Posted at 5:00 am
“When we started making non-alcoholic beer, we were the only ones in Canada. Now everyone does. »
Michael Jean, CEO of Le BockAle microbrewery in Drummondville, sees that the craft beer market in Quebec is pretty crowded.
All niches are explored, all business models are tested. And even though beer consumption is declining in Quebec, the sector is still attracting prospects. Around a hundred brewers are currently waiting for approval from the Régie des alcools, des Courses et des Jeux (RACJ).
The future of these future breweries is more uncertain than ever. Unless they focus on their local market and avoid hitting the supermarket shelves in Quebec.
“Regionalization is what will save microbreweries,” says Philippe Wouters, who witnessed the birth of Quebec’s craft beer ecosystem and follows its evolution closely.
According to him, the brewpub model is still feasible in any Quebec village. “You have to be able to invest a lot of money to distribute and sell your beer all over Quebec and beyond,” he says.
In Drummondville, Le BockAle decided to do just that, focus on its local market and open a pub to sell its beer with alcohol. “We have no choice,” says Michael Jean. We started throwing in the towel for beer with alcohol. »
We have decided to refocus on beer with alcohol in our region because there are so many microbreweries wanting to stand on the shelves that it’s getting tight and it’s going to be difficult.
Michael Jean, CEO of Le BockAle microbrewery in Drummondville
The company has also just partnered with Nicolas Duvernois and Gin Romeo to begin making ready-to-drink beverages with and without alcohol. In order to open up this new market and continue to grow, an investment of 15 to 25 million in a new, fully automated factory is planned.
The moment of truth
At the end of the summer, when beer sales are at their peak, reality could catch up with some craft breweries, believes Philippe Wouters.
All brewers face significant increases in costs: Cereal, can, carton and transport prices have risen sharply over the past year, eroding their profitability.
At the same time, inflation and rising interest rates are reducing the purchasing power of consumers, who are less willing to pay more than the already high craft beer prices.
“There are challenges,” acknowledges Marie-Ève Myrand, executive director of the Association des Microbrasseries du Québec. The aging of the population, which has been responsible for the stagnating beer sales for years, is continuing, she notes. In addition to rising input costs, tough competition for shelf space in grocery stores has become a major problem, she admits.
The entire microbrewery environment is changing, says Frédéric Thibeault, vice president of the group that oversees Glutenberg and Oshlag beer brands and Oshlag distillery.
The beverage market is fragmenting. The number of types of drinks multiplies, with a very short lifespan. That is the challenge we are facing.
Frédéric Thibeault, Vice President of Glutenberg and Oshlag
We have to diversify, that’s a necessity, believes Frédéric Thibeault. Glutenberg, the number one source of gluten-free beer, also brews Oshlag-branded beer, spirits, seltzer and other ready-to-drink products.
The company has established a distribution network for microbrewery beers, a first in Quebec. Transbroue has been representing and distributing its beer brands and a few others in the Quebec market since 2013, filling an important need for microbreweries.
Glutenberg et compagnie has a production capacity of 60,000 hectoliters, making it a large microbrewery. “And we have big ambitions,” assures Frédéric Thibeault.
Small, of your choice
There are more than 300 microbreweries in Quebec. The vast majority of them have a production of less than 2000 hectoliters (1 hectoliter equals 100 liters). The microbrewery La Korrigane is one of them. It has been offering its craft beers in Quebec’s Saint-Roch district since 2010, with a conscious local ambition. With a restaurant-pub, around ten employees and a production of 650 hectoliters, the company is doing well.
From “tripper” to professional
The craft beer sector is young in Quebec, but in 30 years its evolution has been spectacular.
“We have evolved from an industry of day-trippers to an industry of professionals,” sums up Raphaël Sansregret, President and co-founder of Innomalt, a microbrewery malting company.
With the intention of making whiskey, Raphaël and his partner founded Innomalt in Sherbrooke in 2016. With growing demand from microbreweries, they shut down their whiskey project to focus on that clientele.
The demand from microbreweries is undeniable, and Innomalt is currently building a second facility worth more than $40 million in Bécancour that will increase its malt production capacity in Quebec by twentyfold.
Since 2016, Raphaël Sansregret has seen microbreweries becoming more professional.
More and more entrepreneurs with solid business plans are hiring brewmasters.
Raphaël Sansregret, President and co-founder of Innomalt
There are no longer just microbrewers in the microbrewery ecosystem.
The beer giants, who at least had to gain a foothold in this growth industry, went shopping. AB-Inbev (Labatt) bought the Archibald microbrewery. Molson acquired Shawinigans Trou du Diable and Brasseurs de Montréal. Japanese brewer Sapporo owns Sleeman and Unibroue.
Malt producers like Innomalt, increasingly grown hops in Quebec, a distribution network like Transbroue, and specialty retailers have emerged and added depth to the industry.
Eventually, professional investors got on the train. The Caisse de dépôt and the BDC each invested 5 million in the activities of Glutenberg, Oshlag and Transbroue. The FTQ fund invested US$20 million in Brasseurs du Nord, the creators of La Boréale, in addition to more modest sums in Le BockAle in Drummondville and La Voie Maltée microbrewery in Saguenay.
It’s still tentative, but it could be the beginning of the end of the craft.
The industry in figures
Maximum annual production to have the title of microbrewery
Annual production capacity of Boréale, Quebec’s largest microbrewery
Average production capacity of 80% of Quebec microbreweries
84 million hectoliters
Annual production capacity of MolsonCoor
Number of microbrewery licenses revoked voluntarily or involuntarily since 2012
Source: Quebec Microbrewery Association