No, your tax dollars do not fund our business. Here's how the system actually works.

With the recent ordered repeal of the Alberta Small Brewers Development Grant (ASBDG) there has been a lot of comments made that tax-payer dollar shouldn't go to support small local breweries. We couldn't agree with you more. The thing is though, it doesn't.

The Alberta Small Brewer's Development Grant is essentially a tax refund disguised as a grant -- which is probably why it was repealed. How it worked is that brewers pay a mark-up to the Alberta Government based on how much beer they sell in a given month. When we opened our brewery the tax structure was stepped to give us small brewers a little bit of an advantage: we paid $0.10/L while larger producers who enjoy greater economy of scale paid around $1.25/L. In 2016 it was ruled that the stepped structure was unfair and created a trade barrier, so the government created a level tax for all brewers regardless of size at $1.25/L.

Picture for a moment, you are a small business owner in your first years of operations. Your costs are high, your revenues are depressingly low, and the government announces that your taxes are going up 1150%. Yeah, we basically had a heart-attack too. We were stressed.

Instead of killing our business, the government then develops the ASBDG which will essentially provide a tax refund back to your original tax rate. That's awesome! It's going to come in once a month and be based entirely off the last month's sales. So the more beer you sell, the more you pay, but also the more you get back. That's fine, it's a tax refund, and it means that while it will hurt for 29 days, you will get a lump-sum payment each month that makes you flush with cash and you don't have to pass that tax increase along to your lovely and much-appreciated customers. While some breweries took the opportunity of the tax increase to raise the prices on their beer, we kept our prices the same knowing that the tax refund would make us whole again and was just a few weeks away. The province has been operating this way for almost 2 years when, this week, the grant was deemed unconstitutional and unfair. We find this ruling to be the epitome of ironic comedy and here is why:

1. Alberta enjoys the only open alcohol market in Canada, meaning that anyone in the world  can list their product with the AGLC for $75.00 and sell their alcohol here. This has 2 major outcomes: it creates an intensely competitive market for small local producers, and it means an absolutely astounding selection of liquor for consumers.

You would think, then, that other provinces would operate in a similar way, but that isn't the case. With the exception of Saskatchewan, which is slowly making gains in opening its borders (you can even find our beer there!) it is actually easier for small producers like ourselves to list our product in Montana, Idaho, and Washington State in the USA (WHILE NAFTA NEGOTIATIONS ARE ONGOING) than it is to list in any other province or territory in our own country. This is because independent liquor boards and commissions were established at the end of prohibition in the 1920s and they have spawned protectionist policies since then.

As an example: Kel is from BC where she knows a lot of people in the liquor biz. She would love to be able to sell her product in BC but she can't because of BC's prohibitive practices involving liquor imports. Information on how to get product into BC is virtually non-existant but what we have been able to figure out is that: we would need a liquor agent to list the product ($$), ship the product to BC ($$), store the product in a separate warehouse from BC made product where the warehousing fees are up to 4x higher than those the BC manufacturers have to pay ($$$$), pay to ship the product from the warehouse to the retailer ($$), and then rent shelf-space in BC liquor stores for each of our products ($$$$$$$). Ontario and Quebec are even more prohibitive and, well, I don't think anyone really knows about Manitoba...

So what this means is that while Alberta enjoys an open liquor market and anyone producing alcohol all over the world can list here, including the breweries currently in litigation with the Alberta Government over their protectionist policies: Looking at You Steamwhistle & Great Western, Alberta producers are confined to their own home market. If you want to talk about uneven playing fields: BC producers often ship up to 80% of their product into the Alberta market because it is cheaper to sell it here than in their home market, and Alberta producers can ship 0% into BC.

So at this point you might be thinking "that's crazy! We all live in the same country but I can't get Alberta beer outside of Alberta!?" (exception: Big Rock, and Toolshed, and a couple others). The answer to that is, correct: and it doesn't look like it will change any time soon. So while producers in other provinces enjoy the competitive advantage of a restricted market, and often CAPITAL IMPROVEMENT GRANTS FOR BREWERS THAT ARE TAX-PAYER FUNDED *stares at Ontario, where breweries were awarded a $2million grant for improvements*. Instead of these issues being tackled as unconstitutional and providing an unfair advantage, a tax-refund in Alberta that dolls out only a percentage of what the brewery itself puts into it is repealed instead. 

