The 2017 BAR Report


Canadians love their tipple — they’re just not imbibing as much at bars and restaurants. According to Statistics Canada, Canadians spent $22.1 billion on alcohol at retail outlets in the year ending March 31, 2016, a 3.5-per cent increase from the same period a year earlier. From the total, $9.2 billion was spent on beer, $7 billion on wine and $5.1 billion on spirits. The remaining $800 million was spent on ciders, coolers and other alcoholic drinks.

Meanwhile, sales at drinking establishments were $2.4 million in 2016, up slightly from $2.3 million in 2015, according to Restaurants Canada. “We continue to see reductions in the segment,” says James Rilett, vice-president, Ontario, at Restaurants Canada. “There’s a bit of bump up, but, in general it’s been in steady decline for about the last 15 years.”

Rilett says one reason for the decline is people aren’t going to bars like they used to. “Drinking-and-driving laws are affecting that and people are changing the way they go out,” he says. The sales figures also reflect fewer drinking establishments in Canada, dropping from 5,361 in 2015 to 5,293 in 2016.

NPD Canada reports that alcohol sales at full-service restaurants were down two per cent in 2016, thanks largely to an overall decrease in traffic at full-service restaurants, says Robert Carter, executive director, Foodservice at NPD Canada. “[Secondly], the number of times people have alcohol as part of their meal occasion is down. People are having an average of two alcoholic beverages and one non-alcoholic beverage. That’s a change we’ve noticed in the last couple of years that’s helping drive down consumption overall.” While the drinks segment may have lost some spark, bar and restaurant operators continue to bring excitement to the category. Here’s a look at what’s trending in beer, wine and spirits.

Craft beer continues to be a bright spot in the beer segment, with the LCBO reporting sales of local craft beer at $69 million, up a whopping 35 per cent in 2015/16 over the previous fiscal year.

According to a recent survey by U.K.-based Mintel, 57 per cent of Canadians say they typically drink craft beer. In addition, 27 per cent of beer drinkers agree that craft beer offers better quality than mainstream beers, with nearly one quarter agreeing it’s worth paying more for craft beer.

“People are more likely to associate craft beers with ‘premium,’ ‘quality,’ ‘local’ and ‘artisan’ compared to mainstream beers,” says Joel Gregoire, senior food and drink analyst at Mintel. “With craft beer comes a sense of quality and you can tell a good story with craft beer. You can relate it to where it’s being brewed and it has a notion of traceability.”

Rob Swiderski, partner at Craft Beer Market, says there’s been such an explosion in craft beer, they’ve been able to increase their local craft beer offerings to 60 per cent at each location. Craft Beer Market has between 120 and 150 taps at each of its locations in Calgary, Edmonton, Vancouver and Ottawa. The company is adding a second location in Calgary, as well as one in Toronto and one in Kelowna, B.C.

“To be frank, there wasn’t the quality of beers that we were looking for when we first opened,” says Swiderski. “That has changed significantly in the six years that we’ve been in Calgary and with the other restaurants that are opening.”

Craft Heads Brewing Company in Windsor, Ont. brews its own small-batch beer in house, but the owners also support other craft breweries through a promotional event called Downtown Flight Club. At the semi-annual pub-crawl, which involves five local establishments, participants receive a “boarding pass” that lets them sample flights of beer at each stop. “Each venue has something unique and specific to it…but the common ground is the craft beer that we offer,” says Bryan Datoc, co-owner of Craft Heads Brewing Company. “People like to see [bar owners and brewers] working together to promote the region and they gravitate to the camaraderie that we have as businesses.”

One big challenge for the beer segment is demographic shifts, says Gregoire. Mintel found that while 74 per cent of Canadians say they typically drink beer, consumption declines significantly among older consumers: 35 per cent of Canadians over 55 say they do not drink beer. “The good news is the bread-and-butter for foodservice operators is younger consumers,” says Gregoire.

A number of Canadians are gravitating towards drinks that combine beer with other beverages. In fact, one third (32 per cent) of survey respondents say they drink radlers (or shandies), which combine beer with juice. “This speaks to a larger trend and it applies to almost every category — the whole idea of flavour exploration and adventurism,” says Gregoire. “Particularly with younger consumers, we see that there really is an interest in exploring new flavours.”

Aaron Jourden, managing editor and analyst at Chicago-based Technomic says citrus flavours in beers are emerging, particularly grapefruit. “Orange, coriander, lime and citrus are also growing as flavour callouts, and summer should see a rise in sour beers, which are light and refreshing,” he says.

Dan Ellis, brewmaster at Toronto’s Liberty Commons at Big Rock Brewery, says mainstays such as Grasshopper Kristallweizen and Citradelic Single Hop IPA are popular because awareness levels for those products is high. The brewpub’s rotating nano taps, which have included Black Plum Baltic Porter and White Raspberry Berliner Weisse, also do well. “They can be experimental, they can be out there and they can’t be found anywhere else except here and our facility in Etobicoke (Ont.),” says Ellis. “Because of that exclusivity, they’re favourites among the craft-beer crowd here.”

Swiderski says beer drinkers are receptive to trying different things, but the key is to be unpretentious. “If we keep up with the mindset that [craft beer] is approachable, it’s fun and it’s not intimidating, there’s room for growth. People are just going to continue to drink and try new things.”

Consumers are also trying new things on the wine front. At L’Abattoir in Vancouver, diners expect to be challenged a bit, says wine director Lisa Haley. “They expect the cuisine to be things they haven’t necessarily tried before…and the same goes for wine,” she says. “With the rise of wine culture, people are more aware that there’s more out there than Pinot Grigio. We can point them in the direction of something fresh and new.” Haley’s suggestions include Carricante from Mount Etna in Sicily and Muscadet from France’s Loire region.

