The Canadian Craft Beer Sector

Abstract

The number of breweries in Canada has risen from 10 in 1985, which were owned by three companies, to over 640 in 2015 with the clear majority considered microbreweries. The sales of craft beer have risen tenfold in the last decade, and it now accounts for 6% of the Canadian market. The total number of breweries is now over 640 with the clear majority considered microbreweries. The dramatic growth in the number of craft brewers has been spurred by government incentives and consumer demand for locally anchored food experiences. The latter is also related to demographic shifts that are somewhat unique to Canada. The growing demand for craft beer is occurring in many other countries as documented in this book but the corresponding decline in the mid-size breweries is somewhat unique to Canada. Regulations on the sale of alcohol stemming from the temperance movement at the beginning of the last century limit the opportunities for microbreweries to sell outside of its own location other than through local bars and restaurants. Tax policy that imposes lower rates on smaller breweries provides a further disincentive for growth beyond a certain size in most Canadian jurisdiction. Production costs associated with distribution and supply issues complicated by the distance between population centres in Canada have also constrained the size of new breweries. The net result is that the growing demand for unique and distinct beer products in Canada is being met by a resurgence in the number of microbreweries, which will likely continue to grow in number to meet the demand but which are limited in size.