Nova Scotia craft beer business staggering a bit
A veteran of the craft beer business is concerned that a spate of recent closures in the sector might be a harbinger what’s on the horizon.
“Last year there were four operations that either sold or closed, or restructured and brought in financing to stay alive,” said Brian Titus, owner of Garrison Brewing and the past-president of the Craft Brewers Association of Nova Scotia.
“We were kind of sounding the alarm about that since we hadn’t really seen that in the industry. It wasn’t the end of the world, but it was a sign of where things were. But in the last two weeks, there have been four companies who have either closed or are for sale or are desperately trying to bring somebody in to keep the doors open. That is much more alarming than the early tremors we were seeing last year.”
Titus said at the beginning of the year, there were about 60 craft brewing operations in the province, several of them with secondary locations.
“So, I would say 60 brewing companies operating 70 locations,” he said. “There’s nothing magical about breweries, we can fail like any other business. What does make us different is the pure level of control exerted on us, because alcohol is a regulated substance. Because it’s essentially a monopoly, with the province running it, the real issue is … that the system in Nova Scotia, the markup structure and the caps, and the restrictions of what you can and can’t do, does not support the number of breweries that exist, even though the market itself … totally does support it.”
Titus said the issue is not that complex: either change how the province runs the craft alcohol business or accept people going out of business needlessly in an industry that employs more than a thousand Nova Scotians.
“We’ve been saying we don’t need to go through all of that, if we look at best practices in other provinces, but we’ve been getting a deaf ear turned to that, so now we’re seeing businesses shutting down. People are exhausted and broke, and they don’t see a light at the end of the tunnel.”
Combined with the lack of opportunity at the NSLC, Titus said the residue of COVID is still having an impact on the ability of brewers to make a living.
“With inflation and the cost of living, people have cut back on things, so nothing is the same at it was this time in 2020, nothing,” he said. “It wasn’t great then with the government on the regulatory side, but everybody was talking about growth and expansion.
“Nobody’s really talking about that anymore, we’re just trying to control the loss in terms of the number of breweries. I have to imagine it’s not a one-time blip of four breweries in a few weeks and then everything will be good for the rest of the year. The concern is, are there are any more dominos to fall? I certainly hope not.”
Titus said the best ways to get and stay successful are by being diverse and having a number of listings at the NSLC.
“So, you have volume going out through the provincial liquor store system, and you probably have a couple of other irons in the fire in terms of diversification: you’ve got a tap room with a decent following, you’ve got a retail store which is convenient, and people go there,” he said. “You’re diverse enough that if you lose a listing at the NSLC, you’re not screwed.”