Looking for the original Bar Towel blog? You can find it at www.thebartowel.com.

We have a trivia question in order to register to prevent bots. If you have any issues with answering, contact us at cass@bartowel.com for help.

Introducing Light Mode! If you would like a Bar Towel social experience that isn't the traditional blue, you can now select Light Mode. Go to the User Control Panel and then Board Preferences, and select "Day Drinking" (Light Mode) from the My Board Style drop-down menu. You can always switch back to "Night Drinking" (Dark Mode). Enjoy!

G&M (paywall): Canada’s crowded craft beer industry is tapped out. What brewers say must happen to stay afloat

Discuss beer or anything else that comes to mind in here.

Moderators: Craig, Cass

User avatar
sstackho
Bar Fly
Posts: 501
Joined: Mon Jan 30, 2006 11:37 pm
Location: Riverdale

G&M (paywall): Canada’s crowded craft beer industry is tapped out. What brewers say must happen to stay afloat

Post by sstackho »

https://www.theglobeandmail.com/busines ... ed-market/

Very good in-depth article on financial struggles and consolidation in the Canadian craft beer industry.

User avatar
Craig
Seasoned Drinker
Posts: 1942
Joined: Wed Apr 10, 2013 10:23 am

Post by Craig »

Nice to see some coverage from the Globe, thanks for sharing.

People have been warning that the reckoning is coming for the craft scene for a long time now, so I guess I'm not surprised it's finally happening. If anything, it's going a lot slower than I would have thought. It'll be interesting to see how it plays out.

So far the majority of the breweries that have closed or merged or been bought up in whatever way, have not been ones that I think of as leaders in the craft space. It seems that places that are known for less adventurous stuff are the ones most at risk so far.

seangm
Bar Fly
Posts: 604
Joined: Fri Nov 20, 2015 12:44 pm

Post by seangm »

Craig wrote: Thu Apr 21, 2022 10:26 pm Nice to see some coverage from the Globe, thanks for sharing.

People have been warning that the reckoning is coming for the craft scene for a long time now, so I guess I'm not surprised it's finally happening. If anything, it's going a lot slower than I would have thought. It'll be interesting to see how it plays out.

So far the majority of the breweries that have closed or merged or been bought up in whatever way, have not been ones that I think of as leaders in the craft space. It seems that places that are known for less adventurous stuff are the ones most at risk so far.
In some regards thankfully that's the case, it's encouraging that the more inventive and interesting breweries continue to thrive. And this is anecdotally speaking, but it makes sense because as a consumer I'm less likely to pay craft prices for safer styles that can be found for a better price. I still find myself buying lots of German or Czech staples since they are well priced and consistently high quality.

matt7215
Beer Superstar
Posts: 3047
Joined: Fri Sep 05, 2008 11:18 am

Post by matt7215 »

sstackho wrote: Thu Apr 21, 2022 6:43 pm https://www.theglobeandmail.com/busines ... ed-market/

Very good in-depth article on financial struggles and consolidation in the Canadian craft beer industry.
thank you for posting this

User avatar
Cass
Beer Superstar
Posts: 3828
Joined: Sun Jun 17, 2001 8:00 pm
Location: Toronto
Contact:

Post by Cass »

Thanks for sharing, interesting read.

I agree with Craig, it feels like we’ve been awaiting this big upheaval in Ontario beer, whether it be mergers or closures, and it really hasn’t happened in a big way, and/or what’s happened has been pretty slow as Craig mentioned.

Perhaps this wasn’t known in time for the publication of the article, but it seems like Steam Whistle is selling off the Beau’s equipment from Vankleek Hill. Seems like kind of a big deal (or maybe not?), as I remember back in the old days there was an outcry when Sleeman shuttered Upper Canada in Toronto. Quite a sign of the times that a brewery with such ties to the local region becomes just a brand brewed in downtown TO.

matt7215
Beer Superstar
Posts: 3047
Joined: Fri Sep 05, 2008 11:18 am

Post by matt7215 »

Cass wrote: Fri Apr 22, 2022 12:57 pm Thanks for sharing, interesting read.

I agree with Craig, it feels like we’ve been awaiting this big upheaval in Ontario beer, whether it be mergers or closures, and it really hasn’t happened in a big way, and/or what’s happened has been pretty slow as Craig mentioned.

