Innovation is Fueling Canada’s Craft-Spirits Market

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Craft spirits are gaining a strong foothold in Canada, with Spirits Canada reporting upwards of 60 new small-distillery openings over the past year, bringing the total to more than 200 from coast-to-coast.

Although there’s no formal definition of a craft spirit in Canada, most craft distilleries are independently owned and produce spirits in small batches. Following in the footsteps of craft breweries, distilleries are tapping in to the locavore movement and the increased consumer desire to understand the origins of products.

As the craft-spirits industry expands rapidly across Canada, competition among distilleries is on the rise. “There are some places in the country where opening a distillery is a unique thing and you get a lot of attention simply because you’re there,” says Alex Hamer, founder of B.C.-based Artisan Distillers Canada, a national organization focused on celebrating and highlighting artisan distilleries and spirits across Canada. “In B.C., that’s no longer the case. You have to figure out a way to stand out,” he adds.

This competition is driving innovation in the craft-spirits sector. “You’re seeing distilleries trying to find that different kind of spirit that no one else makes,” says Hamer. As an example, he points to Sheringham Distillery in Sooke, B.C., which is producing an akvavit — a traditional Nordic spirit — incorporating locally harvested kelp. “A lot of distilleries are foraging for or sourcing local ingredients,” explains Hamer.

While many consumers appreciate the opportunity to tour craft distilleries and learn about the production process, established distillers, such as Sheringham, report the bulk of sales come through private liquor stores, rather than direct at the distillery. “There are times when we have no product to sell at the distillery because we’re shipping it to stores instead,” says Terence Fitzgerald, SVP, Sheringham Distillery.

Similarly, in Ontario, long-running distilleries, such as Wolfhead Distillery, do most of their distribution through the LCBO, which currently carries several Wolfhead products, including its Banana Caramel Vodka ($19.95 per 375 mL bottle). “The more skus you can get in [the LCBO], the better, but it’s competitive,” says Ryan Bezaire, head distiller at Wolfhead Distillery.

Innovation in the craft-spirits industry is also fuelling stronger sales in foodservice, encouraging bars and restaurants to look beyond the added cost of craft spirits compared to their big brand counterparts. As Canadian craft distillers produce increasingly creative flavours and take home more awards at international competitions, bartenders are taking notice.

Fitzgerald says Sheringham saw a significant uptick in foodservice orders of its Seaside Gin after it was named ‘best contemporary gin’ at the World Gin Awards this year. “They might have found us because of the huge news of the Seaside win, but then they’re trying all the other spirits and saying ‘hey, we really like this,’” he says.

Fitzgerald adds many bartenders are using Sheringham’s Kazuki Gin because of its distinctive flavour profile, which features cherry-blossom petals, yuzu peel and green tea leaves. “It’s such an interesting addition to their cocktail menu,” says Fitzgerald of the Kazuki Gin. “It’s something completely different for a discerning palette.”

Written by Jessica Huras

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