Craft beer in Canada has been on a pretty good ride in the last decade or so. Across most of the country we have seen big increases in the number of breweries and the size of market share they earn. Times have been good. Alas, I am here to say: the party is over.

I have completed the latest iteration of my semi-regular State of the Beer Industry analysis, calculating how many breweries we have in the country and where they come from. The data is complete to November 2023 to the best of my ability. You can read my previous analysis for 2022 here and for 2020 here.

My overall take is that the expansion phase of Canadian craft beer is over. We are not yet in a retrenchment, but the industry has definitely plateaued and may be on the precipice of decline. Overall the numbers don’t suggest decline yet, but if we look at certain regions there is an argument that things are turning south. Expansion is over and we will need to wait another year or two to see if contraction has begun. A recent CBC story goes further, predicting that 10%-20% of all breweries will close next year (read it here). While I don’t disagree with the general tone of the article, it might be a bit too soon to make such firm predictions.

But let me show you the data so you can decide for yourself.

Breweries in Canada

First up, the total number of breweries has completely leveled off. In my database there has only been a net increase of 10 breweries in the past 18 months (and some of that may be a statistical anomaly – see below). I recognize the time periods vary (which I why I did a table rather than a graph) but I think the picture is pretty clear.

My interpretation of this statistic is that while new breweries continue to open, the pace of new operations has slowed and is now matched by the rate at which breweries are closing.

Breweries by Province

Let’s do a regional breakdown. First up the raw numbers of breweries operating in each province. The table below compares the current number from about 18 months ago. The source is my personal database, which is compiled from a variety of sources, including the efforts of Jordan St. John in Ontario and the intrepid work of Greg Clow of Canadian Beer News (thank you both!), among many other sources. I can’t promise it is 100% accurate, but I do believe it is the most complete database of Canadian breweries available outside industry associations. My definition of brewery is sensitive to ownership. Companies that own multiple brewery locations are categorized as one brewery operation per province. Contract breweries are excluded as they do not have a bricks-and-mortar location.

The first thing I notice is the presence of negative numbers. Four provinces have seen a reduction in the total number of breweries in the past two years. That hasn’t been seen in decades in Canada. Two other provinces, plus the Territories, have shown no growth. Alberta has shown modest growth. Only two provinces – Newfoundland and Manitoba – have demonstrated any kind of noticeable growth in the number of breweries.

It is likely here where I need to offer my caveat about Quebec. The table shows a not insignificant 7% growth in that province. However, this is a statistical anomaly. In this current update I discovered a new source for Quebec brewery information that revealed a handful of breweries I had previously missed. Those breweries have been in operation for more than two years but I did not include them in previous analyses, meaning Quebec was under-reported. The new number corrects for that error.

However, I am still not confident of the Quebec number. It has long been the most difficult province for me to gather information. My inadequate knowledge of French and the lack of an English-language source for information has meant the Quebec statistics have been less reliable. I did miss a handful of breweries in previous iterations but I am equally concerned that I currently include breweries that would not meet my criteria if I had a more grounded understanding of the beer industry in that province. I normally exclude contract breweries and pseudo-breweries (i.e., “dump-and-stir” operations) but have no reliable way of evaluating many Quebec breweries in that regard, as I am forced to rely disproportionately on the company’s name (i.e. microbrasserie, brasseurs), rather than their brewing status.

Notwithstanding the Quebec uncertainty, I cannot overstate the difference between my last analysis and this one. Last time there were multiple provinces with double digit increases, including all of Western Canada and Quebec. This time only Manitoba and Newfoundland can claim double digits, and they are both mostly a consequence of small starting numbers.

In short, across Canada the number of breweries closing is matching the number opening. That is a seismic shift for the industry. And it will have real consequences in the coming months and years.

Breweries Per Capita

You all know by now that I much prefer the calculation of breweries per capita as it controls for population. We would, naturally, expect Ontario to have the most breweries. That is not necessarily the best measure for how strong craft beer is in any province. The table below offers the per capita statistics based on population and on the “adult” population, defined as 15 years and over (that is the best we can do using Statistics Canada data). The numbers are from Statistics Canada’s report for the end of 2022.

The topline results find that New Brunswick has held its title as the province with the most brewery density, followed closely by Nova Scotia and PEI. (Yukon continues to blow the rest of the country away with its numbers, but given its small population it makes for a hard comparison.) Everyone else basically kept their relative position in the rankings. B.C. remains the leader among the big four provinces, followed by Alberta and Quebec with Ontario lagging.

But the real story here is the negatives. Nine of 13 jurisdictions report a reduction in the number of breweries per capita (15+). Given that Quebec’s number was previously undereported, there likely isn’t much growth there either. Had I gone with the most recent population data from Q3 of 2023, things would have looked even worse (I didn’t because we can’t get an age breakdown for that dataset).

The clear conclusion from this table is that the growth of craft beer has stalled and that with population growth this means the industry is actually starting to fall behind. We are seeing fewer breweries to serve the available market than we did a couple of years ago.

This need not be a bad thing. The number of breweries is only one metric. I do not have the data to determine whether the craft beer share of the market continues to grow. It could be fewer breweries are filling a growing craft beer space in the market. I argue the flat-lining of breweries is a sign that the industry is maturing.

Anecdotally, it has been relatively smaller breweries that have shuttered over the past year. While there have been some significant buy-outs and mergers (which do affect my statistics), in terms of outright closures it has been mostly small players. That is both not unexpected and a harbinger of things to come.

I will save a fuller analysis of why for a future post. But it is clear COVID was brutal for the entire beer industry. Small breweries struggle the most with cash flow and capitalization. The slow rebound from COVID has made many small breweries unsustainable, and thus they closed their doors. I know of many larger breweries (relatively speaking) who continue to struggle but have enough liquid cash to keep paying the bills – at least for now. Add in stubbornly high interest rates and flagging consumer demand, it is a bit of a trifecta of woes. How much longer can they do that? I don’t know.

All that is to say that I think 2024 will be a year of consolidation. We will see more brewery closures, and likely at a pace that outstrips the number of new breweries.

In short, I fear my next industry update will have an even more negative conclusion.