Craft beer: Is the bubble finally bursting?

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Midian Brewing

Owning your building and all of your equipment is key in order to survive long term. As a new brewer, you are going to encounter roadblocks regardless of your experience in brewing or background. If your equipment is new you need to learn how to use it effectively. Issues will come up regarding electricity, plumbing, and infrastructure in general that will delay your opening. How do you produce excellent beer if you have no experience with your new equipment? You have to practice and mistakes will be made. Do you sell sub optimal beer? You have to if you have loans and leases. Investor financed breweries especially. If you own your building and equipment, you have ample time to optimize your process. Naturally, new brewers have to go to communities where real estate is cheap, otherwise the amount of money to buy a building in large markets is ridiculous. When you get in bed with investors, they own you and your brewery. They do not care about good beer. Most of them are just local fat cats waiting to pounce on your hard work and kick you out as soon as possible. Just remember new brewers: who owns the building really is who owns the brewery. If you manage to survive the cash burning startup phase, as soon as your lease is up the owner of the building will take advantage of the fact that it takes hundreds of thousands to move a brewery and will jack up your lease substantially. One last datum: visit http://www.beercanada.com/statistics . The market share for licensees is declining by double digit percent year on year, and month on month! Beer is so over priced and the economy is so bad that every month fewer and fewer people spend as they used to in bars and restaurants. Having a tap room is the best way to have access to funds, with a retail store a close second. The old model of producing beer in remote places to be served at bars and restaurants is quickly becoming obsolete. Listing with the LCBO as soon as possible is very important also. The coming beer monopoly is quickly killing licensee sales in ontario. It is to their advantage. They own the beer store so the less you spend at bars/restaurants the more money you are likely to spend at the beer store. Cutting out the middle man so to speak.

Mauricio 235 days ago

Contract vs Bricks and Mortar context needed

Decent option piece but it does miss the mark in truly defining success and failures and how they relate to contract vs Bricks and mortar breweries. Many of the unsuccessful examples (Spearhead, Garden) you use are simply contract brewers. They have little invested since they have no building, equipment or much overhead and are just throwing out some modest cash to let somebody else do the hard work. Really they're just marketing and a crappy ale recipe they throw at a brewer to produce. We can't rely on these as market indicators since they can come and go as they please with the minimal startup cost they endure. Sure some might have hopes of turning to a bricks and mortar (ie Left Field) but many are in for a quick buck and are just talking big like they're headed to build a big brewery. You have to remember this may be real dreams or just more marketing bull to convince others that they're "quality". Truth is there have been few failures yet that were genuine brick and mortar with equipment on the floor breweries and we haven't seen a slip on those ones yet (I don't count O'Vinshaws because it's a brewpub which has many other considerations and a true brewery they were always unlikely to become). Notably though, while all this is happening not a few hours away Half Hours on Earth (Seaforth,ON) has created buzz on budget all while DIYing it on a tiny homebrew style setup doing probably some of the best farmhouse and sour beers Ontario has ever experienced. The difference being he made a sure bet on a niche product and does a stellar job of it. In its early stages he's probably just paying the bills but his skills will likely convince others he's worth the investment. For all these other "breweries" we have enough lagered ales and half baked, unproven recipes on the market. Now is the time when those with quality will rise and it's not the money it's the skill, foresight into to market and being daring enough to do something different to be noticed that will drive the demand and success. If you do all that then you likely have the money and the skills and as a result a path to success. Something these contract brews noted will never have. Long live great, well brewed, interesting perfected Ontario craft beer.

Stephen G 290 days ago

Well, actually -

Hi Stephen - I'd like to point out to you that Garden Brewers were very dedicated to attempting to lock in a properly zoned brick and mortar facility - very similarly to the Left Field narrative, I might add - but in keeping with the main argument of this article - it was too damn expensive. Last I spoke to them they were becoming very discouraged with the City of Hamilton in its inability to work with them - and real estate prices were sky rocketing. The stigma of "just contract brewers" is such a loaded term and I don't believe it's fair to write off every contract brewer as "just more marketing bull." Genuinely. Victor North of Garden Brewers has worked with the best of them, and is incredibly good at his craft, but the fact is money is in the way of locking in brick and mortar unless you have major investors, or family money, or just a whole lot of government grant savvy. You need to start somewhere. Some are just more lucky than others.

Tish G 290 days ago

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