The 2016 BAR Report


Canadians aren’t drinking the way they used to. Not only have total alcohol sales within the foodservice industry dipped by five per cent, according to Toronto-based The NPD Group, but consumption in nearly every segment of the market has dropped — with the exception of craft beer. Yet, despite the reduction in alcoholic orders, the production of specialty wines, beers and spirits is proliferating. Canadians love their product, but the market is certainly shifting.

The emergence of the millennial consumer plays a big role. According to Statistics Canada, this noteworthy demographic — as powerful as the baby boomers before them — makes up nearly one third of Canada’s population. And this generation doesn’t imbibe quite the same way their parents did. A cross-Canada look at the commercial industry shows a four-per-cent dip in wine consumption, a shocking 12-per-cent drop in domestic beer and a plateauing of imported beer.

Mark Dempsey, The NPD Group’s director of Client Development, explains the overall decrease in alcohol sales. “The number-1 reason is value,” he says. “People are trying to save money. They will still order that steak, but get tap water or iced tea.” This fits with recent data from Restaurants Canada, which states sales at bars, as opposed to restaurants, were down by 6.6 per cent in 2015 compared to 2014.

Meanwhile, the NPD Group reported restaurant visits increased by two per cent compared to the previous year and 28 per cent of restaurant traffic is the millennial cohort. The shift seems to represent the consumer’s preference for a different type of experience — one which usually accompanies a meal. “But another big reason for the decrease in sales is health,” explains Dempsey. “We’re seeing customers who will opt for a healthier beverage option or some who will opt to not have a drink at all.”

Kristin Menas, associate editor, Canada & Adult Beverage, at Chicago-based Technomic, says beverage menus are also changing. “Our MenuMonitor database shows beer has decreased on menus by 13.6 per cent, but red wine has grown by 3.2 per cent,” she says. “We’re also seeing new items such as hard ciders being added, whether in bottles or as an ingredient in cocktails, and adult milkshakes, an indulgent, dessert-like drink spiked with various spirits.” “Restaurants are becoming more creative in terms of the way they serve alcohol,” says Menas. “There’s also a return of the tiki-bar concept.” Not only are some independents finding success with the kitschy throwback, even The Pickle Barrel offered a limited-time Tiki and Tacos menu with island-inspired tacos and tropical drinks in classic tiki glassware. The good news is Canadian producers of beer, wine and spirits have never been more hands-on or invested in the life-cycle of their creations and the products have garnered international acclaim.

Here’s what’s trending in each segment.

Part of the reason for the drop in beer sales is people don’t drink the same way they used to. “It’s not like people just hang out in bars the way they used to,” says Jamie Rilett, vice-president of Ontario Operations at Restaurants Canada. “We’re finding more young people prefer the casual-dining segment to the bar. For example, before or after a hockey game, a team might go to a Kelsey’s or something similar.”

The craft-beer category continues to rise. Doris Miculan-Bradley, a professor at George Brown’s School of Hospitality & Tourism Management, lives near the Toronto-based Bellwoods Brewery. “I always see line-ups to purchase its ‘beer-of-the-week’,” says Miculan-Bradley. “That’s not something you’ll see at the Beer Store.” She also notes small-batch and purchase at point of production is trending because people want to reignite that sense of engagement with their community.

“The Collective Arts Brewing Company in Hamilton, for example, is making a significant impact in the craft-beer industry by supporting the music and talents of local artists,” says Miculan-Bradley. “Unique labels, clever beer names, sold out product and very good beer is catapulting this style of business.”

Denise Corra, communications specialist at the NSLC (Nova Scotia Liquor Control) says craft-beer producers are creating a premium product. “We’ve had sales growth upwards of 25 per cent and that’s in large part because our buy-local movement is very strong,” says Corra. “That’s especially true with micro-breweries.” There are 28 such breweries in Nova Scotia. “It’s a lot when you consider the small population here,” she says. “But people are passionate. It’s very hands-on.”

Similar to the craft-beer trend, today’s Canadian wine drinker appreciates a local product. “Consumers want to know the ‘story behind the wine’,” says Miculan-Bradley. “My research has shown millennials in particular consider Ontario wines to be of good value and sold at a fair price.” Miculan-Bradley also says millennials are invested in learning more about the product. “They want to know about the lesser-known varietals, such as hybrids like Baco Noir or Xynomavro — not just Chardonnay and Riesling.”

