Crafting success: Duo hops to service in old brewery

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October 20, 2007
— Just more than a decade ago, flat sales and a heavy debt load forced Huber Brewing into Chapter 11 bankruptcy protection.

Today, the oldest brewery in this state known for its prominent role in the U.S. beer industry is rapidly expanding—thanks mainly to the unquenchable thirst among Canadians for cheap, cleverly marketed beer.

Now known as Minhas Craft Brewery, the former Huber brewery recently marked its first anniversary under the control of Ravinder and Manjit Minhas, two young Canadian siblings of Indian descent. The Minhases operate Calgary, Alberta-based Mountain Crest Brewing Corp., which brews its beer in Monroe before exporting most of it to Canada.

Ravinder, 25, and his sister, Manjit, 27, launched Mountain Crest Brewing in 2002. Their company has stirred the Canadian brewing industry by under-pricing the country’s two dominant players, Molson Coors Brewing Co. and Labatt Breweries of Canada.

Monroe, with a population ofless than 11,000, has played a key part in that story.

“This proves the point that in this day and age, anybody with the expertise and experience can compete at the world stage,” Manjit Minhas said.

Mountain Crest Brewing hired Huber in 2003 to brew its beer. By contracting out production, the Minhases saved money.

Within a few years, the Minhases decided to buy the Monroe brewery to ensure a long-term production source. Mountain Crest in September 2006 announced its impending purchase of the brewery, and some of the Huber Brewing brands, including Huber, Rhinelander and Wisconsin Club. The price was not disclosed, but the cost of building a similar brewery would have been just less than $100 million, Manjit said.

Under new ownership, the relabeled Minhas Craft Brewery has undergone $2 million in improvements, including a new warehouse, additional production equipment and a revamped tap room that opened in September. The brewery is launching new products, including iEnergy, an energy drink, and Lazy Mutt, aimed at the craft beer market.

“We want this place to be humming with our brand,” Ravinder said, while showing off the new tap room, known as the Lazy Mutt Lounge.

Minhas Craft Brewery also does contract brewing, including production of the Berghoff brands that were owned by Huber Brewing. The Berghoff line now belongs to a company launched by Huber’s former owners.

Much of the brewery’s production still is devoted to Mountain Crest beer and other low-cost brands. The company’s sales are expected to grow when Mountain Crest, now sold mainly in Alberta and other Western provinces, makes its long-delayed entry by 2008 into Ontario—which accounts for 38 percent of Canada’s population.

For years, provincial regulators have blocked Mountain Crest Brewing’s attempts to sell beer in Ontario. Manjit said the reasons have varied, including the company’s outsourcing of its beer production. Buying the Monroe brewery solved that problem, she said.

Building the new warehouse allows Minhas Craft Brewery to more efficiently produce, store and ship beer, including overseas exports, Manjit Minhas said. The company hopes to begin shipping Mountain Crest beer to Japan in November, she said.

Annual production at Minhas Craft Brewery, with around 75 employees, could reach 250,000 barrels by the end of 2007 and soar to 350,000 barrels by the end of 2008, Ravinder said. The Monroe facility has more than doubled its work force since the Minhases came to town four years ago.

“There’s probably been more investment (in the brewery) in the last year than in the previous 10 years,” said Steve Jacobson, board president of the Monroe Chamber of Commerce and Industry.

Jacobson remembers the glory days of Huber, when its brews included the highly regarded Augsburger. But Huber later sold the Augsburger brand, and in the early 1990s, it followed the lead of other brewers by venturing into gourmet soda production. That investment didn’t pan out, and in 1995, Huber filed for Chapter 11 bankruptcy protection.

The company reorganized its finances and expanded its Berghoff line of beers, tapping into the growing demand for craft brews. It also did contract production for other brewers, which led to the deal with the Minhases.

The feeling in Monroe is that the new owners have energy and ambition.

Ravinder “really wants to turn it into a bigger brewery,” said Chris Soukup, co-owner of Baumgartner’s Cheese Store and Tavern, a longtime local establishment. Baumgartner’s is the place to go for a limburger cheese sandwich on rye bread, and the tavern’s four best-selling beers—Huber Bock, Berghoff Red, Wisconsin Club and Berghoff Oktoberfest—all are brewed at Minhas Craft Brewery.

Businesses in other Wisconsin communities, both large and small, can follow the Minhas example and look for selling opportunities outside the United States, said David Ward, president of NorthStar Economics, an economic development consulting firm in Madison. He said exported products and services are playing a growing role in the state’s economy.

China and India, where 300 million to 500 million people have worked their way into middle class status over the last 10 years, are particularly important markets for Wisconsin exporters, Ward said.

India is where Manmohan Minhas, the father of Manjit and Ravinder, was born before he immigrated to Canada. Manmohan Minhas, a petroleum engineer and entrepreneur, and his wife, Rani, later opened three liquor stores in Alberta. That eventually sparked their children to launch their first company in 1999, when Manjit was a university student and Ravinder was finishing high school.

The Minhases started Mountain Crest Liquors when Manjit saw an opportunity to import inexpensive spirits into Canada.

A few years later, they entered the beer business with a similar low-cost model. After hiring a brewmaster to create formulas for Mountain Crest and other brands, the Minhases began searching for a brewery.

Rebuffed by Canadian brewers, who didn’t want to help a competitor, they hired Huber.

Mountain Crest Brewing ran local TV ads protesting high beer prices. The Minhases also played up the David vs. Goliath theme in their highly publicized clashes with Molson and Labatt.

Mountain Crest Brewing, with annual revenue of $55 million, has irritated its competitors. Molson sued in 2002, claiming the label for the Mountain Crest brand copied the label for its Molson Pilsner brand. The dispute was settled out of court.

Labatt in 2005 bought newspaper ads complaining the company’s Minhas Creek brand, sold in Manitoba, was posing as a Canadian beer by putting the maple leaf—the national symbol—on its cans.

Mountain Crest Brewing’s new Lazy Mutt brand carries a label and taste that evoke comparisons to Spotted Cow, the flagship brand of New Glarus Brewing Co.

“Imitation is the sincerest form of flattery,” said Deb Carey, New Glarus Brewing president. “It’s fine with me. I want them to do well. It’s good for Green County, and for our community, for that brewery to be growing and providing jobs. It just prompts me to play my own best game.”

The Minhas siblings continue to live in Calgary but are spending about one week each month in Monroe, staying at a new house they built next to the brewery.

The Minhases say they’ve adjusted to the slower pace of Monroe, which has about 1 percent of the population of their native city.

“You go to the Subway twice, and they know you,” Ravinder said.

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