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WWW.IBISWORLD.CA
Breweries in Canada
May 2015
Nick Petrillo
16 International Trade
Industry Definition
18 Business Locations
Main Activities
Similar Industries
20 Competitive Landscape
32 Industry Data
Additional Resources
32 Annual Change
32 Key Ratios
4 Industry at a Glance
31 Industry Assistance
32 Key Statistics
5 Industry Performance
22 Barriers to Entry
Executive Summary
23 Industry Globalization
Current Performance
25 Major Companies
Industry Outlook
25 Anheuser-Busch InBev
28 Operating Conditions
13 Supply Chain
28 Capital Intensity
15 Demand Determinants
29 Revenue Volatility
15 Major Markets
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Main Activities
Similar Industries
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Additional Resources
IBISWorld
WWW.IBISWORLD.CA
Industry at a Glance
Breweries in 2015
Key Statistics
Snapshot
Revenue
Profit
Exports
Businesses
$5.7bn
1.8%
0.7%
$515.6m $212.9m 216
Per capita disposable income
Market Share
Anheuser-Busch
InBev
41.5%
20
4
3
% change
Molson Coors
Brewing Company
26.8%
% change
10
0
10
20
Year 07
2
1
0
09
Revenue
11
13
15
17
19
21
Year
09
11
13
15
17
19
21
Employment
SOURCE: IBISWORLD
p. 25
9.7%
Draught beer
47.4%
Canned beer
42.9%
Bottled beer
p. 5
SOURCE: IBISWORLD
Industry Structure
Mature
Regulation Level
Heavy
Revenue Volatility
Low
Technology Change
Low
Capital Intensity
High
Barriers to Entry
High
Industry Assistance
Low
Industry Globalization
High
Concentration Level
High
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32
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Industry Performance
Due
WWW.IBISWORLD.CA
Industry Performance
108
106
Litres
% change
102
0
1
Year
104
09
11
13
15
17
19
21
100
Year 06
08
10
12
14
16
18
20
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Performance
Current
Performance
An evolving industry
In
WWW.IBISWORLD.CA
Industry Performance
Declining
international sales
Industry
exports have
declined due to changing
preferences among US
consumers
represents the largest market for
Canadian beer exports, and recent
consumer preferences for craft beers
could largely explain this decline.
Additionally, the majority of Canadian
exports to the United States consist of
traditional premium and light beer
styles. With the Canadian dollar holding
steady against the US dollar, consumers
may perceive imported Canadian beers
as being too expensive, considering the
range of less-expensive US-based light
beer alternatives.
WWW.IBISWORLD.CA
Industry Performance
Industry revenue
8
4
% change
Industry
Outlook
0
4
8
Year 07
09
11
13
15
17
19
21
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Performance
The
WWW.IBISWORLD.CA
Industry Performance
Per capita alcohol consumption has
shown steady signs of decline
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
15
10
Quantity Growth
Breweries
Flour Milling
Soda Production
Decline
-5
Shrinking economic
importance
-10
-10
-5
10
15
20
WWW.IBISWORLD.CA
Industry Performance
industry
is M
ature
WWW.IBISWORLD.CA
Supply Chain
99CA
Consumers in Canada
Individual consumers ultimately are the final purchaser of industry beverages, although some
may purchase beer directly from small-scale brewpubs and establishments that are licensed to
sell beer for on-premises consumption.
31121CA
32111CA
32221CA
32311CA
Printing in Canada
Brewers adhere printed labels on their products to both market their production and to fulfill
government labeling standards.
32721CA
42451CA
Bottled beer
Bottled beer has for decades been the
standard packaging for the industrys
products. Beer bottles are made of glass
and often come in brown or green hues.
Clear bottles are rare, due to their
Canned beer
An estimated 47.4% of industry products
are packaged in aluminum cans,
representing a robust increase over the
past five years. There are many reasons
for the sudden surge in popularity of
WWW.IBISWORLD.CA
9.7%
Draught beer
47.4%
Canned beer
42.9%
Bottled beer
Total $5.7bn
canned beer. For producers, aluminum is
a far lighter material than glass that
reduces the overall bulk and
transportation costs associated with
shipping bottled beer. Additionally,
compared with glass, aluminum is
relatively inexpensive to purchase from
metal manufacturers.
