There’s nothing quite as satisfying as cracking a beer while lounging on the dock at the cottage. But this sacred time of self-reflection could be in jeopardy, as it turns out as trouble brews in Canada’s beer industry.
According to a report released by Dalhousie University’s Agri-Food Analytics Lab, Canadians are drinking less beer per capita. In 2019 alone, demand dropped by four per cent, the largest decline since Prohibition. Meanwhile, fifteen years ago, beer accounted for 50 per cent of all alcohol sales. Today, the figure sits below 38 per cent, according to A.C. Nielsen, a data analytics company.
“I think the younger generation seems to be more attracted to other kinds of drinks, ” Sylvain Charlebois, the lab’s senior director. He points to ready-to-drink mixes, such as vodka and soda, and non-alcoholic beverages as examples. In an attempt to capitalize on this trend, most major brewers have produced different versions of these drinks for the market.
But the decline in beer consumption is forcing brewers to go beyond offering new products and instead rethink their marketing strategies. “Beer is associated a bit with sports, hockey in particular in Canada,” Charlebois explains. Yet, there’s a growing number of beer drinkers—millennials in particular—who do not associate drinking with watching sports.
Weekly Hack: Serve better beer
The recent legalization of cannabis could also be contributing to the drain of Canada’s beer industry. “I think it’s a legitimate threat in light of the fact that people will get more educated about cannabis,” he said.
“The more people become familiar with the virtues of cannabis, I think it could make a dent in the beer market.”
While there’s no official data to back this up, Charlebois says the effects of cannabis on the beer market can be seen when you look at places like British Columbia. Beer sales in the province have not dropped as much as the rest of the country. Charlebois theorizes that this is because “the illicit cannabis market was relatively established there” prior to it being legalized.
While these factors all point towards the decline of Canada’s beer sector, new microbreweries (independently-owned breweries that produce small amounts of beer) popping up across the country seemingly argue otherwise. “We’re about to reach one thousand breweries in Canada,” Charlebois says. Ontario already has over three hundred, and Nova Scotia boasts one brewery for every 15 thousand people.
The growth in microbreweries is due, in part, to grants and lower taxes introduced by the federal government. Charlebois says that some provincial governments have even waived restrictions around breweries needing to produce a minimum amount of litres to be sold at crown corporations, opening up a larger market for microbreweries to tap into. In turn, the increase of microbreweries has prompted major brewers, such as Molson-Coors, to innovate.
Here’s what to do when someone gives you American beer
With so many options, it’s hard to believe the industry is suffering. However, despite the increased variety, Charlebois points out that many microbreweries are run by one or two people and are not necessarily profitable and scalable, especially as we hit a peak in saturation.
“I actually do believe that the legacy of microbreweries is quite fabulous,” he says. “But demand is weakening and there are more players, so I think we’ve actually reached a point where it’s time to recalibrate and make sure that the brewers that we have in our system or on the market are profitable and sustainable.”
Feature Video
