The year in beer: Strong growth and a heady future for Alberta's craft scene

Despite a year of legal wrangling with courts and other provinces, the business of craft beer in Alberta is settling into a strong industry supported by steady growth and plenty of innovation.

At the start of 2018, there were about 70 independent craft breweries in Alberta, which rose to about 80 by mid-year.

There are now more than 125 existing and pending licences up from about 50 in 2016, according to Neil Herbst, chair of the Alberta Small Brewers Association.

"[Growth] was explosive, province-wide and in Edmonton as well," Herbst said.

Eight new breweries opened in Edmonton, 14 in Calgary and about 13 outside the two cities. Plus, there have been new developments within the Edmonton scene.

• A new cluster of breweries — Sea Change, Omen and Analog — has sprung up south of Whyte Avenue near Alley Kat, one of the city's oldest breweries.
• Blind Enthusiasm is brewing up new tastes for the new year, with a unique barrel-fermented style beer coming out of its new facility, called The Monolith. Another brewery, Polar Park, is now open for special events, after much work on the old Bee Bell Bakery building in Old Strathcona. Already, it has held five concerts on its top floor. 
• SYC Brewing is the new kid on the block, opening in Edmonton's far west end at 180th Street, while Two Sergeants moved from Fort Saskatchewan to a new home in Queen Mary Park at 118th Street and 105th Avenue.
• High Country and Rural Roots opened in Nisku and Leduc, and are considered part of the Edmonton batch.

Herbst noticed during the city's annual summer festival, K-Days, that more people are developing an interest in craft beer. 

"Everything they had at K-Days was brewed in Alberta by small brewers," he said. "It was awesome, I mean they really came out to support local brewers and local industry."

Beer battles

The craft beer culture persists despite decisions in 2018 that threatened government's ability to assist small brewers.

In June, Alberta was ordered to repeal its small brewers grant program, which was introduced in 2016 to help support small-batch brewing and diversify the economy.

Canada's Agreement of Internal Trade panel ruled that the program put beer producers from other provinces at a disadvantage.

Early that month, a Calgary Court of Queen Bench justice ordered the Alberta government to pay a combined $2.1 million to Saskatchewan's Great Western Brewing Company and Ontario-based Steam Whistle Brewing, which claimed Alberta's markups on beer — creating a subsidy for craft brewers — violated the Canadian Constitution.

• Alberta launches trade challenge against Ontario over beer, liquor imports
• Alberta ordered to pay Saskatchewan, Ontario breweries $2.1M over beer tax
• Alberta ordered to amend or repeal craft brewer grant program

In response, Alberta launched a trade challenge against Ontario over policies that the government and industry say discriminate against Alberta's small brewers.

Ontario has the largest liquor market in Canada, but the Alberta government and industry experts believe it is also the most restrictive.

The industry has long been fighting for provinces to open their borders to Alberta products.

"It's a bit embarrassing that in many instances there's freer trade with some of our trading partners in other countries than there is between provinces," Herbst said.

Along with the trade challenge to Ontario under the Canadian Free Trade Agreement, Alberta also repealed its smaller brewers grant program and replaced it with a graduated markup ranging from 10 to 60 cents a litre for brewers that produce under 50,000 hectolitres a year.

Craft challenge

Those with the impression that the Alberta craft brew market is becoming saturated may want to rethink that perspective.

Beer experts say most local brewers embrace their fellow competitors.

One example is Polar Park's collaboration with Situation Brewing.

Situation has enjoyed a near-monopoly of the Whyte Avenue area for more than two years, with a prime location on the corner of 81st Avenue and Gateway Boulevard. 

We're still just a drop in the bucket- Neil Herbst

Now, down the road at 80th Avenue and 104th Street, Polar Park is open for special events, and has already hosted numerous concerts and a wedding. They serve a beer called 1938 Pale Ale, named after the decades-old kettle the company acquired from a brewery in California.

Polar Park founder, Rob Oeming, said 1938 is currently being produced at Situation while he gets his equipment cleaned and ready for brewing.

Oeming would love to be able to welcome more brewers in the neighbourhood.

"If two more were to open up on Whyte Avenue, I think it would propel the culture," he said. "It would create some demand that wasn't there beforehand.

"People now go out to sample different beers from different breweries and make an evening out of it." 

Still, craft brews only comprise about 10 per cent of suds sold in Alberta.

"We're still just a drop in the bucket," Herbst said.

Herbst said there are three craft breweries per 100,000 drinking-age adults in Alberta. This is low compared to some other places in the U.S. where there are four to five.

The main competition here, he said, are the multinational companies like Budweiser and Labatt.

If more beer connoisseurs switch to craft, Herbst said there would be room in Alberta for many more craft breweries.

"I think consumers are becoming more interested in consuming locally," he said. "I think you'll always see the small brewers will be the ones that will be the innovators and the experimenters."

Erica Francis, editor of the Alberta Beer Guide, agrees there's plenty of room. She believes the industry must show drinkers of commercial beer that there's a craft brew for them.

"We don't necessarily have to sway their palette," Francis said. "We could make beer that they already like."  

All-malt lagers, for example, is a style similar to commercial beers but made with a craft process and craft ingredients. Instead of using barley or wheat, macro breweries tend to use other grains like corn, rice, or malt extract, to save money.

"We don't have to tell people what they're drinking is wrong. We can tell them, 'We also make beer that you'll like, and you can support a local company.'" 

Ian McIntosh, founder of Sea Change Brewing at 98th Street and 62nd Avenue, would also like to see a push for more locally crafted suds.

"We have to try to win people over on a cultural side, get people enjoying local beer more, even though they have all these options from all over the world."

He, too, would rather compete with local brewers and take some of the commercial beer out of the equation.

"Rather than cannabalizing our own industry, I'd rather take a tap from Labatt or Molson than Alley Kat or Situation, that's for sure."

Things to watch for in 2019

Herbst predicts a continuing trend of India Pale Ales and West Coast IPAs.

He believes there will be a lean toward more malt-forward beers.

"The big producers are producing malt of outstanding quality, so we here are in just an awesome place for malts," he said.  

Smaller producers are now on the scene making specialty malts, alongside the big malting companies like Canada Malt and Rahr Malt.

"Some of those can be traced right down to a specific farmer's field," he said.

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In 2018, Francis noted that brut-style beers started appearing on craft brewing scene in Alberta.

Brewsters has a brut-style IPA and Ale Architect, a contract brewery in Edmonton, has a brut imperial stout.

Francis expects to see at least three more breweries will come online in Edmonton in 2019: Odd Company Brewing in the Oliver Exchange Building, Campio in the former Characters restaurant in downtown Edmonton and the Growlery Beer Co. near the Blatchford development on the former City Centre Airport lands.

Edmonton is hosting the second annual Alberta craft beer awards, organized by the Alberta Small Brewers' Association. Edmonton's Blind Enthusiasm won brewer of the year in 2018, with Alley Kat taking second place. Herbst believes hosting the awards will give local breweries more provincial exposure.