The first step seemed big enough. It was the gruelling mid-1990s. Grain prices had been in the tank more or less continuously for 15 years when, like many others, the Warwaruk family at Erickson, an hour north of Brandon, Man., lost their farm.
Through the turmoil, the four Warwaruk brothers — Chris, Eric, Eugene and Lawrence — knew they would always love the farm, but it was time to tackle reality. They needed a future, hopefully one that would let them stay together while they individually got their bearings back.
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That’s when the idea came up to start Lux Sole, a Winnipeg restaurant they opened in 1999, operating it as a family business with the competitive advantage of having the four highly dedicated and energetic brothers all working together.
As first steps go, it was a significant success, earning stellar reviews and a solid place in Winnipeg’s restaurant community while giving the brothers time to sort out their own priorities.
Step two, however, has even more surprises, including the biggest surprise of all — buying back the farm that their father had lost, and growing the ingredients they need for their new craft beer on the old family place.
The idea to make beer came up when the brothers opted to expand their restaurant business in 2008 to include a pub, called the Luxalune Gastropub, two doors down for their original restaurant location. By then, Eric and Eugene had already left the business to return to school.
Again, it was a strong entrepreneurial streak that drove the process, with Lawrence and Chris creating the gastropub with the objective of tapping into Winnipeg’s evening market.
However, this was at a time when there was a limited selection of beer at the Manitoba Liquor Control Commission (MLCC), and it became clear to the brothers that if they wanted to be successful in the pub market, they would need to offer a more diverse selection than simply domestic brands.
The brothers began by ordering every kind of beer the MLCC had listed in its stores. Then they honed in on what the MLCC selection was lacking, focusing on the many beers that MLCC didn’t carry.
The Warwaruks started special-ordering beer from the Yukon, Victoria, the East Coast, and small U.S. craft breweries.
Since opening Luxalune, the brothers went from offering 50 kinds of beer to boasting Manitoba’s largest selection of beers — over 170 — most of them by the bottle or by the can.
In hindsight, now, the next step seems almost inevitable.
Having come to know the beer market so well, the brothers’ wheels began to turn again, this time with the concept of creating their own craft beer, for which they would grow their own ingredients and thereby not only tap into the local food and the specialty beer trends, but also breathe life into their dream of someday buying back the home farm.
Thus the origin of Farmery Estate Brewery.
Chris and Lawrence started the brewery two years ago, and since then have eliminated 99 per cent of all the domestic brands and even some of the well-known import brands from Luxalune.
Of the $320 million of beer sold in Manitoba in 2012, less than 10 per cent was craft beer (and an even a smaller percentage of that is craft beers from within Manitoba). Market experts believe there is huge potential for growth in this industry, yet most Manitobans still drink domestic beer.
“We want to support the craft beer industry — we don’t see it as a competition,” says Chris. “Although the craft beer industry is growing quickly, it’s still very small on the grand scheme of beer sales in Canada.”
Historically, this has been the case in most U.S. states and Canadian provinces, but there are signs of change. Today, in the Yukon, craft brewers command a 35 per cent market share. In other growing markets, consumers have begun supporting the craft beer industry too.
This was enough proof for the Warwaruks to expand their beer market here, and now they plan to expand Luxalune into a second or third location before competitors open up their own copies.
It hasn’t all been easy, including dealing with the regulatory environment. When the Warwaruks first opened Luxalune, the MLCC didn’t allow businesspeople to have more than one liquor licence. “Because we already had the lounge licence, the MLCC wouldn’t let us also have a manufacturing licence,” Chris recalls.
Subsequent changes to provincial liquor laws, however, now allow businesses like theirs to hold two licences — one for manufacturing and a second making it possible for one location to supply another location with its product.
“This wasn’t allowed in the past, because post-prohibition, they were scared that big, domestic companies would buy hotels and chain stores, and have their own beer exclusive for their patrons — having a monopoly on beer,” Chris explains. “The irony is today these big, domestic brands don’t own restaurants or hotels, but they do have a monopoly on those licensees. So, the laws were changed to spur growth.”
The Warwaruks took a leap of faith, going after the consumer who appreciates beer and who probably travels — thus having some familiarity with non-domestic, unique beers — and that market segmentation is paying off in spades. Now the Warwaruks have customers requesting craft beers.
“There’s a demographic of customers wanting to be exposed to something a little bit more premium and unique, and who are willing to pay for it,” says Chris.
“Although there’s definitely a higher cost for it, it’s really the consumer who’s driving the change,” Chris continues. “We were lucky enough to be in the neighbourhood while also successful with our previous restaurant — with a strong customer base wanting to experiment.”
But this success story began at a very low point for the Warwaruk family, dating back to the early 1980s, when their dad owned the family’s mixed farm and went broke. “He hung on to the farmland and homestead by his fingernails for 20 years,” says Chris.
The brothers watched their dad struggle, no different than many farms in Western Canada that saw their own ups and downs.
In 1997, they actually lost the farm when the bank took it from them. At the time, Eugene and Eric had just begun going to university on student loans.
“In the fall of 1997, the bank gave us walking papers, saying we had two weeks to vacate the property,” Chris remembers.
