Small Breweries Continue to Increase Sales

With BC Craft Beer Month fast approaching, it appears that BC's smaller breweries have much to celebrate.

For the umpteenth time in a row, BC breweries producing less than 150,000 hectolitres of beer annually, normally, but not always, the size of brewery that produces craft beer in this province, have increased their sales both in dollars and litres sold, despite an overall drop in domestic beer sales in BC,  according to the BC Liquor Distribution Branch's latest Quarterly Market Report, published June 2011.

With domestic beer sales down 3.45% in dollars sold and 6.8% in litres sold for the 12-month period ending June 2011, compared to the 12-month period ending June 2010, the breweries producing less than 150,000 HL  have managed to increase sales a whopping 28.45% in dollars sold and 24.28% in litres sold. For the same time period, the larger breweries, those producing over 150,000 HL, have seen sale shrink 10.62% in litres sold and 7.08% in dollars sold. It seems that the craft beer movement is catching on here in BC and is reaching out beyond the beer nerds into the general population.

Now before you go reaching for a craft beer to ward off the sudden onset of a migraine resulting from all the above-posted statistics (keep that beer close at hand as there are scads more stats to come) and to celebrate the impending death of our province's macrobreweries, remember that the smaller breweries still hold only 13.4% of the BC market share in dollars and 14.4% in litres sold in BC. More than 85% of BC's domestic beer drinkers still drink beers from larger breweries, no matter how you measure it and for the most part, this means they are drinking bland, mainstream beers brewed with little artistry or imagination.  But if you compare today's numbers for smaller BC breweries to just four years ago, they have more than doubled their market share growing today's numbers from 6.6% in dollars sold and 7.45% in litres sold in 2007 and that means big dollars if consider that each percentage of the market share computes to approximately $8, 850,000 in sales.

Before the local craft beer scene start patting themselves on the back they should take a quick look over their shoulder. Sales for US imports have grown immensely over the past year increasing increasing 177.8% for draft beer and 49.3% for packaged (bottles and tins) for litres sold and 169.13% for draft and 39.43% for packaged products in dollars sold over the last year. They hold about a 6% share of the total market in BC, about where our domestic craft beers sales were four years ago. US imports are not eating into the total market share as much as the local craft beers, but they have clawed out an extra 2% in the past four years. These totals include all US import beers, not just craft beers, but if you take a look around Vancouver and the Lower Mainland, US craft beers are becoming more and more available in bars, restaurants and Retail Liquor Stores which feature craft beers, they are great beers and are becoming very popular.

And remember, each percentage of the market represents about $8, 850,000 in sales.

I'm not sure if there are more people drinking craft beer in BC or if those who have always drank it are just progressing as alcoholics. The cynical side of me says the latter, but common sense dictates that there are more and more people being exposed to, enjoying and therefore drinking these great local brews at least in and around the major urban centres. I'll be curious to see just how the next quarter's numbers look, due out at year-end, as yours truly has, for various reasons, cut back drastically on the amount of beer I am consuming, which may skew the numbers to some degree and slow down craft beer sales in general.

But with the way things are trending here in BC, I won't be too surprised to see craft beer sales increase even more and it won't be long before we see an obvious reaction from the larger breweries moving to protect their market share. It has already started with Molson's launching their Six Pints Specialty Beer Co which is meant to target the craft/specialty beer market and will, at least initially, feature Creemore and Granville Island beers, with both breweries falling under the Molson's ownership umbrella. I don't think it will be long before the other larger breweries start to fight back to protect their territory and it could get ugly if the BC government goes forward with its plan to open up and deregulate the tied house and industry inducement laws.

As consumers, we have to hope this trend continues as we are the beneficiary of this rapid growth in the BC craft beer industry. I know I am not alone in rejoicing over this shift in the market and hope it encourages others to open more craft breweries in BC, increasing consumer choices even more.