In his almost three decades of working in Nova Scotia’s craft beer industry, Brian Titus says he’s never seen so many breweries shut down in such a short period.
While the industry saw huge growth in the number of craft breweries, growing to as many as 60 breweries with some having additional taproom locations, the number of breweries has decreased to around 50 in just the last two years, he said.
“It’s certainly unheard of what we’re seeing right now,” said Titus, the president and general manager of Garrison Brewing Company in Halifax, which opened in 1997.
And while it’s been normal for a couple of breweries to shut down most years, these closures were usually met with some new openings.
“Honestly, the last couple of years has pretty much just been backward movement … which is frustrating because historically this industry for a decade has seen nothing but growth,” said Titus.
The latest casualty is Halifax’s 2 Crows Brewing, which announced on social media Feb. 18 that its last day of business will be March 7. The business, which employs around two dozen people, opened in 2017.
One thing that made the 2 Crows closure so surprising to many is it’s one of the largest breweries in the province, while other craft brewery closures in recent years were for smaller operations.
Co-owner Mark Huizink said there were several contributing factors behind the closure. One was that the costs for seemingly everything had gone up, from raw materials to the software they use to run the business.
“Everything has just chipped away at our margins,” said Huizink.
He said the brewery had initially expanded to selling in Quebec, but a problem with a distributor there led 2 Crows to pull out of the market. Another deal selling beer in New Brunswick through their provincial Crown liquor retailer also never took off, leaving the business to sell mostly in Nova Scotia, although it has done some sales in provinces like Alberta and B.C.
“Getting your beer in front of people is a difficult thing in Nova Scotia,” said Huizink, noting it requires a lot of spending on marketing.
Andrew Tanner, the president of the Craft Brewers Association of Nova Scotia, called the closure of 2 Crows sad and unfortunate. He told CBC Radio’s Information Morning that while local craft beer continues to get a bigger piece of the market share for beer in the province, most craft breweries are struggling.
“No one has raised their hand saying, ‘You know, that I feel like I’m next,'” said Tanner. “But we certainly know the pressure is on, and the spring, summer season can’t come quick enough.”
That’s because those months are the busiest for breweries, with the profits earned keeping them going through fall and winter, said Titus.
Frustrations with the NSLC
One of the biggest challenge brewers say they face is some of the fees they must pay the NSLC.
For example, Titus said that while breweries selling a can from their brewery must pay a five per cent markup to the NSLC, that markup is 40 per cent if that same can is sold at an NSLC. (For comparison, he said the latter’s equivalent in New Brunswick to sell through the provincial alcohol retailer there is 18 per cent.)
Brewers have long voiced concerns with how the NSLC operates.
In a statement, the NSLC said it “does not have any immediate plans to change the markup structure for local products.”
And with the provincial government’s deficit, Titus said it’s unlikely the markups would get adjusted any time soon.
Titus said that selling through the NSLC is the most realistic way for breweries to get their product in the most hands, but the fees discourage craft breweries from expanding.
Titus said this means to make the economics work, some breweries will open taprooms.
“You’ve got people who, you know, entered the industry because they wanted to make really great craft beer and a local product,” said Titus. “They’re almost forced into becoming bar owners and competing with an industry that already has its share of challenges.”
For Titus, that’s especially true. He said he had “zero interest” in having a taproom, but 29 years since Garrison’s inception, the business now has two, even though the Halifax Seaport location is now closed for renovations.
2 Crows opened a taproom in west-end Halifax in late 2023 that partnered with Yeah Yeahs Pizza. Huizink said this move helped, but it came too late. The pizza shop will remain in business, but will have a different beer supplier.
Huizink said they considered opening an additional taproom, but said it’s a capital- and labour-intensive move that’s easier said than done.
“If we were to grow significantly, it would have to be through additional taprooms,” he said.
Titus said breweries aren’t just a place to drink. They’re community hubs where friends and family gather, and play activities like darts or cards, so any closure is significant.
“I guarantee they leave a hole in those communities much bigger than their actual business,” he said.
MORE TOP STORIES
