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‘Still room’ left in Alberta’s booming brewing and distilling industry: brewery founder

Capitalizing on Alberta’s craft beer boom: marketing, branding and tourism in 2020
WATCH: With Alberta’s craft beer industry expanding at a rapid pace, it’s becoming challenging for new brewers competing for a share of the market. As Adam MacVicar reports, those hoping to cash in on the booming beer business have to find ways to stand out.

This is Part 2 in our Alberta Matters series on alcohol. Click here to read Part 1 on craft beer marketing and tourism, and Part 3 on inter-provincial trade barriers hampering the growth of craft distilleries, Part 4 on the cider industry, and Part 5 on the passion distillers have for making local spirits.

Alberta’s craft brewing and distilling industries have been experiencing a boom at a time when the province’s economy hasn’t performed as well.

According to Alberta Gaming, Liquor and Cannabis, the number of breweries in the province has shot up to 123 from 27 between October 2015 and January 2020, a more than four-fold increase.

The number of distillers in the province has gone up by more than five times over what it was four years ago, from seven to 39 in the same time period.

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“There’s still room,” Jordan Saracini, co-founder of Eighty-Eight Brewing, told Global News. “It’s still a growing industry.

“I don’t think that saturation is something that we need to worry about now or even in the next couple of years.”

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READ MORE: Small manufacturers struggle to grow in Alberta’s craft alcohol industry

Saracini pointed to the craft brewing industry in and around Portland, Ore.

According to the Oregon Brewers Guild, the state had 281 breweries in June 2018. At 4.2 million, Oregon’s population is similar in size to Alberta’s 4.4 million.

“The market [in Oregon] seems willing to bear them, and the consumer seems excited to have them,” Saracini said.

According to Statistics Canada, Canada’s brewers made up a $6.3-billion industry in 2018, while distilling across the country has become a $1.3-billion industry.

And according to an October 2019 report from IBISWorld, Alberta had just more than 10 per cent of breweries in the country, behind Ontario, B.C. and Quebec.

READ MORE: Capitalizing on Alberta’s craft beer boom: marketing, branding and tourism in 2020

“We estimate that Alberta beer employs over 3,000 Albertans directly,” Mike McNeil, the executive director of the Alberta Small Brewers Association, told Global News.

“[The] craft liquor industry supports direct and indirect employment in urban and rural communities, processes Alberta’s agriculture and supports investment and economic diversification across the province,” he said.

Alberta breweries generated $316 million in GDP (at basic prices in chained 2002 dollars) in 2018, a seven per cent dip, following steady increases from 2015 to 2017. Alberta wineries and distilleries produced $59 million in GDP in 2018.

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“The next phase of growth is going to start hitting the industry soon,” McNeil said.

“Where we had so many breweries start up, now they’re going to start to grow, so there’s going to… [be] some challenges with cash flow.”

IBISWorld’s report said the three largest breweries in Canada, including AB InBev and Molson Coors, are expected to generate more than half of the country’s industry revenue in 2019.

A decade of foreign investment has led to consolidation of the industry, concentrating market share and improving profits through economies of scale in production and marketing, the IBISWorld report read.

LISTEN: Mike McNeil joins Calgary Today to discuss the state of craft brewing in Alberta

According to McNeil, interprovincial trade restrictions on alcohol have limited the ability of Alberta breweries to sell their products past provincial borders.

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“The biggest thing, I think, is we want to see our breweries be able to sell their beer outside of the province,” McNeil said.

Analog Brewing on Edmonton and Alberta’s growing craft beer scene
Analog Brewing on Edmonton and Alberta’s growing craft beer scene

READ MORE: Craft beer industry says ‘cheers’ to local brewery expansion

More Albertans have been turning to domestic beer offerings, including craft beers.

According to Beer Canada, an industry association, more Albertans moved to domestic beers between 2017 and 2018, with import sales dropping by 12.7 per cent.

Almost nine out of 10 beers sold — 87.1 per cent — were domestic in 2018, but per capita consumption dropped by 2.7 per cent in the same time period in the province.

AGLC told Global News that, as of Jan. 23, 2020, 4,391 Alberta-made beer products and 713 Alberta-made spirits products were on shelves in the province.

“It’s a big market here in [Calgary],” Matty Stewart, general manager of Freehouse, told Global News. “From Red Deer, south, I heard there’s 120 breweries.

“There’s so much going on and everyone’s doing such a wonderful job that it’s easy to sell the beer here.”

–With files from Global News’ Jessica Robb and Adam MacVicar