Canadian craft brewers getting business boost from small suppliers

TORONTO – When Nigel Pike founded Main Street Brewing three years ago, his primary goal was to create an intimate, small-scale craft beer business nestled in one of Vancouver‘s few surviving industrial heritage buildings, with eventual plans to build a full-scale brewery on the city’s outskirts.

But Pike says he’s now closer to his long-term vision than he thought he would be thanks to innovative companies resolving some of the logistical nightmares facing fledgling breweries that want to package and distribute products beyond their brick-and-mortar walls.

“We’ve had two key partners who’ve played a massive role in how we’ve been able to grow quicker than we would otherwise be able to,” he says. “We’re two years ahead of where we wanted to be.”

Given the small foot space of his downtown brewery, Pike says installing a standard canning line is not practical. That’s where West Coast Canning has played an indispensable role in enabling him to ramp up production, one of many small suppliers tapping into the exploding growth of the craft brewing industry.

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The mobile canning company started four years ago in Vancouver and now also serves Alberta, says its co-founder Matt Leslie. Brewers such as Pike can schedule time for West Coast to arrive with its equipment, which can include custom-labelled cans, pack rings and case trays.

It’s pay-as-you go service designed for breweries that want to do small orders or runs of up to 1,000 cases per day, says Leslie. “We hook into their brite tanks, we do our quality control testing and we go to town.”

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Leslie says his business, modelled after mobile canning operations in the U.S., gives Canadian microbrewers options they otherwise couldn’t afford.

“For a standard canning line, you could get into it for $60,000 but most startup breweries would outgrow that in a year or two. Something like what we have is $150,000 to $200,000,” he says. “Small brewers are better off dedicating their space to producing more beer until they’re ready to expand.”

Main Street Brewing’s other pivotal partner has been Vancouver-based Direct Tap, a specialized service for B.C. craft brewers that warehouses their packaged products and arranges to have them shipped on request to stores, bars and restaurants throughout the province from one of its three distribution centres.

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“It gives you a much bigger reach than we could otherwise,” says Pike. “It’s comparable with us running our own trucks on the road.”

Direct Tap founder Mike Macquisten says that since starting his operation in 2015, the business has expanded from 36,000 square feet of storage to over 110,000 square feet.

“We now have 27 trucks on the road but we started with two,” he says. “We’re 72 employees and we started with six.”

While Direct Tap warehouses all manner of beer drinking vessel, including kegs and bottles, cans make up a significant and growing part of their business.

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Between 2010 and 2015, can sales rose from a 36.6 per cent to 54.7 per cent share of the domestic packaged beer market, while bottle sales dropped from 54.0 per cent to 35.4 per cent, according to industry trade group Beer Canada. That reversal occurred while the number of licensed breweries in Canada rose almost 108 per cent to 644 during the same time period, a spike driven by small local brewers.

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In Ontario, which houses about a third of Canada’s breweries, similar businesses helping the craft beer industry have set up shop.

Sessions Craft Canning, a mobile canning and warehousing company serving craft brewers in the province, has played a role in the success of Toronto’s Junction Craft Brewing, which plans to move to a new location with its own canning line this year.

Founder Tom Paterson says mobile canning has enabled his brewery, named for West Toronto’s historic railway neighbourhood, to do a variety of the “wild and weird” small-batch one-offs that appeal to its craft beer clientele – the kind of products “we couldn’t make a huge 120-hectolitre batch of and hope to sell within four months of the shelf life, which we do with two of our core brands,” he says.

“That’s allowed breweries to diversify their portfolios. People are always looking for the latest, greatest thing.”