How to make a splash in the beer business

When life gave Steve Waugh lemons, he decided to make sour beer. Laid off from his job as vice-president, head of client services at Giants & Gentlemen in July because of the pandemic, Waugh decided to put off a return to agency life and instead focus on his fledgling beer company.

Launched in March with fellow ad professional Mike Lee (the pair were later joined by Rick Tanton), Something In the Water Brewing Co. is the manifestation of Waugh’s longstanding fascination with the beer business, which began when he was first assigned to the Rickards account at Taxi about 10 years ago

“I just fell in love with beer,” says Waugh, who soon began making his own brew in his Toronto condominium, and subsequently completed the Prud’homme Beer Certification program (named for Canada’s first-ever licensed brewer, Louis Prud’homme). He became so enamoured with it that he even wrote a business plan for a would-be brewing company, only to put it on the back-burner. “I was building an advertising career, and it wasn’t the right time,” he says. “It was something I was passionate about, but starting a brewery at 28? It would have failed for sure.”

But the idea stayed with him, and upon leaving G&G, Waugh (from left in photo, with Lee and Tanton) decided to dedicate himself full-time to turning Something In the Water into a successful business.

Assessing the brand, he was convinced he had the right approach—and most importantly, the right people—to pull it off.

Waugh is currently the only one of three partners working full-time on Something In the Water, although each member of the team possesses considerable marketing and advertising expertise—a key requirement in a crowded category where brand is paramount.

“Without question, our point of difference is our marketing background,” says Waugh. “We have to try and do it our own way, and leverage what we know and what we’re good at, which is advertising and marketing. I think we’re going to over-index there.”

Lee, who developed everything from Something In the Water’s eye-catching cans to its website, is currently ECD at Theo, the bespoke agency created by WPP last year to manage the Rogers brand, while Tanton—himself an accomplished home brewer who produces what Waugh describes as “phenomenal liquid”—operates his own boutique media shop, Loyal Order.

Befitting their professional background, Waugh and Lee developed the brand architecture even before they had a finished product. “The way a craft beer company is traditionally launched, a guy who brews in his garage or kitchen gets really good at it, and his friends start saying ‘You should sell this thing, it’s so good’ and then he puts a brand together,” says Waugh. “We totally went the opposite way.”

Waugh remembers sitting with Lee in now-closed Toronto pub The Old Nick batting around names for their would-be venture. He knew he wanted the company name to include the word “water” because of beer’s traditional association with lounging by the pool or hanging with friends at the lake. “It’s kind of where beer’s meant to be,” he says. “It’s that feeling of being around the water and how it brings you closer to friends and family, which is kind of what beer does as well.”

Waugh originally wanted to call it Sweetwater, but that name was already owned by a successful Georgia-based brewery called SweetWater Brewing Co. (which was recently acquired by the Canadian cannabis company Aphria for $300 million). “I was like ‘Let’s just call it Sweetwater, man. They’re down there, we’re up here’ and Mike was like ‘No Steve. We don’t have to use somebody else’s name. We’re going to come up with our own.'” Something In the Water has made its connection to water even more explicit by committing to donate five cents from every sale to water conservation.

Something In the Water specializes in sours, a fast-growing subset in the equally fast-growing craft beer category distinguished by their acidic or tart taste. According to Waugh, citing LCBO statistics, sours are a top-five growth category within the retailer’s network, while a recent Forbes report said that the category grew by 40% in the U.S. market in 2019.

But while Something In the Water seems to possess requisite ingredients for success in a crowded category (the LCBO currently carries approximately 1,200 beer and cider brands), it was also forced to deal with the inevitable growing pains that come with building a brand.

The partners knew they wanted to make a sour beer, so Waugh went to the LCBO’s Summerhill store in midtown Toronto and bought every available sour brand. He and Lee then sat at his kitchen table sampling each beer before coming up with a consensus choice for their favourite. Waugh took that product to a syndicate brewery in Niagara Falls and asked the brewer to make a variant containing specific tweaks to the recipe.

