On the first Friday of every month, beer bloggers from around the world all write their own perspective about a single topic, as chosen by a monthly host. As this month’s host, I have chosen the top to be “Is Craft Beer a Bubble?”
I’m going to take a local approach to my answer and talk specifically about craft beer in Ontario.
Let’s start with numbers. There are 31 breweries in the Ontario Craft Brewers Association, the newest of which are Ramblin’ Road Brewery Farm of La Salette and Sleeping Giant Brewery of Thunder Bay, and there are a few more craft breweries in the province that don’t belong to the OCB. The total number is probably around 40.
For a comparison, Belgium, with a population less than that of Ontario, is served by nearly 200 breweries. Closer to home, Michigan, again with a smaller population than Ontario, has around 140 craft breweries, having grown from only 3 in 1991.
The incredible growth rate in Michigan is representative of the US as a whole – in the 1970s there were less than 100 breweries in the States, including the BMCs, while today there are over 2,500. This is an all-time record; the number had previously peaked at a little over 2,000 before Prohibition.
Clearly, if we take the States as a comparison (and I think it’s fair to do so), a craft beer bust is not imminent in Ontario. If anything, the boom here is just getting started.
Could craft beer be a bubble in the States? The market is much more saturated than in Canada (California alone has over 300 breweries) while still very much a young industry. However, it’s misleading to compare the number of pre-war breweries, almost all of which closed due to Prohibition, to the number today without factoring in population growth.
The 2,000 American breweries pre-Prohibition served 63 million people, while the 2,500 of today serve 316 million. So if the market was in equilibrium before prohibition (a big “if”), then it won’t reach saturation today until there are at least 10,000 breweries in the States.
In Ontario specifically, the most obvious (and possibly the best) thing to compare to the craft beer industry is the wine industry. There are more than 180 wineries in Ontario, and hopefully we’ll have that many breweries soon.
The Lake Erie North Shore (Greater Essex County) is the latest recognized wine region in Ontario and has grown from 4 wineries to almost 20 in the last 11 years. Yet the same region still only has one craft brewery and one micro-brewery.
It’s far too early to start worrying about a craft beer bubble in Ontario. And here’s hoping that when the growth does finally taper off, the breweries that will survive will be those that focus on specialisation, localisation, and quality. A competitive craft beer market is a good thing: it rewards quality and punishes sub-par breweries, ultimately benefitting the beer drinker.