Hamilton’s craft beer industry growing despite hurdles

If you don’t think craft beer is big business in Ontario, look no further than the $10 million brewery under construction on Hamilton’s waterfront.

The facility is the "big dream" of Matt Johnston and Bob Russell, the Hamilton-born founders of Collective Arts Brewing, who partnered with another local brewer, Nickel Brook, to rebuild the old Lakeport brewery on Burlington Street East.

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When the facility's finished in April, it will be able to produce some 36 million bottles of beer each year while also housing a concert venue, art gallery, tap room and beer garden. 

With your own brewery, it’s really like an artist’s palette – you can do whatever you want.- Bob Russell, Co-Founder of Collective Arts Brewing

Getting to this point hasn’t been easy. And further growth will continue to be difficult as craft brewers look for ways to get their product to more customers and overcome the hurdles of a market set-up that favours big breweries.

Craft beer is surging in popularity, but the industry still represents just around 4 per cent of all beer sales in Ontario — "we're significantly underdeveloped here," Johnston says — compared to about 8 per cent of sales in the U.S. and figures as high as 14 per cent in B.C.

Craft brewers blame the limited amount of places they can sell their product due to the massive multinational beer corporations’ grip on distribution systems like The Beer Store. Small brewers also battle just to get taps for their beer at bars, or to score the right to sell bottles at the LCBO.

Still, craft brewers are striving to open brick and mortar operations, which allow them to scale up production and create more unique brews, something the beer-drinking public is increasingly demanding. 

"With your own brewery, it’s really like an artist’s palette – you can do whatever you want," said Russell.

"I think it’s about having control of your own destiny," Johnston said.

Currently, Collective Arts signs contracts with large craft breweries to make their beer, a well-established practice in the industry. Two other brewers, Brad Clifford of Clifford Brewing Co. and Warren Pyper of The Hamilton Brewery, have also recently launched in the city by producing beer elsewhere.

Johnston warns that growth is at risk if the provincial government doesn’t do something to make it easier for brewers to sell their product.

"There’s going to be a bubble if things don’t change," Johnston said, noting there are some 160 craft brewers in the province now, but their beers are normally only available to the public at bars, in select LCBOs or at the breweries themselves.

"If the retail environment doesn’t open up, that will become a declining number because those businesses will not be sustainable. Some of these breweries will starve."

Big changes, however, could mean those 160 breweries might survive and another 100 might follow in their footsteps, he said. And to be clear, that's something Johnston wants. 

A craft beer store?

Brad Clifford is one small brewer (his claim to fame is running a Toronto nano-brewery that would produce just two kegs at a time) that might benefit from changes to the industry.

CBC Hamilton contacted Clifford after news that The Beer Store was planning to give Ontario craft brewers more space in its select stores near their operations for a lower cost, something he dismissed as "optics."

"To be honest, I have no plans — in its current format — to ever sell in The Beer Store. I just don’t see the point," he said, adding he figures that even if he tried to sell there, his product would be relegated to the back reaches of the store.

"What we want to see is our own craft beer stores more than anything," Clifford said.

For now, Clifford is hoping to get some of his Clifford Porter – an award-winner in the past – into bars around the city and southern Ontario. The actual brewing of the 60 kegs happened in Waterloo.

Clifford said if he did bottle beer for mass sales, he’d likely do it through the LCBO, but cautioned that's also a difficult and risky process. Craft brewers who win an LCBO "listing" then have to persuade individual liquor store managers to stock their beer.

"It can be a pretty tough sell just to get it on the shelf at the LCBO. And if it doesn’t sell right away, they’re stuck with the product so they’re not going to carry it again," Clifford said.

"You can shoot yourself in the foot pretty fast."

'We're trying to establish a beer brand here'

Warren Pyper, founder of The Hamilton Brewery, has launched what’s by far the most city-specific beer brand. His Blue Collar Pale Ale, a home brew recipe that was scaled up at Railway City’s brewery in St. Thomas, is now in some 13 bars in Hamilton.

I don’t want to put out a beer out that only super beer snob aficionados will really want to have — you gotta’ sell volume to grow this brand- Warren Pyper, Founder of The Hamilton Brewery

Pyper is unabashed in his ambition: grow the brand, sell lots of beer and make brewing his full time job (currently, he manages the produce section at a Mountain health food store.)

"I really love all manners of beer … but I do know that we’re trying to establish a beer brand here," he said.

He’s hoping his crisp ale — not as hoppy or boozy as many craft beers, but still featuring a degree of complexity taste-wise — will be the crowd-pleasing beer that becomes a staple at local bars.

"I don’t want to put out a beer out that only super beer snob aficionados will really want to have — you gotta’ sell volume to grow this brand and build that brick and mortar brewery, which is the goal."

These days, you’ll find Pyper driving around with kegs of Blue Collar in his trunk, hoping to secure a coveted tap at a bar (a handle, in his language,) something that's a "continual struggle" in his industry.

While many bars have a dozen or more beer options, big brewers including some large craft beer operations pay for the installation of the hardware, with the agreement that only their beer will be offered, he explains.

Often, bars agree to take his beer, but "when the rubber hits the road is when you start to learn about the actual availability of some of their tap handles," Pyper said. 

"I’m certainly not crying foul, it’s just one of those things you wish was a little different," he said, adding this is even something he’s considering doing with some businesses.

From buck-a-beer to artsy ale

Back at Collective Arts, Johnston and Russell gamely pose for a picture next to what’s left of Lakeport’s exterior signage, the weathered outline of "Cold Beer."

Russell says it feels good to bring some pride back to Hamilton’s beer landscape, especially after the way Lakeport — known for its buck-a-beer price — went from owning 11 per cent of the province’s beer market to being shut down in 2010.

"Hamiltonians grew up on discount beers that were brewed here. Now, the tap lineups are changing," said Johnston.

Consumer pressure, more than anything the brewers are doing, appears to be getting to the province, he said.

And if change does come to the industry, Hamilton could be on the leading edge.