![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: Canada: Sales of craft and specialty beers are growing in Canada![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
Craft and specialty beers are keeping the domestic beer industry afloat and offer the best opportunities for growth, according to a BMO Capital Markets market report released on September, 27.
British Columbia’s (B.C.) craft brewers are recording sales growth of 15 to 20 per cent a year, according to Tod Melnyk, chairman of the Craft Brewers Association of B.C.
“I’ve doubled my sales in the past four or five years and the other brewers are doing about the same,” said Melnyk, who runs Kelowna’s Tree Brewing.
But the surging growth of craft beer sales comes against a backdrop of decline in the overall popularity of beer.
Per-capita consumption of beer has been declining steadily for at least 15 years, according to the report by BMO economist Kenrick Jordan.
A decade ago, beer had a market share of 52 per cent in dollar value, compared to 23 per cent for wine. By 2010, beer’s share had fallen to 46 per cent, while wine accounted for 29 per cent, according to Statistics Canada.
Over the long term, the brewing industry has seen slow growth, but that has been driven by population growth and more recently by product innovation, said Jordan. Continued growth will require continued innovation and focus on the “brisk consumption gains” in the market for craft, specialty and premium brands.
Surrey’s Central City Brewing Company is one of a small handful of B.C. craft brewers looking to the United States for sales growth.
“We are seeding the market and building brand acceptance,” said owner Gary Lohin. With a new brewery under construction, Lohin sees the U.S. as an important place to grow sales.
“We are brewing for North America, not just B.C.,” said Lohin.
Low startup costs and changing public tastes have combined to foster a dynamic group of craft brewers concentrated in British Columbia, Ontario and Quebec. Craft brewers are offering stiff competition to Canada’s major brewers, Molson and Labatt, which each own about 40 per cent of the domestic market. The remaining 20 per cent is split between Sleeman and a host of smaller brewers.
The market share for craft beer in B.C. is about 15 per cent, Melnyk said.
“The smaller players are seeing strong growth and they are a good indication of what could happen throughout the industry,” Jordan said. “Craft brewers and specialty brewers are experiencing pretty strong growth but they are still a small part of the industry.”
Molson took early notice of the shift in public taste, launching its own line of Rickard’s craft-style beers and more recently purchasing Canada’s first craft brewery, Granville Island Brewing.
The major brewers will need to continue to exploit those emerging markets and develop products for affluent customers, who are increasingly turning to wine and spirits, to achieve continued growth, Jordan said. While not particularly sensitive to changes in income, beer sales fell 10 per cent in Canada during the recent recession, from 2008 to 2010.
“While sales should improve, the industry will be challenged to record substantial, sustained production gains,” he said.
28 September, 2011
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