An Argument for the Changing Shape of Suds
Recently, the CBC spoke to some of our friends in the industry at Snake Lake Brewing Co, Toolshed Brewing Company, and Troubled Monk Brewery -- the latter two make some damn fine beers and we genuinely can't wait to try what Snake Lake has to offer in 2018. If you haven't seen the clip, you may want to watch it for some back-ground information. The piece below is a response to some of the points raised, and a different perspective on the industry.
We believe that concerns about the industry 'bubble' bursting or becoming over-saturated are premature. There are a couple of reasons for this, so bear with us as we take you through our perspective of a booming industry.
North America is Weird. For entire generations North Americans have become accustomed to a certain way of doing things. We love monopolies, and entire empires in the business world have been built on the idea that in order to be the best, you must be the only one. We see this in our vast competitive markets pitting Goliath corporations against the mom's & pop's shops of the world. The brewing industry in North America is no different, and it can all be traced back to the 1920s.
A Brief History of Albertan (and Canadian) Prohibition
Before Prohibition in Alberta there was a scattering of successful breweries and distilleries of various sizes. The first brewery in the province opened in Medicine Hat as early as 1883, and Lethbridge was home to upwards of 6 breweries in the 1890s and early 1900s. Everyone was doing quite well. Lethbridge's largest and most notable brewery historically was the Lethbridge Brewing Company -- home of the Lethbridge Pilsner (yes, that Pilsner) which began in 1901 under founder Fritz Sick. Sick would eventually go on to found 2 more breweries in the province: in Edmonton and Calgary, as well as Mt. Rainier Brewery (yes, that Rainier) in Washington State. Most people don't realize that Mr. Sick and his son Emil were virtual Beer Barons of Alberta-- some pretty cool history if we do say so ourselves.
Alberta's Prohibition began in 1916-- during the height of the Great War (more commonly referred to as WW1) and continued until 1924 when it was repealed. Prohibition had a disastrous affect on the brewing industry in Alberta (and across Canada) for a couple of reasons. Firstly, the small brewers who were in operation before Prohibition were generally not able to survive the eight years, and could not afford to start back up again after prohibition was repealed. Secondly, the larger brewers who did survive (they mostly made 'soft' drinks -- yes that's where that phrase comes from-- and rented out cooler space to store fur coats [true story]) were able to lobby the provincial government at the time to impose certain rules under the guise of "industry advisors". The advice they provided basically assured that smaller competition operations that had existed before prohibition could not start back up-- meaning that those larger companies could walk back onto the beer scene with a virtual monopoly. Because everyone needed a drink, and when you're the only supplier, everyone drinks your stuff. Pretty canny (pun totally intended).
Some of those rules, like the 500,000L minimum annual capacity repealed in 2013, took literal generations to shake off. Thank goodness we are finally making progress on this, there are still a lot of nonsensical rules that we have to follow thanks to that early 'advice'.
With the abolishing of prohibition, many of the provinces formed Liquor Control Boards (ours is called the AGLC) to control liquor and (usually) gambling-- as these were seen as social vices that required their own special controllers to handle. Also, this is why in Alberta, Liquor Inspectors still have badges. They are literally Vice Cops (cue Bad Boys music).
Liquor control Boards were set up to do a couple of things: control the amount and price of liquor being sold in their territory, administer taxes, and prevent too much fun (not really, but that's what some of the policies wound up doing anyway), all in the name of public safety and moral decency.
So back to monopolies: because a lot of those brewing companies that boast of long histories: Molson- established 1786, Labatt - founded 1847, Coors - established 1873 -- they had distribution systems already in place to get their product to market quickly after the end of prohibition in each territory. They literally hit the ground running after booze was back in, and did everything the could to prevent smaller (what we now call micro and craft) breweries from starting back up.
This is why the North American brewing industry is so damn weird. We literally made it so that certain companies got to make all the rules, then ignore the rules that inconvenienced them, because they literally ran the show. The kicker is... they still are.
So what does this mean for the modern brewer?
We keep hearing about this "Craft Beer Bubble" and it's formed a couple of times, even in recent memory. There was one in the 80s, that burst and the industry flat-lined. There was another one in the 90s, that also burst, why should the 20-teens be any different?