That makes total sense. Sarcasm intended.

Inter-Provincial Alcohol Trade Still Behind the Times

In Alberta, we are fortunate to enjoy a wide selection of craft and micro-brewed beers from around the world. It makes for an interesting and dynamic market for producers, who have to keep on top of world trends and compete with vast pricing differences and economies of scale. No complaints, we love our market and we love the selection it provides.

It astounds us that Alberta's is the only open alcohol market in Canada. We have 10 provinces and 3 territories, and only one of them, with a population of just over 4 million, allows in alcohol from anywhere to be enjoyed by the people that live there. Astounding.

We are disappointed to learn of the Supreme Court of Canada's decision to uphold interprovincial trade barriers for alcohol markets. It basically means that the transportation and trade of liquor produced in Canada cannot be sold province to province. It isn't the Federal Government's fault, it's the provinces. Alberta is the only province in the nation that has embraced an open-market when it comes to liquor trade. If you're curious about details: this is what it takes to list a liquor product in Alberta:

1. Register the product with the AGLC ($75 listing fee)

2. Distribute through an accredited warehouse in the province (there are several to choose from).

As a bit of a social experiment, we attempted to register our product in several other provinces. The easiest one was Saskatchewan, because a client there is requesting our product, so they actually approached us! (Cool). In BC, we can't get our product into the province because of warehousing fees that would price us out of the market, and the BC government's requirement to list our product with a BC agency, instead of with the government agency itself. Essentially: it would be easier for us to open a brewery in BC (and cheaper) than to export our product into Kel's home province, which is a bit of a bummer.

Ontario is even worse: You can list your product with the AB-Inbev owned Beer Store chain, and the LCBO, but a single listing can cost in the tens of thousands of dollars. Once you ship your product there, it can hang out in limbo, a quarantine warehouse, for months before hitting store shelves, which means that the product will not be fresh, and could have quality issues.

In Quebec, it is very similar to the Ontario situation, some breweries we have talked to have cited 10+ months of wait time to get their product to store shelves, and tens of thousands of dollars per sku for listing their products in that market (compared to $75 in Alberta).

What we were hoping for: was a Supreme Court Decision that says these exhorbitant fees and trade-blocking practices would be ruled as unconstitutional. The decision, beyond logical comprehension, went the other way-- and our current practices were maintained. That essentially means that while breweries across Canada can list in Alberta and dump product into our province, there is no mechanism for Alberta breweries to sell product in other Canadian markets because of those markets being so closed off.

So with the courts basically saying "status quo is go", it comes down to the consumer to demand better of their governments and open up inter-provincial markets. Keeping the status quo as is, actually only hurts the craft-producing market Canada Wide, because it keeps those avenues closed to craft producers. Keep in mind, Domestic Producers like Molson, Coors, Labatt's, and Pilsner are all owned by multi-national conglomerates and operate their own warehouses in each province (set up at the end of Prohibition in 1924-26 depending on what province you are looking at). This essentially means that those trade barriers between the provinces (conveniently) don't apply to them as they have already established their own networks of moving product outside of those barriers. It must be nice to make up and play by your own rules.

By creating a greater market inter-provincially for regionally and locally produced craft alcohol products, small craft producers have a better chance of surviving market fluctuations. By keeping them closed: the courts are basically assuring that small craft producers stay small, and the big domestics maintain that beautiful 90% market share that they have enjoyed since the mid 1920s.

So: make it a talking point in your province, ask your governments to open up borders and stop with the shenanigans. It's time to let Canadian Craft Beer flow, province to province, territory to territory, across the True North. Cheers.

What is a Community Based Patio/Beer Garden

We are expanding our Tasting Room capacity on a seasonal basis by the addition of a local patio and beer garden! Our pocket parking lot is being tweaked to include a patio expansion that will help us host more events and guests! Exciting right? We think so too. Adding a patio will do a number of things to help transform our small local business into the proper Lethbridge hang-out we always dreamed it would be, but it's about more than that too. 

What the heck is a Community Based Patio & Beer Garden? 

