National Post - Financial Post Magazine

BARROOM BRAWL

PARENT COMPANY CORE BRANDS ARE TAKIN GOVER BY ANDY HOLLOWAY

- by Andy Holloway

The rise and success of craft brewers across Canada have some touting a David vs. Goliath storyline, but it’s very possible that Goliath doesn’t care too much — at least, not yet.

Ontario should be the place for beer drinkers to be. It can be argued that beers from Quebec tend to be more flavourful, or that British Columbian suds have more of the west coast hop bomb taste currently in vogue, but Ontario has more than 100 small brewers, a number that makes it home to more breweries than any other province. The number could even be as high as 150.

But that sum isn’t apparent when you walk into a Beer Store or LCBO, the province’s only two retail outlets. The former is owned by three multinatio­nals: Anheuser-Busch InBev NV, Molson Coors Brewing Co. and Sapporo Breweries Ltd., who obviously have a vested interest in keeping their products, especially their signature, non-Canadian brands, at the top of customers’ minds. The latter, operated by the Liquor Control Board of Ontario, is owned by the province and, despite its best intentions, clearly can’t keep up with the exploding craft beer scene however much it tries.

As a result, there are always calls to allow beer — and wine and spirits — in cans and bottles to be sold through other retail channels. As it currently stands, you’re sometimes better off making a trip to a brewery to load up on your favourite beer than waiting for the LCBO to find shelf space or for a small brewery to come up with the cash to get listed at the Beer Store.

That rankles a lot of beer drinkers who have taken a strong anti-big-beer position — there’s even an app in the U.S. to check a brewery’s ownership — even if the brewers don’t see things the same way. “I don’t think there’s a war,” Peter Bulut Jr., cofounder and chief brewing officer at Great Lakes Brewery Co. Inc., two-time national brewery of the year winner. “I do think some passionate craft beer drinkers make it seem like they’re taking guerilla-type tactics: ‘I ain’t drinking that big brewery stuff.’ They get pretty aggressive and upset about it.”

If there is a war at the brewing level, it’s in stealth mode. Despite the buzz about craft beer, it only has about 6% of the market nationwide, and just 3% of Ontario’s volume, according to Ontario Craft Brewers, an associatio­n that represents more than 30 small brewers in the province. That’s quite a bit more than the 1% it had in 2002, but keep in mind that B.C. craft beer has about a 21% market share, according to the Liquor Distributi­on Branch in British Columbia. That figure includes Pacific Western Brewery Co., which was included after the province increased the threshold to be considered craft to 160,000 hectolitre­s from 150,000 hectolitre­s. A hectolitre is equivalent to about 12 24- packs or two kegs of draft beer. Neverthele­ss, B.C.’ s craft industry is growing at 38% while Ontario’s is growing at about 10%.

Those growth rates have some claiming the Canadian beer industry has a David vs. Goliath battle brewing, with hundreds of Davids trying to topple a three-headed Goliath. It’s a similar story in the United States, which had 3,084 breweries as of July

31, according to the Brewers Associatio­n. But there are only two dominant market players in the U.S.: ABI and Molson Coors, which has tied up with SABMiller PLC south of the border. Despite the small market share, craft certainly has the attention of more than just beer snobs. Molson Coors bought two of the first craft brewers to experience success in the current renaissanc­e, Creemore Springs Brewery and Granville Island Brewing Co. in 2005 and

2009, respective­ly, and ABI took a controllin­g interest in the well-regarded Chicago-based Goose Island Beer Co. in 2011. Pete Coors, great-grandson of Coors founder Adolph Coors and chair of Molson Coors, recently wondered why consumers were switching to craft beer and paying more for

6% Percentage of the market craft beer has nationwide

 ??  ??

Newspapers in English

Newspapers from Canada