It's a challenging business, so six craft breweries, that share a passion for brewing and sharing great beer. are working together to ensure survival.
It's called the Northern Ontario Brewer's Alliance, and is a collection of small, independent northern Ontario breweries.
"It came about because we're sort of stranded up here and the main market for all our beer, of course, is the GTA and Toronto," Dwayne Wanner of Highlander Brew Company told BayToday as he served samples recently at the Royal Agricultural Winter Fair.
"We decided that the best way to handle that might be to work together so I approached Lake of the Woods in Kenora, Sleeping Giant in Thunder Bay, Manitoulin Island, Stack Brewery in Sudbury, New Ontario in North Bay and ourselves in South River and we just added Full Beard Brewing in Timmins and we're going to add others as well."
The Alliance has worked together with each brewery putting one of their cans in a six-pack and selling it as a limited time offer through the LCBO.
"That was a tremendous success, very popular," said Wanner.
The group tried a second time but it wasn't quite as popular, made difficult because of the distribution regulations, so that might be the end of that experiment.
"in the meantime, we've focused on shows and events, and since I'm the most southerly member and the guys in Kenora can't always come down to events, I generally front the organization with rolling in with the bar and they contribute financially to the cost and we share that, but we market all their beers."
The craft beer industry has taken off in the past few years and Wanner credits a couple of things for the rise...one being former premier Kathleen Wynne, as distribution is the main thing in the beer business.
"She's our big hero. She lowered the taxes for the small brewers and she also made the Beer Store open up so they must carry craft beer at the front, which they didn't do before, and she made the LCBOs build those beer sections in their stores and she also gave us the grocery stores, which changed distribution entirely. Craft beer in North America is running 15 to 17 per cent of the market in the western US and B.C. but was only five per cent in Ontario. When she finished it had already moved to seven per cent and that's where we're about now."
Wanner says the second reason for the proliferation of craft beer in Ontario is that there is no barrier to entry, anyone can start a brewery.
"If you are making wine you have to grow grapes and if you're making cider you have to grow apples. The barley that is used in making beer does not grow in Ontario."
The main supply is grown in western Canada because the high humidity in Ontario makes the barley susceptible to fungus growth. However, there are some micro-climates in this province that can grow it. One is the New Liskeard area and the other is around Verner, west of Sturgeon Falls, where the Plowing Match was held last summer.
To celebrate that, Highlander got Steven Roberge in Verner to grow barley especially for the Plowing Match called Horses and Plow lager.
But Wanner predicts a difficult future for the industry.
"There are too many breweries right now. There's 300 in the province which is far too many and there is no barrier to entry so a lot of people jump in and think if they make good beer at home they should have a brewery. No. If they know how to distribute beer they should have a brewery," laughs Wanner.
"The ones in the north are pretty well established, most of us have been around eight or 10 years and we've been through the tough times. Up north is tough always, as you know. The real place for a brewery is in downtown Toronto because then you don't need the LCBO, you have street traffic and you keep the LCBO commission, whereas up north we have to ship down south and we have to promote down there, so it is difficult."
Wanner says FedNor, Canada's economic development organization for northern Ontario, helps about 17 northern breweries promote their product.
"I think that's probably where we'll stay at, there's just not enough population to support it, but more and more are expanding."
He points to Lake of the Woods Brewery in Kenora which has expanded to Manitoba and Minnesota and to a growing share of the market in southern Ontario,
"But it's going to be a tough slog."
One bright spot on the horizon is online sales.
"All of us sell online and we can do the tradeoff and make it easy for people because if we sell in the LCBO they charge roughly 30 per cent commission. Well, 30 per cent commission on the beer is almost exactly the cost to ship it anywhere in Ontario. So if you buy online you're going to pay the same price as if you went to the LCBO or you were at the brewery and it helps the northern guys out a lot."
