Microbreweries not a pint-sized industry anymore

Four Alberta buddies typify the new small-business approach. They love beer, but now they realize they need to know about production and marketing as well.

Passionate entrepreneurs bring thousands of new brands, intense competition

Don Pare, one of four partners who founded Ribstone Creek Brewery during a beer-tent inspired moment in 2006. (CBC)

If you've set foot in a liquor store lately, you've likely noticed new and unusual types of beer sprouting like dandelions in the spring — brands like Fighting Irish Red, Melon Head, and 33 Acres of Nirvana.

The artful labels are hard to miss. Long gone are the days when going for a beer meant a choice between Blue and Canadian.

The craft beer industry is booming in Canada.

According to the industry association Beer Canada, there are 520 licensed breweries, up 60 per cent over five years.

While this gives beer lovers unprecedented choices, the influx of new brands creates a dizzying playing field for the brewers, who fight for shelf space, placement in bars and restaurants, and ultimately enough profit to brew the next batch.

On a hot summer night nine years ago, a group of old school pals were imbibing at the annual sports days in their home town of Edgerton, Alta.

Like many prairie villages, Edgerton, 250 km southeast of Edmonton, had seen its best days decades ago when it was a thriving agricultural centre. Now, with fewer than 400 residents, there's not much left beyond the post office, school and a smattering of small businesses along its main street.
Stacks of Ribstone Creek beer at the company's brewery in Edgerton, Alta. (CBC)

One boarded-up building was an old service station and farm equipment dealership. The huge space was being used for storage by Al Gordon, its owner,who is also the town's administrator.

Gordon and Don Pare, a farmer who lives in the area, were joined by old buddies Cal Hawkes, a race car driver from Edmonton, and Chris Fraser, a lawyer in British Columbia. In one of those inspired, beer-tent moments, the four old classmates decided to give something back to the village they'd called home. They decided on a brewery.

None of them knew a thing about brewing beer or marketing it. But Pare says they did have one qualification. "We all drink beer. We've always drank beer," he says with a chuckle.

Rounding up investors for the project proved unusually easy, recalls Pare. "You say, 'We need need money for an an investment,' and they turn and walk away, and then you say, 'We're going to build a brewery,' and they spin on their foot and come right back."

It took five years to assemble the equipment and transform the old White Rose service station into a working brewery. In the meantime, the partners got a crash course in brewing, as they developed their recipes and brewed their beer under contract at an Edmonton brewery.
Peter Johnston-Berresford heads the brewery program at Olds College in Olds, Alta. (CBC)

Standing in his south Edmonton garage, next to his pair of sprint cars, Hawkes describes his foray into the beer business as "interesting."

The company hasn't been able to break in to B.C. or Saskatchewan yet, and Alberta's private liquor store system puts Ribstone Creek, named for a local waterway, in competition with about 4,400 other labels, by Hawkes' estimation.

The owners soon learned that brewing a beer people like is only the beginning.

"We didn't know anywhere near what we should have about marketing and that type of thing." laments Hawkes. "I think we're still really learning on the marketing part."  

In spite of selling half a million dollars in beer last year, the owners have yet to take a penny in profit from their venture.

"I'm not sure there are a lot of millionaires being made," laughs Jason Foster, an Edmonton-based beer blogger and columnist.

But there is a lot of beer being made, in every part of Canada. Yukon Brewing in Whitehorse is winning awards for its Yukon Gold Pale Ale. St. John's, N.L., has a vibrant craft beer culture, much of it on full display in the pubs of George Street.

At the other end of the country, nearly 20 craft brewers are producing beer on Vancouver Island alone. Hundreds more are creating new brands in small towns and big cities in the vast space between coasts.
Program head Peter Johnston-Berresford and second-year student John Edwards operate a beer canning machine at the Olds College Brewery. (CBC)

"I think consumers are just becoming more and more interested in exploring craft beer, but they're also particularly interested in local beer," says Foster. "They like the idea of beer being made down the street from where they live or in the town next door, whatever it might be."

There are two paths to becoming a brewmaster in Canada: Working hands-on with an established company or enrolling at one of the nation's two colleges that teach beer, brewing and business.

Olds College in Alberta has operated its program for only two years. It could easily double the 30 students per year it accepts, if only there were room for them in the college's fully operational craft brewery. Students travel to the small town north of Calgary from all over Canada.

Screaming for graduates

"The students right now have no end of opportunity," says program head Peter Johnston-Berresford. "This is really a great opportunity for people who are looking for something unique and different to do. To get some training in a trade that ostensibly is screaming out loud for graduates."

The industry is screaming so loud, in fact, that the college is having trouble keeping students through the second year of the program. Many are plucked out early, lured away by lucrative offers from breweries in the U.S. and Canada.

John Edwards has stuck it out to complete the two-year program. At 52, he's making a career shift and has no regrets about choosing brewing.

A self-described beer-geek, he's already applied his new skill set to his own home brews. Once he graduates this month, he has no concerns about finding a job. "Everybody got a job, and even the first years that have come through, 99 per cent of them have gone out and found jobs in the field."  

More opportunity ahead?

According to business research firm IBISWorld, the Canadian brewing industry pulls in annual revenues of $5.7 billion, with the two largest companies, Anheuser-Busch InBev and Molson Coors, holding close to 70 per cent of the market.

In its May 2015 report on Canadian brewing, IBISWorld warns of slowing growth affecting primarily the larger brewers, as Canadians shift away from traditional light and premium beer brands.

Does that mean more opportunity for craft brewers?

Foster offers an enthusiastic yes.

Not only does he see consumer tastes evolving toward craft beers, but he also notes the new breed of entrepreneurs who open breweries do it out of passion.

"They say, 'I'm going to open a brewery,' and they're excited about the idea of opening a brewery. And so they go and they make it happen."

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