Why are B.C.’s craft breweries in such trouble right now?

First of all, I’m not an optimist. You could call me a realist. My wife might say I’m pessimistic. I think I’ve spent the past 10 years living with constant anxiety. Because that’s common when you’re running a small business.

Let me be clear: most of the time I worry for no reason. Probably just to worry. Steel & Oak, the New Westminster brewery I co-founded, has had more good times than bad. We were able to grow our business from nothing to something meaningful.

Approximately 1 million glasses of beer are enjoyed each year. We have a wonderful staff of 22 of his people who help us work the brewery. On the surface, we are successful. But internally, we are like any other small business in a competitive market, trying our best to stay creative, stay positive, stay relevant, and survive.

There are currently many challenges facing the craft beer industry. The cost of operating a brewery has gone up, but our customer base hasn’t. There are more than 230 of us in B.C., competing for a limited number of liquor store shelves and taps. Predictions are that by the end of 2025 more than 20 percent of the population will be bankrupt. I don’t disagree with that (mainly because I think 20 percent is about right).

Market saturation and declining alcohol consumption among customers are the most cited reasons for the current state of the industry. While these are certainly factors, the big factor for many breweries will be the high cost of ownership. One.

Breweries are expensive. But most of it was done by a few people, including those at the current company, who took advantage of everything they had and took risks because they loved the craft of beer-making and wanted to improve the communities in which they lived. It was started by taking a risk.

Many of us borrow small amounts of money from family and friends, but the risk of not being able to pay them back prevents us from being invited to parties. But most of the $1 million to $2 million needed to fund a brewery comes from banks, which if not paid back risk bankruptcy (bankers suck anyway). These outstanding bank loans, whether for the establishment of a brewery or the growth of a brewery, were likely renewed during the recent rise in interest rates. And while the cost of servicing that debt is now much higher, for most people, increased beer sales won’t cover it.

Add to this the potential for breweries to take on even more debt to get out of previous debts, and the potential for increased costs across the board for everything from raw materials to packaging to distribution and, of course, rent. , a scary situation for many.

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But friends, it’s business. There are risks involved. And in the end, many businesses fail.

Most products with wild trajectories like craft beer end up having to make a market adjustment once the category meets demand. However, many of the beer people are friends of mine, so it’s hard to say that this is just a market correction. They are important members of the community. They care about beer and the people who enjoy it. they are good people. I want them to succeed. Some people do.

My predictions for the future are nothing revolutionary. People are drinking less and there are more breweries than the population can support. Therefore, we feel the perspective on what makes a successful craft brewery needs to change from sales volume to community impact.

It’s a good thing when people gather in spaces that are important to the neighborhood and enjoy beer made with love. There’s nothing better than seeing old friends together, new friends meeting for the first time, and enjoying something you’ve worked hard for.

If you think about why you fell in love with craft beer, local spirits and B.C. wine in the first place, it’s probably because you were able to connect with the people who make it. Feel the passion behind it. I learned that the reason it tastes better than mass-produced products is because there are real people involved. That’s why we did it too: to connect with you. Let us tell you why we’re proud.

In other words, this is not the end of craft beer. People have been enjoying beer for over 6,000 years and will continue to do so. But things change.

Craft beer is made by real people who live and play in your neighborhood and are important stalwarts of your community. But at the end of the day, some things just don’t last. Unfortunately, it’s just business.

If you like local craft breweries, this is a must stop. Please bring a friend. Tell your inner circle about it. Give the spot a great review on Google. Post on social media during your stay. Spread the word about why you love your brewery. Please have a meeting there. We also have a large selection of non-alcoholic beverages, so even if you don’t want to drink beer but need space, we’re a great place to shop.

In the end, those who survive will emerge stronger, more resilient, and better brewers because of these challenges. This also improves your experience. My friend Adam Henderson of his Superflux says: “Right now, breweries have to get the right attitude.” Most of the brewery doors you’ll walk through a few years from now will be doing just that.

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