Well we are optimistic. The world is changing at an alarming rate. Literally, technology advances every day, and while the world is still big, the communications networks are vast. Things go viral very quickly-- then also fade from view very quickly. Today the younger generations (go Millennials! [note Kel was born in '89, she can't help it]) is paying a lot closer attention to the way advertisement and marketing works. We are the most educated populace that has ever lived, and we are starting to see through some the old-hat tricks that corporations and monopolies like to play. It is getting harder and harder for those monopolies to survive and that has them running scared -- which means also getting super aggressive.
Back to Beer
If you take a look at Europe, most of which never underwent a 'Prohibition Era' the culture of drinking over there is very different. Yes, you still have large-brand beers (looking at Guinness, Heineken, and Carlsburg) but you also have a plethora of small, local, 'craft' brewers in your towns and small cities as well. These are brands that North Americans have never heard of, and will never hear of, unless you actually go and travel to those places. Entire breweries are sustained just within their local communities because that's what the locals drink-- they don't waste their time on brand-name beers because the beer they drink is made down the street. There are towns that exist in Europe that boast a population of 50,000 people (ok, cities, pick your nomenclature) and 10 breweries!
Seriously...we picked a random location in Germany (Coburg-- population 41,000 people) and it has 9 breweries in it! (google it, seriously). That's insanely cool! Lethbridge, a city of 98,000 has just TWO, and it's still hard to make a go of it!
So what does this tell us? It can be inferred from the statistics referenced in the CBC video that the shape of the brewing industry is changing-- and so it should. The spot talks about how beer sales have been declining over the last few years-- that people are drinking less beer, and this is true. It's also probably a good thing-- you don't need to drink a lot to have a good time, you just need to drink responsibly.
However, the video also put up an interesting statistic and that has to do with market share: 90% of the Canadian market is still cornered by 'Big Beer' -- our Domestics. That means that despite the fact that there are upwards of 800 breweries operating in Canada, (and that number is on the rise! Awesome!) those 650 breweries that are NOT domestics (or owned by a larger corporation) share just that 10% of the market share. That's insane! AND we are splitting that market share with the non-independent craft brands that have been bought out like Granville Island, Mill Street, and Belgian Moon that still masquerade as "independent craft" despite the fact that, unequivocally, they are not.
This all does tie together, we promise.
So while we dig on the CBC shining some light on some key players in the Craft Brewing Industry (there is no argument that Toolshed and Troubled Monk are founding members of the Craft Beer Industry in Alberta -- thanks guys, for paving the way for boot-strapping little upstarts like ourselves) the narrative they chose to pursue is just...wrong.
The Craft Beer industry isn't about to burst. There is no bubble to pop, in our opinion, we are just getting back to a very old-style of thinking: what can be produced locally ought to be consumed locally. While we wouldn't thumb our noses at the prospect of opening up new markets (will leave THAT to a future post) in BC and Saskatchewan, we do recognize that our local market in Lethbridge, and in Alberta does need to come first.
This comes back to the heart of our argument: support local. The CBC spot talks about how craft brands are bumping other craft brands off of draft systems at locations, and that's brutal. We want to get on draft at bars across Alberta, we have kegs of beer sitting here waiting to be bought (cheapest way to get beer, by the way), but we don't really want to bump one of our friends to do it. Rather, we would like to see a bar take one of their 5 domestic taps and turn it into a craft brand tap. We want to see chain restaurants that have back-room deals with Coors and Molson (redundant, they are the same company), pull a draft line for the locally-produced stuff.
This is something that the consumer can help with, and we implore you to do so! When you walk into a bar and you look at the draft handles, and your local breweries are not on a line-- we want you to ask why not? We want you to point out that Keiths, Labatt, and Coors all taste close to the same (because they are made at the same place), and we want you to demand better from your drinking establishments because that's how the industry changes. Also-- the AGLC really needs to crack down on the shady back-room deals going on, (but that's another post). Craft brewers should not have to vie for shelf space or draught lines when the domestics still have 9/10 lines in a pub, or 18/20 shelves in a shop.
Thanks for looking, friends. We raise our glass to you. Please feel free to leave a comment below. We will be updating the blog section regularly as things in the industry progress. Also-- there will be occasional recipes.