by Lakeport Brewing Co. in Ontario. They opted for a kind of hybrid vertical integration. Even as they contracted out the brewing, they brought other services in-house to keep costs down. “We couldn’t afford to pay the prices of third-party companies,” says Ravinder, “so we found experts and built teams around them.” Over time, they opened a graphics shop to make labels and point-of-sale materials, a video-production company to produce commercials, a glass manufacturer to make bottles, and even a trucking operation and a construction division (Harvey’s firm falls under the Minhas umbrella).

Creating what amounts to a mini-conglomerate seems an unusual move, adding to management complexity at a time when maintaining growth of the core business is the priority. But Andreas Schotter, a strategy and management professor at Ivey Business School, sees the logic of bringing some functions in-house. Existing service providers may be too focused on the needs of industry mega-players like Labatt and Molson—a problem that disappears when you own the supplier. There’s also added speed and flexibility in areas like graphics and video production. Some of the divisions may even bring in additional profit. Minhas Breweries doesn’t break out numbers for its various revenue streams, but each subsidiary aims for self-sufficiency by serving outside clients. Spotlight Productions, for instance, has produced about 700 hours of TV for broadcasters that include Rogers.In 2006, Manjit and Ravinder bought the Wisconsin brewery that was making their beer on contract, and then added a distillery and a second brewery, this one in their hometown. The Calgary facility brews many of Minhas’s craft and specialty beers, with names like Lazy Mutt Gluten-Free Lager and Thumper American IPA (India pale ale). Beer now accounts for 70% of their booze business, but that heavy concentration may constitute the family’s first big challenge: Canada’s $9-billion brewing industry is in upheaval, as consumers increasingly opt for wine or forgo alcohol altogether. The budget segment has been particularly affected, especially since Labatt bought Lakeport to tone down its aggressive pricing, says Stephen Beaumont, a Toronto-based beer writer and consultant. “Minhas mainly occupies [the budget-brand] part of the marketplace that’s disappearing, yet they manage to make it work,” he says. “They’ve expanded considerably, and they’re doing it almost below the radar.”

So far, the company appears to be powering ahead, claiming 30% annual growth over the past two to three years. But it’s also making sure its product line is diverse enough to withstand shifts in the market. “A lot of success now is about staying fresh,” says Beaumont. “Keep the beer geeks happy with new brands and flavours and ideas.” The Minhases have not slacked on that front, introducing a Bunny line (such as Chocolate Bunny stout) with heavier tastes and higher alcohol content, and regular new arrivals, like Uptown Girl, which is aimed at women (“It’s my baby,” says Manjit). Even the budget Boxer line now has watermelon and apple varieties. But the siblings admit that craft brewing is ultimately a sideline for them—the segment makes up less than 10% of the total market. “We do things for attention and notoriety to get in front of you,” says Manjit, “but at the end of the day, the core of our business is lager and ale.”

MORE CRAFT BEER: Make Your Product Sell Itself »

Over the past three to four years, the company has also built a Signature Spirits line that includes apple pie moonshine, craft gins and even Punjabi whisky (“We got our grandpa’s moonshine recipe!” boasts Ravinder). Minhas has also dabbled in wine—a project of Manjit’s that turned out to be a colossal failure. She figured they had the distribution network and the sales team. “My brother said, €˜Are you sure?’ €˜Absolutely!'” recalls Manjit cheerfully (six years later, she can laugh about it). She sourced Argentinian and Chilean wine to create a mid-priced line and put it into liquor stores. It was a hard lesson in the unique challenges of the wine market, where branding is all important (much more than price). No one bought it. “I’ve got a fair bit sitting in my basement, aging€¦very€¦nicely!” she says.

As any Canadian brewing upstart quickly learns, the hardest part of the business is getting product to consumers. Every province has its own beer distribution regulations and retail systems, and some are harder to navigate than others. Minhas has a 15% market share in Alberta, says Ravinder, and sells dozens of products in Manitoba, Saskatchewan and B.C. But Ontario took years to crack, and the only brand the company sells there is Boxer.

MORE LOCATIONS: 3 Retail Lessons From the Beer Store’s Overhaul »

Even that inroad was a battle: Securing shelf space in the Beer Store, the provincial retail network controlled by the three largest brewers, was a tough fight that, by Manjit’s account, even included an Ontario Provincial Police investigation sparked by competition putting “bugs in their ears.” Minhas has found the U.S. much easier—California is now its second-biggest market after Alberta—thanks to fewer regulatory hurdles and Minhas’s ability to secure private-label deals with major chains such as Trader Joe’s and Costco.

The scrappiness with which Manjit fought her way through Ontario’s red tape should prove a useful trait on Dragons’ Den. “I’m fast at cutting through the BS—it’s my personality,” she says. “I don’t have patience for people who are wasting our time. I can say, €˜Stop it! You’ve sunk half a million dollars into nothing!'”

Entrepreneurial hopefuls, you’ve been warned.

This article appeared in the June 2015 issue of Canadian Business. Subscribe now!

MORE STORIES FROM THE DEN:

Originally appeared on PROFITguide.com

Comments are closed.