Ben's Beer Blog

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Is the hammer about to drop on Ontario beer?

44 Comments

According to my sources, it will soon be announced that Stone Hammer Brewing in Guelph is closing its doors for good.

While I have not been able to reach the company for confirmation, I’m told that last week employees were told to head home and asked not to return and that production of beer had ceased permanently.

And while it’s unlikely that “lack of shelf space” will be listed as the official cause of death for Stone Hammer Brewing, the closure has me — once again — wondering if the inevitable purge of Ontario craft beer is about to begin.

It’s a topic I seem to be asked about with increasing frequency whenever a reporter is doing a story on craft beer and stumbles upon my blog seeking “industry expertise.” Can Ontario continue to sustain this growth of craft breweries? My answer is always the same, and it’s “No. It’s not sustainable. Something’s gotta give.”

The industry here has essentially ballooned over the past half a dozen or so years. Robin LeBlanc and Jordan St. John have now written two editions of their guide to craft beer in the province and between the first and second editions, published just a year apart, they had to visit 50 more breweries to add to the list—and even the latest edition was essentially outdated as soon a they went to print because of the breweries that had opened in the interim. It’s predicted that, by this time next year, roughly half of all Ontarians will own and operate their own small brewery or brewpub.

OK, not really, but the growth has been exponential and it has, thus far, not been met with equally exponential growth in opportunities for brewers to actually sell their beer. As I’ve lamented elsewhere on numerous occasions, there are still just four places that brewers can sell closed containers of their product in this province: the state-run LCBO, the big-foreign-brewery-owned Beer Store, a brewery’s own onsite retail space and, as of 2015, a smattering of grocery stores.

That roughly 250 craft brewers in this province are forced to compete for this limited shelf space (along with the usual collection of marketing-first industrial lager companies) is absurd and seemingly not sustainable long term.

And yet…here we are.

The funny thing about my answer to those reporters chasing down whatever craft beer story is current, is that that has been my answer for about three years now. For three years I’ve been saying this growth is not sustainable and for three years I have been proven wrong. With the exception of a few relatively unsurprising brewery closures, nothing seems to have given yet.

Somehow craft beer in Ontario, like life on Jurassic Park, finds a way. And while many might point to recent government initiatives as a show of support for the industry, I will argue (and often do) that craft beer in Ontario has not been growing because of government, it has actually managed to grow in spite of it. There are frequent token gestures, notably the provincial government recently handing out grants to breweries like a drunken Oprah throwing out car keys, but none of them really fix the eventual and inevitable bottleneck at the end of the distribution chain: Retail space.

It’s all well and good for the Ontario government to throw money at Steam Whistle and Muskoka Brewery, for example, but it seems like those two breweries, who have enjoyed success working within the current system, will use the dough to find ways to be more profitable working within Ontario’s limited retail space or, more likely, will expand their distribution outside the province. The net result, in other words, is probably that government money won’t actually grow the industry and won’t be used to create new jobs here in the province–and that would probably be the end result if the provincial government could instead dedicate resources to opening up the retail playing field.

The owners of Stone Hammer, Leslie and Phil Woodhouse, arguably just gave the former F&M a few more years when they purchased and rebranded the brewery in 2015 and perhaps the fate of the former F&M brewing won’t surprise a lot of folks familiar with how the business was being run as of late, but every time I hear news like this, I can’t help wondering if the other shoe is finally about to drop in Ontario.

We can bolster our existing breweries all we want, but without more space for them to actually showcase and sell their product to the public, we’re definitely going to see more closures like this. The only question is when.

Author: Ben

http://www.bensbeerblog.com

44 thoughts on “Is the hammer about to drop on Ontario beer?

  1. Wellington County, Hometown Breweries (London), Wheatley Brewery, F&M Breweries, MacLean’s Ales, and now F&M Brewery…it seems Charles Maclean’s lies finally catching up to him. He’s not only hugely ignorant about business, but he suckered a lot of people out of money for his employment. Watch Maclean’s Ales, as they continue to invest loads of cash into his selfish shortsightedness. The province is also full of it as well, but we all know that. They’re crooks from the start.

    • What lies do you speak of?

    • In six years of beer writing, this is the first time I’ve ever heard anyone talk shit about Charles MacLean. He seems pretty well respected in the industry. Unless you’re going to back that accusation up (which seems unlikely given that used a fake email address) it’s seems like you’re probably someone with a personal issue with the guy, or a strange troll…

      • Reason: Six years as a writer. Anybody that’s done business with him, or lived with the guy, has little respect for the guy. And how is it a fake email address? I emailed you using that email address. Seems you’re just as up to date on technology as well.

        If you’re looking for people with issues with Charles in your small town, go talk to the retired owner of the Ceep’s. Or do you not know where that is? Another poster is indeed very correct to call you opinionated. Six years writing about beer and suddenly you know anything about beer anywhere, not to mention one of the most contentious locations on Earth called Ontario.

        Anybody looking for more dirt on Maclean should investigate. He leaves a wake of people behind him cursing they ever met the guy. He’s been a poser since day one.

      • You seem like a fun guy.