Perhaps this wasn’t known in time for the publication of the article, but it seems like Steam Whistle is selling off the Beau’s equipment from Vankleek Hill. Seems like kind of a big deal (or maybe not?), as I remember back in the old days there was an outcry when Sleeman shuttered Upper Canada in Toronto. Quite a sign of the times that a brewery with such ties to the local region becomes just a brand brewed in downtown TO.
certainly the brand wasnt acquired because steam whistle had volume constraints that would be eased buy owning another manufacturing facility, shuttering the Beaus facility makes way more sense then keeping it open

User avatar
Craig
Seasoned Drinker
Posts: 1942
Joined: Wed Apr 10, 2013 10:23 am

Post by Craig »

It's hard to believe the downtown Toronto facility is cost effective though. Such a premium chunk of land.

User avatar
Tapsucker
Seasoned Drinker
Posts: 1910
Joined: Fri Apr 28, 2006 6:21 pm
Location: Toronto

Post by Tapsucker »

If I recall, the Vankleek brewery was built as a showcase of brewing with renewable energy and they had fundraised from their customers and community to get it done. I wonder how those people feel about that now. That feels like more of a betrayal than selling out.
Brands are for cattle.
Fans are cash cows.
The herd will consume until consumed.

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

Craig wrote: Thu Apr 21, 2022 10:26 pm So far the majority of the breweries that have closed or merged or been bought up in whatever way, have not been ones that I think of as leaders in the craft space. It seems that places that are known for less adventurous stuff are the ones most at risk so far.
Closures obviously suck for the people involved - we are talking about people's jobs and livelihoods - but as a consumer there is only so much bandwidth for what you can drink on a regular basis. I have made a point of trying new breweries and visiting them while traveling and have apparently tried 310 of the 346 currently open brick and mortar breweries on my list. Of those, there are maybe 10 that I would personally miss if they closed, and some for sentimental reasons as more than the products they make. Some are important to me because they make great beer, some are good but mostly make the list because they are local to me. (By the same logic for someone else their local breweries probably matter to them more than they do me.)

Breweries roughly fall into these (over simplified) categories for me:
Top Tier - Are making good to great beer and are capable of competing on the basis of their product regardless of other factors.
Second Tier - Okay to good beer, brewery has established a market and reputation for themselves.
Third Tier - Okay beer, but brewery sells a decent amount, possibly largely to a local audience.
Fourth Tier - Beer is legitimately bad to just okay. Survives primarily on local sales and low operating costs outside of major cities.

I think those lower tiers are where we may see closures. My assumption is a brewery can likely survive selling "boring" but technically proficient beer locally, but beer that is not good will have a harder time of things. The potential for mergers and expansion is potentially highest in that third tier - the beer is okay but they haven't yet expanded much beyond their immediate area. Partnering with other breweries would help with costs, economies of scale etc., but I wonder how much room there is for that? For many (most?), expanding beyond their local area will now put them in greater competition with some other more local brewery in addition to the bigger breweries. There are imho a LOT of breweries out there making similar okay versions of accessible styles, where the primary appeal is location or that they are local to the area they are in. These are very different business models from breweries trying to sell all across larger regions of the province.

Do people think similarly or am i way off in my perception? Not working for a brewery I have no idea what the actual day to day is like these days.

matt7215
Beer Superstar
Posts: 3047
Joined: Fri Sep 05, 2008 11:18 am

Post by matt7215 »

JerCraigs wrote: Sat Apr 23, 2022 11:05 am
Craig wrote: Thu Apr 21, 2022 10:26 pm So far the majority of the breweries that have closed or merged or been bought up in whatever way, have not been ones that I think of as leaders in the craft space. It seems that places that are known for less adventurous stuff are the ones most at risk so far.
Closures obviously suck for the people involved - we are talking about people's jobs and livelihoods - but as a consumer there is only so much bandwidth for what you can drink on a regular basis. I have made a point of trying new breweries and visiting them while traveling and have apparently tried 310 of the 346 currently open brick and mortar breweries on my list. Of those, there are maybe 10 that I would personally miss if they closed, and some for sentimental reasons as more than the products they make. Some are important to me because they make great beer, some are good but mostly make the list because they are local to me. (By the same logic for someone else their local breweries probably matter to them more than they do me.)

Breweries roughly fall into these (over simplified) categories for me:
Top Tier - Are making good to great beer and are capable of competing on the basis of their product regardless of other factors.
Second Tier - Okay to good beer, brewery has established a market and reputation for themselves.
Third Tier - Okay beer, but brewery sells a decent amount, possibly largely to a local audience.
Fourth Tier - Beer is legitimately bad to just okay. Survives primarily on local sales and low operating costs outside of major cities.