Our marvelous landlord is looking after some logistical additions to the building and parking lot, which provides us with an opportunity to create a community-focused space. A gate will be added to the lot, that will be able to block off access to the parking area, meaning that we can license the space as a beer garden on a semi-permanent basis. This provides us an additional 2000 square feet of outdoor space with which to do something absolutely awesome. Some of the events we are already planning include: 

1. An outdoor cask event and food-truck rally 
2. Outdoor craft markets and fairs 
3. Home brewing and compound extracting classes 
4. Meetings, special events, fundraisers, and private events such as weddings and birthday parties 
5. Outdoor concerts, comedy nights, music festival nights, and more! 

So that all sounds awesome, but clearly, those are all going to be great for the brewery as well. That's true! We are not denying that an increase in traffic to our location will be a massive bonus for us. But it's about giving back too. 

You may have noticed that we exist in a...somewhat sketchy...area of town. The lighting on our street sucks (let's be honest) and walking down there after dark can be scary. By adding our patio, which will enjoy late hours in the summer time, we will be enhancing the aesthetic of our street, and creating a space for people to enjoy. Gentrification occurs in an area when people frequent the space for a good time, and feel comfortable and safe there. With the additional traffic we are hoping to encourage other businesses in the area to stay open later, enhancing the experience and the neighborhood. 

In addition to that, one of the pillars of our business is to provide a venue for non-profit organizations to use on a regular basis that is both cheaper to use and accessible. We are pleased to work with multiple non-profit organizations in town, and would love to welcome even more! We believe that local business should support their local community, and we are happy to do so! 

There is plenty of opportunity in our beautiful Upper EastSide neighborhood for small businesses like ours to thrive, and to help create that atmosphere of inclusion and pride that Lethbridge so deserves. Of course, as is the case with many small businesses, it is sometimes difficult to put away the capital to help fund some of the cool stuff we want to do. Instead, we are asking the community for help, so we can then work to grow the community. Investing in this project is an investment in the future of the Upper EastSide, and Lethbridge as a thriving local scene. 

To contribute to the campaign please head to the Campaign Website and take a look at some of the rewards you can get just for helping us out! There is a video to watch that will help explain the project, and of course we are happy to answer any questions you might have. If you are interested in this and other local projects and start-ups, you can also check out the ATB BoostR Stage taking place at the Galt Museum & Archives on March 21st. We will be presenting this idea and plan at that event, and you can help us raise even more awareness and money to make the patio spectacular. 

Brewsters: Ladies This Brew is For You!

A Little History Lesson in Beer

If you look at the brewing industry today you will find that most beer is targeted towards a male audience. If you look at ads from the early 1900s - mid 2000s you will find radio and television ads for big-name beer aimed specifically at men. These were also the decades of the Domestic Lager - the big-brand producers who specialized in easy-drinking, ice-cold beers. This attitude perpetuates the myth that beer is a 'manly' beverage that only men drink. In truth, historically speaking, everyone drinks beer.

Pre-history 35,000 BCE

Beer is the oldest traceable fermented beverage on the planet. Back when human society consisted of nomadic roving bands of hunters and gatherers, they had an alcoholic beverage that would have been the precursor to beer. These beers are what we would today, in our hipster-clad craft-beer culture, refer to as "raw" beers. 

(Raw beers are fermented by the naturally-occurring yeasts extant on the grain itself, rather than pasteurizing the wort during the boil and adding predictable yeast later. Flavours in raw beers are unpredictable and therefore most breweries will not produce them, however the effect of the beverage is the same.)

This is literally when grains got soaked in rain, naturally fermented themselves, and then neolithic peoples figured out they could get a buzz off the stuff if they drank it. Human beings have always been into mind-altering substances, so this makes sense. We know that pre-historic peoples had beer as a beverage because vessels from the eras exist with beer stone on them (a calcium-magnesium oxalate -- a residue of beer). Historical scientists are convinced that this is a pretty decent indicator that pre-historic peoples understood that wet grains, left for a period of several weeks produce a drinkable substance responsible for an awesome time and it can be argued that the rise in agricultural practices were directly related to beer production.

