Deep Roots Distillery

DEEP ROOTS DISTILLERY

INTRODUCTION

By September 2015, Deep Roots Distillery (DRD) had been operating for 22 months. While the start-up

had taken a little longer than originally estimated, material progress was now in evidence. By November,

the company expected to have six of its products (either spirits or liqueurs) available in the Prince Edward

Island Liquor Control Commission (PEILCC) outlets.

However, numerous questions remained for Mike Beamish and his small, family-run business. Given

capital and resource constraints, how could DRD grow into a competitive business? How should time be

allocated between research and development, production, marketing, and administration? Would the startup’s

current product/market strategy allow it to achieve its goals? If not, which expansion route should

DRD take?

BACKGROUND

DRD was located in Warren Grove, Prince Edward Island (PEI), a village about 15 kilometres outside

Charlottetown, the largest city in Canada’s smallest province. PEI’s population was only 140,000, but the

province was a popular tourist destination, with 1.3 million visitors annually. The tourists were mostly

from Canada (87.7 per cent), but with material numbers from the United States (7.7 per cent) and other

countries (4.6 per cent). Most tourists visited from June to September, and tended to enjoy the area’s laidback

lifestyle, beaches, fresh seafood, music, and scenery.

The family-owned Beamish Orchard had been growing tree and field fruit since 1990. With over 500 apple

trees, and by 1995, the orchard started to sell its apples by the roadside. As production grew, the family

opened the farm to customers looking to pick their own fruit (u-pick). With a consumer trend toward more

organically grown food products, the family decided in 2004 to move away from conventional agricultural

practices. In 2005 the Beamish Orchard acquired full organic certification from Atlantic Certified Organic.

The Department of Agriculture and Fisheries stated:

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