Nova Scotia and the Annapolis Valley have witnessed an explosion of craft breweries, cideries, and distilleries in the last few years. Not unlike wine, our craft beers reflect the terroir and heritage of our region.
There are currently approximately 38 craft breweries in the province but, like the product, that number is fluid and constantly changing as new licences are issued. Put another way, the craft beer business in our neck of the woods is on a roll.
Province-wide the craft breweries range from small, one-person operations to larger operations like Propeller1 and Garrison2. Occupying the middle ground, is a wide and expanding range of breweries and brewpubs punctuating the province and constituting an industry that scarcely existed 20 years ago.
Anything that sounds too good to be true usually is
As an investment advisor, part of my job is to be cynical and suspicious – to look for the downside when everyone else is getting carried away by the upside. I’m an adherent to the principle that anything sounding too good to be true usually is.
How hot is hot?
Just how hot is Nova Scotia’s beer scene in general and ours in the Annapolis Valley in particular?
One important – and exceptionally positive – leading indicator was the news that the so-called godfather of Nova Scotia vintners, Hans Christian Jost, announced the sale of his vineyards and proclaimed that he’s founding a brewery. He sold the business, which includes the Jost winery in Malagash and Gaspereau Vineyards outside of Wolfville, to food industry veteran Carl Sparkes, former chief executive officer of Canada Bread.
Part of the business rationale for this decision was that, unlike Alberta for example – whose regulatory environment is somewhat tougher than our own – Nova Scotia doesn’t impose minimum production quotas on start-ups.
A salutary warning
Still, a somewhat salutary warning about the long-term growth future of the craft beer business was sounded last year in The Canadian Press – Craft beer has runway to grow in Canada3 – (May 17, 2017) as reported by The Chronicle Herald:
‘The Canadian craft beer market still has room to expand even as growth in the United States begins to run out of steam, the head of Molson Coors Canada said Wednesday.’
Molson Coors CEO Mark Hunter – Molson Coors sells Creemore Springs, Granville Island and Belgian Moon as craft beers in Canada and it has bought a stake in the Brasseurs de Montreal – was quoted as saying later in the same article that:
‘The rate of growth of craft beer in the U.S. has slowed over the past 18 months because the market has become oversupplied with options, prompting retailers to remove craft beer choices from store shelves.’
Added Brittany Weissman, a beer analyst with Edward Jones: ‘People wanted craft beer but there was way too many choices and it was almost overwhelming to a consumer.’
This may end up being a problem for us too precipitating – in the medium to long term – more business failures in the craft beer category than we might prefer.
So, as we continue to discover and embrace our many outstanding micro and craft breweries – featuring everything from India pale ales, lagers, pilsners and stouts to local twists on traditional including spruce, maple, jalapeno, pumpkin and vanilla beers – let’s not get carried away.
Growth is good, both for our local economy and for our collective morale. Just don’t expect it to continue at the dazzling rate we have experienced so far. It won’t.
Dave Ritcey, The Ritcey Team, Scotia Wealth Management