Ancient History - 2,000 BCE - 600 CE

While there is plenty of documentation for wine in the ancient era, we know that beer existed there too -- it was enjoyed by the lower societal classes. The water in ancient and medieval Europe was dangerous to drink, and beer was often a safer alternative because at this time the beer was boiled before fermentation.

Slaves, soldiers, and lower-class peoples were often given daily beer stipends as beer is high in nutritional value and was safe to drink. Beer at this stage in history, particularly intended for daily consumption, was usually low alcohol - around 1.5% alc./vol.

Across the world, grains have been fermented into beers. In ancient Asia, beer recipes from rice and local grains grown in the area have been recorded as early as 6,000 BCE. Even in what would become the American continents, Original Peoples had their own version of natural fermentation from grain, which would have resulted in a low-alcohol beer-like-substance.

The Middle Ages - Rise of Women in Beer - 800 CE - 1600 CE

In Europe, we know that beer exploded in use during the middle ages (sometimes referred to as the Dark Ages). Rivers in Europe were polluted from concentrated populations, and water was not safe to consume due to the high amount of waste (ew) in the water sources. Beer was a safe alternative because of the heating required in the brewing process killed off a lot of the harmful parasites and bacteria. At this time most households had some kind of brewing facility, or took advantage of communal facility located at the local monastery.

Ladies began to take on the role of house-hold brewers while men worked out in the fields, and later in cottage industries. Children as young as 2 drank low-alcohol beers throughout the day to maintain their health and have something to drink. Later in the middle ages, local markets would spring up and women would move through the market crowds in tall hats, selling off the extra beer made in their households. These ladies were known as Brewsters.

Early Modern Era - 1700s

Women would eventually be forced out of the brewing industry by industrialization and the rise of the domestic sphere (ladies stayed in the home to tend to families, while men went off to earn a living). This would remain the trend and the brewing industry would become male-dominated right up until the 1990s when the return of craft beer would herald a rise in women brewers. The late 1700s and early 1800s would also welcome the development of large brewing companies in Europe and North America - where beer production would be centralized and people could purchase it commercially from public houses (pubs) and individuals called "brewers" or "brew masters" who were particularly skilled in the art of brewing beer, became professions.

Modern Day and North American Prohibition -1900s - 1930s

Prohibition was a movement that banned the commercial manufacturing, distribution, and consumption of alcohol. Each province in Canada had its own prohibition laws. In Alberta, hotels were still able to serve alcohol in their in-house bars and restaurants, which meant that several breweries actually purchased hotels in which to sell their products. Alberta prohibition lasted from 1916 - 1924. After Prohibition ended, rules were put in place that dramatically stymied the craft beer movement. With the rescinding of those rules in 2013, the craft beer industry in Alberta has boomed, welcoming over 50 new breweries in the space of 4 years (and growing!). With the rise in craft beer, and changing attitudes, women are getting into beer more and more at every level. From consumers to producers, women are stepping back into the world of beer. Alberta is currently home to 6 breweries who have primary owners who are women, and around 15 breweries have women who are a part of the manufacturing/brewing teams.

Brewing today is a predominately male-oriented industry still with over 90% of brewing teams nation-wide being male only crews, but women who drink craft beer are on the rise as more dynamic flavour profiles are introduced into the world of beer. Women are the fastest growing demographic of beer consumer, and brew-masters programs around the world are seeing an increase in female enrollment as the industry returns to its roots and finds ladies at the helms of award-winning breweries the world over. 

The Annual Women's Brew

Each year Kel gets a team of kick-ass women together to brew a beer. The purpose of this event is 2-fold: to encourage women to engage in the brewing industry and beer culture, and to brew some incredible beers we don't normally get to make. In 2017 we teamed up with an incredible group from the Campus Women's Centre at the University of Lethbridge to brew Gemutlichkeit a 7.0% Roggenbiere. This year we will be going a bit bolder with The Matilda Effect, a 9 - 11% Lavender Gin Extra Strong Wheat Ale. The beer will be launched on International Women's Day (March 8) at Mocha Cabana in Lethbridge.

Ladies, whether you are a passionate consumer of cold brews, or have built your life's work perfecting the Craft: this brew is for you! Cheers!

 

 

 

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.

Watch it Here. 

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. 

Cheers!