FROM FARM TO GLASS:

The Value of Beer in Canada

Glen Hodgson
Chief Economist and Senior Vice President, The Conference Board of Canada
November 5, 2013

conferenceboard.ca

Economic Footprint of Beer.

Report investigates size and
scope of beer economy.
Breweries are a large
manufacturing industry, but
there is more to the story.
Beer has a long supply chain
and is retailed in stores and
consumed in bars, and
restaurants.
Therefore, beers contribution
to Canadian
Ca ad a G
GDP is
s much
uc
larger than brewers
themselves.

Beer is the preferred alcohol choice.

(volume of Canadian sales in absolute alcohol content; millions of litres)

Spirits

Wine

Beer

140
120
100
80
60
40
20
0

Sources: Statistics Canada; The Conference Board of Canada.

3

Putting the industry into perspective.

Canadian breweries industry:

Smaller than forestry and logging
About the same size as the postal service
Larger than wineries and distilleries
distilleries, soft drink
manufacturing, and many others.

Putting the industry into perspective.

(2012 real GDP for selected Canadian industries; 2007 $ millions)

Forestryandlogging
Pharmaceuticalandmedicinemanufacturing
Postalservice
Breweries
Radioandtelevisionbroadcasting
Dairy product manufacturing
Dairyproductmanufacturing
Coalmining
Softdrinkandicemanufacturing
Fishing h nting and trapping
Fishing,hunting,andtrapping
Wineriesanddistilleries

3,729
3,451
,
3,179
3,166
3,081
2 866
2,866
1,666
1,168
1 127
1,127
889

Sources: Statistics Canada; The Conference Board of Canada.

5

What is the Beer Economy?

Its more than just breweries

When you drink a bottle of beer, you support:

1. Direct Impacts: The brewing industry
2. Supply Chain Impacts:

What is the Beer Economy?

Its more than just breweries

3. Induced Impacts: Employees of breweries and the supply chain

spend their earned income on goods and services.

4. Fiscal Impacts:
Corporate taxes
Income taxes of employees of breweries and supply chain
industries
Product taxes: includes GST, PST/HST, remittances from liquor
authorities to provincial governments
governments, fuel transport taxes
taxes, etc
etc.

Beers economic footprint.

(Annual average, 2009-2011)

Spendingonbeer(billions,real$)

12.3

RealGDP(billions,real $)

13.8

Economicmultiplier

1.12

Jobs
Taxes (billions,nominal
Taxes
(billions nominal $)

Accounts for 0.9% of

total GDP.
Every $1 spent on
beer generates $1.12
in real GDP.

163,200 Beer economy

58
5.8

supports 1 out of
every 100 jobs in
Canada.

Sources: Statistics Canada; The Conference Board of Canada.

8

Economic footprint of beer, by industry.

(GDP annual average over 2009-2011; real $ billions)

2.2

Manufacturing

3.1

Retail trade
Accommodation and food services

2.2

Fi
Finance,
iinsurance, and
d reall estate

1.0
Wholesale trade

1.2

1.7

Other

Source: The Conference Board of Canada.

9

Prominent Commodities in Beer Supply Chain.

10

Regional Supply Chains: Atlantic Canada.

Long brewing traditions: Moosehead, Oland Brewery, etc.
There are 22 breweries in Atlantic provinces.
The region supplies beer, electricity, paperboard containers
and much more to the national beer economy.
Beer consumption across Canada supports10,349 jobs in
the Atlantic provinces.

11

Beer Consumption Across Canada Supports

L
Local
l Jobs.
J b
Number of jobs supported as a result of beer consumption in various regions.
Provincial consumption
Other Atlantic consumption

Central Canada consumption

Prairie consumption

B.C. & North consumption

Newfoundland & Labrador
Prince Edward Island
Nova Scotia
New Brunswick
0

500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

Sources: Statistics Canada, 2009 Interprovincial Input-Output Model; The Conference Board of Canada.
12

Regional Supply Chains: Central Canada.

Brewing hub of Canada, home to the three largest
breweries in the country.
Quebec and Ontario account for 71% of brewing activity in
Canada.
Supplies
pp
beer,, and head-office and financial services to the
national beer economy, among other things.
Beer consumption
p
across Canada supports
pp
86,913
,
jjobs in
Central Canada.

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Beer Consumption Across Canada Supports

L
Local
l Jobs.
J b
Number of jobs supported as a result of beer consumption in various regions.
Provincial consumption
Atlantic consumption
B.C. & North consumption

Other Central Canada consumption

Prairie consumption

Quebec

Ontario

5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Sources: Statistics Canada, 2009 Interprovincial Input-Output Model; The Conference Board of Canada.
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Regional Supply Chains: Prairie Provinces.

Not large brewers relative to other regions.
Very important region for the supply chain of beer.
Supplies many inputs into production: malting barley,
energy, water, etc.
Large transportation and warehousing activity.
Beer consumption
p
across Canada supports
pp
20,394 jjobs in
the Prairies.

15

Beer Consumption Across Canada Supports

L
Local
l Jobs.
J b
Number of jobs supported as a result of beer consumption in various regions.
Provincial consumption
Central Canada consumption
Atlantic consumption

Other Prairie consumption

B.C. & North consumption

Manitoba

Saskatchewan

Alberta
0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Sources: Statistics Canada, 2009 Interprovincial Input-Output Model; The Conference Board of Canada.
16

Regional Supply Chains: B.C. & the North.

B.C. has an active brewing industry, with 72 large, medium,
and small breweries.
One brewery in Whitehorse: Yukon Brewing.
Tourism boosts beer consumption, and supports a sizable
accommodation and food services industry.
y
Beer consumption across Canada supports 18,967 jobs in
B.C. and the North.

17

Beer Consumption Across Canada Supports

L
Local
l Jobs.
J b
Number of jobs supported as a result of beer consumption in various regions.
B.C. & North consumption

Prairie consumption

Central Canada consumption

Atlantic consumption

B C & the North

B.C.

2,000

4,000

6,000

8,000 10,000 12,000 14,000 16,000 18,000 20,000

Sources: Statistics Canada, 2009 Interprovincial Input-Output Model; The Conference Board of Canada.
18

Fiscal Impact of Beer Economy.

($ billions; annual average, 2009-2011)

Corporateprofitsbeforetax
Primary household income
Primaryhouseholdincome

4.3 Beer economy supports

corporate profits and
7.2
household income
income.

Personalincometax
C
Corporateincometax
t i
t
Taxesonproducts
Totaltaxes

1.0 These incomes help to

generate sizeable
10
1.0
contributions to federal,
3.8
provincial, territorial, and
municipal revenues.
5.8

Source: The Conference Board of Canada.

Every $1 spent on beer

generates $0.44 in
ta es (nominal)
taxes
(nominal).
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Economic Contribution of Beer Exports.

Growing global demand for beer from developing countries.
China is currently worlds biggest beer market.
Ca
Canada
ada e
exports
po s less
ess than
a $300 million
o o
of bee
beer/year.
/yea
Increasing Canadian beer exports by $10 million would:
support
support 70 jobs (26 at breweries),
breweries)
add $10.54 million to domestic GDP, and
contribute $
$327,000
,
to taxes on products.
p

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Conclusion
Measuring the beer economy
Beer
B
i a llarge manufacturing
is
f t i iindustry,
d t b
butt much
h more.
The beer industry has a long and integrated supply chain
across Canada.
C
d
It supporting nearly 1 per cent of Canadas GDP and
163,000 jobs.
Growing global demand offers an even brighter future.

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