Consumers have also taken to canned
beer over the past five years. Although
canned beer may once have been
perceived as consisting exclusively of
light, subpremium and bottom-shelf
varieties, canned alternatives of many
premium craft beers have entered the
market in recent years. Because canned
beer is more cost-effective for
producers to manufacture, they can
pass along some of the cost savings to
consumers. Aluminum cans have given
consumers far greater exposure to
higher-priced brands without any
negative consequences to flavor. In fact,
craft beer producers regard aluminum
containers as a much better packaging
material than glass. Although dark
amber glass bottles generally reduce the
likelihood of UV light exposure and the
potential skunking effect it has on
SOURCE: IBISWORLD
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Demand
Determinants
Major Markets
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Major Markets
continued
7.9%
9.7%
Women aged 71
years old or older
19.9%
10.1%
15.6%
10.4%
Total $5.7bn
International Trade
Level & Trend
xports in the
E
in the
industry are
Mediumand S
teady
12.1%
14.3%
Imports
During the past five years, the continued
strength of the Canadian dollar has made
foreign products relatively inexpensive
for Canadians. As a result, imported beer
Exports
Exports were weakened by a strong
Canadian dollar during the past five years,
WWW.IBISWORLD.CA
Exports To...
$ million
International Trade
continued
0
300
600
900
1200
Year 07
Exports
09
11
13
Imports
15
17
19
21
Balance
SOURCE: IBISWORLD
Imports From...
9.9%
Belgium
1.9% 0.7%
Other Japan
0.8%
Australia
1.1%
32.1%
12.2%
Other
Mexico
Ireland
21.3%
Netherlands
95.5%
United States
24.5%
United States
Year: 2015
Total $212.9m
Total $715.4m
SOURCE: USITC
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Establishments (%)
Less than 5%
5% to less than 20%
20% to less than 40%
40% or more
NT
YT
NU
NORTHERN TERRITORIES
0.4
BC
26.3
AB
3.8
SK
0.4
MB
1.3
ON
40.7
NL
QC
1.7
21.2
NB
1.3
NS
PE
0.4
2.5
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Saskatchewan
Quebec
Ontario
Nova Scotia
Newfoundland
Northern Territories
New Brunswick
Manitoba
Alberta
0
British Columbia
Business Locations
Establishments
Population
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
20
Competitive Landscape
in
this industry is H
igh
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Economies of scope
Brewers that produce a wide variety of
beer styles can achieve a marketing
advantage by appealing to a greater range
of customer tastes.
Cost Structure
Benchmarks
Profit
Industry profit, defined as earnings before
interest and taxes, fell slightly over the five
years to 2015 to 9.1% of revenue. The
industrys largest breweries typically yield
much higher profit margins as a result of
significant economies of scale, while
smaller breweries are often unable to
spread large fixed costs over similarly
large product output. This differentiation
among companies profit is the result of
high variable costs and the bargaining
power that larger players have over
Economies of scale
Breweries that can manufacture beer on
the largest scale possible can purchase
wholesale ingredients at a cheaper bulk
cost and sell their products at a lower
retail price.
Having a cost effective
distribution system
Breweries are typically more efficient
when streamlining distribution
agreements with provincial entities and
downstream wholesalers.
WWW.IBISWORLD.CA
21
Competitive Landscape
80
Percentage of revenue
Cost Structure
Benchmarks
continued
9.0
10.6
9.1
8.8
36.7
60
60.0
40
20
Industry Costs
(2015)
2.9
3.0 1.9
12.5
Profit
Wages
Purchases
Depreciation
Marketing
Rent & Utilities
Other
4.4
4.2
7.0
29.8
0
SOURCE: IBISWORLD
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22
Competitive Landscape
Basis of Competition
Level & Trend
ompetition
C
in
this industry is
Highand the trend
is I ncreasing
Barriers to Entry
WWW.IBISWORLD.CA
23
Competitive Landscape
Barriers to Entry
continued
Level & Trend
arriers to Entry
B
Industry
Globalization
Level & Trend
lobalization
G
in this
industry is H
ighand
the trend is S
teady
Level
High
High
Mature
High
Low
Heavy
Low
SOURCE: IBISWORLD
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24
Competitive Landscape
Trade Globalization
200
Export
150
100
50
0 Local
0
200 Export
Exports/Revenue
International trade is a
major determinant of
an industrys level of
globalisation.
