Wine, Beer and Spirits – An inside look at the rapidly growing alcohol-based beverage manufacturing industry across the country.
In 1866 the first Canadian commercial winery opened for business on Pelee Island. Today, there are over 1,000 licensed wineries operating throughout Canada. In addition to wine, production of craft beer, and distilled spirits are on the rise, and Canada is quietly putting itself on the map as a contributor to the international alcoholic beverage market.
Since 1990 the number of commercial wineries in Ontario has increased from 30 to 350. It is predicted that the province will be home to more than 400 micro breweries by the end of 2016. Nationally, expansion in all three sectors is on par with Ontario.
In terms of national retail sales, wine has aggressively closed the gap on the past leader in this industry – beer. Wine sales have increased from 7 billion in sales in 2006, to over 13 billion estimated for 2016. Beer has maintained annual sales in the 14 billion range since 2006. Spirits or distilled beverages have moved from 7 billion to just over 10 billion expected for 2016.
Combined, these beverages represent a burgeoning 40 billion dollar industry that is contributing to Canada’s economy, on both local and international scales.
What challenges face the continued growth of this booming industry?
I have been working closely with wine and beer manufacturers, their employees, and their consumers for several years now, and have noticed three particular areas for attention to ensure business success within the alcohol-based beverage industry in Ontario. I believe quality products, local support, and close attention to operational expenses are important factors that all beverage manufacturers need to consider, and we as consumers should be aware of.
Quality products, quality controls, and quality services:
Canadian beverage manufacturers have established a reputation for unique and specialized products that are created using quality ingredients and state-of-the-art processing methods. Ontario based wineries have teamed up to create what is known as “VQA” in terms of branding and marketing. “Vintners Quality Alliance” is a provincial regulatory authority that administers Ontario’s wine appellation system. Its primary functions are wine testing, audits, inspections, and compliance. Initiatives like the VQA help build Ontario wine brands nationally and globally. Specialty products including “Ice Wine” have garnered international attention and remain extremely popular, at home and abroad. It is imperative that we maintain our commitment to high calibre products as we enjoy the many benefits of this rapidly expanding industry.
Supporting Local Manufacturers:
It is no coincidence that when you walk into a liquor & wine store the local brands are up front for shoppers to see. The federal and provincial governments recognize these products are becoming major contributors to the Canadian economy. We consumers need to consider that supporting local manufactures is supporting the local economy itself. Many of us do not realize that some Canadian wineries actually share the same climate and latitude of world
leaders in wine production. The fact of the matter is our wine making industry, like our country, is still very young and will take time to develop. But, it will take less time if we have the continual support of local manufactures by local consumers. The next time you are in your neighborhood wine store, take a chance, try a locally manufactured beverage and enjoy some of these fine products!
Leaking financial Statements:
Strategic, Operational, Human Capital, and financial risks are key performance indicators that should be considered when looking at your beverage manufacturing business and its operation. I understand running a business can be difficult, and many factors contribute to your success or failure. Watch for the ‘little’ things on your financial statements, such as increased costs in materials, over paying for business services or insurance, and any other areas that can creep up over time.
As an avid supporter of the success of local wineries and breweries, and as an Insurance Broker, I have developed a unique insurance program to help protect an industry I am quite passionate about. Beverage Protect was created to match the specialized insurance needs of the alcohol-based beverage industry in Ontario and across the country. By teaming up with the right insurance companies we are able to offer wineries, craft breweries and distilleries a customized insurance program that offers the best coverage available with the best rates in Canada. This national program provides beverage manufactures, from start-ups to global producers, with tailored coverage to fit their budget and their specialized needs. For more information please feel free to contact me or visit www.bkifg.com/beverageprotect
By Joshua Kearley
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