Justin Taylor, general manager at the Vancouver-based Cascade Room, says today’s consumers are looking to push the envelope of flavours when it comes to wine. “It’s a huge trend here in B.C. for consumers to look outside of the usual suspects. Merlots, Cabernet, Chardonnay and so on are being pushed aside for lesser-known varietals such as Zweigelt, Carmenere and Mourvedre.”

While Technomic reports a drop in listings of white wine on menus by 5.5 per cent, Canadian winemakers are still growing in popularity and number. “I can say the trend is towards supporting the local — but also organic, natural and biodynamic wines,” says Taylor.

Magdalena Kaiser, director of Public Relations for the Wine Marketing Association of Ontario, says the real trend is towards sparkling wines and rosé. “In the last five years, we’ve had a growth in the production of rosé by 25 per cent in Ontario,” says Kaiser.

“We’re also seeing more people are enjoying it. It’s just as serious and approachable a wine as red or white.” Kaiser notes that it also has a versatility that many consumers are discovering for the first time. “A lot of people still have that age-old stereotype of rosé being sweet. But you can have a huge range in taste, from dry and light to fruity and aromatic,” she says.

The international attention garnered by Ontario’s sparkling wines has translated into big business, but also a new appreciation and demand for the product. “In the last five years, the number of Ontario wineries that produce sparkling wine has tripled,” says Kaiser. “There’s a movement within the industry to invest in sparkling wines right now.” She says Ontario’s cool climate and glacial soils bring a different minerality to the grapes, allowing for superior flavour profiles.

Veronique Rivest, owner of Quebec-based wine bar Soif and second-place champion at the 2013 World Sommelier Competition in Tokyo, agrees sparkling wines often go unappreciated. “Many Canadians don’t realize that some of the best sparkling wines in the world come from here,” says Rivest. She highlights Nova Scotia’s Benjamin Bridge and Quebec’s L’Orpailleur’s Brut as two of her favourites.

While Technomic reports spirits listings have dipped by 0.9 per cent on menus, gin cocktails are on the rise. “Gin in particular is up 8.6 per cent,” explains Menas. “We can see it across the board from Canyon Creek’s Foxy Lady made with Hendrick’s gin, Mediterranean tonic, strawberry, English cucumber, mint bitters and rose water to The Pickle Barrel’s Spanish Gin & Tonic with Beefeater 24 gin, raspberries, orange, cucumber, lemon, bitters and Fever-Tree all-natural tonic water.”

Robin Goodfellow, a bartender at the Toronto-based Bar Raval, is seeing a resurgence of mescal (a distilled alcoholic beverage made from any type of agave plant native to Mexico). “In cocktails or on its own, it’s delicious,” he says. “I believe everyone has to find a bar pouring single-village mescal before it’s gone.”

There’s something to be said about the consumer chase for the ever-shrinking quality. “We’re seeing small batch spirit production and that’s on trend,” says Miculan-Bradley. “There’s also big support out there for ‘rogue distillers’ who have a finite product resulting in a premium-priced distillate and a memorable experience.” It’s one perfectly concocted by and tailored to that millennial consumer.

Nova Scotia is especially active in its spirit production. “We’ve got 11 local distilleries that are very well supported,” says Corra. “These are terrific products — like Glenora Distilleries in Cape Breton for example — that are making the product by hand. Look at our production of Fortress Rum — they dip every single one of those bottles in wax by hand.” Again, it’s the authentic and hand-made products generating the most appreciation.

“The B.C. spirit industry has exploded,” says Taylor. “The province is really carving out its own drinking culture through creating spirits with locally sourced ingredients.” He notes that bartenders are also taking the time to hand-make their own bitters, sakes and infusions with products such as shrubs or tree saps. “If someone gave me the money, I would build a 100-per-cent B.C.-sourced bar and restaurant.”

With an industry in flux, the trend is clear — attention to detail is a valuable commodity, newly appreciated by today’s consumer. It’s not only attention to the product’s ingredients, but the narrative it creates around itself — the more local and community-oriented, the better.

Just don’t forget to advertise the storyline across every social-media platform available. Millennials are often scrolling through their phones between sips.

Volume 49, Number 5
Written By Jennifer Febbraro

This site uses Akismet to reduce spam. Learn how your comment data is processed.