Has Ottawa Reached Peak Craft?

As the industry adjusts to the popularity of craft beer, Jordan Duff crunches the numbers to determine if the city’s beer drinkers can support more microbreweries

Unless you’ve been living under a rock for the past five years or so, you’ve likely noticed that craft beer is a hot industry here in Ottawa and across Ontario. The number of breweries in this province, including brew pubs and contract brewers, currently sits at more than 250. In fact, the growth of breweries across Ontario, combined with the seemingly limitless love Ontarians have developed for crafty suds, has helped change some very old laws. Earlier this year, the Ontario government announced major changes to the way beer is sold in this province. While previously beer could be purchased only at the approximately 600 LCBO outlets or 450 Beer Store locations, 450 grocery stores will soon be allowed to carry beer. In addition, The Beer Store will eventually pay a higher tax and will no longer be able to charge higher prices to small commercial establishments. And there will be mandatory profiling of local craft beers in stores to help promote the craft beer industry, which is essentially any Canadian brewery or beer outside the big macrobreweries.

For those wondering how we got here, a quick history lesson. In days of yore, the local brewery was a common establishment in communities across Ontario. Before World War I, Canada was home to 117 independent breweries. Not bad for a nation of Canada’s size at that time. Prohibition, that dark period when both production and consumption of alcohol were illegal, lasted in Ontario from 1916 until 1927. Though some breweries survived those days of temperance, most did not. In the post-Prohibition liquor law reform boondoggle, a handful of larger breweries were able to acquire smaller ones across the province. Though it made smart business sense, this consolidation of the beer market limited the creativity, flavours, and styles brewed, because beer was put under the control of a small number of large Canadian breweries. By the early 1980s, the three largest breweries (Molson, Labatt, and Sleeman), owned 96 percent of the market. Fastforward to the mid-2000s, and these large breweries had gradually been bought out by major international companies, such as Belgium’s Anheuser-Busch InBev, which now owns Labatt. In short, big business became the norm and popular styles of beer (mostly lagers) were mass-produced by the few breweries.

The changes that are currently happening in the beer market have come on quickly. For reference, Beau’s All Natural Brewery, now one of the major breweries in Ontario, opened its doors on Canada Day of 2006. Ottawa and Ontario have come a long way since then. The illustration on the following page, which uses Ontario Beer Network (OBN) figures, shows the outstanding growth the craft beer industry has seen in Ontario. These include contract breweries (which brew their recipes in the breweries of others) and brew pubs (basically a restaurant with a small brewery within), as well as breweries. The OBN statistics show things really started to escalate in 2012, when 22 new breweries emerged; that number grew to 31 in 2013, continued to grow to 48 in 2014, and dipped slightly in 2015 with the arrival of 27 new breweries.

What is even more telling than the growth over the past few years is the continuing confidence of investors in this sector: more than 70 breweries are currently in development. I hope you’re thirsty!

The Ottawa area is already home to more than 20 breweries, with still more proposed. It’s a challenging