E-Malt.com News article: Canada, ONT: Small breweries multiplying daily in the Toronto area

As he sits in his Kensington Market restaurant watching diners munching on gourmet burgers and sweet potato fries, Brock Shephard has something else on his mind.

“You’ve got to come and check out the back. This is just awesome,” says Shephard, a 25-year veteran of the food and restaurant business.

Awesome might not be the word most people would choose to describe a chilly, dark room filled with construction rubble and in dire need of a paint job. But in that mess, Shephard sees space to indulge his latest project; a brewery attached to his Burger Bar restaurant.

“I’m just getting the licenses and all the paperwork sorted out, but I’m planning to be up and running this year,” said Shephard. In fact, he’s already having some beer brewed under his “Kensington Brewing Company” banner at Etobicoke-based Black Oak Brewing.

According to a recent report by The Star, Shephard’s project is just one of four brewpubs and small breweries slated to start up in the Toronto area this year. In the last 18 months, there have already been another four: The trickle of small-batch flavourful brews is turning into a flood of good suds.

That’s no surprise to beer author and long-time industry watcher Stephen Beaumont.

“This is the only part of the beer market that’s growing, and it’s doing it in double-digit numbers,” said Beaumont, who calls it an exciting time for Toronto’s beer scene. “We’re so close to seeing craft beer drastically alter the beer scene.”

At the LCBO, sales of Ontario craft beer have been growing by leaps and bounds, too. In the year ending Feb. 26, Ontario craft beer sales rose by 46 per cent at the LCBO. Overall beer sales at the LCBO rose just 4 per cent in the same period.

“It’s a small segment but by far the growth segment for beer,” said LCBO spokesperson Chris Layton.

In contrast, overall beer consumption in Canada has been flat or declining for the better part of the last three decades.

Not that the big guys have reason to panic about market share just yet: Despite the rise, craft breweries hold just a 5 per cent share of the Ontario market, according to the Ontario Craft Brewers trade association.

While Shephard was driven by a passion for good beer, there’s also a more than solid business reason for starting up his own brewing operation; it’s more profitable than serving someone else’s.

“It costs me about $2.50 a pint for someone else’s beer. Making my own will cost me about half of that, but because it’s a handmade, premium product I’ll still be able to tell it for the same price,” said Shephard.

At downtown Toronto’s Bar Volo, which serves more than 170 different kinds of bottled and draft beers from around the world, owner Ralph Morana decided last year to start making his own wares too. Morana’s “House Ales” brand has its official launch later this month, although he started brewing late last year.

If it’s that profitable, why isn’t every single bar or restaurant owner making their own brew?

Red tape and financing are two of the biggest reasons, says Jason Fisher, whose Indie Alehouse is opening in the formerly alcohol-free Junction neighbourhood in June.

Fisher, a former marketing executive at Bell Canada and American Express, has been working full-time for almost two years to get his brewpub up and running. While finding equipment and coming up with staff has taken plenty of time and energy, dealing with three levels of government has been the biggest drain.

“I had to pay the city $100 to get a letter saying that I wasn’t opening in a dry area, even though there isn’t a single dry area in the city any more,” said an exasperated-sounding Fisher. There were also city zoning bylaws which put the kibosh on four potential locations before Fisher settled on a former storefront on Dundas St. West for the site of the Indie Alehouse.

That frustration was echoed by Volo’s Morana. One form submitted to the federal government’s excise tax department was bounced back three times for small errors made by his insurance company. The excise tax people also wanted to see a diagram of his brewing area.

“I sent them a picture and they laughed when they saw how small it was,” said Morana of his tiny system, which can make just 140 pints of beer at a time.

Getting banks to lend money to someone going into the notoriously-unstable hospitality business can be a tough sell too, Fisher added.

“If I didn’t have equity in my house and a good network of people to get advice from, it would have been very difficult,” said Fisher, who took out a $350,000 loan under a small business program backed by the federal government. He also raised small amounts from friends and family.

“If you think you can do it for under $400,000, you’re dreaming, but $1,000,000 isn’t out of the question either, depending on what neighbourhood you’re in,” said Fisher.

Despite the hassles, it’s something Morana and Fisher wouldn’t trade for the world.

“I put a couple of casks of one of my beers on sale a few weeks ago, and it sold out in two and a half hours. That’s a pretty amazing feeling, knowing that people like what you do,” said Morana.


08 April, 2011