Did you know that beer sales in Alberta in 2012 were almost $1 billion? Let that sink in for a moment. That’s right, sit back, sip that brew and let that number settle — $1 billion. Now think about how many microbreweries we have in the province, or better yet, consider that Calgary, a city of 1.1 million thirsty souls, has only three microbreweries (plus some brewpubs). With those numbers alone, it’s probably safe to say that we need more local brews.
While the market share of microbreweries in our province hasn’t been pinned down by an august organization like Statistics Canada, it hovers around three per cent, according to those who work at the breweries, leaving an astonishingly large market share to lure. In the States — far ahead of Canada in terms of embracing microbreweries and innovative beers — some markets report a craft brew take of 10 to 40 per cent. Calgary needs more beer. And those that are already brewing? They say bring it on.
“Competition, I suppose, is one word for it, but overall I think a better beer scene with more brewers benefits everybody involved at this level,” says Brian Smith, the operations manager at Wildrose Brewery.
Wildrose is currently working on a new facility that will allow it to at least double its capacity right off the bat, and ramp up to approximately seven times its current level in the future. “We’ll be able to meet demand,” says Smith, sitting in the brewery’s Tap Room. “Right now we’re just doing all we can to get enough beer out the door. It will be nice to have enough space and actually be able to get ahead of things a bit, get our sales guys out there firing on all cylinders.”
In other words, one of three craft breweries in Calgary is struggling just to meet demand, and it’s not even the big guy on the block.
Out in the sprawling, wide-lane expanse that is the Foothills Industrial Park, the green metal roofs of Big Rock’s complex offer a respite from gravel, dust and car parts. Surprisingly, Bob Sartor, the president and CEO who faced the impossible task of taking over from the larger-than-life Ed McNally, agrees with Smith on the need for more faces in the local beer scene.
Sartor is a businessman whose last job was CEO of Forzani Group Ltd. Unlike Smith, who has 15 years of brewing experience under his belt, including time at Edmonton’s Alley Kat brewery and at Wildwood brewpub on Fourth Street S.W., Sartor rose through the ranks selling consumer goods, or at least managing the operations that did. “When I was in the sports business, once we turned Forzani around and got it fixed, then it was ‘Okay, who can we gobble up? How big can we get? And who’s not going to make the cut?’ It’s very different in craft beer. Craft beer is by its very nature collaborative.”
Okay, so everyone plays nice. But what does that have to do with the need for more small breweries in the city? It doesn’t matter if a bunch of beer lovers get together to talk over the mash tun, what matters is the effect it has on the city, in a general sense and in an economic sense, right?
At a recent webinar presented by Calgary Economic Development and appropriately hosted at Village Brewery, Scott Metzger, an economist and the owner of Freetail Brewing Company in San Antonio, broke it down. Although his numbers related to the U.S. market, they’re just as applicable here.
“One of the big things to highlight is the jobs that these breweries create,” says Metzger to a small crowd at the Calgary gathering. “One of the things I really want to emphasize is the relative inefficiency of craft breweries.”
That may seem like a bad argument to make, particularly to a crowd at a Calgary Economic Development event, but let’s hear him out.
“The beer market as a whole doesn’t necessarily have to grow in order for the economic impact of the beer industry to grow,” he says. “That’s because as the activity shifts away from large, multinational producers to small brewers, by default more jobs will be created, more economic activity will be created. So that labour inefficiency, although it’s not something that a business owner or manager is necessarily usually proud of, it’s that inefficiency that’s driving all of the economic growth.”
According to Metzger’s numbers, a large multinational like Anheuser-Busch employs approximately 116,000 people worldwide in its massive operations. It sells approximately 335 million barrels of beer, or about 3,000 per employee. In the U.S., craft brewers employ approximately 3,000 people and sell about 112 barrels per employee. It’s a symptom of small breweries that could offset the 20 per cent decline in brewing industry employment in Canada between 1999 and 2009 according to Agriculture and Agri-Food Canada.
More jobs means more money. That’s a pretty basic economic truth, one that even beer drinkers and writers can understand. But that’s not the only benefit to a city, a province or a country when more craft beer hits the market.
Metzger says that craft brewing has a disproportionate effect on community revitalization and tourism than other retail industries — opening brewpubs, offering local fare for diners and drinkers, and supporting the local community.
It’s something that Jim Button of Village Brewery understands well. At the same gathering, Button highlighted community as the driving force of Calgary’s newest craft brewer. The company decided to eschew the regular route of having a few large investors and opted to reach out into the community to bring more people on board. It was, as Button says, a challenge, but one that reflects the intent of the fledgling operation. “Everybody had different answers, but the one thread that went through all of them was to be a big part of the community,” he says of the people behind the brand. “So when we started building the brewery, we had that at the forefront all the way through.”
It’s a theme that runs through all of Calgary’s craft brewers, including the relatively large Big Rock. “Every craft brewer that I know wants to give back to the people who have honoured it with the purchase and consumption of their beer,” says Sartor. “So what I see is way more thriving music and arts scenes, theatre scenes, in those areas where craft beer is very prevalent to where it’s not.”
And there’s certainly room for more product. In 2010, the most recent year numbers are available, Canada was the sixth largest importer of beer in the world. Most of that comes from the Netherlands, the U.S. and Mexico. Our local shelves are bursting with options, but there is limited local variety, and a lot of those imports reflect the desire of consumers to have options beyond the mass-produced Canadian fare of the past.
If you go to a store in B.C. there are sections stocked with an abundance of local products from Vancouver, Victoria, the Interior and down the coast from the beer meccas of Portland and Seattle.
“I think we’re under-represented for sure,” says Smith. “Again, hopefully that will rectify itself in the future. I mean, you look at places like Vancouver, it’s still growing — I think there are eight or nine breweries that are supposed to be opening there this year.”
There are challenges, including a lack of investor interest in breweries. Regulations in Alberta also mean that you can’t start off really small and work your way up. You have to demonstrate the ability to produce at least 5,000 hectalitres the day you open, blocking the rise of nanobreweries (yes, that’s a trend) and preventing small entrepreneurs from entering the market. Although Alberta offers tax incentives to small brewers, not many have taken the plunge.
Amidst the dearth of local breweries, awareness about good, craft beer is growing exponentially. National, Craft Beer Market, Beer Revolution, Bottlescrew Bills and other pubs offer a dizzying array of beer styles and breweries on their taps. There are beer dinners, introducing throngs of Calgarians to the joys of beer and food pairings. If you walk into most liquor stores, the shelves are bursting with craft offerings that would have been unheard of a few short years ago.
Wildrose and Big Rock both plan on experimenting more and offering different styles of beer, and Village is now going full-tilt, so things are getting better here. What we really need, and what can only help our beer/arts/dining/tourist scene, is more local beer to feed a thirsty population.