I recently sat down with an old university friend and roommate of mine at Dalhousie for breakfast in Calgary while we were both on our way through town.
Cam McDonald. Dalhousie graduate 14′. Serial entrepreneur. Co-Founder of Sage Mixology.
Here’s what he had to say…
Tell us a little about each of the 3 products you currently have on the shelves in Canada? What demographic do each of the products appeal to?
Sage Mixology: First launched in August of 2014 in Ontario (LCBO). Sage is a ‘bottle within a bottle’ where one compartment has vodka and the other compartment has juice. The goal is to give consumers the taste of an upscale cocktail bar made beverage with the convenience of picking up our bottle at a local liquor store. Sage’s primary demographic are female’s between 19-40.
Crazy Beard Apple and Ginger: Crazy Beard Apple launched in the LCBO in February 2015 and Ginger in October 2015. Crazy Beard is an irreverent brand that seeks to excite consumers. The taste profile for both products is designed to be drinkable and not too sweet. Our Apple beer has the initial taste of a cider with a smooth aftertaste. The Ginger profile combines a natural ginger flavor similar to Ginger Ale with an easy malt base for drink-ability. Crazy Beard is an easy drinking beverage and has a wide target demographic.
Dusty Boots Hard Root Beer: Dusty Boots just launched in Alberta in December 2015. Dusty Boots is a throwback beverage with traditional Root Beer flavors and spice but with a 5.9% twist of alcohol.
You’ve been an entrepreneurial guy since I met you in business school at Dal. What was it about the alcoholic beverage industry that drew you to start launching products within it?
It was one of the few industries that I felt I understood given I was a loyal consumer in university! Bobby, one of my two business partners in Sage, had a novel concept (the Sage bottle within a bottle), and I thought it would be fun to try to innovate in the alcoholic beverage space. We quickly learned that our experience being a consumer within the industry did not necessarily translate into production or operational “know-how”. Nevertheless, we committed to our vision and have learned a great deal about all aspects of the alcoholic beverage industry. It was far more complex than we had originally thought. Nevertheless, it’s been a fun ride!
What is it about Alberta that you and your partners felt it was a prime place to launch your Dusty Boots Root Beer?
Alberta consumers drink the most beer per capita in Canada so that intrigued us from the outset. We also wanted to learn more about how private markets operated where the sales and distribution are fragmented relative to markets like Ontario (LCBO) and Nova Scotia (NSLC), where the buying, selling and warehousing is done by the government. We also thought the Dusty Boots name and brand proposition would be a hit with Alberta consumers. Since launching in December, we have been incredibly excited by the early uptake and reviews. We are pumped to continue to invest in the Alberta marketplace with all of our brands!
Since the introduction of the NDP government in Alberta, have they made any tax or regulatory changes as it relates to the alcoholic beverage market? How have the changes affected the launch of your Dusty Boots brand in Alberta?
Unfortunately yes. The NDP Government raised excise taxes twice last year, once in April and again in October. Raising taxes twice in six months is unprecedented. The second increase was difficult because it dramatically increased taxes for brewers outside of Alberta, BC and Saskatchewan. It cost us nearly half of our anticipated gross margin. What’s unfortunate is that it directly affects how many people we can hire in the Alberta marketplace. That being said, we are still very excited about the Alberta market and plan to keep pushing our products in Alberta. However, some other Ontario brewers are pulling out of Alberta all together, as the protectionist tax hike doesn’t allow many to compete fairly in the province.
You appeared on Dragons Den in 2015 and made a successful pitch to all 5 dragons; however, you ended up turning down all of their offers. Was that a difficult decision? What did you take away from the experience?
Dragons Den was a very cool experience for us. We ended up striking a deal with a Halifax based group of investors, as that deal made more sense to us than the deal we were offered on the show. That being said, we were fortunate to have Arlene Dickenson wanting to invest and she treated us very well after the show.
The experience was a little nerve wracking. I think we were well prepared and knew what we wanted to convey to the Dragons. However, for the first few seconds with the bright lights and cameras going, not to mention standing in front of five very highly established businessmen/women, it was definitely a little intimidating! Nevertheless, after a minute or so, we were able to settle down and have a conversation with the Dragons and it felt more normal. Overall the experience was great and we were fortunate to take part in it.
Watch their pitch here: http://www.cbc.ca/dragonsden/pitches/sage-mixology
What is the best and worst part of being a serial entrepreneur?
The best part is being able to see the results of our hard work. The feeling when you first walk into a store and see a consumer buy a product that we have worked on for years is amazing.
The hardest part is when things go wrong, which happens quite often as a start-up. Considering a start-up venture becomes such a large and emotional part of any entrepreneur’s life, we really wear the downs. It affects sleep and happiness, even when we are not working. That being said, I have worked on getting better at compartmentalizing and realizing that it’s a long journey and you need to learn from the downs and getting upset won’t help solve the problem at hand.
Who are some of the most influential people in your life, as it relates to your business ventures?
Tom Hickey: Tom is the Chairman of our board. Tom has built many successful businesses so I have been able to learn just by being around him and seeing his approach to meetings and relationships.
David Cynamon: I learned from David more so when I started my first business when I was in high school. David, like Tom, is also a serial entrepreneur and previously owned the Toronto Argos. The biggest lesson David taught me was happiness = reality / expectations. At the time I didn’t fully grasp how important it was to manage expectations but I certainly know the importance now.
#1 book to read for entrepreneurs?
I will give you two. The first book is The Lean Startup by Eric Ries. Eric has mentored many of today’s most successful technology companies. The Lean Startup changed my thinking of business, as it made me think of business as a continuous process where you are constantly testing ideas and trying to evolve as an organization. Furthermore, the book helped me focus on making data driven decisions as opposed to being anecdotal. The Lean Startup is probably a little more relevant for technology entrepreneurs but I believe the learning can span across all industries.
Pour Your Heart Into It by Howard Schultz, founder and CEO of Starbucks. This book taught me about how important a vision is and the significance of bringing the right people on board to achieve that vision. Before I read it, I underestimated the importance of Human Resources in an organization. Starbucks was ahead of its time by offering employee stock options and health care in the US. Financial analysts were critical about the costs associated with this at the time. Who’s laughing now?
Last question – If you could have dinner with any 3 people currently living on the planet, who would they be and why?
Tom Brady: I am a big New England Patriots fan and naturally a big Brady fan as a result. I think Tom Brady’s relentless pursuit of perfection is admirable. He was the 199th pick in the draft because many scouts didn’t think he had the physical tools to play at the NFL level. He took that as a challenge and that led an unparalleled work ethic and drive to not only make it, but dominate at the NFL level.
Mark Cuban: Mark Cuban interests me not only because he has been a successful serial entrepreneur but also the owner of the very successful Dallas Mavericks NBA franchise. I enjoy reading his blog and surely the guy has to have some pretty cool stories!
Elon Musk: In my opinion, Elon is the most fascinating businessman of our generation. To simultaneously build electrics cars, send rockets to space and have a successful solar power company… I would be interested to understand where he gets his audacity and the method to his madness.
That’s all for this episode of Coffeetalk! Next time you’re heading out to a liquor store for some libations, keep your eyes peeled for Cam’s products on the shelves. Surely, it can’t hurt to help out a good Canadian kid trying to break into a market dominated by global corporations 🙂
You can pick up Dusty Boots in Alberta at any of the following retailers: Co-op, Wine and Beyond, Solo Liquor, The Liquor Barn, Liquor Depot and Sobey’s.