While the partners regarded the first batch (originally meant to be 200 cases, but a production mishap limited it to just 40) as a test, Waugh secretly harboured hopes that they might be able to sell it to some bars and restaurants. It took just one sip to realize that wouldn’t happen.

“It was shit,” he says bluntly, recalling the deflating feeling that accompanied the first taste of his fledgling product. “You do the business plan, it’s all on paper, you spend six months working on it, you build the website, and then you finally have this can in front of you and it’s filled with your beer.

“I hand-delivered four packs to everyone I know, and it was so fucking gross,” he continues. “Not everyone would tell me. They’d say ‘Oh it’s pretty good,’ but I should have just thrown it down the drain.” The second batch was better, although still a little too sour for the average drinker, but Waugh says the partners have perfected their formula through a series of slight tweaks to the recipe.

The next challenge for Something In the Water was getting their beer into consumers’ hands, no easy feat during a pandemic, when the bars, restaurants and beer festivals—so intrinsic to achieving beverage alcohol’s primary objective of getting “liquid on lips”—were closed or cancelled.

While waiting to hear if they would be carried by the LCBO, the principals turned to Shopify, quickly selling 300 cases. Always conscious of the bottom line, Waugh made many of the deliveries to online customers himself. Eventually, the province’s liquor authority—having assessed the product on the basis of packaging, taste and sustainability—awarded them a listing last fall.

Aided by its eye-catching can design, Something In the Water’s flagship product Lee River Blackberry Vanilla (all of its products will be named after bodies of water) sold through its first production run within two weeks of arriving on LCBO shelves. “You walk through the LCBO and you’re scanning the shelves for something that looks interesting,” says Waugh. “That’s where Mike Lee crushed it.” The beer is now carried in 110 stores, selling about 200 cases each month.

To further build awareness, the three principals partnered with HeydSaffer, Alter-Ego and The Assembly Reps (now Smile + Wave) to create a series of videos featuring the brand’s distinctive mascot, Colonel Troutman—a top hat-wearing, moustachioed fish who sports a monocle, carries a cane and wears spats (imagine Charlie Tuna doing a cameo on Downton Abbey).

Shot in a single day at a home on Lake Simcoe, an hour north of Toronto, the four video ads (see them below) play with beer advertising cliches, depicting Colonel Troutman in various idyllic settings: paddling a canoe with a gorgeous Ontario sunset in the background, lounging poolside, and fishing with an attractive young woman in a bikini (the beeriest beer trope of them all).

“It was a big bullet to bite to do these videos,” Waugh admits. “I don’t think most people would have done it, but we need to build brand awareness and the best way to build brand awareness is with video. This is an investment in our future.”

The partners applied a similar philosophy when it came to the development of the Colonel Troutman mascot itself. The original plan for the videos was to purchase a fish costume online, but then they reconsidered. “[We said] we have a real director, a real DOP and a real editing house, and we’re going to use a shitty costume?” says Waugh.

Instead, some research led them to Loonie Times, an independent manufacturing company that Waugh describes as “a magical little place on an industrial road in Mississauga” that has produced mascots for everything from M&Ms characters to Toucan Sam and Kool-Aid Man.

They ultimately spent $7,000 on the Colonel Troutman costume. “It wasn’t part of the plan, but we did it,” says Waugh. “We’re punching above our weight.”

Waugh expects Colonel Troutman to be a key part of Something In the Water’s go-to-market strategy, particularly once the pandemic is over and things return to normal. “He’s our guy, and we’re going to leverage him as much as we can once people can be back at beer festivals,” he says.

Waugh has given himself until the end of 2022 to turn Something In the Water into a success before pondering a return to agency life. Right now, though, he says he’s having more fun than he’s had in years, blending the skills learned in the agency world with new ones he’s picked up along the way.

“What I found really interesting is how directly applicable everything I’ve learned as an account person is to what I’m doing right now,” he says. “I’ve never been happier or more motivated. I’m better in sales than I was as an account person and I’m more financially disciplined than I was. I’ve taken all of my skills and continued to enhance them, because now I’m applying them to something I truly love.”

And there’s nothing fishy about that.

Chris Powell