BC CRAFT BREWERS GUILD ORGANIZATIONAL OVERVIEW FEBRUARY 2019 ABOUT - - PowerPoint PPT Presentation

BC CRAFT BREWERS GUILD

ORGANIZATIONAL OVERVIEW FEBRUARY 2019

ABOUT US

• The BC Craft Brewers Guild represents craft brewers from all over BC.
• Some are small and others smaller, but they all brew flavourful local beer

with passion and dedication.

• The mission of the Guild is to support the ongoing creation and discovery of

truly great BC Craft Beer.

• hold a valid manufacturer license
• 100% independently owned and 51% BC owned
• less than 200,000 HL of beer produced annually
• Contract manufacturing is not more than 50%
• f annual production.

WHO WE ARE

WHO WE ARE

• Currently over 170 independently owned and
• perated BC Craft breweries/brewpubs in over 60

communities.

• Employs almost 4,500 people directly
• The Guild represents just under 150 members in

total around the province

• Sales now exceed $295 Million (estimated) for craft

beer and British Columbians bought $110 million in 2010

• 5 year double digit growth rate in a flat/declining

beer category

• Provincial market share nears 30% from 9% in

2011; the largest market share in Canada

• 22 breweries have opened in 2018
• 28 more breweries are scheduled to open in 2019

WHAT WE DO

• Promote our full-flavoured, premium craft beers to beer

lovers

• Help British Columbians understand the cultural, community

and economic benefits of BC’s vibrant Craft Beer scene

• Unite the voices of all the craft breweries in BC; so BC’s Craft

Beer community continues to develop and grow

• Work with local and provincial government to sustain and

improve support for BC craft breweries that create local jobs and boost local economies and communities throughout BC

• Activate local festivals and community events to showcase
• ur products and support worthwhile local causes
• Provide tourist destinations for visitors to tour our breweries

and visit our communities

• Support the use of BC ingredients and sustainable brewing

and business practices, wherever and whenever possible

20 40 60 80 100 120 140 160 180 200 1985 1990 1995 2000 2005 2010 2015 2018 Future

CRAFT BREWERIES IN BC

OUR PRIORITIES

The BC Craft Brewers Guild is committed to working collaboratively with decision makers across all levels of government. Our members want to work in collaboration with the provincial government to ensure:

• the continued growth of the BC Craft Brewing sector;
• good governance with good policy that enables the

growth of the industry in BC, nationally and internationally;

• our members are fully engaged in consultation

processes;

• relationships are in place to address issues and
• pportunities effectively and efficiently; and
• we focus on short-term priorities in the context of

long-term market growth.

OPPORTUNITIES

The Guild represents over 150 BC-based craft entrepreneurs keen to be engaged and contribute to the growth of the industry. The Guild has members across the province, with the ability to mobilize regional consultation and convene on matters important both to its members and government. The Guild is interested in:

• Acting as a convener and facilitator for discussions on key policy issues across the province with its members
• Work collaboratively with government to establish engagement processes that are mutually beneficial and

structured to support the BC context of the industry

DISTRIBUTION ISSUES

Nelson Brewery is an organic brewer in the Kootenays. The Castlegar government liquor store is 44 km away, but all Nelson product destined for Castlegar is required to go to the Kamloops Distribution Centre before being shipped to Castlegar.

873 EXTRA KMS 11 EXTRA HOURS

CONTRACTING OUT PRODUCTION

Craft breweries create jobs and investment in communities across the province. The graduated markup rate was established to improve gross margins for small brewers so that the savings could be reinvested into their facilities, growing capacity and creating jobs. While “contracting out” brewing production from an owned facility to a third party can be a valuable tool, continuing to allow the full benefits of the graduated markup rate to apply to this contracted beer volume creates risks: LOCAL ECONOMY RISK Employment opportunities as well as investment in local communities is reduced as beer production is contracted to a handful of large efficient operations. INDUSTRY RISK Manufacturing consolidation into fewer, larger facilities increases diversification risk of the industry as a whole. CONSUMER RISK The growth of the industry is driven by a consumer desire to know where their beer is made and who is making it. If brewers are not actually making their own products, the industry as a whole threatens the consumer trust that has helped it succeed. SHADOW BRANDS Brand owners who do not own a manufacturing license in any jurisdiction are currently allowed to hire a contract brewer to produce beer for them at discounted markup

• rates. These brand owners do not

have a facility, so either outspend or charge cheaper prices for their products than bricks-and-mortar brewers who reinvest into their facilities and create jobs.

WORLDWIDE PRODUCTION

The markup rate should be the sum of all worldwide production (WWP):

• any beer produced off-site
• any beer produced on-site for

another brewer

• the WWP of any affiliated breweries
• the WWP of any breweries that the

reporting brewer has a branding agreement with Total WWP now equals 20,500 HL 20,500HL x $44 = $902,000 to BC LBD For example, Brewery X produces 13,000HL on-site. 13,000HL x $40 = $520,000 Due to increased demand and a lack of capacity at their brewery, they contract 7,500HL at a contract manufacturer.

• VS. SHADOW

BREWERS

Proposal: Have brands with no bricks and mortar pay $1.08/L, regardless of volume. Markup paid on worldwide production to BC LDB: 13,000HL x $108 = $1,404,000 Differential = $884,000 For example, Brewery Z produces 13,000 HL through contract and no manufacturing licence.

BRICKS-AND- MORTAR BREWERS

For example, Brewery Y produces 13,000HL in house. Markup paid on worldwide production to BC LDB: 13,000HL x $40 = $520,000

OUR PRIORITIES

• Consultation and execution of the Hicken’s report
• Creation of a Craft Beer Caucus with the BC Legislature
• BC Craft Brewers Short, Medium and Long-Term Market

Development Strategy Ken Beattie Executive Director 604-306-1500 ken@bccraftbeer.com @bccraftbeer bccraftbeer.com

CONTACT

2019 / 2020 BOARD

Don Farion, Bomber Brewing – Chairman Adam Crandall, Moody Ales – Treasurer, Director Paul Hadfield, Spinnakers Brewpub – Director Matt Lockhart, Phillips Brewing – Director Mike Coghill, Yellow Dog Brewing – Vice Chair, Director Chloe Smith, Townsite Brewing – Director Michael Kuzyk, Category 12 Brewing – Director Ken Beattie – Executive Director