Market Growing For Craft Beer in Ontario

Jeff Green | Mar 05, 2014

“Beer is the most perfect food. It’s full of vitamins and minerals; it’s made from grain and it has been around longer than just about any other agricultural product,” says Bill White, who has spent 37 years in the brewing industry. White now teaches at Niagara College and judges at some of the larger beer competitions in Canada and the United States.

Through his work with the Ontario Craft Brewers (OCB), he is also an advocate for the craft brewing industry in Ontario, which has been growing in leaps and bounds in recent years, even as sales of mass-market beer have been more or less flat.

Although there are brewers in most regions of Southern Ontario listed on the OCB website, including Toronto, the Golden Horseshoe, Southwestern Ontario and the National Capital Region, Southeastern Ontario is not listed.

That is why the FAB (Food and Beverage) region, a co-operative formed by the Community Futures Development Corporations (CFDC) from Frontenac, Prince Edward, L&A, and Hastings Counties to promote food and beverage production, brought Bill White to speak to a gathering of brewing enthusiasts at the Sydenham library last week.

Hosted by Anne Prichard of the Frontenac CFDC, the event was attended by brewers from throughout Eastern Ontario, including John Graham, the owner of Church Key Brewing Company of Campbellford.

Bill White placed craft brewing within the context of the local food movement that has been sweeping through the region.

“Artisanal foods and beverages are inextricably linked. Craft beer brings excitement with new experience. People want to enjoy food; they want to have an experience. They’ve travelled around Ontario and around the world and have tried interesting foods and interesting beverages and they will search those things out. The craft brewers are part of the local food movement just like the cheese-makers and sausage makers are, and they complement each other,” he said.

The standing-room-only crowd in the library seminar room was heavily weighted towards enthusiasts from all around the region, and as far as promoting beer was concerned, Bill White did not have much convincing to do, so he moved on to the industry.

In the 1800s, there were 2000 brewers in North America but by 1980 there were only 89, and of those only eight were craft brewers. Since then two things have happened. Those 89 large-scale brewers have consolidated into a mere handful, while the number of small-scale craft brewers has increased exponentially. 
In 1994 there were 537 brewers in North America, by 2008 there were over 1500, and by 2012 over 2100.

“I expect that by the time the Denver Beer Festival [the premier annual gathering for the craft beer industry in the United States] rolls around this year there will be over 3,000,” White said.

With 371 active brewing licenses, Canada is proportionally in sync with the United States. Ontario, which lagged behind Quebec and other provinces until recently, now accounts for 89 of those Canadian licenses, while Quebec is at 107.

“There are some real success stories in Ontario in recent years,” he said, “but I would argue there is still room in the market for more breweries.”

Looking at beer sales figures, he showed that while the increase in overall sales has remained in a very narrow range over the last 10 years, from increases of no more than 2% in any year to decreases of up to 1%, craft beer sales are increasing in excess of 10% per year. Although the sales only account for 5% of the market currently, they were only at 2% just a few years ago.

“And even though the sales are going up [to over 11 million barrels last year] the percentage increase each year is not going down. Demand continues to grow each year and the great thing is that it is all consumer-driven,” he said.

The beer distribution system in Ontario has long been a barrier for craft brewers. The Beer Store system, formerly known as Brewer’s Retail, is owned by the major brewers and therefore has no economic incentive to promote the wares of its still small, but growing, competition. The Liquor Control Board of Ontario has taken on the Ontario Craft Brewing industry as a growth area, and there are more beers available than ever before.

But for small brewers, alternative forms of marketing are essential.

John Graham, from Church Key, said that the essential thing is brewing quality beer. “If the beer is good, people will come and find it, one way or another.”

In order to help people find their beer, Church Key operates a pub, The Stinky Rose [beer and garlic, anyone?] and they sell their beer out of the retail store that is attached to the brewery, which is located in a former church. A few of their beers, particularly Northumberland Ale and Holy Smokes Scotch Ale, are available at selected LCBO stores, but they produce a number of specialty beers that beer lovers need to search out, such as their spicy Namastale, and Friar Buck’s Sarrasin Buckwheat beer. Sadly, three Church Key versions of the hoppy India Pale Ale, Hop Lust IPA, Black IPA and White IPA, are sold out.

At the end of Bill White’s presentation the question of how much it costs to start up a brewery was raised.

“There is no fixed answer to that. There are a lot of ways to start up a brewery. Some nano-brewers use extra capacity under contract at more established breweries until they can build up some capital and some market and then they start building on a very small scale, whereas others invest $500,000 or $1 million to get going. It also depends on location. Cities are different from rural areas,” Bill White said.

Anne Prichard said that the members of FAB are all committed to helping with financing, either by providing advice and support in seeking bank loans or their own money lending capacities. To that end, they have created the icraft handbook and app that can be downloaded from their website, fabregion.ca.

She said there are already a number of people who are thinking about starting up a brewery in the region, and the event in Sydenham last week was part of the process of helping bring a new and unique brewery to southeastern Ontario.

However, Bill White had one note of caution.

“You don’t start a brewery because you think it is a neat idea or because you think you can jump on a bandwagon and make a lot of money. It doesn’t happen that way, You need to have a passion for it, you need to want to spend 24 hours a day working on it.”

Kennebec Cream Ale anyone? or perhaps K&P IPA is more your style? or Parham Imperial Stout …?