Lawrence and Chris moved into the city, broke, and into the one-bedroom apartment that their two younger brothers were already renting with student loans while going to school.
Eugene and Eric slept on two single beds in the bedroom, while Chris and Lawrence shared the living room couch.
“Lawrence would take off the cushions for me to sleep on, on the floor, and he would sleep on the couch,” says Chris. “That was our first six months living in Winnipeg.”
Lawrence saw an ad in the newspaper for a restaurant for sale on Osborne Street. The brothers already had some experience, having worked in the summer selling fries at a concession stand.
Lawrence called the owner of the restaurant and asked him to show them around. The restaurant was fully furnished, but had gone broke three times in two years.
The brothers levelled with the owner, telling him they had no money to pay him for it, but that once they got it off the ground, they would pay him, and until then, they would pay rent. The owner said, “With four brothers working together, you can’t go wrong.”
The Warwaruk brothers opened Lux Sole on Osborne Street in 1999, and started, wherever possible, to buy beef, bison and pork directly from the farmer, understanding people wanted local product.
With their customers getting used to their locally-sourced, quality products, it became a natural course for the Warwaruks to branch out into beer — offering something different and high-quality that improves the customer experience.
After about the first six months of operation, Marion Warhaft, from the Winnipeg Free Press, visited the restaurant, giving it a four-star review.
Since starting up that restaurant, Eric and Eugene moved on — one going into film studies and the other into law. Meanwhile, Chris and Lawrence made a living with the restaurant.
In their second year, with the equity they built up from the restaurant, they convinced a bank to lend them the money to buy their original family farm back from the bank.
Over the years, Chris says, “We farmed to the best of our ability, but it still never made money. It was always money from the restaurant being sunk into the farm.”
Like a light bulb switching on, Lawrence and Chris came up with the idea of going back to the farm to grow the barley, wheat and hops and create what they believe was North America’s first estate brewery.
For the last three years, they have been growing barley and experimenting with hops. “We’re growing five different varieties of hops to see how they contribute differently to the beer, and if they can be grown sustainably in Manitoba,” says Chris.
Lawrence and Chris bought some familiar and affordable used farm equipment — a smaller 1972 combine and some old tractors — and, together, they work the 160-acre farm, about 60 of which is bush.
“Being in the city, it was such a joy for us to go back to the farm, to the fresh air of rural Manitoba,” says Chris. “We didn’t leave the farm because we wanted to. We were forced to.
“Our dad couldn’t afford to keep the farm, but it wasn’t his fault. You can blame commodity prices, the weather, or farming smarts, but really it was just being in the wrong place at the wrong time.” Chris is a strong believer that it’s important to learn how the farm that had been sustainable for generations had lost that sustainability. “Farmers started growing grain for the wholesale market and shipping it out of country, rather than adding value to it,” he now says. “There’s no food processing on the Canadian Prairies, and that’s unique.
“We just need to think outside the box. Instead of us farmers trying to buy and farm 1,000 acres of barley, only to ship that barley elsewhere to be produced, and then consumers paying millions of dollars for the beer, why not just do it all here with as little as 100 acres of barley?”
The Warwaruk brothers believe they are on stride to make farming make sense again.
And while they don’t have a chip on their shoulder, it’s undeniable that they also want to prove to the bankers that they didn’t lose the farm because they were bad farmers.
“The future is us, having tourists come here to our farm estates to tour the estates and taste the beer, just like they’ve done (with the wine industry) in Kelowna,” says Chris.
The craft beer industry is undergoing an evolution, with increasing consumer demand. “We’re filling a niche that’s there already,” said Chris. “These are very exciting times in Manitoba.”
Producing their own ingredients and offering ingredients to other breweries, the Warwaruk brothers are able to market their beer as a premium beer, a success that is filtering down to the rural community because it is sustainable.
“If we’re successful, there will be many more cropping up after us,” says Chris.
Expanding and implementing the business has come with some surprises.
“Some things we thought would be easy ended up being hard and vice versa,” said Chris. The brothers’ main focus now is on getting their beer into the marketplace through the MLCC store chains and distributing it through hotel venues and licensees.
“We’re already in every MLCC, provincewide, and in almost 300 locations of beer vendors and restaurants,” said Chris, noting they are receiving requests for their craft beer from Calgary and Edmonton, and from Saskatchewan.
“Even though we don’t have the brewery up and running yet, we’re focusing on finalizing the recipe, getting it cold brewed (right now with a company in Muskoka, Ont.), and then finishing the financing with the banks to build the brewery and facilities.”
The Warwaruks plan on doing everything possible to be sustainable on their farm, but even if they have to buy more barley from their neighbour, that’s good too, as it adds to the neighbour’s sustainability.
Meanwhile, the family continues to focus on the value of being a family. After all, it’s that family approach that enabled them to tap into the beer opportunity.
Lawrence and wife Erin have three small kids and Chris and wife Lisa have two, all close in age.
“The cousins play together as often as they can now that Lawrence and family have moved out to the farm,” says Chris. “We’re thankful to have taken this road together, working through the tough times and enjoying the good times.”
— Rebeca Kuropatwa is a Winnipeg freelance writer. This article appears in the September 2013 edition of Country Guide (pgs. 12-16).