Exports/Revenue
Industry
Globalization
continued
Breweries
40
80
Import
120
Imports/Domestic Demand
160
Global
150
100
50
2004
0 Local 2015
0
40
Import
80
120
160
Imports/Domestic Demand
SOURCE: IBISWORLD
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Major Companies
Major players
(Market share)
31.7%
Other
Player Performance
Anheuser-Busch
InBev
Market share: 41.5%
Industry Brand Names
Budweiser
Labatt
Becks
Stella Artois
Alexander Keiths
Bass
Kokanee (Columbia
Brewing Company)
Lakeport
Lucky
Oland
SOURCE: IBISWORLD
Revenue
($ million)
(% change)
Operating profit
($ million)
2010
2,459.3
-9.6
339.4
9.7
2011
2,401.3
-2.4
333.8
-1.6
(% change)
2012
2,461.8
2.5
347.1
4.0
2013
2,305.3
-6.4
355.0
2.3
2014
2,330.7
1.1
358.9
1.1
2015
2,351.6
0.9
362.2
0.9
*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD
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Major Companies
Player Performance
continued
Player Performance
Molson Coors
Brewing Company
Market share: 26.8%
Industry Brand Names
Molson Canadian
Coors Light
Rickards
Carling
Keystone Light
Pilsner
Black Label
Molson Export
Molson Dry
Molson M
Revenue
($ million)
(% change)
Operating profit
($ million)
(% change)
2010
1,866.9
-15.7
437.3
-11.7
2011
2,077.3
11.3
477.2
9.1
2012
1,996.3
-3.9
417.4
-12.5
2013
1,962.0
-1.7
364.2
-12.7
2014
1,683.9
-14.2
376.7
3.4
2015
1,516.8
-9.9
337.0
-10.5
*Estimates
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Major Companies
Player Performance
continued
Other Companies
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Operating Conditions
of capital
intensity is H
igh
Capital intensity
Economy
Breweries
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Bottled Water
Production
Soda Production
Breweries
Flour Milling
Capital Intensive
Labour Intensive
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labour abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Operating Conditions
Capital Intensity
continued
Technology
& Systems
Level
The level
of
Technology
Change is L ow
Revenue Volatility
Level
The level
of
Volatility is L ow
WWW.IBISWORLD.CA
Operating Conditions
Volatility vs Growth
1000
Revenue Volatility
continued
Hazardous
Rollercoaster
100
10
Breweries
1
0.1
Stagnant
30
10
Blue Chip
10
30
50
70
Regulation is
Heavyand the
trend is S
teady
Nutrition
The industry is regulated by Health
Canada, which establishes standards for
food safety and nutritional quality.
Meanwhile, the Canadian Food
Inspection Agency (CFIA) enforces these
health and safety standards, in addition
to packaging, labelling and marketing
regulations. The Organic Products
Regulations were instated in mid-2009
and require certification from the CFIA if
a brewery chooses to advertise its
products as organic.