      • Fun? You looking for fun? If you want fun, buy a dog. Business is business, and Maclean has pissed off a lot of people. For a words guy, you don’t seem to read very well. But I’m speculating business isn’t your strong point.

      • I just got a dog, actually! Thanks for coming by the blog, “Phil.” It’s been a huge waste of time chatting with you. ❤️

      • It’s been a huge waste of time reading your wonderful insight into something you know absolutely nothing about. Try dog training.

      • I just came to say that you’re a funny guy, Ben. Keep up the lulz and give your dog a pet for me.

        This will not be the last closure in Ontario. We’ve seen the closures accelerate south of the border quickly, and I think that despite the fact we are not the US, that we will see the same thing happen even quicker; largely because there just isn’t anywhere to sell retail beer. The only brewery model that really works in Ontario’s current beer landscape is direct to consumer/taproom sales.

        Also, this is a good article and i’m not really sure where people think you’ve made crazy assumptions.

    • Both this and in your reply have no supporting facts. You say “talk to X” yet you’re the one making the accusations. Back up what your saying or be labelled a slanderer.

      • LOL by whom? Bloggers? Do your own homework. It’s not like it would matter much anyway. If you can possibly go back and re-read what I put, I said many know about this guy. Many. If you talk to them, maybe you would. Second, it’s pretty much none of your business. But when people run around talking highly about someone who is a complete fake, then they get called out. And no, I don’t owe you anything, and neither does anybody in the brewing industry.

    • The burden of proof lies with the accuser.

      • Believe me, no burden at all. Like I said, those that know, know. If you don’t know, then you just have no clue.

    • Charles McLean had nothing to do with this and he’s one of the finest brewers in the country.

  2. Surely you bothered to reach out to Steam Whistle and Muskoka on what their plans were for expansion and out of province distribution and this isn’t just wild speculation?

    • I’m not sure what you consider wild about speculating that the two companies will use the grants to profit while working within Ontario’s system. If you’re asking if I speculated that they will not use the money to open independent craft beer stores and will not use the money to lobby the government that gave that money in order to change said system, then yes, I confirm that that is pure speculation and I also confirm that it’s a speculation I’m extremely comfortable making.

      • Your response here leaves out the bit where you said it was more likely that they’ll use it to expand their out of province distribution. Steam Whistle is building an entirely new facility, and the implication here is that will do nothing to add new jobs in the province? They’re going to have to pay people to build it and run it.

        It’s also not like the government is just handing out free money. The grant money being handed out (which is going to basically everyone, from Bellwoods and Left Field, to Whitewater, to Haliburton Highlands) is being given on the back of significant private investment on the behalf of these breweries. But you already know all of this.

        Obviously the smart move is to use this money to try to be efficient within the system we have. As you have documented, the system is pretty entrenched and not really simple to overhaul. Look at all the work needed to implement the new “Master Framework Agreement” and all that really got us was a couple hundred more LCBO agency stores in the shape of some grocery licenses. No matter how much “free money” craft breweries get that could ostensibly be used to lobby for retail changes, the multinationals will always have more to throw behind maintaining the status quo. Why flush the money, figuratively, when you could use it to put in new tanks, or a canning line, or an entirely new facility?

      • Some thoughts:
        – Out of province sales means a purchase of a brewery in target province. Interprovincial barriers still exist, however a cheap acquisition can get around that. It’s how Sleeman’s started shipping to BC and Quebec.
        – The amount for Ontario startups is minimal. Maybe one person for just over a year.
        – Steamwhistle has had plans for a BC brewery for ages…or at least talks about one, specifically for my first point. Shipping product to BC is expensive.
        – From the looks of it, both the government (so they call themselves) and the larger breweries are not allowing much. Zak’s comment on the LCBO’s charges for sampling, demonstrates that the control is still ludicrous. Decades old, it isn’t changing. This is where the OCB should come into play, but they can be so awful that I think they’re organized by the large brewers.

        Just some thoughts.

  3. Ben, I think you are spot on in your analysis, and things are only becoming more difficult for Ontario breweries in retail. Beginning in 2019, if a craft brewer wants to sample their product to consumers in the LCBO, the craft brewer will now be forced to pay the LCBO $245 to have an LCBO staff member conduct the sampling. This is a big departure from the past where small breweries who were just starting out were able to use their sweat equity and sales teams to promote their products. Instead now they will have to spend thousands to keep up with the big guys, simply not possible for many small brewers.

    • This isn’t entirely correct. The new LCBO policy will no longer allow “Third-Party” companies to perform tastings for breweries. This means companies like Mosaic and Media Marketing. However, breweries will still be able to staff their own tastings, if they want to. Nothing is stopping a small brewery owner from standing at an LCBO and directly speaking to consumers, they just can’t hire an agency to do it for them.

      • Matthew, that’s not correct. Starting in 2019 breweries won’t be able to use their own staff. It’s a union issue that was part of the last CBA negotiation.

  4. From a purely consumer perspective, I’d be fine seeing a few boring breweries go away to make room for more exciting/better made offerings. The last time I walked into a bar or store and was excited to see a beer simply labeled “Dark Ale” was the early 90’s. The last time I was excited to see a “Premium Light Lager” was never.

