Companies & Industries

The beer up here

How Yukon Brewing beat Labatt & Molson.

(Photo: Jeff McIntosh/Canadian Press)

(Photo: Jeff McIntosh/Canadian Press)

Yukoners love their beer. At 132 litres per capita, the territory’s 35,000 residents guzzle more each year than anyone else in the country. Yet when Yukon Brewing unveiled its first batch of India Pale Ale in 1997, no one would buy it. After decades of chugging Canadian and Blue, Yukoners had developed an unflinching loyalty to the major brands’ bland ales. The upstart’s full-bodied stouts, smacking of espresso and pumpkin, were not to be trusted.

But 16 years later, the craft brewer can’t cook up a beer “so different it scares people off,” says founder Bob Baxter, a former engineer, from his Whitehorse headquarters. The company now sells more draught in the territory than giants Molson-Coors and Labatt combined, and in stores, Yukon Brewing enjoys a market share most microbreweries only dream of. Now, with a line of whisky, the brewery intends to build a national brand.

From Day 1, Baxter knew he wasn’t going to win Yukoners’ dollars without first winning their hearts. So, even as he took on part-time work to pay for groceries, Yukon Brewing sponsored festivals, charities and sports teams. Three years in, Baxter’s strategy of grassroots gumption still wasn’t delivering. People would drink his brew in bars, but they wouldn’t touch the stuff in stores. “We had to find a way of selling more beer, or we weren’t going to survive,” he says.

At the time, most Yukoners drank beer from a can, and Yukon Brewing only sold suds in bottles. Maybe consumers weren’t buying the label so much as the container, Baxter thought. So in 2000, he bought a unit that filled cans two at a time and sealed them one at a time. “We did hundreds of thousands of cans that way,” he says.

The gambit worked: by 2005, Yukoners were rabidly plucking his flagship Chilkoot IPA off the shelves. Today, the company’s share of the territory’s total beer sales is well into the double digits and climbing. “A craft brewer that’s doing 2% of the market share would be phenomenal, and we’re doing well above that,” says Baxter, adding that Yukon Brewing is gaining popularity in B.C., Northwest Territories and Alberta, too.

At the Cork and Bull restaurant in Whitehorse, three of four taps carry the Yukon Brewing label. Next door at the Dirty Northern Public House, it’s in five of 11. “I would say it’s the unofficial beer of the Yukon,” says Katja Schmidt, who co-owns both establishments.

Baxter’s next plan is to extend his market reach beyond his home territory. In 2009, he sectioned off a portion of the brewery and began filling barrels with single-malt rye whisky, which is expected to be in stores and bars by 2014. Because spirits travel better than beer—they don’t freeze, spoil or get damaged by bumpy journeys—whisky can be shipped all over the country. Competition is fierce, but Baxter is confident he can win Canadians’ hearts like he did Yukoners’. “We’re pretty good at making flavour,” says the 2009 Canadian Brewing Award winner. “We think we could become pretty good at making whisky with flavour, too.”