At DiVino Wine Studio in Ottawa, owner and sommelier Eric Diotte resisted selling mainstream wines such as Pinot Grigio and Cabernet Sauvingon for years, but now he’s adding them to the list. “Many people want that and they don’t enjoy their meal unless their wine is that style,” he says. “But at the same time, we do see people with more wine knowledge and they’re experimenting with their wine.”

One beverage Diotte is excited about is sparkling red wine. “It’s a fun way to start [a meal] and it always surprises people when you pour them a glass of sparkling red wine because not many people have tried it,” says Diotte.

According to Technomic, wine sales overall decreased three per cent on menus, but sparkling wine/Champagne edged up 0.8 per cent and “other wines” (including blush, rosé, port and sherry) were up 7.3 per cent.

Sparkling wine is one of the largest wine trends globally, notes Magdalena Kaiser, director of Public Relations – Marketing & Tourism at the Wine Marketing Association of Ontario. “The exciting thing for Ontario is that we’re perfectly suited for producing quality sparkling wine,” she says. “More Ontario [wineries] are producing sparkling wine and the volume and different styles are increasing — so we see growth in that area.” The local movement is also having a big impact on Ontario’s wine sector. Sales of Ontario wine through LCBO and Vintages were $456 million in fiscal 2015/16, almost eight per cent higher than the previous year.

“Consumers are becoming more aware of what we produce locally and realizing the quality and variety that’s available to them,” says Kaiser. She notes that people in the Greater Toronto Area have the opportunity to experience wine country within about a two-hour drive. “They can meet the people from the wineries, learn about the viticulture, and there’s a greater connection with the product,” says Kaiser. “They’ll go back to Toronto and order [the wine] in a restaurant or purchase it at the LCBO.”

Heather Rankin, co-owner of Halifax wine bar Obladee, says there’s a movement towards organic, biodynamic and natural wines. “As with food, wine is being ‘stripped down’ to its basic elements as consumers are becoming less comfortable with the idea of unnecessary additives and over-manipulation, and producers abandon modern winemaking techniques in favour of traditional, hands-off methods,” she says. “Wine lovers, particularly wine professionals, are demanding a cleaner, more transparent product that is made sustainably with minimal intervention.”

Spirits and specialty drinks increased 6.7 per cent overall on menus, according to Technomic. Lighter, clearer spirits are showing growth, namely tequila (up 45.6 per cent), gin (up 35.6 per cent), rum (up 21.5 per cent) and vodka (up 20.4 per cent). High-growth specialty drinks include Moscow mules (up 60 per cent), Long Island iced teas/other teas (up 23.3 per cent) and mojitos (up 17 per cent).

Guests and operators alike also love low-proof libations. Sabrine Dhaliwal, bar manager at Vancouver’s Uva Wine and Cocktail Bar, says sales of low-proof cocktails have been better than she anticipated. “There’s no hard bar in our low-proof section, so people are really enjoying that,” she says. “They can still have a cool and interesting ‘cocktail’ without having all the alcohol. It’s low octane, but full flavour.”

Trevor Kallies, Bar & Beverage director at Vancouver-based Donnelly Group, says low-proof cocktails also help maximize guests’ length of stay. They can drink more throughout the night, without bars serving them irresponsibly, he says. “You increase the length of time in that seat and your price point is still quite good.”

With new modernized liquor laws that came into effect in B.C. this past January, patrons can expect to see more liquor infusions and barrel aging (or pre-mixing) at B.C. bars. The practices were formerly illegal, but are among the changes in the new legislation. “It’s been a long time coming,” says Kallies, who is also president of the Vancouver-based Canadian Professional Bartenders Association. “The reaction from bartenders was ‘thank goodness, we can start marketing the interesting things we’re doing behind our bars.’” In terms of cocktail trends, Kallies thinks slushy drinks are going to be a hit this summer. “You’re going to see a ton of slushy drinks on mainstream menus — not so much the blended margarita or daiquiri, but classic-style or craft-style cocktails put through an actual [frozen-cocktail dispenser,]” he says. “At every patio-driven place or any place that’s got a bit of a warmer climate, it’s going to be on fire.”

At Blind Owl, a craft-cocktail club in Windsor, Ont., co-owner Mark Dutka is creating a rum-based tiki menu for the summertime, as he’s seeing a rise in the popularity of rum. Mescal is also becoming trendy, but with the Mad Men craze still going strong, Dutka says the Old Fashioned and Manhattan remain the most popular drinks. That’s followed by Blind Owl’s own creations such as The Big Fig, made with fig, balsamic vinegar and rye whiskey. “Our customers are getting braver and trying different drinks that they probably haven’t heard of before,” says Dutka.

Technomic’s Jourden says spirits with a backstory continue to be a trend. Consumers are interested in the craft ethos: small batch, handcrafted spirits produced locally. In fact, Jourden says that applies to spirit makers, brewers and wine makers alike. “Across the board, as millennials come of age, they’re interested in authenticity and locally produced products,” he says.

On the service side, Kallies says one trend is bringing back the fun to the bar. “In terms of the style of service, it’s getting a bit more lighthearted and more about the welcoming nature of the bar.”

While Canadians aren’t drinking the way they used to, the recipe for success just might be one part authenticity, one part new taste experience and a dash of old- fashioned fun.

Volume 50, Number 4
Written by Rebecca Harris 

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