Ontario Craft Brewers Propose Complementary Beer Sales Channel

"Off Site" Craft Beer-Focused Stores would Accelerate Growth of Ontario Craft Brewing Industry & Create 1000+ New Jobs

TORONTO, March 24, 2015 /CNW/ - Ontario Craft Brewers today added another idea to the public conversation about beer retailing in Ontario.

In addition to the existing retail channels of the LCBO, The Beer Store and possibly grocery stores, OCB proposes the government allow established craft brewers the right to open at least one off site store per brewery, along with the ability to sell each other's products (cross sell) in them, and in their existing on site brewery stores.

The ability to sell in this complementary channel will help grow the industry of 150+ small, independent and entrepreneurial craft breweries that are operating throughout the province, with more planned and opening on a steady basis. This new channel would also directly impact the growth of the emerging local hop industry, which is also expanding across the province.

OCB also suggests that, to accommodate other craft producers with similar needs, some of the brewery store shelf space should be dedicated to their products ie: cideries, craft distilleries, etc.

In 2013, there were approximately 1,000 direct craft brewery jobs in Ontario with a share of about four per cent for premium-priced craft products. Comparisons to other jurisdictions show shares ranging from six to 30 per cent for craft products. Also, the specialty product/premium priced category in Ontario is easily over 20 per cent and much of it is produced outside of Ontario. Consequently, there is plenty of room for growth and job creation, with no local job offsets.

"We believe our share could double or triple in the next few years, as our access improves," says Darren Smith, President of Lake of Bays Brewing and vice-chair of Ontario Craft Brewers.

This would mean an additional 1,000 to 2,000 new direct brewery jobs. In addition, each off site store will generate another four to five direct jobs, at no cost to government.

Off site stores could be placed in or near other retailers or located in the downtown cores of smaller communities whose downtowns could use a retail boost. These would be craft brewery-owned stores at the local level, and would complement the stores owned by large chains and corporations. As well, they would allow for the building of a number of showcase stores in communities across the province. 

"Our industry will see approximately 200 craft breweries operating in Ontario in the near future. Most breweries have at least five brands so the bigger stores could carry as many as five hundred to a thousand brands, including some imports for trade purposes," says Smith.

While the existing and proposed retail channels would serve the public well for the large volume brands, both domestic and foreign, their focus will undoubtedly continue to be on big brands with high turnover unless government, very aggressively, regulates them in another direction. And, even then, their shelf space will likely be very limited.

We encourage the bigger chains to continue their excellent trend of carrying more locally sourced products, just like the LCBO already does so well.

"The fact that Ontario's Craft Brewers continue to proliferate to the degree they have, in spite of the retail access barriers they face, is a testament to their fierce determination to make world class products and to a surging consumer demand for those products," says John Hay, President of Ontario Craft Brewers.

"What craft breweries need most right now is a retail channel that is a true extension of the craft brewing movement and its spirit of cooperative entrepreneurialism," says Hay. "This is difficult to do well in retail channels that are grounded in big corporate culture as their business models are designed for throughput and big volume brands with long term consistency."

Craft beer off site stores owned by local Ontario craft brewers would keep profits within the province, allow for the abundance of stock keeping units (SKUs) offered by craft brewers and provide an entrepreneurial environment in which the beer can stay fresh and be marketed in unique and enterprising ways.

Direct delivery is a key component that must be preserved for all retail options because it guarantees freshness and allows quick responses to market changes without having to go through large chain distribution complexities.

"This concept would provide an ideal addition to the existing and proposed mix of options," says Hay. "It is a model that could lead the way throughout North America in innovating ways to give small, local brewers a real boost. It costs the Ontario government nothing and in no way threatens any of the larger chains, either existing or proposed."

"Craft brewers are a unique breed and they make unique beers," says Smith. "We are entrepreneurial, passionate and have a history of sharing and helping each other.  For us, it is all about the beer."

"Ontario Craft Brewers appreciate the effort government is putting into the discussion to reform the alcohol distribution system in Ontario and we value their desire to help our industry grow," says Hay.

For more detail on the proposed off site craft beer store concept, see http://www.ontariocraftbrewers.com/news.php

Ontario Craft Brewers: Discover the Difference. http://www.ontariocraftbrewers.com
Ontario Craft Brewers is an association of over 50 small brewers dedicated to making great tasting, high quality beer in Ontario. Ontario Craft Brewers brew their beers locally using fresh, all natural ingredients in communities throughout Ontario - from the Ottawa Valley to Windsor and Niagara to Muskoka and as far north as Kenora. Handcrafting over 450 premium brands in multiple pack sizes and types, Ontario Craft Brewers employ well over 1,000 people in direct brewery jobs (FTE's) in Ontario, accounting for over 30 per cent of the direct brewing industry jobs in the province. As of 2013, Ontario's Craft Brewers' share for premium priced brands was almost 4% of the beer volume sold. Craft beer continues to be the fastest growing segment within the LCBO's beer category. The OCB's long term vision is to make Ontario a North American Centre of Excellence for Craft Brewing. Funding provided by the government of Ontario. Please discover responsibly.

SOURCE Ontario Craft Brewers

Media Contact: Christine Mulkins, [email protected], 647-242-3686