Innovation is connecting ideas that already exist but have not been combined before. Like a railway track that provides new paths between cities, innovation allows for a faster route and easier access to a market. A new railroad shapes the landscape, as an innovation disrupts the market, changing the environment for its consumers as well as its competition.
Paul Liberti and Sam Puntillo have been friends since the beginning of high school. They share a deep affinity for craft beer and have visited over 140 craft breweries in Ontario. Although they enjoy travelling around the province seeking out new brews, one night while enjoying Wave, a New England Pale Ale from Signal Brewing in Corbyville, they lamented over the fact that they would have to drive out another two and a half hours to taste it again.They wished there was a way to make craft beer more accessible. Instead of having to drive hundreds of kilometres across Ontario to enjoy craft beer, what if consumers could have craft beer delivered to them? Since they felt that something was missing in the local beer industry, they believed other craft beer lovers probably did too. After a bit of brainstorming and some research the two of them brewed up an idea and turned their passion into a side hustle.
The two friends started Small Batch Dispatch, which acts as a middleman distributing beer from small breweries directly to consumers. Many craft breweries are not big enough to have their own distribution team, and it’s too time consuming to cold call and get their product into the Beer Store or LCBO; the only way to try their product is to travel to the brewery. Small Batch Dispatch gives craft breweries a means to wider distribution, and they specifically target beer that is not available at the LCBO or the Beer Store. “The easiest way to describe it is: a wine club, for craft beer,” says Paul. Every month, Paul and Sam carefully pick between 7 to 9 bottles of craft beer from various Ontario breweries, providing beer aficionados with a fine selection of brews. Customers can order the monthly selections in 1-month, 3-month, 6-month or 12-month subscriptions. Small Batch Dispatch provides a new distribution channel for craft breweries, and offers customers a chance to get a variety of beer styles from all over Ontario, delivered right to their door. It allows people who don’t have access to transportation outside of the city to enjoy craft beer too. “Instead of driving 800 kilometres to go to the tap rooms of each of these breweries, we do that for you, and we’ll send you a collection of 4 litres of the finest craft beer, the freshest craft beer every month,” Paul promises.
“Performance is a product of both motivation and ability, so I think we both value [each other’s intelligence] but we’re also both motivated for this to succeed”
With a catchy name, a simple logo, and great marketing, Small Batch Dispatch is growing quickly. Paul and Sam started the business in February 2018, accepted offers in April, and started shipping in May! To spread the word, they advertise with Instagram, put up Google ads for major holidays, offer promotions, and attend craft beer festivals. Today Small Batch Dispatch represents 26 craft breweries, ranging from Sleeping Giant in Thunder Bay, to Dominion City in Ottawa, to Cowbell in Blyth, and many in the GTA. Recently they have also started to distribute to a few bars in the city, such as Victory Café and Crafty Coyote. The two of them attribute their rapid success to dedicated teamwork. “Performance is a product of both motivation and ability, so I think we both value [each other’s intelligence] but we’re also both motivated for this to succeed,” says Paul.
Photo by Alex Banman
Not only is Small Batch Dispatch creating new revenue streams for small businesses, it is also is changing the way beer is presented. As passionate beer lovers themselves, Paul and Sam have a deep knowledge of their products and they truly understand their target market. Since the Industrial Revolution, beer has been advertised as a blue-collar man’s drink. While major breweries are still marketing quite traditionally, to the male working class, Paul and Sam know that the target market for quality beer is so much wider. Their consumers are actually 60 % male, and 40 % female, which is a more even divide than most people would assume. Small Batch Dispatch caters to all beer lovers in different regions of the province. In a monthly selection, there is a beer for everyone to enjoy – novice drinkers can choose based on beer styles, while cicerones can select depending on mood.
Photo by Alex Banman
A challenge for Small Batch Dispatch has been getting to know their consumer base. Since Small Batch Dispatch was new to the industry, with no direct competition, there was not much consumer data available when they started. At first, when analyzing the population density of Toronto, the number of people who don’t have access to cars, and the number of craft breweries in the city, the partners thought Toronto would be their biggest market. However, they were surprised to learn that in any given month, people in the city represent only about 20% of their subscriber base. It turns out most of their customers are from outside of the city, with the majority from the Kitchener, Waterloo, and Guelph area. This could be because craft beer lovers in rural areas have already tried the few breweries close to home, and are thirsty to try some more. Fortunately, now they have their own internal data, which has been very insightful for their advertising.
“The best and worst thing [about a partnership] is that we’re two different people…”
Although Paul and Sam still both work full-time, they have managed to successfully start this side hustle because they are dedicated to their goals and know how to use any differences in opinion to best meet those goals. “The best and worst thing [about a partnership] is that we’re two different people…we don’t think the same, and so sometimes we can conflict…but at the same time I think that’s also something that’s really good, and the [reason it works is because] both Sam and I have removed our ego from the business…we honestly question and openly question each other and that allows us…to see what works and what doesn’t,” Paul shares.
Photo by Alex Banman
While Small Batch Dispatch has made an impact on Ontario’s beer industry and allowed the smaller breweries to compete with the bigger players, there’s still a lot to be done. Government regulations in the industry are a challenge, so once they gain enough capital and consumer backing, they plan to lobby for change. The book Regulatory Hacking by Evan Burfield and J.D. Harrison has been particularly helpful on their entrepreneurial journey. It talks about how businesses such as Uber have conquered industries that were highly regulated. Applicable to any industry, the book teaches “how to create a narrative, how to get people behind you, and how to not only use your own resources, but your customers as a resource to help affect change. So that’s been a big learning source for us,” Paul shares.
Innovation drives the market and pushes it in a new direction. We are constantly searching for the next great idea that will make us leaders in our industry, and force everyone else to adapt. Will your next idea be a reaction, or the catalyst for change?
For Instagram inspiration, Paul recommends following Barn Cat Brewery.
Photo by Alex Banman
Published November 7, 2018