Who Cares About Contract Brewing?

 

by Stephen Beaumont

In an article for the Globe and Mail on July 6, Ben Johnson asks the question of whether so-called ‘contract breweries,’ which is to say companies that hire the facilities and sometimes the brewers of other breweries to make their beer for them, should be deemed ‘legitimate’ craft brewing companies. To fuel the conversation, he invites Shehan De Silva, founder of the contract brewer Lost Craft, and Jason Fisher, the ever-garrulous proprietor of Toronto’s Indie Alehouse, to make their cases for and against.

It is a spirited debate, albeit one unfortunately restricted by word count. (Johnson has promised to continue the discussion on his blog.) What is left unanswered, however, or even unasked, is whether the public actually cares one way or another. Or, for that matter, whether or not they should care.

One of the many things I have learned over the course of my 27 years covering the beer biz is that brewers, brewery owners and managers and die-hard beer aficionados care deeply about issues that worry the average beer consumer not a whit. Concerned about the viability of the word ‘craft?’ Jane Drinker doesn’t care. Upset that Beer X is misrepresenting its style? Joe Imbiber isn’t fussed one way or the other. Angry because contract breweries are less ‘legitimate’ than bricks-and-mortar breweries? Joe and Jane both just looked at you as if you’re crazy.

Which is not the same as declaring that they are right not to care. Cast your gaze internationally and you will find that contract brewing has been a boon to some markets and a decided detriment to others. The world’s largest new-era craft brewery, Samuel Adams creator Boston Beer Company, began life as a contract brewer and continued largely as such during a time in the United States when such activity was common and actually helped along the industry by utilizing excess capacity at breweries that might otherwise be struggling. The practice fell out of favour over time, however, as many struggling and high-profile contracting firms denigrated the market with beer of questionable quality, at one point inspiring the Wall Street Journal to declare the end of microbrewing.

In New Zealand, on the other hand, a land with a small population spread over a lengthy territory, the first wave of craft brewing failed partially for a lack of contract brewing, a lesson learned by the savvier and highly contract-friendly second wave. With little or no stigma attached to contract brewing there, some of the most successful beer companies, such as Yeastie Boys and Epic, have been and continue to be producers employing the facilities of others. In Brazil, a very young market stretched over vast amounts of land, contracting and shared-use facilities are commonplace and do much to further growth.

Which leads us to where Canada sits in all of this.

In Ontario, where the industry-watch website, Ontario Beverage Network, reports there are 69 contract breweries, with 15 in the process of transitioning to physical locations, I believe that we find ourselves at the mid-point between ‘necessary’ and ‘detrimental.’

On the one hand, several prominent local breweries, such as Left Field and Sawdust City, began life as contracting outfits, and contracted breweries like Cool Beer and Wellington have certainly benefited from the added business the practice has brought them. While on the other side, some rather mundane and, frankly, not too dissimilar from the mainstream craft brands threaten to dilute the market in the same fashion as did U.S. outfits like the execrable Bad Frog and better but still ultimately doomed Rhino Chasers in the 1990s.

Elsewhere in the country, contract brewing is not nearly so prevalent, and frankly may never be. Most likely to see some contract brewing are either coast, with Factory Brewing set up in Vancouver to exclusively serve the needs of contract brewers and Atlantic provinces like Newfoundland and Labrador showing the greatest market opportunity, assuming of course that drinkers begin embracing craft beer with greater enthusiasm. But contract brewing depends heavily on volume, and frankly not many places in Canada can boast the sort of volume sales that does Ontario.

In the end, there is no definitive ‘good’ or ‘bad’ to contract brewing, with the practice serving its purpose in some regards and not in others. One thing that is almost assured, however, is that whatever ill contracting brings to the market from the consumer perspective, it is most certainly outweighed by the detrimental effects of poor or outright flawed beer that appears on shelves from ‘legitimate’ bricks-and-mortar breweries.