BC CRAFT BREWERS GUILD ORGANIZATIONAL OVERVIEW FEBRUARY 2019
ABOUT US The BC Craft Brewers Guild represents craft brewers from all over BC. • Some are small and others smaller, but they all brew flavourful local beer • with passion and dedication. The mission of the Guild is to support the ongoing creation and discovery of • truly great BC Craft Beer. WHO WE ARE hold a valid manufacturer license • 100% independently owned and 51% BC owned • less than 200,000 HL of beer produced annually • Contract manufacturing is not more than 50% • of annual production.
WHO WE ARE • Currently over 170 independently owned and operated BC Craft breweries/brewpubs in over 60 communities. • Employs almost 4,500 people directly • The Guild represents just under 150 members in total around the province • Sales now exceed $295 Million (estimated) for craft beer and British Columbians bought $110 million in 2010 • 5 year double digit growth rate in a flat/declining beer category • Provincial market share nears 30% from 9% in 2011; the largest market share in Canada • 22 breweries have opened in 2018 • 28 more breweries are scheduled to open in 2019
WHAT WE DO • Promote our full-flavoured, premium craft beers to beer lovers • Help British Columbians understand the cultural, community and economic benefits of BC’s vibrant Craft Beer scene • Unite the voices of all the craft breweries in BC; so BC’s Craft Beer community continues to develop and grow • Work with local and provincial government to sustain and improve support for BC craft breweries that create local jobs and boost local economies and communities throughout BC • Activate local festivals and community events to showcase our products and support worthwhile local causes • Provide tourist destinations for visitors to tour our breweries and visit our communities • Support the use of BC ingredients and sustainable brewing and business practices, wherever and whenever possible
CRAFT BREWERIES IN BC 200 180 160 140 120 100 80 60 40 20 0 1985 1990 1995 2000 2005 2010 2015 2018 Future
OUR PRIORITIES The BC Craft Brewers Guild is committed to working collaboratively with decision makers across all levels of government. Our members want to work in collaboration with the provincial government to ensure: • the continued growth of the BC Craft Brewing sector; • good governance with good policy that enables the growth of the industry in BC, nationally and internationally; • our members are fully engaged in consultation processes; • relationships are in place to address issues and opportunities effectively and efficiently; and • we focus on short-term priorities in the context of long-term market growth.
OPPORTUNITIES The Guild represents over 150 BC-based craft entrepreneurs keen to be engaged and contribute to the growth of the industry. The Guild has members across the province, with the ability to mobilize regional consultation and convene on matters important both to its members and government. The Guild is interested in: Acting as a convener and facilitator for discussions on key policy issues across the province with its members • Work collaboratively with government to establish engagement processes that are mutually beneficial and • structured to support the BC context of the industry
DISTRIBUTION ISSUES Nelson Brewery is an organic brewer in the Kootenays. The Castlegar government liquor store is 44 km away, but all Nelson product destined for Castlegar is required to go to the Kamloops Distribution Centre before being shipped to Castlegar. 873 EXTRA KMS 11 EXTRA HOURS
INDUSTRY RISK Manufacturing CONTRACTING consolidation into fewer, SHADOW BRANDS larger facilities increases OUT PRODUCTION Brand owners who do not own a diversification risk of the manufacturing license in any industry as a whole. jurisdiction are currently allowed to hire a contract brewer to produce Craft breweries create jobs and LOCAL ECONOMY RISK beer for them at discounted markup investment in communities across Employment opportunities rates. These brand owners do not the province. The graduated as well as investment in markup rate was established to have a facility, so either outspend or improve gross margins for small local communities is charge cheaper prices for their brewers so that the savings could reduced as beer production products than bricks-and-mortar be reinvested into their facilities, is contracted to a handful of brewers who reinvest into their growing capacity and creating jobs. large efficient operations. facilities and create jobs. While “contracting out” brewing production from an owned facility to a third party can be a valuable CONSUMER RISK tool, continuing to allow the full The growth of the industry is driven by a consumer desire to know benefits of the graduated markup where their beer is made and who is making it. If brewers are not rate to apply to this contracted actually making their own products, the industry as a whole threatens beer volume creates risks: the consumer trust that has helped it succeed.
WORLDWIDE PRODUCTION Due to increased demand and a lack of capacity at The markup rate should be the sum of their brewery, they all worldwide production (WWP): contract 7,500HL at a contract manufacturer. • any beer produced off-site • any beer produced on-site for another brewer • the WWP of any affiliated breweries • the WWP of any breweries that the reporting brewer has a branding Total WWP now equals agreement with 20,500 HL 20,500HL x $44 = $902,000 to BC LBD For example, Brewery X produces 13,000HL on-site. 13,000HL x $40 = $520,000
BRICKS-AND- VS. SHADOW MORTAR BREWERS BREWERS Proposal: Have brands with no For example, Brewery Z bricks and mortar pay produces 13,000 HL through $1.08/L, regardless of volume. contract and no manufacturing licence. For example, Brewery Y produces 13,000HL in house. Markup paid on worldwide production to BC LDB: Markup paid on worldwide 13,000HL x $108 = production to BC LDB: $1,404,000 13,000HL x $40 = $520,000 Differential = $884,000
OUR PRIORITIES CONTACT • Consultation and execution of the Hicken’s report Ken Beattie • Creation of a Craft Beer Caucus with the BC Legislature Executive Director • BC Craft Brewers Short, Medium and Long-Term Market Development Strategy 604-306-1500 ken@bccraftbeer.com @bccraftbeer bccraftbeer.com
2019 / 2020 BOARD Don Farion , Bomber Brewing – Chairman Mike Coghill , Yellow Dog Brewing – Vice Chair, Director Adam Crandall , Moody Ales – Treasurer, Director Chloe Smith , Townsite Brewing – Director Paul Hadfield , Spinnakers Brewpub – Director Michael Kuzyk , Category 12 Brewing – Director Matt Lockhart , Phillips Brewing – Director Ken Beattie – Executive Director
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