I think those lower tiers are where we may see closures. My assumption is a brewery can likely survive selling "boring" but technically proficient beer locally, but beer that is not good will have a harder time of things. The potential for mergers and expansion is potentially highest in that third tier - the beer is okay but they haven't yet expanded much beyond their immediate area. Partnering with other breweries would help with costs, economies of scale etc., but I wonder how much room there is for that? For many (most?), expanding beyond their local area will now put them in greater competition with some other more local brewery in addition to the bigger breweries. There are imho a LOT of breweries out there making similar okay versions of accessible styles, where the primary appeal is location or that they are local to the area they are in. These are very different business models from breweries trying to sell all across larger regions of the province.

Do people think similarly or am i way off in my perception? Not working for a brewery I have no idea what the actual day to day is like these days.
bang on

the only thing ill add is that with the vast majority of breweries now shipping beer province wide the amount of beer a brewery in your second tier can sell is drastically affected
it used to be that is you were the best or near best in your region youd have decent local traction, but with shipping now so prevalent many consumers that are trying to drink the best beer possible are able to buy from a much larger number of breweries and are not dependent on their local ones to be the best
Last edited by matt7215 on Sat Apr 23, 2022 2:43 pm, edited 1 time in total.

User avatar
Craig
Seasoned Drinker
Posts: 1942
Joined: Wed Apr 10, 2013 10:23 am

Post by Craig »

I think you've nailed it.

I've thought about this a bit and I also think there's a pricing thing at play here. If you want a crazy sour or a hazy fruity IPA in name only, you pretty much have to pay craft prices and seek it out from bars or breweries directly. Traditional styles are (mostly) easier to find and often are priced a lot better from traditional makers. Why the heck would I buy a craft Czech lager for 4.50 a can when PU is 3.15? Even if you price it the same like Lost Craft did, I'm probably not buying more than the first one out of curiosity. So those craft breweries competing with imports have to keep costs lower to be competitive, which means tighter margins, which means they're more at risk when there's a downturn.

User avatar
Tapsucker
Seasoned Drinker
Posts: 1910
Joined: Fri Apr 28, 2006 6:21 pm
Location: Toronto

Post by Tapsucker »

I agree with this assessment too. Since Beaus was referenced, I'd say they are a good example of somewhere between 2nd and 3rd tier. That's probably what consolidations and acquisitions are targeting.

Sometimes I wonder if there are breweries that are just built to be sold. Hendersons comes to mind. They just scaled fast, but the beer is nothing remarkable. In fact, I've had samples at the brewery that made me scratch my head. Like, you couldn't nail this style?

Has anybody checked local business registrations recently? I'm wondering which we have more of. Pot dispensaries or breweries.
Brands are for cattle.
Fans are cash cows.
The herd will consume until consumed.

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

Tapsucker wrote: Sat Apr 23, 2022 4:15 pm Has anybody checked local business registrations recently? I'm wondering which we have more of. Pot dispensaries or breweries.
New ones? Dispensaries for sure (or at least that's my impression). Jordan St. John posted somewhere about the lack of new breweries being registered on Twiter or maybe on the OCB podcast?

Edit: This is my 3000th post on Bartowel! Wow!

User avatar
JerCraigs
Beer Superstar
Posts: 3053
Joined: Sun May 25, 2003 8:00 pm
Location: Toronto

Post by JerCraigs »

matt7215 wrote: Sat Apr 23, 2022 11:43 am the only thing ill add is that with the vast majority of breweries now shipping beer province wide the amount of beer a brewery in your second tier can sell is drastically affected
it used to be that is you were the best or near best in your region youd have decent local traction, but with shipping now so prevalent many consumers that are trying to drink the best beer possible are able to buy from a much larger number of breweries and are not dependent on their local ones to be the best
That's a good point. We have so many more options today than years ago!

User avatar
Tapsucker
Seasoned Drinker
Posts: 1910
Joined: Fri Apr 28, 2006 6:21 pm
Location: Toronto

Post by Tapsucker »

Edit: This is my 3000th post on Bartowel! Wow!
Sorry dude, you are being moved over to the macro board now. Regulations, content rules, etc. etc....
Brands are for cattle.
Fans are cash cows.
The herd will consume until consumed.

Post Reply