    • Don’t go to England, Joe. It’s filled with traditional beers you’d never like. They don’t make Milkshake Shitake Mushroom IPAs there.

  5. Hey Phil. Sounds like your own failures in life have made you a bitter man. As someone who knows Charles and many people around him, I can say that with out a doubt you are full of it. Maybe he has made mistakes and there is someone out there who doesn’t like him, but hey who hasn’t pissed someone off. I am sure there are plenty of people that don’t like you. Probably a long line

    • Hi Paul. I’m quite successful thank you very much. But thanks for asking. Anybody running through the Ontario brewing industry on a false introduction gets me ticked off. And others as well. You don’t know Charles one bit. You’ve obviously not done any business with the guy. Those aren’t mistakes when you catch the guy lying. I doubt you have any clue about Charles, as I have no clue who you are. I’m sure if you have met Charles (I doubt that), you would also know how much of a problem he is. Other brewers in the industry have said as much. Right over your head I guess.

      Thanks Paul! Don’t be downwind of Maclean.

      • Well “Phil” if that really is your name. I don’t know who you are either. But I have a feeling i know who you are. I am in the industry and have knowledge of what’s going on. You are so mis informed. You still haven’t backed anything up. No facts and I know enough to no you are full of it.so easy to shoot your mouth when you remain hidden. Not sure what has happened to you.

      • You obviously have no clue what has gone on. He’s been doing all of this since his return from England. You can’t be misinformed about facts. He’s been fired from more breweries than you could list. For serious reasons. Reasons you obviously know nothing about. Not do I need to back anything up. I don’t owe anybody here on this sad little forum, any type of answer, proof, or evidence.

        But it’s easy to shoot your mouth because you make assumptions about things you don’t know about. You are obviously aren’t privy to what others have witnessed and acted upon.

  6. “You can’t be misinformed about facts” yet “I don’t need to back anything up. I don’t owe anybody … any type of answer, proof or evidence.”

    If you are unwilling to back up your claims, then your claims are not facts. It is the evidence of your claims that make them facts. For all I know you’re right, but have no way of knowing. Therefore without evidence your claims are baseless.

    You might was well be saying “The Earth is flat. This is a fact. I don’t need to offer any evidence, just ask others.”

    • Like I said before. Do your own homework. Other people know about him, but you don’t. It’s not my job to inform you. If you wish to not believe it, then go right ahead. This closing has everything to do with Maclean. My claims are facts, even if you don’t think they are. Gravity was a fact before anybody knew about it. See how that works?

      My claims are not baseless at all. You just have no clue. You don’t know because you know nobody but myself that’s said anything to this matter. You see this guy starting all these breweries, involved with so many of them, yet somehow is still moving on from every one. Or have you not even seen that? Your ignorance is not my concern. You can’t do simple math because you refuse to look, and you’re obviously talking to the wrong people.

  7. A brewery Charles sold his ownership in over 20 years ago closes yet it’s his fault? That’s ridiculous.

    I guess the Cerniuk’s, who ran the brewery longer than anyone else and refused to listen to advice given to them, refused to spend money on equipment (like a canning line), refused to rebrand, refused to come out with new styles, refused to change and grow with the industry, are blameless?

    You sir, are ignorant.

    • You simply have no clue. You’re off base on many levels. I’m only guessing Maclean told you these things. Typical, since the guy is a liar. You’ve been had, and that’s the normal Maclean way.

    • Let’s also say that he doesn’t know what the term means to “sell out”. He also doesn’t understand the word “business” and what a “profit” is. He knows absolutely nothing about business, and it’s evident in videos online where he rants about accountants staring over his shoulder. I guess that evidence doesn’t come into play either.

      You’ve been had.

  8. Your right, you’re only guessing. I worked for the Cerniuk’s for years, I speak from experience and not from Charles’ mouth.

    I’ve already stated that maybe you’re right about Charles in some way, however I have no way of knowing because you refuse to back up your claims. Instead you call me names and make incorrect assumptions. Good day.

  9. He was sold on buying the brewery, because Maclean said he would run it. Interesting that he was fired twice by Cerniuk. I don’t need to back anything up. My stories are legit from well before Cerniuk. He inherited problems in the brewery that Maclean designed.

    Have a great day. Sorry you worked with Maclean.

  10. Pingback: The Roundup for April 23-20, 2018 Edition – Excited Pixels

  11. Please let the “The Brief and Frightening Reign of Phil” be over. Back to the beer. Stonehammer’s unchanging line-up of meh offerings did them in. A decent dark (I guess) but as they say over on BA “. . . not something I would seek out”.

  12. …………..does this mean I can go to England if I want now?

  13. Hey, surprised to go through the comments here, and no one mentioned that one of the reasons Stone Hammer may be closing is the loss of the contract to supply the Neighbourhood group of restaurants their Harvest Ale and Harvest Lager. Wellington is making them now.

  14. Boy, am I glad I am a homebrewer living in Ontario.

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