Inputs
The Canadian Wheat Board had been the
price setter and exclusive seller of
malting barley on behalf of producers in
western Canada until August 2012, when
its monopoly ended. This change
WWW.IBISWORLD.CA
Operating Conditions
Industry Assistance
Level & Trend
he level of
T
Industry Assistance
is L owand the
trend is S
teady
WWW.IBISWORLD.CA
Key Statistics
Industry Data
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Revenue
($m)
5,710.1
5,484.3
5,219.5
5,564.2
5,189.0
5,407.0
5,524.9
5,598.3
5,648.6
5,665.6
5,695.0
5,744.0
5,751.5
5,781.4
5,859.1
Annual Change
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Revenue
(%)
-4.0
-4.8
6.6
-6.7
4.2
2.2
1.3
0.9
0.3
0.5
0.9
0.1
0.5
1.3
Industry
Value Added
($m)
1,168.4
1,218.5
961.9
1,159.5
1,216.0
1,309.2
1,185.7
1,214.1
1,250.8
1,260.6
1,254.8
1,273.8
1,274.6
1,281.3
1,298.3
Establishments
189
198
198
208
206
220
210
215
215
219
219
224
224
228
228
Industry
Value Added
(%)
4.3
-21.1
20.5
4.9
7.7
-9.4
2.4
3.0
0.8
-0.5
1.5
0.1
0.5
1.3
Establishments
(%)
4.8
0.0
5.1
-1.0
6.8
-4.5
2.4
0.0
1.9
0.0
2.3
0.0
1.8
0.0
Key Ratios
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
IVA/Revenue
(%)
20.46
22.22
18.43
20.84
23.43
24.21
21.46
21.69
22.14
22.25
22.03
22.18
22.16
22.16
22.16
Imports/
Demand
(%)
9.77
11.12
11.80
12.24
12.73
10.67
10.78
11.38
11.36
11.60
12.07
12.45
12.94
13.44
13.84
Enterprises Employment
186
9,295
195
9,467
195
7,998
205
8,571
202
9,692
207
9,758
207
9,081
212
9,222
212
9,264
216
9,342
216
9,366
220
9,477
220
9,478
224
9,567
224
9,640
Exports
($m)
400.5
381.7
377.7
288.8
296.8
243.3
232.6
239.7
224.9
212.9
198.8
188.9
182.8
174.2
167.4
Imports
($m)
575.0
638.4
647.5
735.7
713.6
616.9
639.6
688.3
694.8
715.4
754.6
790.1
827.7
870.3
914.0
Wages
($m)
523.2
522.0
413.8
452.9
499.9
508.9
484.0
492.0
495.1
498.9
500.6
506.7
506.9
511.5
516.7
Domestic
Demand
5,884.6
5,741.0
5,489.3
6,011.1
5,605.8
5,780.6
5,931.9
6,046.9
6,118.5
6,168.1
6,250.8
6,345.2
6,396.4
6,477.5
6,605.7
Enterprises Employment
(%)
(%)
4.8
1.9
0.0
-15.5
5.1
7.2
-1.5
13.1
2.5
0.7
0.0
-6.9
2.4
1.6
0.0
0.5
1.9
0.8
0.0
0.3
1.9
1.2
0.0
0.0
1.8
0.9
0.0
0.8
Exports
(%)
-4.7
-1.0
-23.5
2.8
-18.0
-4.4
3.1
-6.2
-5.3
-6.6
-5.0
-3.2
-4.7
-3.9
Imports
(%)
11.0
1.4
13.6
-3.0
-13.6
3.7
7.6
0.9
3.0
5.5
4.7
4.8
5.1
5.0
Wages
(%)
-0.2
-20.7
9.4
10.4
1.8
-4.9
1.7
0.6
0.8
0.3
1.2
0.0
0.9
1.0
Domestic
Demand
(%)
-2.4
-4.4
9.5
-6.7
3.1
2.6
1.9
1.2
0.8
1.3
1.5
0.8
1.3
2.0
Exports/
Revenue
(%)
7.01
6.96
7.24
5.19
5.72
4.50
4.21
4.28
3.98
3.76
3.49
3.29
3.18
3.01
2.86
Revenue per
Employee
($000)
614.32
579.31
652.60
649.19
535.39
554.11
608.40
607.06
609.74
606.47
608.05
606.10
606.83
604.31
607.79
Wages/Revenue
(%)
9.16
9.52
7.93
8.14
9.63
9.41
8.76
8.79
8.77
8.81
8.79
8.82
8.81
8.85
8.82
Employees
per Est.
49.18
47.81
40.39
41.21
47.05
44.35
43.24
42.89
43.09
42.66
42.77
42.31
42.31
41.96
42.28
Average Wage
($)
56,288.33
55,138.90
51,737.93
52,840.98
51,578.62
52,152.08
53,298.09
53,350.68
53,443.44
53,403.98
53,448.64
53,466.29
53,481.75
53,465.04
53,599.59
Share of the
Economy
(%)
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.01
SOURCE: IBISWORLD
WWW.IBISWORLD.CA
Industry Jargon
IBISWorld Glossary
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